nep-bec New Economics Papers
on Business Economics
Issue of 2005‒10‒15
sixteen papers chosen by
Christian Calmes
Universite du Quebec en Outaouais

  1. The Impact of Gender Segregation on Male-Female Wage Differentials: Evidence from Matched Employer-Employee Data for Spain By Catalina Amuedo-Dorantes; Sara de la Rica
  2. "Deteriorating Bank Health and Lending in Japan: Evidence from Unlisted Companies Undergoing Financial Distress" By Shin-ichi Fukuda; Munehisa Kasuya; Jouchi Nakajima
  3. Ajustement structurel dans les industries du textile et du vêtement dans l'environnement commercial de l'après - ATV By Denis Audet
  4. Household Savings in Russia during the Transition By Mark C. Foley; William Pyle
  5. De l'évaluation du risque de crédit By Francois-Éric Racicot; Raymond Théoret
  6. Part-Time Entrepreneurship and Wealth Effects: New Evidence from the Panel Study of Entrepreneurial Dynamics By Kameliia Petrova
  7. Entry Costs and Stock Market Participation Over the Life Cycle By Sule Alan
  8. Advertising, Competition and Entry in Media Industries By CRAMPES, Claude; HARITCHABALET, Carole; JULLIEN, Bruno
  9. Two-Part Tariffs versus Linear Pricing between Manufacturers and Retailers: Empirical Tests on Differentiated Products Markets By BONNET, Céline; DUBOIS, Pierre; SIMIONI, Michel
  10. Impact of Performance and Expressiveness Value of Store Service Quality on the Mediating Role of Satisfaction with Store By Kaul Subhashini
  11. Resolutions, Recoveries and Relationships: The Evolution of Payment Disputes in Central and Eastern Europe By William Pyle
  12. On the Origin of Shared Beliefs (and Corporate Culture) By Van den Steen, Eric
  13. Delivering on the Vendor's Value Proposition: Business Process Outsourcing at EFunds By Beath, Cynthia; Ross, Jeanne W.
  14. What Makes Small and Medium Enterprises Competitive By Piergiuseppe Morone; Giuseppina Testa
  15. Does Motivation Trigger Autonomy, or Vice Versa? By Kameliia Petrova
  16. Making Design Rules: A Multi-Domain Perspective By Andrea Prencipe; Stefano Brusoni

  1. By: Catalina Amuedo-Dorantes (San Diego State University and IZA Bonn); Sara de la Rica (Universidad del País Vasco and IZA Bonn)
    Abstract: This paper presents new evidence on the role of gender segregation within industry, occupation, establishment, and occupation-establishment cells in explaining gender wage differentials of full-time salaried workers in Spain during 1995 and 2002. Using data from the Spanish Wage Structure Surveys, we find that the raw gender wage gap decreased from 0.26 to 0.22 over the course of seven years. However, even after accounting for workers’ human capital, job characteristics, and female segregation into lower-paying industries, occupations, establishments, and occupations within establishments, women still earned approximately 13 percent and 16 percent less than similar male counterparts as of 1995 and 2002, respectively. Most of the gender wage gap is attributable to workers’ sex. Yet, female segregation into lower-paying occupations within establishments, establishments and industries accounted for a sizable and growing fraction of the female-male wage differential.
    Keywords: gender wage differentials, female segregation, matched employer-employee data
    JEL: J16 J7
    Date: 2005–09
  2. By: Shin-ichi Fukuda (Faculty of Economics, University of Tokyo); Munehisa Kasuya (Research and Statistics Department, The Bank of Japan); Jouchi Nakajima (Graduate School of Economics, University of Tokyo)
    Abstract: When a borrower faces an informational hold-up problem, deteriorating bank health might reduce a borrower's credit availability. However, a bank with an impaired balance sheet might attempt to "gamble for resurrection" and hence increase risky lending to "zombie" firms. The purpose of this paper is to investigate what impacts the weakened financial conditions of banks had on loans outstanding to medium-size firms in Japan. Estimating lending functions, we examine the determinants of lending to unlisted Japanese companies in the late 1990s and early 2000s. We find that two alternative measures of bank health -regulatory capital adequacy ratios and ratios of non-performing loans (NPLs)- had opposite impacts on lending. In the case of regulatory capital adequacy ratios, its deterioration had a perverse impact on lending. The deteriorating NPL ratios, however, increased lending to troubled firms to keep otherwise economically bankrupt firms alive.
    Date: 2005–09
  3. By: Denis Audet
    Abstract: La présente étude porte sur les problèmes d'ajustement auxquels les industries du textile et du vêtement sont confrontées dans le monde entier. L'idée d'effectuer cette analyse est née au cours des consultations informelles qui se sont déroulées entre le Comité des échanges de l'OCDE et les organisations de la société civile. Il a fallu duex longes années de discussions au Groupe de travail du Comité des échanges pour mieux comprendre les questions en jeu et arrêter la version finale de cette étude....
    Keywords: politique commerciale, Accord sur les Textiles et les Vêtements (ATC), ajustement de la main-d'œuvre, ajustement structurel, Arrangement multifibres (AMF), facilitation des formalités douanières, technologie et innovation, textiles, vêtements
    Date: 2004–09–13
  4. By: Mark C. Foley; William Pyle
    Abstract: We exploit panel data from the second phase of the Russian Longitudinal Monitoring Survey (RLMS) to investigate the household characteristics that explain saving during a period of extreme dislocation. Among our more noteworthy findings, we find evidence of short-term consumption smoothing behavior as households respond to temporary income shocks. Conditional on income level, we find that savings rates are higher in households benefiting from non-standard (likely transitory) sources of support such as private transfers and sales of home produced food; savings rates are lower, moreover, in households suffering from unemployment or payment arrears. We also confirm the robustness of an atypical U-shaped age-savings relationship to multivariate specifications. And finally, we turn up strong support for an inverse relationship between the household’s stock of durables and its saving rate.
    JEL: D91 P20
    Date: 2005
  5. By: Francois-Éric Racicot (Département des sciences administratives, Université du Québec (Outaouais)); Raymond Théoret (Département de stratégie des affaires, Université du Québec (Montréal))
    Abstract: En recourant de plus en plus aux modèles à forme réduite, la théorie de l'évaluation du risque de crédit se distance de plus en plus de l'ingénierie financière traditionnelle qui donne la part belle aux modèles structurels. Bien qu'ils postulent l'absence d'arbitrage, les modèles à forme réduite reposent sur la distribution des pertes d'une entreprise dans un monde risque-neutre plutôt que sur un processus de diffusion. Il s'ensuit que la faillite n'est pas un processus prévisible comme dans le modèle original de Merton mais survient de façon subite. L'avenir de l'évaluation du risque de crédit semble être du côté des modèles hybrides qui combinent les modèles structurels et les modèles à forme réduite.
    Keywords: évaluation des actifs, risque de crédit, ingénierie financière.
    JEL: G12 G13 G33
    Date: 2005–09–01
  6. By: Kameliia Petrova (Boston College)
    Abstract: Why do people become part-time entrepreneurs? Are they financially constrained? Previous studies on entrepreneurship do not deal with part- timers. In contrast, a recent survey on the establishment of new businesses reports that 80 percent of entrepreneurs also hold outside paid jobs. In this study, I develop a model of entrepreneurial choice in which individuals make a joint decision of how much capital to invest and what proportion of time to spend in business. The outside wage is inversely related to both time in business and capital for part-timer entrepreneurs. I also show that wealth and ability are positively correlated. To evaluate wealth effects, I use data from the Panel Study of Entrepreneurial Dynamics. I instrument wealth with month-to-month changes in the Standard & Poor 500 stock market index and I find that wealth does not affect the propensity to become an entrepreneur. If individuals know their entrepreneurial ability ahead of time and expect financial difficulties, they will accumulate funds before making entrepreneurial decisions. Wealth is shown to be less significant for starting new businesses.
    Keywords: Start-ups, Entrepreneurship, Liquidity Constraints
    JEL: M13
    Date: 2005–10–10
  7. By: Sule Alan (Department of Economics, York University)
    Abstract: Several explanations for the observed limited stock market participation have been offered in the literature. One of the most promising one is the presence of market frictions mostly in the form of fixed entry and/or transaction costs. Empirical studies strongly point to a significant structural (state) dependence in the the stock market entry decision, which is consistent with costs of these types. However, the magnitude of these costs are not yet known. This paper focuses on fixed stock market entry costs. I set up a structural estimation procedure which involves solving and simulating a life cycle intertemporal portfolio choice model augmented with a fixed stock market entry cost. Important features of household portfolio data (from the PSID) are matched to their simulated counterparts. Utilizing a Simulated Minimum Distance estimator, I estimate the coefficient of relative risk aversion, the discount factor and the stock market entry cost. Given the equity premium and the calibrated income process, I estimate a one-time entry cost of approximately 2 percent of (annual) permanent income. My estimated model matches the zero median holding as well as the hump-shaped age-participation profile observed in the data.
    Keywords: Entry costs, Stock market, Structural estimation
    JEL: G11 D91
    Date: 2005–01
  8. By: CRAMPES, Claude; HARITCHABALET, Carole; JULLIEN, Bruno
    JEL: L13 L82
    Date: 2005–07
  9. By: BONNET, Céline; DUBOIS, Pierre; SIMIONI, Michel
    JEL: L13 L81 C12 C33
    Date: 2004–06
  10. By: Kaul Subhashini
    Abstract: This study explores the extent to which store service attributes having appeal for consumer self-image impacts store satisfaction and patronage intentions and discovers that this 'expressiveness' value has significant associations with both. By using the adapted RSQS for measuring service quality in the Indian appare! retail context, this paper finds that service expressiveness value is distinct from the performance value obtained from service delivery. This paper provides empirical evidence that the mediation effect of satisfaction varies depending on consumer perceived value from service and that it is neither as universal nor as strong as retailers and researchers lend to believe.
    Date: 2005–10–05
  11. By: William Pyle
    Abstract: What determines the mechanism chosen to resolve a commercial dispute? To what degree does the aggrieved recover damages? And does the relationship survive in the aftermath? The answers to these questions affect expectations as to the costs of transacting and, thereby, the development of markets. But they have received almost no attention in the economic literature on the post-socialist transition. This article exploits a rich survey of small and medium-sized manufacturing enterprises in three Central and East European countries to explain responses to an inter-firm payment dispute. The evidence suggests that behavior at successive stages is strongly influenced by the transaction costs associated with greater geographic distance between the firms. The evidence also strongly suggests that the costs of a dispute can be mitigated by membership in a business association.
    JEL: D23 D74 K40 K41 P37
    Date: 2005
  12. By: Van den Steen, Eric
    Abstract: This paper shows why members of an organization often share similar beliefs. I argue that there are two mechanisms. First, when performance depends on making correct decisions, people prefer to work with others who share their beliefs and assumptions, since such others 'will do the right thing'. Second, beliefs will converge over time through shared learning. While such homogeneity reduces agency problems, it does so at a cost. I show that, from an outsider's perspective, firms invest on average too much in homogeneity. The theory further predicts that homogeneity will be strongest in successful and older firms where employees make important decisions. Within a firm, homogeneity will be stronger among more important employees. Homogeneity will also be path-dependent, making managers more selective on early hires. Since shared beliefs are an important aspect of corporate culture (Schein 1985, Kotter and Heskett 1992), I finally show that the model matches some observations on corporate culture, such as the influence of a manager on her firm's culture and the persistence of culture in the face of turnover. A fundamental difference from earlier economic theories of corporate culture is that I show that culture, instead of being created for its own good, can be a side-effect of other purposeful actions. As a consequence, there can be too much culture in firms.
    Keywords: homogeneity, shared beliefs, differing priors, corporate culture,
    Date: 2005–09–23
  13. By: Beath, Cynthia; Ross, Jeanne W.
    Abstract: EFunds Corporation is the third largest business process outsourcing (BPO) provider in India. Specializing in the financial services, retail and telecommunications industries, EFunds offers financial services, customer services and transaction intensive applications. In early 2005 EFunds was assessing how it could garner a larger share of the growing offshore BPO market. EFunds management was focusing on honing three distinctive competencies: robust IT support, business process expertise, and its unique customer qualification methodology. But to really grow its business EFunds also needed to help customers recognize how BPO could make them stronger.
    Keywords: Retail, business model, IT and information management, IT enabled strategy, outsourcing,
    Date: 2005–09–23
  14. By: Piergiuseppe Morone; Giuseppina Testa
    Abstract: : This paper aims at understanding the determinants of Italian small- and medium-sized enterprises’ competitiveness. Having in mind the fact that the Italian economic system relies substantially on small firms which have managed to stay competitive by adopting strategies such as the creation of well-integrated social and institutional clusters (the so-called industrial districts) or specialising in the production of quality goods (the so called made in Italy). However, the growing competing pressure coming from the Far East has rendered this production system vulnerable, challenging its internationally competitiveness. By developing a conceptual model we identify the sources of competitiveness of Italian SMEs. The model is tested using a unique database which collects data, for the year 2004, over a sample of 2,600 SMEs.
    Keywords: SMEs, competitiveness, innovation, interval regression, ordered probit
    JEL: L1 O31 C24
    Date: 2005–09
  15. By: Kameliia Petrova (Boston College)
    Abstract: Do firms use autonomy to motivate workers, or do they give autonomous jobs to workers who are already especially motivated? A standard result in economics is that firms offer autonomous jobs to promote worker motivation. But surprisingly, little attention has been given to the details of this practice of giving autonomy to especially motivated workers. In contrast, findings from social psychology demonstrate that how people handle new information is closely related to what motivates them. Does autonomy in fact trigger motivation? I argue in this study that motivation may trigger autonomy, and thus that firms may benefit from screening for intrinsically motivated workers. I assume that workers differ in their degree of motivation, and that motivated workers have a lower cost of processing information than unmotivated ones. While motivated workers concentrate on searching for available information, unmotivated ones focus on ignoring certain information as irrelevant. Therefore, firms would gain efficiency from giving the more motivated workers a higher degree of autonomy. This link between autonomy and motivation also has implications for non-monetary aspects of the job, such as forms of leadership style and job design.
    Keywords: Incentives, motivation, job-design, tasks and authoirity
    JEL: C7 D8
    Date: 2005–10–10
  16. By: Andrea Prencipe (SPRU, University of Sussex); Stefano Brusoni (Bocconi University (CESPRI and CRORA) and Silvio Tronchetti Provera Foundation)
    Abstract: This study analyzes the processes whereby organizations develop radical innovations in response to environmental transformations. It explores the changes in organizational structures, practices and business strategies entailed by the implementation of such innovations. From the literature on modularity, we borrow the idea that the evolutionary dynamics of artifacts and organizations are linked by design rules, i.e. a set of principles that allocate functions to components, identify the operating principle of each component and determine the interfaces among modules. Through an in-depth case study of radical innovation in tire manufacturing, we study the joint dynamics of technical and organizational change during the transition from old to new design rules. We argue that technical change and organization adaptation are linked, but that such relationship is mediated and rendered open-ended by the evolution of the underlying bodies of knowledge.
    Keywords: organizational change, innovation, technological change, modularity, tire manufacturing
    JEL: O33 L20 L62
    Date: 2005–10–10

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