nep-bec New Economics Papers
on Business Economics
Issue of 2006‒03‒05
twenty papers chosen by
Christian Calmes
Universite du Quebec en Outaouais

  1. Organizational Capital and Employment Fluctuations By Thijs van Rens
  2. Understanding the Evolution of World Business Cycles By M. Ayhan Kose; Christopher Otrok; Charles H. Whiteman
  3. Manufacturing Trends in the U.S., By Swenson, David A.
  4. Boom-Bust Cycles in Housing: The Changing Role of Financial Structure By Calvin Schnure
  5. Profitability of Horizontal Mergers in Trigger Strategy Game By Berardino Cesi
  6. Estimating Markov Transition Matrices Using Proportions Data: An Application to Credit Risk By Matthew T. Jones
  7. Can the Standard International Business Cycle Model Explain the Relation Between Trade and Comovement? By M. Ayhan Kose; Kei-Mu Yi
  8. Debt Maturity, Risk, and Asymmetric Information By Marco Espinosa-Vega; Allen N. Berger; W. Scott Frame; Nathan H. Miller
  9. The Dynamics of Firms' Entry and Diversification: A Bayesian Panel Probit Approach. A Cross-country analysis By Gianni Amisano; Maria Letizia Giorgetti
  10. Monitoring and Commitment in Bank Lending Behavior By Rodolphe Blavy
  11. Uncertainty Determinants of Corporate Liquidity By Oleksandr Talavera; Christopher Baum; Mustafa Caglayan; Andreas Stephan
  12. Macroeconomics Uncertainty and Firm Leverage By Oleksandra Talavera; Christopher Baum; Andreas Stephan
  13. Multiple banking Relationships and Over-Leverage in Italian Manufacturing Firms By Valentina Meliciani; Stefania Cosci
  14. Towards a Measure of Financial Fragility By Oriol Aspachs; Charles A.E. Goodhart; Dimitrios P. Tsomocos; Lea Zicchino
  15. Input Specificity and Global Sourcing By Galina A. Schwartz; Ari Van Assche
  16. Market Oganization and the prices of financial Assets By Professor George M Constantinides
  17. The 'sponge' organisation: A creativity-based reflection on the innovative and sustainable firm By Rodriguez, Miguel A.; Ponti, Franc; Ayuso, Silvia
  18. Bank ownership type and banking relationships By Zaidi, Rida; Martinez Peria, Maria Soledad; Klapper, Leora F.; Berger, Allen N.
  19. Service Offshoring, Productivity, and Employment: Evidence from the United States By Mary Amiti; Shang-Jin Wei
  20. Start-up entry strategies: Employer vs. Nonemployer firms By Michele Moretto; Gianpaolo Rossini

  1. By: Thijs van Rens
    Abstract: In this paper I present a model in which production requires two types of labor inputs: regular productive tasks and organizational capital, which is accumulated by workers performing organizational tasks. By allocating more workers from organizational to productive tasks, firms can temporarily increase production without hiring. The availability of this intensive margin of labor adjustment, in combination with adjustment costs along the extensive margin (search frictions, firing costs, training costs), makes it optimal to delay employment adjustments. Simulations indicate that this mechanism is quantitatively important even if only a small fraction of workers perform organizational tasks, and explains why the hiring rate is persistent and why employment is slow to recover after the end of a recession.
    Keywords: Business cycles, labor market, organizational capital, jobless recoveries
    JEL: D92 E24 J41 J64
    Date: 2004–11
  2. By: M. Ayhan Kose; Christopher Otrok; Charles H. Whiteman
    Keywords: Business cycles , Globalization , Group of Seven , Economic models ,
    Date: 2005–11–22
  3. By: Swenson, David A.
    Abstract: A comparative assessment of major trends and shifts in manufacturing employment in the U.S. and in Iowa in recent years. In addition, comparisons are made of Iowa's manufacturing job performance in relation to the average for all states that border Iowa.
    JEL: N6
    Date: 2006–02–22
  4. By: Calvin Schnure
    Keywords: Financial sector , Financial stability ,
    Date: 2005–10–27
  5. By: Berardino Cesi
    Abstract: It is shown that, in a dynamic competition, an exogenous horizontal merger is profitable even if a small share of active firms merge. However, each firm has incentive to remain outside the merger because it would benefit more (Insiders’dilemma). We show that in an infinite repeated game in which the firms use trigger strategies an exogenous bilateral merger can be profitable and the Insiders’dilemma is mitigated.
    Keywords: Horizontal mergers; Insiders’ dilemma; trigger strategy
    JEL: C73 L13 D43 G34 L41
    Date: 2006–01
  6. By: Matthew T. Jones
    Keywords: Credit , United States , Risk premium , Loans , Data analysis ,
    Date: 2005–12–06
  7. By: M. Ayhan Kose; Kei-Mu Yi
    Date: 2005–11–03
  8. By: Marco Espinosa-Vega; Allen N. Berger; W. Scott Frame; Nathan H. Miller
    Keywords: Debt , Risk premium , Banks , Credit , Economic models ,
    Date: 2005–10–27
  9. By: Gianni Amisano; Maria Letizia Giorgetti
    Abstract: In this paper we analyze entry dynamics in new submarkets of pharmaceutical companies. In particular we study entry decisions at time t in a new submarket, conditioned on the entrance in a new submarket at time t-1. This model allows us to connect with the flourishing literature about the prominent role of submarkets, (Klepper and Thompson, 2002, Mitchell, 2000 and Sutton,1998) in explaining diversification and entry choices. Our analysis is based on a Bayesian approach which allows us to properly account for heterogeneity among firms. We try to manage the inclusion among regressors of non strictly exogenous variables, which can be correlated with unobserved heterogeneity,(Honoré and Kyriazidou, 2000, Honoré and Lewbel, 2002, Arellano and Carrasco,2003, Wooldridge, 2003).
  10. By: Rodolphe Blavy
    Keywords: Banking , Bank credit , Bank supervision ,
    Date: 2005–12–13
  11. By: Oleksandr Talavera (DIW Berlin); Christopher Baum (Boston College); Mustafa Caglayan (University of Leicester); Andreas Stephan (European University Viadrina DIW Berlin)
    Date: 2005–09–03
  12. By: Oleksandra Talavera (DIW Berlin); Christopher Baum (Boston College); Andreas Stephan (European University Viadrina DIW Berlin)
    Date: 2005–09–03
  13. By: Valentina Meliciani (University of Teramo); Stefania Cosci (LUMSA University of Rome)
    Date: 2005–09–03
  14. By: Oriol Aspachs; Charles A.E. Goodhart; Dimitrios P. Tsomocos; Lea Zicchino
    Abstract: This paper proposes a measure of financial fragility that is based on economic welfare in a general equilbrium model calibrated against UK data. The model comprises a household sector, three active heterogeneous banks, a central bank/regulator, incomplete markets, and endogenous default. We address the impact of monetary and regulatory policy, credit and capital shocks in the real and financial sectors and how the response of the economy to shocks relates to our measure of financial fragility. Finally we use panel VAR techniques to investigate the relationships between the factors that characterise financial fragility in our model, i.e. banks' probabilities of default and banks' profits - to a proxy of welfare.
    Date: 2006
  15. By: Galina A. Schwartz; Ari Van Assche
    Abstract: This paper investigates the role of productivity on a firm’s organizational choice. We expand Antràs and Helpman (2004) by allowing heterogeneous firms to choose between adopting specific and generic inputs. In input-intensive industries, firms face a trade-off between the lower productivity of generic inputs and the reduced hold-up friction of generic outsourcing. We demonstrate that the hold-up friction under generic outsourcing increases with a firm’s productivity. This implies that: (i) high productivity firms choose ideal outsourcing to the South, (ii) medium productivity firms choose generic outsourcing to the South, (iii) low productivity firms choose generic outsourcing to the North. <P>Cet article étudie le rôle de la productivité sur les choix organisationnels des entreprises. Nous élargissons l’étude d’Antràs et Helpman (2004) en permettant aux entreprises hétérogènes de choisir entre l’adoption d’intrants spécifiques ou génériques. Au sein des industries caractérisées par une forte utilisation d’intrants, les entreprises font face à un compromis entre une productivité réduite liée aux intrants génériques et un problème de hold-up moindre découlant de l’impartition générique. Nous démontrons que le problème de hold-up lié à l’impartition générique augmente selon la productivité d’une entreprise. Ce qui implique que : les entreprises dont le taux de productivité est élevé choisissent l’impartition optimale au Sud, (ii) les entreprises dont le taux de productivité est moyen choisissent l’impartition générique au Sud, (iii) les entreprises dont le taux de productivité est bas choisissent l’impartition générique au Nord.
    Keywords: input specificity, outsourcing, firm heterogeneity, incomplete contracts, hold-up problem, spécificité des intrants, impartition, hétérogénéité des entreprises, incomplétude des contrats, problèmes de hold-up.
    JEL: F23 F12
    Date: 2006–02–01
  16. By: Professor George M Constantinides (University of Chicago)
    Date: 2005–09–03
  17. By: Rodriguez, Miguel A. (IESE Business School); Ponti, Franc (EADA); Ayuso, Silvia (IESE Business School)
    Abstract: Nowadays, many companies striving for sustainability have developed new and effective communication channels with their stakeholders and, at the same time, successful innovation strategies. However, stakeholder engagement and innovation tend to be managed as parallel rather than interconnected activities within companies, and any link between them seems to be informal and tacit. The aim of this paper is to gain a deeper understanding of how companies' relationship with the environment can be harnessed for sustainable innovation. Given the scant experience of companies linking stakeholder dialogue and sustainable innovation, we decided to adopt an original and innovative research method based on gathering a group of managers from different companies and stimulating their imagination using creativity techniques. In this paper, we first describe the creative research method we used to explore how businesses can integrate stakeholder insights into the process of organisational innovation. Then we present the result of our research experiment: the model of the "sponge" organisation. Based on the experience and intuitively stimulated ideas of the project participants, we propose a definition -a list of values and principles, and important "hard" and "soft" attributes- of the ideal enterprise, i.e., one that uses its relationship with the environment as an essential innovation factor. Finally, we discuss the implications of this business concept and compare it with existing management literature.
    Keywords: sustainable development; stakeholders; environment; innovation; creativity;
    Date: 2006–01–24
  18. By: Zaidi, Rida; Martinez Peria, Maria Soledad; Klapper, Leora F.; Berger, Allen N.
    Abstract: The authors formulate and test hypotheses about the role of bank ownership types-foreign, state-owned, and private domestic banks-in banking relationships, using data from India. The empirical results are consistent with all of their hypotheses with regard to foreign banks. These banks tend to serve as the main bank for transparent firms, and firms with foreign main banks are most likely to have multiple banking relationships, have the most relationships, and diversify relationships across bank ownership types. The data are also consistent with the hypothesis that firms with state-owned main banks are relatively unlikely to diversify across bank ownership types. However, state-owned banks often do not provide the main relationship for firms they are mandated to serve (for example, small, opaque firms), and the predictions of negative effects on multiple banking and number of relationships hold for only one type of state-owned bank.
    Keywords: Banks & Banking Reform,Financial Intermediation,Financial Crisis Management & Restructuring,Banking Law,Economic Theory & Research
    Date: 2006–03–01
  19. By: Mary Amiti; Shang-Jin Wei
    Keywords: Productivity , United States , Employment , Labor , Manufacturing sector , Economic models ,
    Date: 2005–12–30
  20. By: Michele Moretto; Gianpaolo Rossini
    Abstract: From 1997 to 2001 we observe in the Usa a faster growth in the number of Nonemploye firms (NF) vis à vis Employer firms (EF). The diverse speed of net entry may be due to particular internal organisation of the two types of firms and the effect that this has on the reactions to market uncertainty. However, the set of internal organizations of firms is larger than that made up simply by EFs and NFs, in particular among newborn firms, since we observe corporate start-ups with employees, firms owned and managed by their founders who are simultaneously the employees and, finally, non corporate enterprises. The second class of firms mostly belongs to the category of NFs, according to US nomenclature, while non corporate firms may belong to either category. Our curiosity is attracted by different entry patterns of NFs and EFs and our aim is to interpret them. According to recent literature, firms carry out an irreversible investment, such as entry, only if market prices are strictly larger than average total costs (Marshallian point). However, the trigger price that makes firms become active is affected by institutional rules, the existence of profit sharing, efficiency wages, exit options - i.e. partial reversibility - financial constraints. Then, the internal organization of a newborn firm may make the difference. In a continuous time stochastic environment, where firms bear a sunk cost, we model entry as a growth option. On the trace of distinct objective functions we show that NFs and EFs have specific entry patterns in terms of output price and/or size. Why? Simply because they react in diverse fashions to market price volatility. In this sense we are able to show that, in most cases, the NF is locally less risky. This makes the NF better suited to enter under conditions of higher volatility. This exactly corresponds to what happened during the years between 1997-2001.

This nep-bec issue is ©2006 by Christian Calmes. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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