|
on Business Economics |
| By: | Steven J. Davis; John Haltiwanger; Ron Jarmin; Javier Miranda |
| Abstract: | We study the variability of business growth rates in the U.S. private sector from 1976 onwards. To carry out our study, we exploit the recently developed Longitudinal Business Database (LBD), which contains annual observations on employment and payroll for all U.S. businesses. Our central finding is a large secular decline in the cross sectional dispersion of firm growth rates and in the average magnitude of firm level volatility. Measured the same way as in other recent research, the employment-weighted mean volatility of firm growth rates has declined by more than 40% since 1982. This result stands in sharp contrast to previous findings of rising volatility for publicly traded firms in COMPUSTAT data. We confirm the rise in volatility among publicly traded firms using the LBD, but we show that its impact is overwhelmed by declining volatility among privately held firms. This pattern holds in every major industry group. Employment shifts toward older businesses account for 27 percent or more of the volatility decline among privately held firms. Simple cohort effects that capture higher volatility among more recently listed firms account for most of the volatility rise among publicly traded firms. |
| JEL: | D21 E32 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12354&r=bec |
| By: | Pierre Mohnen; Jacques Mairesse; Marcel Dagenais |
| Abstract: | This paper proposes a framework to account for innovation similar to the usual accounting framework in production analysis and a measure of “innovativity” comparable to that of total factor productivity. This innovation accounting framework is illustrated using micro-aggregated firm data from the first Community Innovation Surveys (CIS1) for seven European countries: Belgium, Denmark, Ireland, Germany, the Netherlands, Norway and Italy for the year 1992. Based on the estimation of a generalized Tobit model and measuring innovation as the share of total sales due to improved or new products, it compares the propensity to innovate, and the innovation intensity conditional and unconditional on being innovative, across the seven countries and low- and high-tech manufacturing sectors. Even with relatively few explanatory variables our innovation framework already accounts for sizeable differences in country innovation intensity. It also shows that differences in innovativity across countries can be nonetheless very large. <P>Nous proposons, dans cette étude, un cadre d’analyse, ou « comptabilité de l’innovation », semblable à celui très généralement utilisé pour la « comptabilité de la croissance », ainsi qu’une mesure de la « productivité des facteurs d’innovation » ou « innovativité » comparable à celle de la productivité totale des facteurs. Nous appliquons ce cadre d’analyse à la comparaison de l’innovation pour sept pays européens – l’Allemagne, la Belgique, le Danemark, l’Irlande, l’Italie, la Norvège et les Pays-Bas –, à partir des données d’entreprises « micro agrégées » de la première enquête communautaire sur l’innovation (CIS1) portant sur l’année 1992. Sur la base d’un modèle Tobit généralisé et en mesurant l’innovation par la part du chiffre d’affaires des entreprises en produits innovants (nouveaux ou améliorés sur les trois années 1990-1992), nous estimons la propension à innover et l’intensité de l’innovation (conditionnellement ou non au fait d’innover) pour les industries manufacturières de haute et basse technologie des sept pays. Bien que disposant de variables explicatives peu nombreuses, nous rendons compte ainsi de différences déjà très significatives d’intensité d’innovation entre pays. Les différences d’innovativité entre pays restent néanmoins très fortes. |
| Keywords: | Europe, innovation, innovativity, R-D, selectivity, Europe, innovation, innovativité, R-D, sélectivité |
| JEL: | C35 L60 |
| Date: | 2006–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2006s-11&r=bec |
| By: | Til Schuermann; Kevin J. Stiroh |
| Abstract: | This paper examines the common factors that drive the returns of U.S. bank holding companies from 1997 to 2005. We compare a range of market models from a basic one-factor model to a nine-factor model that includes the standard Fama-French factors and additional factors thought to be particularly relevant for banks such as interest and credit variables. We show that the market factor clearly dominates in explaining bank returns, followed by the Fama-French factors. The bank-specific factors are not informative, particularly for the largest banks, which take advantage of protection in the form of interest rate and credit derivatives. Even in our broadest model, however, considerable residual variation remains, with the mean pairwise correlation of residuals for the largest banks near 0.25. This finding suggests that important hidden factors remain. A principal component analysis shows that this residual variance is relatively diffuse, although the largest banks do tend to load in the same direction on the first component. Relative to the returns of large firms in other sectors, bank returns are relatively well explained with standard risk factors, and both the residual correlation and degree of factor loading agreement are not particularly large. These results have clear implications both for public policymakers seeking to quantify those shared bank exposures that create systemic risk and to portfolio managers seeking to devise optimal diversification strategies. |
| Keywords: | Bank holding companies ; Bank profits ; Rate of return ; Bank investments |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:252&r=bec |
| By: | Carry Mout |
| Abstract: | This paper discusses the method of comonotonicity to estimate the sum of risks. Two applications are presented. First, we estimate a property insurer.s exposure to claims after a severe storm. Second, we apply our approach to a pension fund.s investment risk to estimate the prospective total assets and the conditional prospective funding rate. Both applications show that comonotonicity can be a useful tool to assess the upper bound for the risk exposure of financial institutions. |
| Keywords: | estimate, sum of risks, investment |
| JEL: | C13 G22 G23 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:105&r=bec |
| By: | Francine D. Blau; Jed DeVaro |
| Abstract: | Using a large sample of establishments drawn from the Multi-City Study of Urban Inequality (MCSUI) employer survey, we study gender differences in promotion rates and in the wage gains attached to promotions. Several unique features of our data distinguish our analysis from the previous literature on this topic. First, we have information on the wage increases attached to promotions, and relatively few studies on gender differences have considered promotions and wage increases together. Second, our data include job-specific worker performance ratings, allowing us to control for performance and ability more precisely than through commonly-used skill indicators such as educational attainment or tenure. Third, in addition to standard information on occupation and industry, we have data on a number of other firm characteristics, enabling us to control for these variables while still relying on a broad, representative sample, as opposed to a single firm or a similarly narrowly-defined population. Our results indicate that women have lower probabilities of promotion and expected promotion than do men but that there is essentially no gender difference in wage growth with or without promotions. |
| JEL: | J1 J3 J7 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12321&r=bec |
| By: | Baldwin, John R.; Yan, Beiling |
| Abstract: | During the post-1970 period, Canadian manufacturing prices have alternately increased and fallen relative to U.S. prices' just the reverse of the cycle in the Canada' U.S. exchange rate. But not all manufacturing industries have experienced the same amplitude of relative price changes. This paper examines the industry characteristics that are related to the shifts in competitiveness, measured as the relative price ratio between Canadian prices and U.S. prices adjusted by the exchange rate. We find that relative factor input costs and relative productivity growth are the two most important factors influencing changes in relative Canada' U.S. prices. Competitive pressures emanating from trade are important determinants of the extent to which relative productivity differences are passed through to cross-country relative prices in the manufacturing sector. We also find that the magnitude of domestic market competition and export intensity affects the short-run relative price shifts over the cycle of exchange rate. |
| Keywords: | Trade, Prices and price indexes, Manufacturing, International trade, Prices, Manufacturing industries |
| Date: | 2006–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp5e:2006041e&r=bec |
| By: | Marco Caliendo; Frank M. Fossen; Alexander S. Kritikos |
| Abstract: | The influence of risk aversion on the decision to become self-employed is a much discussed topic in the entrepreneurial literature. Conventional wisdom asserts that the role model of an entrepreneur requires to make risky decisions in uncertain environments and hence that more risk-averse individuals are less likely to become an entrepreneur. Empirical tests of this assumption are scarce however, mainly because reliable measures for risk-aversion are not available. We base our analysis on the most recent waves of the German Socio-Economic Panel (SOEP) which allow us to use experimentally-validated measures of risk attitudes. Most importantly and in contrast to previous research, we are able to examine whether the decision of starting a business is influenced by objectively measurable risk attitudes at the time when this decision is made. Our results show that in general individuals with lower risk aversion are more likely to become self-employed. Sensitivity analysis reveals, however, that this is true only for people coming out of regular employment, whereas for individuals coming out of unemployment or inactivity risk attitudes do not seem to play a role in the decision process. |
| Keywords: | Risk attitudes, entrepreneurship, self-employment. |
| JEL: | D81 J23 M13 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp600&r=bec |
| By: | Philip R. P. Coelho (Department of Economics, Ball State University); James E. McClure (Department of Economics, Ball State University) |
| Abstract: | Failures may lead to ultimate success in both nature and business. Just as dynamic ecosystems depend on death to replace senescent organisms with vigorous growth, the termination of uneconomic activities is essential to wealth creation. This paper explores the benefits of failures, and uses aspects of the analogy between death and business failure to analyze how failures in business economize upon resources and lead to better firms and greater efficiencies. A distinguishing feature of our work is the analytic use of competitive markets to provide insights into the processes of success and failure. Recognizable patterns of business failures are discussed in an effort to provide entrepreneurs and mangers with a basis for understanding and acting upon changing circumstances. |
| Keywords: | Entrepreneurship, Business Failure, Evolution, Uncertainty, Learning from Failure |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:bsu:wpaper:200402&r=bec |
| By: | Jacek Warda |
| Abstract: | In a knowledge-based economy, business performance and overall levels of economic growth are increasingly dependent on the development and exploitation of intellectual assets. A number of OECD countries offer tax incentives to encourage and reward business expenditures on intellectual assets. This working paper examines the tax treatment of corporate expenditures on selected intellectual assets and develops an indicator of the relative generosity of tax systems in OECD countries to such investments. Five types of intellectual assets are considered: research and development (R&D), patents, workforce training, software and organisational change. The paper shows that although tax incentives have, to date, mainly favoured R&D expenditures, they are gradually embracing other types of intellectual assets, especially in those countries that provide more generous tax treatment of R&D. Nineteen OECD countries had specific R&D tax incentives in place in 2005, up from only 12 in 1996, and 6 offered tax incentives for corporate training. <BR>Dans une économie du savoir, la performance des entreprises et les taux de croissance économique globaux dépendent de plus en plus du développement et de l’exploitation d’actifs intellectuels. Un certain nombre de pays de l’OCDE appliquent des mesures d’incitation fiscale afin d’encourager et de valoriser les dépenses des entreprises portant sur des actifs intellectuels. Ce document de travail examine le régime fiscal des dépenses des entreprises portant sur certains actifs intellectuels et définit un indicateur de la générosité relative des systèmes fiscaux des pays de l’OCDE vis-à-vis de ces investissements. Cinq catégories d’actifs intellectuels sont envisagées : recherche et développement (R-D), brevets, formation de la main-d’oeuvre, logiciels et changement organisationnel. La note montre que, si les incitations fiscales ont surtout à ce jour favorisé les dépenses de R-D, elles s’appliquent aussi de plus en plus à d’autres catégories d’actifs intellectuels, surtout dans les pays qui accordent déjà un régime fiscal plus généreux à la R-D. Dix-huit pays de l’OCDE appliquaient des mesures d’incitation fiscale spécifique à la R-D en 2005, au lieu de 12 seulement en 1996, et 6 d’entre eux appliquaient des mesures d’incitation fiscale aux dépenses de formation des entreprises. |
| Date: | 2006–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaaa:2006/4-en&r=bec |
| By: | Dambrin, Claire; Lambert, Caroline; Sponem, Samuel |
| Abstract: | This paper studies the process by which a change in the institutional logic of an organisational field diffuses through the management control system of a firm. |
| Keywords: | change; institutionalisation; management control systems; decoupling; salespeople |
| JEL: | M11 M12 |
| Date: | 2006–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:heccah:0842&r=bec |