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on Business Economics |
| By: | Filipe Almeida-Santos; Karen Mumford |
| Abstract: | We use British household panel data to explore the wage returns to training incidence and intensity (duration) for 6924 employees. We find these returns differ greatly depending on the nature of the training (general or specific); who funds the training (employee or employer); and the skill levels of the recipient (white or blue collar). Using decomposition analysis, we further conclude that training is positively associated with wage dispersion in Britain and a virtuous circle of wage gains but only for white-collar employees. |
| Keywords: | Training, wage compression, performance |
| JEL: | J24 J31 J41 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:06/14&r=bec |
| By: | Mark J. Zbaracki; Mark Bergen; Daniel Levy |
| Abstract: | The fact that organizations find it hard to change in response to shocks in the environment is a crucial feature of the economy. Yet we know little about why it is so difficult for organizations to adjust, and where these limitations come from. In an effort to discover some of these reasons we ground ourselves in the context of price adjustment, and present a qualitative analysis of an intensive ethnographic field study of the pricing practices at a one-billion dollar Midwestern industrial manufacturing firm and its customers. We go into depth on a specific episode, a price cut, which most vividly exemplifies the themes that emerged from our data. In the specific situation, market forces clearly dictate that the firm should cut prices, and everyone in the firm agrees with this assessment, suggesting a fairly straightforward price adjustment decision. Yet when we look deeper, and dissect how the firm implemented the price cut, we uncover a rich tapestry of frictions hidden within the organization. At their core, these frictions relate to how managers, in the context of an organization, attempt to apply the fundamental elements of economic theory. Essentially they face a series of constraints that make sense in the context of an organization trying to make these adjustments, but constraints that are rarely articulated or incorporated into economic understanding of price adjustment. We discover that the largest barriers to price adjustment are related to disputes arising from collisions between "partial models" used by different organizational participants as they confront fundamental economic issues. Often, these issues have not been settled and exist in a tenuous truce within the organization – and adjustment requires the organization to deal with them in order to react to these changes. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:emo:wp2003:0610&r=bec |
| By: | Robert Boyer |
| Abstract: | This paper challenges the conventional wisdom that the dynamism of employment is always contradictory to the enforcement of some forms of security for workers. Contemporary theorizing now recognizes the specificity of the wage-labour nexus. Consequently, minimum security is required for good economic performance by firms and national economies. A comparative analysis of OECD countries shows that the extended security promoted by welfare systems has not been detrimental to innovation, growth and job creation. Developing countries cannot immediately catch up with the emerging standards of flexicurity but the methodology of employment diagnosis might help them in designing security/flexibility configurations tailored according to their domestic economic specialization, social values and political choices. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2006-21&r=bec |
| By: | Jeong Yeon Lee (Graduate School of International Studies, Yonsei University); Jung Woo Kim (Samsung Economic Research Insitute) |
| Abstract: | This study analyzes total factor productivity in manufacturing industries for a sample of OECD countries. The estimates of Malmquist indexes clearly indicate that research and development (R&D) capital is an important determinant of productivity growth in manufacturing industries. The empirical results also show that it is the pace, not the intensity, of R&D investment that is significantly related to the extent to which R&D capital formation contributes to output growth. Furthermore, this study finds that productivity gains in manufacturing industries depend importantly on R&D spillovers as well. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:ewc:wpaper:wp89&r=bec |
| By: | Urban Jermann |
| Abstract: | This paper studies the determinants of the equity premium as implied by producers’ first-order conditions. A closed form expression is presented for the Sharpe ratio at steady-state as a function of investment volatility and adjustment cost curvature. Calibrated to the U.S. postwar economy, the model can generate a sizeable equity premium, with reasonable volatility for market returns and risk free rates. The market’s Sharpe ratio and the market price of risk are very volatile. Contrary to most models, the model generates a negative correlation between conditional means and standard deviations of aggregate excess returns. |
| JEL: | E23 G12 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12487&r=bec |
| By: | Angela Maddaloni (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Alberto Musso (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Philipp Rother (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Melanie Ward-Warmedinger (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Thomas Westermann (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper examines the macroeconomic consequences of future demographic trends for economic growth, financial markets and public finances. It shows that in the absence of reforms and responses by economic agents, the currently projected demographic trends imply a decline in average real GDP growth and a severe burden in terms of pay-as-you-go pension and health care systems. Population ageing will change the financial landscape, with a potentially larger role for financial intermediaries and asset prices. All this points to a need to closely monitor demographic change also from a monetary policy perspective. While population projections are surrounded by considerable uncertainty and the effects of demographic change tend to be drawn out, the magnitude of the potential effects calls for an early recognition of this issue. This paper provides some input to the examination of possible policy issues. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:20060051&r=bec |
| By: | Jiawei Chen (Department of Economics, University of California-Irvine) |
| Abstract: | We investigate the price and welfare effects of mergers through simulations using a dynamic model of capacity accumulation in which firms produce near-homogeneous products and compete in prices. We find that mergers are welfare-reducing and that their long-run effects are worse than their short-run effects: in the long run average price increases further while total surplus and consumer surplus decrease further. A key feature of the model is that firms are ex ante identical but the industry evolves towards an asymmetric size distribution. If we instead fit the simulated data with an asymmetric costs model, which is a standard approach to explaining persistent asymmetries in market shares, we will systematically underestimate the long-run welfare-reducing effects of mergers, giving rise to misguided antitrust policies. |
| Keywords: | Merger effects; Dynamic oligopoly; Capacity; Cost misspecification; Simulation |
| JEL: | C73 D24 L11 L41 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:060701&r=bec |
| By: | Nordström Skans, Oskar (Institute for Labour Market Policy Evaluation (IFAU)); Edin, Per-Anders (Department of Economics); Holmlund, Bertil (Department of Economics) |
| Abstract: | The paper describes the Swedish wage distribution and how it correlates with worker mobility and plant-specific factors. It is well known that wage inequality has increased in Sweden since the mid-1980s. However, little evidence has so far been available as to whether this development reflects increased dispersion between plants, between individuals in the same plant, or both. We use a new linked employer-employee data set and discover that a trend rise in between-plant wage inequality account for the entire increase in wage dispersion. This pattern, which remains when we control for observable individual human capital characteristics, may reflect increased sorting of workers by skill levels and/or increased scope for rent sharing in local wage negotiations. Our discussion suggests that both factors may have become more important. |
| Keywords: | Wage inequality; labor turnover |
| JEL: | J31 J63 |
| Date: | 2006–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2006_018&r=bec |
| By: | Kozo Kiyota; Miho Takizawa |
| Abstract: | This paper examines the pre-exit productivity performance and asks how productivity affects future survival, controlling for firm size and unobserved firm heterogeneity. Based on firm-level data in Japan for 1995–2002, we found that firms did not face "sudden death" but there was a "shadow of death." Future exiting firms had lower performance five years before their exit. Moreover, unobserved firm heterogeneity had a statistically significant effect on firm survival analysis. However, we also found that the effects of unobserved heterogeneity were not very large and thus did not reverse the conclusion. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:06033&r=bec |
| By: | Laarni Bulan; Christopher J. Mayer; C. Tsuriel Somerville |
| Abstract: | We examine the extent to which uncertainty delays investment and the effect of competition on this relationship using a sample of 1,214 condominium developments in Vancouver, Canada built from 1979-1998. We find that increases in both idiosyncratic and systematic risk lead developers to delay new real estate investments. Empirically, a one-standard deviation increase in the return volatility reduces the probability of investment by 13 percent, equivalent to a 9 percent decline in real prices. Increases in the number of potential competitors located near a project negate the negative relationship between idiosyncratic risk and development. These results support models in which competition erodes option values and provide clear evidence for the real options framework over alternatives such as simple risk aversion. |
| JEL: | D4 D52 E23 R3 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12486&r=bec |
| By: | Ramon Marimon; Vincenzo Quadrini |
| Abstract: | We study how barriers to competition---such as restrictions to business start-up and strict enforcement of covenants or IPR---affect the investment in knowledge capital when contracts are not enforceable. These barriers lower the competition for human capital and reduce the incentive to accumulate knowledge. We show in a dynamic general equilibrium model that this mechanism has the potential to account for significant cross-country income inequality. |
| JEL: | L14 L16 O4 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12474&r=bec |
| By: | S. Montresor; G. Vittucci Marzetti |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:566&r=bec |
| By: | A. Fedele; M. Tognoni |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:562&r=bec |
| By: | G. Bono |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:540&r=bec |
| By: | R. Antonietti |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:538&r=bec |
| By: | R. Andergassen; F. Nardini; M. Ricottilli |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:543&r=bec |
| By: | A. Mantovani |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:533&r=bec |
| By: | Terttu Luukkonen; Mari Maunula |
| Keywords: | venture capital, biotechnology |
| JEL: | O16 G24 O38 L65 |
| Date: | 2006–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1032&r=bec |
| By: | Erik Stam |
| Abstract: | Entrepreneurship is an important process in regional economic development. Especially the continued growth of a minority of new firms is of major significance to the commercialization of new ideas and employment growth. These growing new firms are transforming on a structural basis, like caterpillars turning into butterflies. However, like butterflies they are at risk to leave their region of origin for better places. This paper analyses how and why the spatial organization of firms develops subsequent to their start-up. A new conceptual framework and an empirical study of the life course of entrepreneurial firms are used to construct a theory on their locational behavior that explains that behavior as the outcome of a process of initiatives taken by entrepreneurs, enabled and constrained by resources, capabilities and relations with stakeholders within and outside of the firm. This study shows that entrepreneurs decide whether or not to move their firm outside of their region of origin for different reasons in distinct phases of the firm life course. Being embedded in social networks, for example, is an important constraint on locational behavior during the early life course of a firm, but over time this becomes less important and other mechanisms like sunk costs increasingly determine the locational behavior of fast-growing firms. The development of the spatial organization is also of major importance: when a multilocational spatial organization has been realized, it is much easier to move the headquarters to another region. The spatial organization of entrepreneurial firms co-evolves with the accumulation of their capabilities. A developmental approach incorporating evolutionary mechanisms and recognizing human agency provides new insights into the age-old study of firm location. |
| Keywords: | location, location behavior, spatial organization, theory of the firm, entrepreneurial firms, entrepreneurship, firm growth, regional economic development |
| JEL: | D21 L14 L22 M13 R11 R30 |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:esi:egpdis:2006-20&r=bec |
| By: | Granier, L.; Trinquard, S. |
| Abstract: | This paper fills the gap in the theoretical literature concerning mergers between brand-name and generic laboratories in pharmaceutical markets. To prevent generic firms from increasing their market share, some brand-name furms produce generics themselves, called pseudo-generics, enabling them to set up barriers to entry. We develop this topic by considering the pseudo-generics production as a mergers.catalyst. We show, in a duopoly model with substitutable goods, in which a brand-name firm and a generic firm compete à la Cournot, that a brand-name company always has an incentive to purchase its competitor. The key insight of this paper is that the brand-name laboratory can increase its merger gain by producing pseudo-generics beforehand. In some cases, pseudo-generics would not otherwise be produced. |
| Keywords: | Mergers, Pharmaceutical Market, Pseudo-Generics. |
| JEL: | I11 L12 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:mop:lasrwp:2006.21&r=bec |