nep-bec New Economics Papers
on Business Economics
Issue of 2007‒03‒03
sixteen papers chosen by
Christian Calmes
University of Quebec in Ottawa

  1. International Financial Integration through Equity Markets: Which Firms from Which Countries Go Global? By Claessens, Stijn; Schmukler, Sergio
  2. The Rules of Standard Setting Organizations: An Empirical Analysis By Chiao, Benjamin; Lerner, Josh; Tirole, Jean
  3. Routines and representations at work - observing the architecture of conceptual design By Mike Hales; Joe Tidd
  4. The Gender Pay Gap over Women's Working Lifetime By Hyun H. Son; Nanak Kakwani
  5. The Role of Debt and Equity Finance over the Business Cycle By Covas, Francisco; Den Haan, Wouter
  6. Outsourcing By Australian Prudential Regulation Authority
  7. Statistical Early Warning Model of Financial Distress in Australian General Insurance By Ian G. Sharpe; Andrei Stadnik
  8. Gender Differences in Quits and Absenteeism in Canada By Zhang, Xuelin
  9. What's good for Toyota…? By Arnold, Ivo J.M.; Galakis, John
  10. Are Workers' Enterprises entry policies conventional? By M. Moretto; G. Rossini
  11. The Impact of Structured Training on Workers’ Employability and Productivity By Ang Boon Heng; Park Cheolsung; Liu Haoming; Shandre M. Thangavelu; James Wong
  12. Learning mode of small business owners By Willem, A.; Van den Broeck, H.
  13. Social Interaction and Effort in a Success-at-Work Augmented Utility Model By George J. Bratsiotis; Baochun Peng
  14. CONFLICT, WAGES, AND MULTIPLE EQUILIBRIA. By Hernando Zuleta; Veneta Andonova
  15. Slippery slopes of stress : ordered failure events in German banking By Kick, Thomas; Koetter, Michael
  16. The perils of globalization: offshoring and economic insecurity of the American worker By Richard G. Anderson; Charles S. Gascon

  1. By: Claessens, Stijn; Schmukler, Sergio
    Abstract: This paper studies international financial integration analyzing firms from various countries raising capital, trading equity, and/or cross-listing in major world stock markets. Using a large sample of 39,517 firms from 111 countries covering the period 1989-2000, we find that, although international financial integration increases substantially over this period, only relatively few countries and firms actively participate in international markets. Firms more likely to internationalize are from larger and more open economies, with higher income, better macroeconomic policies, and worse institutional environments. These firms tend to be larger, grow faster, and have higher returns and more foreign sales. While changes occur with internationalization, these firm attributes are present before internationalization takes place. The results suggest that international financial integration will likely remain constrained by country and firm characteristics.
    Keywords: access to capital markets; globalization of financial markets; international financial integration; internationalization
    JEL: G15 G18 G20
    Date: 2007–02
  2. By: Chiao, Benjamin; Lerner, Josh; Tirole, Jean
    Abstract: This paper empirically explores standard-setting organizations’ policy choices. Consistent with Lerner-Tirole (2006), we find (a) a negative relationship between the extent to which an SSO is oriented to technology sponsors and the concession level required of sponsors and (b) a positive correlation between the sponsor-friendliness of the selected SSO and the quality of the standard. We also develop and test two extensions of the earlier model: the presence of provisions mandating royalty-free licensing is negatively associated with disclosure requirements, and the relationship between concessions and user friendliness is weaker when there is only a limited number of SSOs.
    Keywords: forum shopping; innovation; licensing; standardization
    JEL: L2 O3
    Date: 2007–02
  3. By: Mike Hales (SPRU, University of Sussex); Joe Tidd (SPRU, University of Sussex)
    Keywords: routines, representations, artifacts, product development, workplace observation, evolutionary economics, chip manufacturing
    JEL: O32 D23
    Date: 2007–02–27
  4. By: Hyun H. Son (International Poverty Centre); Nanak Kakwani (International Poverty Centre)
    Keywords: Gender pay gap, Unpaid work, Poverty, Gender discrimination, Brazil, South Africa, Thailand
    Date: 2006–06
  5. By: Covas, Francisco; Den Haan, Wouter
    Abstract: This paper documents that debt and equity issuance are procyclical for most size-sorted firm categories of listed U.S. firms. The procyclicality of equity issuance decreases monotonically with firm size. At the aggregate level, however, the results are not conclusive. The reason is that issuance is countercyclical for very large firms which, although few in number, have a large effect on the aggregate because of their enormous size. We show that the shadow price of external funds is procyclical if firms use the standard one-period contract. This model property generates procyclical equity and - as in the data - the procyclicality decreases with firm size. Another factor that causes equity to be procyclical in the model is a countercyclical cost of equity issuance. The calibrated model (i) generates a countercyclical default rate, (ii) generates a stronger cyclical response for small firms, and (iii) magnifies shocks, whereas the model without equity as an external financing source does the exact opposite.
    Keywords: agency problems; firm heterogeneity; magnification
    JEL: E32 E44
    Date: 2007–02
  6. By: Australian Prudential Regulation Authority (Australian Prudential Regulation Authority)
    Date: 2006–03–23
  7. By: Ian G. Sharpe; Andrei Stadnik (Australian Prudential Regulation Authority)
    Abstract: We develop and test a statistical early warning model to identify Australian general insurers experiencing deteriorating financial health over the 1999–2001 period. Using a logit model and two measures of financial distress we are able to predict, with reasonable confidence, the insurers more likely to be distressed. They are generally small and have low return on assets and cession ratios. Relative to holdings of liquid assets they have high levels of property and reinsurance assets, and low levels of equity holdings. They also write more overseas business, and less motor insurance and long-tailed insurance lines, relative to fire and household insurance.<p>
    Date: 2006–03–16
  8. By: Zhang, Xuelin
    Abstract: Female workers are traditionally viewed as more likely to quit, to be absent and to take more days of absence than male workers, and this gender difference is widely used as an important explanation for the gender wage gap and other labour market differences between men and women. This study documents the gender differences in quits and absenteeism in Canada and attempts to assess whether the traditional view is still valid today. The study found that Canadian women's quitting behaviour changed dramatically over the past two decades. While women's permanent quit rate was greater than that of men in the 1980s, it converged with men's permanent quit rate since the early 1990s, and today there does not seem to be any significant difference in quitting behaviour between Canadian men and women. In terms of absenteeism, it was found that, other things being equal, Canadian men and women were somewhat different in paid sick leave, not in other paid and unpaid leaves, and their difference in paid sick leave was not large: women took only one day more than men. Taken together, these results imply that, in Canada, the current gender differences in quits and absenteeism are not significant factors to explain certain gender differences in labour market outcomes, such as the wage gap between men and women.
    Keywords: Labour, Labour mobility, turnover and work absences
    Date: 2007–02–23
  9. By: Arnold, Ivo J.M.; Galakis, John (Nyenrode Business Universiteit)
    Abstract: Since long the auto industry has been a valued source of leading business cycle indicators. While practitioners continue to use data on new car registrations to forecast economic activity, the predictive performance of auto industry related stock returns has deteriorated in the past decades. For the US this can be traced to the advent of Japanese manufacturers. The increased US market penetration by Japanese automakers coincides with a decline in the predictive ability of domestic auto returns. We are, however, able to recover a role for auto returns in business cycle forecasting by employing Japanese data. No such result can be found for European countries. We do conclude, however, that what’s good for Toyota, is good for the world economy
    Keywords: Forecasting, Business Cycle, Financial Markets
    Date: 2006
  10. By: M. Moretto; G. Rossini
    Date: 2007–02
  11. By: Ang Boon Heng (Manpower Research and Statistics Department, Ministry of Manpower); Park Cheolsung (Department of Economics, National University of Singapore); Liu Haoming (Department of Economics, National University of Singapore); Shandre M. Thangavelu (Singapore Centre for Applied and Policy Economics Department of Economics, National University of Singapore); James Wong (Manpower Research and Statistics Department, Ministry of Manpower)
  12. By: Willem, A.; Van den Broeck, H.
    Abstract: The aim of the paper is to explore the learning mode of small business owners, from a theoretical stance, and based on empirical evidence. We distinguish between the required learning mode, the actual learning mode and the supported learning mode. Data were collected using the focus group method in a very heterogeneous sample of Belgian small business owners. The results indicate several gaps between the required, actual and supported learning modes, of which many are due to unawareness of learning needs and lack of reflective learning among small business owners. The data also indicate among others that solutions to fill learning gaps proposed in the literature are not applicable to all owners, e.g. not all owners are able to learn through networks.
    Keywords: Belgium, learning capability, learning mode, learning gaps, learning process, learning support, reflective learning, research paper, small business owners, focus groups
    Date: 2007–02–27
  13. By: George J. Bratsiotis; Baochun Peng
    Abstract: This paper examines how success-at-work, interpreted by both subjective and relative criteria, can motivate individuals to enhance their effort and utility. We employ a general specification utility function and show that the final effect of technological growth on individuals’ effort and utility depends, respectively, on the assumptions we make about their nature with regard to their effort strategies (i.e. conformists, deviants or neutrals) and to their utility preferences (i.e. altruistic or envious). We show that these effects are determined largely by individuals’ personal success-consciousness at-work, as well as their competition strategies towards relative success and status.
    Date: 2006
  14. By: Hernando Zuleta; Veneta Andonova
    Abstract: Firms’ compensation practices affect the protection of investors’ interests and the degree of economic inequality by changing the stakes of engaging in appropriation activities versus respecting the status quo. We use a general equilibrium model where workers can either work peacefully or join a guerrilla movement that expropriates entrepreneurs. If workers are peaceful, they receive a competitive wage. If they join a guerrilla movement, they receive a share of the appropriated wealth, which depends positively on the number of guerrilla members. In this framework, we find one low-income, low-wage equilibrium with guerrilla activity and one peaceful, high-income, high-wage equilibrium. The peaceful equilibrium can be reached through redistribution policies such as efficiency wages, which are also used to control agency problems. In essence, through their compensation policies entrepreneurs might be able to control the internal principal-agent issues and simultaneously protect their assets against expropriation, while alleviating economic inequality.
    Date: 2006–10–01
  15. By: Kick, Thomas; Koetter, Michael
    Abstract: Outright bank failures without prior indication of financial instability are very rare. Supervisory authorities monitor banks constantly. Thus, they usually obtain early warning signals that precede ultimate failure and, in fact, banks can be regarded as troubled to varying degrees before outright closure. But to our knowledge virtually all studies that predict bank failures neglect the ordinal nature of bank distress. Exploiting the distress database of the Deutsche Bundesbank we distinguish four different distress events that banks experience. Only the worst entails a bank to exit the market. Weaker orders of distress are, first, compulsory notifications of the authorities about potential problems, second, corrective actions such as warnings and hearings and, third, actions by banking pillar's insurance schemes. Since the four categories of hazard functions are not proportional, we specify a generalized ordered logit model to estimate the respective probabilities of distress simultaneously. Our model estimates each set of probabilities with high accuracy and conrms, first, the necessity to account for different kinds of distress events and, second, the violation of the proportional odds assumption implicit in most limited dependent analyses of bank failure.
    Keywords: Bank, failure, distress, generalized ordered logit
    JEL: C35 G21 G33 K23 L50
    Date: 2007
  16. By: Richard G. Anderson; Charles S. Gascon
    Abstract: According to polls from the 2006 congressional elections, globalization and economic insecurity were the primary concerns of many voters. These Americans apparently believe that they have fallen victim to liberal trade polices and that inexorable trends in globalization are destroying the American Dream. In this analysis, we use time series cross-section data from the General Social Survey (GSS) to examine the links among offshoring, labor market volatility, and the demand for social insurance. Unique among the GSS literature, our analysis includes a pseudo-panel model which permits including auxiliary state and regional macroeconomic information.
    Keywords: Globalization ; International economic integration
    Date: 2007

This nep-bec issue is ©2007 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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