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on Business Economics |
| By: | TOMIURA Eiichi |
| Abstract: | This paper empirically examines how technology and capital intensity are related with the firm's global sourcing decision. Firm-level data are derived from a survey covering all manufacturing industries in Japan without any firm-size threshold. Firms are disaggregated by their make-or-buy decision (in-house or outsourcing) and by their choice of sourcing location (offshore or domestic). Capital-intensive or R&D-intensive firms tend to source in-house from their FDI affiliates rather than outsourcing to independent suppliers. This paper also confirms that high productivity is related with offshore sourcing. These findings are basically robust even after industry and firm-size are controlled for. |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:07024&r=bec |
| By: | Christian Belzil (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Michael Bognanno (Department of economics - [Temple University]) |
| Abstract: | This paper explores the dynamics of wage growth in corporate hierarchies. Using panel data techniques, we estimate the causal effect of current and past transitions in reporting level and past earnings growth on components of current earnings and earnings growth using a large panel of US executives. After conditioning on unobserved heterogeneity, current compensation growth is positively correlated with past promotion outcomes but negatively correlated with past compensation growth. In a flexible model of wage growth, there is an important asymmetry between the effect of a promotion and a demotion. The effect of promotion is smaller in magnitude than the effect of a demotion. The causal effect of a promotion is positive on both growth in base pay and total cash compensation but is negative on bonus growth. The effect of a demotion is negative on growth in all pay components. |
| Keywords: | earning growth ; promotion ; reputation |
| Date: | 2007–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00142838_v1&r=bec |
| By: | Rodolfo Apreda |
| Abstract: | In this paper we put forward an alternative approach to dealing with the Charter of any organization, that essential document which ought to be regarded as the mainstay of governance. In the first place, we show that an organization carries out its tasks by becoming a responsive mechanism to fulfill stakeholders’ demands as well as costly restraints stemming from transactional environments. In the second place, organizations behave like conflict-systems within which political issues are of the essence when coping with power, influence, control and authority; on these grounds, we give heed to agenda building and the problem of factions. We argue that such three-tiered structure stands for the preconditions of any Charter. Lastly, we set up the Charter as a compact of regulatory and discretionary governance, comprised not only by the articles and certificate of incorporation, but also internal bylaws of the organization, the Statute of Governance, the Code of Good Practices, and provisions for upgrading, overhauling, and even changing the architecture of governance in its entirety. |
| Keywords: | charter, corporate governance, stakeholders, transactional environments, conflict-systems, regulatory governance. |
| JEL: | G30 G34 G20 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:346&r=bec |
| By: | Pengfei Wang; Yi Wen |
| Abstract: | Under aggregate technology shocks, both aggregate inputs and sectorial inputs decline initially and then rise permanently. However, under sector-specific technology shocks, sectorial inputs decline permanently. In addition, sectorial output is very responsive to aggregate technology shocks but not so to sector-specific technology shocks. We show that a flexible-price RBC model with firm entry and exit is consistent with these stylized facts. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2007-18&r=bec |
| By: | Gary D. Hansen |
| URL: | http://d.repec.org/n?u=RePEc:cla:uclaol:421&r=bec |
| By: | Christopher C. Klein |
| Abstract: | This article fills in some notable gaps in the literature on the existence and empirical implementation of dual cost and production models embodying the time utilization of capital. A proof of the existence of such dual cost and production functions is provided; previous results of Betancourt (1986) and Klein (1984) are extended to the general N-input-factor, continuously variable time-utilization case; and the restrictive conditions under which a conventional neoclassical empirical cost model captures the characteristics of a capital-utilization technology are derived. The general specification of cost functions that capture utilization effects is indicated. |
| Keywords: | duality, capital utilization, time in production. |
| JEL: | C81 D24 L23 |
| URL: | http://d.repec.org/n?u=RePEc:mts:wpaper:200704&r=bec |
| By: | Spitz-Oener, Alexandra |
| Abstract: | The increased diffusion of computers is one of the fundamental changes at workplaces in recent decades. While the majority of workers now spend a substantial fraction of their working day with a computer, research on the wage effect of computer use effectively came to a halt after DiNardo and Pischke [1997] found that wages were also positively associated with pencil use, calling into question the ability to distinguish the effect of computers from other confounding factors. Using the same data set as DiNardo and Pischke, but a more recent wave, this paper revitalizes the discussion by showing that the pencil effect disappeared in 1998/99, whereas the computer effect is still present. Computer users - but not pencil users - have experienced a pronounced shift towards analytical and interactive tasks, for which they are rewarded in the workplace. |
| Keywords: | Computer wage differential, pencil wage differentials, changing skill requirements |
| JEL: | C13 J31 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5508&r=bec |
| By: | Leonardo Becchetti; Rocco Ciciretti; Iftekhar Hasan |
| Abstract: | Corporate social responsibility (CSR) is increasingly a core component of corporate strategy in the global economy. In recent years its importance has become even greater, primarily because of the financial scandals, investors’ losses, and reputational damage to listed companies. While corporations are busy adopting and enhancing CSR practices, there is (beyond very few notable exceptions) no established empirical research on CSR’s impact and relevance in the capital market. This paper investigates this issue by tracing the market reaction to corporate entry and exit from the Domini 400 Social Index, recognized as a CSR benchmark, between 1990 and 2004. The paper highlights two main findings: a significant upward trend in absolute value abnormal returns, irrespective of the type of event (for example, addition or deletion from the index), and a significant negative effect on abnormal returns after exit announcements from the Domini index. The latter effect persists even after controlling for concurring financial distress shocks and stock market seasonality. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2007-06&r=bec |
| By: | Baldwin, Richard; Robert-Nicoud, Frédéric |
| Abstract: | A simple model of offshoring, which depicts offshoring as ‘shadow migration,’ permits straightforward derivation of necessary and sufficient conditions for the effects on wages, prices, production and trade. We show that offshoring requires modification of the four classic international trade theorems, so econometricians who ignore offshoring might reject the Heckscher-Ohlin theorem when a properly specified version held in the data. We also show that offshoring is an independent source of comparative advantage and can lead to intra-industry trade in a Walrasian setting. The model is extended to allow for two-way offshoring between similar nations, and to allow for monopolistic competition. |
| Keywords: | inter-industry trade; intra-industry trade; offshoring; shadow migration; trade theorems |
| JEL: | F02 F12 L22 R11 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6218&r=bec |
| By: | Boockmann, Bernhard; Steffes, Susanne |
| Abstract: | Job mobility and employment durations can be explained by different theoretical approaches, such as job matching or human capital theory or dual labor market approaches. These models may, however, apply to different degrees at different durations in the employment spell. Standard empirical techniques, such as hazard rate analysis, cannot deal with this problem. In this paper, we apply censored quantile regression techniques to estimate employment durations of male workers in Germany. Our results give some support to the job matching model: individuals with a high risk of being bad matches exhibit higher exit rates initially, but the effect fades out over time. By contrast, the influence of human capital variables such as education and further training decreases with employment duration, which is inconsistent with the notion of increasing match-specific rents due to human capital accumulation. The results also suggest that the effects of certain labor market institutions, such as works councils, differ markedly between short-term and long-term employment, supporting the view that institutions give rise to dual labor markets. |
| Keywords: | Job Durations, Mobility, Matching, Human Capital, Quantile Regression |
| JEL: | C41 J62 J63 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5502&r=bec |
| By: | Shingo Ishiguro (Graduate School of Economics, Osaka University) |
| Abstract: | This paper provides a dynamic general equilibrium framework to investigate how organizations change the modes to govern transactions over time. We show that the agency problem becomes less serious when the economy is developed well so that large market size favors decentralized organizations having more specialization. We then show that different organizational modes endogenously emerge even in the same economy and cause endogenous process of economic development. |
| Keywords: | Economic Development, Incentive Contracts, Moral Hazard, Specialization |
| JEL: | D82 G30 L22 O11 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:0714&r=bec |
| By: | Lorino, Philippe (ESSEC Business School) |
| Abstract: | We analyze the role of management instruments in the development of collective activity and in the dynamics of organization, recurring to pragmatic and semiotic theories. In dualist representation-based theories (rationalism, cognitivism), instruments are seen as symbolic reflections of situations, which enable actors to translate their complex concrete activities into computable models. In interpretation-based theories (pragmatism, theory of activity, situated cognition), instruments are viewed as signs interpreted by actors to make sense of their collective activity, in an ongoing and situated manner. Instruments combine objective artefacts and interpretive schemes of utilization. They constrain interpretation and utilization, but do not completely determine them: they define genus (generic classes) of collective activity, but they leave space for individual or local interpretive schemes and stylistic creation in using them. A major part of organizational dynamics takes place in the permanent interplay between instrumental genus and styles. Whereas representation-based theories can be acceptable approximations in stable and reasonably simple organizational settings, interpretation-based theories make uncertain and complex situations more intelligible. They view emotions and creativity as a key part of the interpretive process, rather than as external biases of a rational modelling process. For future research, we wish to study how interpretation-based theories should impact managerial practices and improve, not only intelligibility, but also actionability of instruments and situations. |
| Keywords: | Collective Activity; Genus; Instruments; Interpretation; Management Instruments; Performance Management; Pragmatism; Semiotics; Style |
| JEL: | M00 Z00 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-07007&r=bec |
| By: | Ed Nosal; Michael Smart |
| Abstract: | We study the consequences of the introduction of widespread limited liability for corporations. In the traditional view, limited liability reduces transactions costs and enhances investment incentives for individuals and firms. But this view does not explain several important stylized facts of the British experience, including the slow rate of adoption of limited liability by firms in the years following legal reforms. We construct an alternative model that accounts for this and other features of the nineteenth century British experience. In the model, project risk is private information, and a firm’s decision to adopt limited liability may be interpreted in equilibrium as a signal the firm is more likely to default. Hence less risky firms may choose unlimited liability or forego investments entirely. We show the choice of liability rule can lead to "development traps," in which profitable investments are not undertaken, through its effect on equilibrium beliefs of uninformed investors in the economy. |
| Keywords: | Capital market |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:0703&r=bec |
| By: | Emilie Dargaud (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]) |
| Abstract: | When it examines the risk of coordinated effects, an antitrust authority will usually compare the situation where the merger is accepted with an attendant risk of collusion with the benchmark case in which competition is present ex-post. The main objective of this paper is to show that the antitrust authority must take into account the possibility for firms to collude if a merger is rejected. In fact, firms can have incitations to make collusion ex-post (after a rejection of a merger) whereas they would not make collusion ex-ante. All the papers on mergers and collusion tend to look at a minimal discount factor threshold for collusion to be sustained. This article does not only suggest necessary and sufficient conditions for collusion to be enforced but it also analyses the choice which firms have as to whether to collude. We consider an industry with cost-asymmetric firms and we study the analysis of collusion under leniency programmes. |
| Keywords: | leniency programme ; merger ; oligopoly supergame |
| Date: | 2007–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00142435_v1&r=bec |
| By: | Nathalie Havet (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]) |
| Abstract: | L'objet de cet article est d'évaluer la valorisation salariale et professionnelle des formations continues, formelles et informelles, en centrant l'analyse sur les différences entre sexes. Pour ce faire, les données canadiennes de l'Enquête sur le miliau du travail et les employés (EMTE) 1999-2000 sont utilisées. On estime, par maximum de varisemblance simulé, un probit trivarié récursif qui modélise simultanément la probabilité de suivre les différentes formations en entreprise et leur influence sur l'obtention d'une promotion. Les rendements salariaux des formations en entreprise et la rentabilité des promotions sont évalués à l'aide d'équation de salaires où ces variables sont instrumentées. |
| Keywords: | différences hommes/femmes ; formation professionnelle ; maximum de vraisemblance simulé ; probit multivariée ; promotion |
| Date: | 2007–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00142878_v1&r=bec |
| By: | Schmidt, Tobias |
| Abstract: | In this paper we analyse the decision of firms in the Canadian manufacturing sector to co-operate on innovation projects. Our focus is on the motives behind this decision and the firm characteristics, both general and with respect to innovation activities, which influence the motives for innovation co-operation. Using data from the Canadian Survey of Innovation 2005 we find that the factors influencing the decision to co-operate in order to access external knowledge are very similar to those influencing cost-sharing motives. We also show that public funding leads firms to cooperate in order to access external knowledge and R&D. |
| Keywords: | Innovation Co-operation, Motives for Co-operation, Canadian Survey of Innovation |
| JEL: | L22 O31 O32 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5506&r=bec |
| By: | Robert E. Hall; Susan E. Woodward |
| Abstract: | The standard venture-capital contract rewards entrepreneurs only for creating successful companies that go public or are acquired on favorable terms. As a result, entrepreneurs receive no help from venture capital in avoiding the huge idiosyncratic risk of the typical venture-backed startup. Entrepreneurs earned an average of $9 million from each company that succeeded in attracting venture funding. But entrepreneurs are generally specialized in their own companies and bear the burden of the idiosyncratic risk. Entrepreneurs with a coefficient of relative risk aversion of two would be willing to sell their interests for less than $1 million at the outset rather than face that risk. The standard financial contract provides entrepreneurs capital supplied by passive investors and rewards entrepreneurs for successful outcomes. We track the division of value for a sample of the great majority of U.S. venture-funded companies over the period form 1987 through 2005. Venture capitalists received an average of $5 million in fee revenue from each company they backed. The outside investors in venture capital received a financial return substantially above that of publicly traded companies, but that the excess is mostly a reward for bearing risk. The pure excess return measured by the alpha of the Capital Asset Pricing Model is positive but may reflect only random variation. |
| JEL: | G12 G24 G32 L14 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13056&r=bec |
| By: | Emrah Arbak (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Marie-Claire Villeval (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]) |
| Abstract: | When it examines the risk of coordinated effects, an antitrust authority will usually compare the situation where the merger is accepted with an attendant risk of collusion with the benchmark case in which competition is present ex-post. The main objective of this paper is to show that the antitrust authority must take into account the possibility for firms to collude if a merger is rejected. In fact, firms can have incitations to make collusion ex-post (after a rejection of a merger) whereas they would not make collusion ex-ante. All the papers on mergers and collusion tend to look at a minimal discount factor threshold for collusion to be sustained. This article does not only suggest necessary and sufficient conditions for collusion to be enforced but it also analyses the choice which firms have as to whether to collude. We consider an industry with cost-asymmetric firms and we study the analysis of collusion under leniency programmes. |
| Keywords: | endogenous switching models ; experiment ; influence ; leadership ; voluntary contribution |
| Date: | 2007–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00142461_v1&r=bec |
| By: | Fabio Berton; Pietro Garibladi |
| Abstract: | The liberalization of fixed term contracts in Europe has led to a two tier regime, with a growing share of jobs covered by temporary contracts. The paper proposes a matching model with direct search in which temporary and permanent jobs coexist in a long run equilibrium. When temporary contracts are allowed, firms are willing to open permanent jobs in as much as their job filling rate is faster than that of temporary jobs. From the labour demand standpoint, a simple trade-off emerges between an ex-ante job filling rate and ex-post flexible dismissal rate. From the labor supply standpoint, a trade-off emerges between an ex-ante lower job finding rate and ex-post larger retention rate. The model features a natural sorting of firms and workers into permanent and temporary jobs. It is also consistent with the observation that workers hired on a permanent contract receive more training. The paper shows that the transition from a rigid to a two a tier regime system is always associated with a transitory fall in unemployment. |
| Keywords: | Matching Models, Temporary Jobs. |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wplabo:51&r=bec |
| By: | Jacob Funk Kirkegaard (Peterson Institute for International Economics) |
| Abstract: | This working paper evaluates the validity of available data on and the extent of the impact of offshoring on service-sector labor markets in the United States, EU-15, and Japan. A three-tier data validity hierarchy is identified. The impact of offshoring on employment in the three regions is found to be limited. Correspondingly, developing Asia is unlikely to experience large employment gains as a destination region. The paper highlights the case of the Indian IT industry, where the majority of job creation has been in local Indian companies rather than foreign multinationals. Domestic entrepreneurs have played a crucial role in the growth of the Indian IT-related service industry. However, increased tradability of services and associated skill bias in favor of higher skilled workers could have an uneven employment impact on developing Asia. Some high-skilled groups are benefiting and will continue to benefit dramatically from new employment opportunities and rising wage levels. Meanwhile, the same skill bias may eliminate many employment opportunities for unskilled or low-skilled groups in the region. Developing Asian countries therefore face a double educational challenge in the coming years: the need to simultaneously improve both primary aCreation-Date: 2006-06 |
| Keywords: | Service Sectors, Offshoring, Production Relocation, Data Source Validity, Automation, Highly Skilled Workers |
| JEL: | F23 J21 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp07-2&r=bec |