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on Business Economics |
| By: | Fehr, Ernst (University of Zurich); Brown, Martin (Swiss National Bank); Zehnder, Christian (Harvard Business School) |
| Abstract: | We study the impact of reputational incentives in markets characterized by moral hazard problems. Social preferences have been shown to enhance contract enforcement in these markets, while at the same time generating considerable wage and price rigidity. Reputation powerfully amplifies the positive effects of social preferences on contract enforcement by increasing contract efficiency substantially. This effect is, however, associated with a considerable bilateralisation of market interactions, suggesting that it may aggravate price rigidities. Surprisingly, reputation in fact weakens the wage and price rigidities arising from social preferences. Thus, in markets characterized by moral hazard, reputational incentives unambiguously increase mutually beneficial exchanges, reduce rents, and render markets more responsive to supply and demand shocks. |
| Keywords: | Reputation; Reciprocity; Relational Contracts; Price Rigidity; Wage Rigidity |
| JEL: | C90 D82 E24 J30 J41 |
| Date: | 2008–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:snbwpa:2008_017&r=bec |
| By: | Jacob A. Bikker |
| Abstract: | The adequate performance of banks, insurers and pension funds is of crucial importance to their private and business customers. The prices and quality of financial products sold by such entities are largely determined by operational efficiency and the degree of competition in the markets concerned. Since efficiency and competition cannot be observed directly, various indirect measures in the form of simple indicators or more complex models have been devised and used both in economic theory and in business practice. This paper demonstrates that measuring the performance of financial institutions is no simple matter and that indicators differ strongly in quality. It investigates which methods are to be preferred and how by combining certain indicators stronger measures may be developed. These measures are then subjected to a predictive validity test. |
| Keywords: | concentration, competition, costs, efficiency, performance, profits, banks, insurance firms, pension funds, predictive validity test |
| JEL: | C52 G21 G22 G23 G28 L1 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0836&r=bec |
| By: | Ines Drumond (CEMPRE and Faculdade de Economia, Universidade do Porto); José Jorge (CEMPRE and Faculdade de Economia, Universidade do Porto) |
| Abstract: | This paper assesses the potential procyclical effects of Basel II capital requirements by evaluating to what extent those effects depend on the composition of banks' asset portfolios and on how borrowers' credit risk evolves over the business cycle. By developing a heterogeneous-agent general equilibrium model, in which firms' access to credit depends on their financial position, we find that regulatory capital requirements, by forcing banks to finance a fraction of loans with costly bank capital, have a negative effect on firms' capital accumulation and output in steady state. This effect is amplified with the changeover from Basel I to Basel II, in a stationary equilibrium characterized by a significant fraction of small and highly leveraged firms. In addition, to the extent that it is more costly to raise bank capital in bad times, the introduction of an aggregate technology shock into a partial equilibrium version of the model supports the Basel II procyclicality hypothesis: Basel II capital requirements accentuate the bank loan supply effect underlying the bank capital channel of propagation of exogenous shocks. |
| Keywords: | Business Cycles, Procyclicality, Financial Constraints, Bank Capital Channel, Basel II, Heterogeneity |
| JEL: | E44 E32 G28 E10 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:307&r=bec |
| By: | Christian Calmès (Département des sciences administratives, Université du Québec (Outaouais), et LRSP); Raymond Théoret (Département de stratégie des affaires, Université du Québec (Montréal), et Chaire d'information financière et organisationnelle) |
| Abstract: | After reviewing some basic self-enforcing labour contracts models, we expose how self-enforcing labour market theory can help explain some important dynamic properties of key macroeconomic variables. Calmès (1999, 2003) detail how self-enforcing labour contracts improve the way macroeconomic models account for the response of the economy to external shocks. The introduction of a state-dependent outside opportunity for the manager is the first step in generalizing the theory (Calmès 2007, Thomas and Worrall 2007). In this paper, we discuss the next step, the endogenization of capital. Although desirable, this task is not straightforward as the contract set might no longer be compact in this case. Relatedly, we also discuss the introduction of a third agent (the financial intermediary) in the model. We also analyse the link between stationarity and set convexity when incorporating growth in the model. A stochastic trend may be considered but then the non-convexity issue arises again. The aggregation of heterogeneous individual contracts can also lead to the same problem. |
| Keywords: | Internal propagation mechanisms; Real business cycle; Self-enforcing contract; Risk-sharing hypothesis; Non-convexity. |
| JEL: | E12 E49 J30 J31 J41 |
| Date: | 2009–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:pqs:wpaper:012009&r=bec |
| By: | Sabien Dobbelaere (VU University Amsterdam); Jacques Mairesse (CREST, Institut National de la Statistique et des Études Économiques (INSEE), Merit, Maastricht University, and NBER) |
| Abstract: | Embedding the efficient bargaining model into the R. Hall (1988) approach for estimating price-cost margins shows that both imperfections in the product and labor markets generate a wedge between factor elasticities in the production function and their corresponding shares in revenue. This article investigates these two sources of discrepancies both at the industry level and the firm level using an unbalanced panel of 10646 French firms in 38 manufacturing industries over the period 1978-2001. By estimating standard production functions and comparing the estimated factor elasticities for labor and materials and their shares in revenue, we are able to derive estimates of average price-cost mark-up and extent of rent sharing parameters. For manufacturing as a whole, our estimates of these parameters are of an order of magnitude of 1.17 and 0.44 respectively. Our industry-level results indicate that industry differences in these parameters and in the underlying estimated factor elasticities and shares are quite sizeable. Since firm production function, behavior and market environment are very likely to vary even within industries, we also investigate firm-level heterogeneity in estimated mark-up and rent-sharing parameters. To determine the degree of true heterogeneity in these parameters, we adopt the P.A. Swamy (1970) methodology ailowing to correct the observed variance in the firm-level estimates from their sampling variance. The median of the firm estimates of the price-cost mark-up ignoring labor market imperfections is of 1.10, while as expected it is higher of 1.20 when taking them into account and the median of the corresponding firm estimates of the extent of rent sharing is of 0.62. The Swamy corresponding robust estimates of true dispersion are of about 0.18, 0.37 and 0.35, showing indeed very sizeable within-industry firm heterogeneity. We find that firm size, capital intensity, distance to the industry technology frontier and investing in R&D seem to account for a significant part of this heterogeneity. |
| Keywords: | Rent sharing; price-cost mark-ups; production function; panel data |
| JEL: | C23 D21 J51 L13 |
| Date: | 2009–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20090001&r=bec |
| By: | Damiaan Persyn |
| Abstract: | This paper analyses the wage demands of a sector-level monopoly union facing internationally mobile firms. A simple two-country economic geography model is used to describe how firms relocate in function of international dierences in production costs and market size. The union sets wages in function of the firm level labour demand elasticity and the responsiveness of firms to relocate internationally. If countries are suffciently symmetric lower foreign wages and lower trade costs necessarily lead to lower union wage demands. With asymmetric countries these intuitive properties do not always hold. But even for symmetric countries it holds that small increases in market size or trade costs makes union wages more sensitive to the foreign wage level. |
| Keywords: | Unions, globalisation, economic geography |
| JEL: | J50 J31 F16 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:22808&r=bec |
| By: | Diego Martínez, y José L. Torres (Universidad Pablo de Olavide); Jesús Rodríguez-López (Universidad Pablo de Olavide); José L. Torres (Universidad de Málaga) |
| Abstract: | This paper presents an evaluation on the technological sources of productivity growth across European countries and the U.S. for the period 1980-2004. Technological progress is divided into neutral change and investment specific change. Contribution to productivity growth from each type of technological progress is computed using a growth accounting approach and a general equilibrium approach. Concerning the growth accounting view, the neutral change dominates the effect from the implicit change, and the ICT assets provide most of the implicit technological change. Regarding the general equilibrium approach, ICT assets (specially the hardware equipment) also respond for most of the implicit change affecting productivity growth. |
| Keywords: | Productivity growth, Investment-specific technological change, Neutral technological change. |
| JEL: | O41 O47 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cea:doctra:e2008_12&r=bec |
| By: | Patrick Bolton; Antoine Faure-Grimaud |
| Abstract: | We propose a model of equilibrium contracting between two agents who are "boundedly rational" in the sense that they face time-costs of deliberating current and future transactions. We show that equilibrium contracts may be incomplete and assign control rights: they may leave some enforceable future transactions unspecified and instead specify which agent has the right to decide these transactions. Control rights allow the controlling agent to defer time-consuming deliberations on those transactions to a later date, making her less inclined to prolong negotiations over an initial incomplete contract. Still, agents tend to resolve conflicts up-front by writing more complete initial contracts. A more complete contract can take the form of either a finer adaptation to future contingencies, or greater coarseness. Either way, conflicts among contracting agents tend to result in excessively complete contracts in the sense that the maximization of joint payoffs would result in less up-front deliberation. |
| JEL: | C61 D81 D84 D86 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14654&r=bec |
| By: | Thomas Philippon; Ariell Reshef |
| Abstract: | We use detailed information about wages, education and occupations to shed light on the evolution of the U.S. financial sector over the past century. We uncover a set of new, interrelated stylized facts: financial jobs were relatively skill intensive, complex, and highly paid until the 1930s and after the 1980s, but not in the interim period. We investigate the determinants of this evolution and find that financial deregulation and corporate activities linked to IPOs and credit risk increase the demand for skills in financial jobs. Computers and information technology play a more limited role. Our analysis also shows that wages in finance were excessively high around 1930 and from the mid 1990s until 2006. For the recent period we estimate that rents accounted for 30% to 50% of the wage differential between the financial sector and the rest of the private sector. |
| JEL: | G2 J2 J24 J3 O3 O32 O33 O51 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14644&r=bec |
| By: | Oleksiy Kryvtsov; Virgiliu Midrigan |
| Abstract: | Real rigidities that limit the responsiveness of real marginal cost to output are a key ingredient of sticky price models necessary to account for the dynamics of output and inflation. We argue here, in the spirit of Bils and Kahn (2000), that the behavior of marginal cost over the cycle is directly related to that of inventories, data on which is readily available. We study a menu cost economy in which firms hold inventories in order to avoid stockouts and to economize on fixed ordering costs. We find that, for low rates of depreciation similar to those in the data, inventories are highly sensitive to changes in the cost of holding and acquiring them over the cycle. This implies that the model requires an elasticity of real marginal cost to output approximately equal to the inverse of the elasticity of intertemporal substitution in order to account for the countercyclical inventory-to-sales ratio in the data. Stronger real rigidities lower the cost of acquiring and holding inventories during booms and counterfactually predict a procyclical inventory-to-sales ratio. |
| JEL: | E31 E32 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14651&r=bec |
| By: | Ľuboš Pástor; Pietro Veronesi |
| Abstract: | We survey the recent literature on learning in financial markets. Our main theme is that many financial market phenomena that appear puzzling at first sight are easier to understand once we recognize that parameters in financial models are uncertain and subject to learning. We discuss phenomena related to the volatility and predictability of asset returns, stock price bubbles, portfolio choice, mutual fund flows, trading volume, and firm profitability, among others. |
| JEL: | G0 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14646&r=bec |
| By: | Markku Lanne; Helmut Luetkepohl |
| Abstract: | The role of expectations for economic fluctuations has received considerable attention in recent business cycle analysis. We exploit Markov regime switching models to identify shocks in cointegrated structural vector autoregressions and investigate different identification schemes for bivariate systems comprising U.S. stock prices and total factor productivity. The former variable is viewed as re°ecting expectations of economic agents about future productivity. It is found that some previously used identification schemes can be rejected in our model setup. The results crucially depend on the measure used for total factor productivity. |
| Keywords: | Cointegration, Markov regime switching model, vector error correction model, structural vector autoregression, mixed normal distribution |
| JEL: | C32 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2008/29&r=bec |
| By: | Javier Andrés (Universidad de Valencia); Óscar J. Arce (Banco de España) |
| Abstract: | We develop a dynamic general equilibrium model with an imperfectly competitive bank-loans market and collateral constraints that tie investors credit capacity to the value of their real estate holdings. Banks set optimal lending rates taking into account the effects of their price policies on their market share and on the volume of funds demanded by each customer. Lending margins have a significant effect on aggregate variables. Over the long run, fostering banking competition increases total consumption and output by triggering a reallocation of available collateral towards investors. However, as regards the short-run dynamics, we find that most macroeconomic variables are more responsive to exogenous shocks in an environment of highly competitive banks. Key to this last result is the reaction of housing prices and their effect on borrowers' net worth. The response of housing prices is more pronounced when competition among banks is stronger, thus making borrowers' net worth more vulnerable to adverse shocks and, specially, to monetary contractions. Thus, regarding changes in the degree of banking competition, the model generates a trade-off between the long run level of economic activity and its stability at the business cycle frequency. |
| Keywords: | banking competition, collateral constraints, housing prices |
| JEL: | E32 E43 E44 G21 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0830&r=bec |
| By: | Jan M. Hoem (Max Planck Institute for Demographic Research, Rostock, Germany); Dora Kostova (Max Planck Institute for Demographic Research, Rostock, Germany); Aiva Jasilioniene (Max Planck Institute for Demographic Research, Rostock, Germany); Cornelia Muresan (Max Planck Institute for Demographic Research, Rostock, Germany) |
| Abstract: | By European standards, consensual first unions have been rare in Romania, and they remain so even though their incidence has increased by a factor of almost five since the early 1960s. Rates of conversion of consensual unions into marriages have been cut in half over the same four decades or so, and marriage rates have declined by a similar factor since the fall of state socialism, which is more dramatic because this period is so much shorter. There have been strong ethnic differentials in union-entry rates in the country. |
| Keywords: | Romania |
| JEL: | J1 Z0 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2009-002&r=bec |
| By: | Thierry Lallemand (Université Libre de Bruxelles, SBS-EM, DULBEA); François Rycx (Université Libre de Bruxelles, SBS-EM, CEB, DULBEA and IZA) |
| Abstract: | This paper investigates the effects of the workforce age structure on the productivity of large Belgian firms. More precisely, it examines different scenarios of changes in the proportion of young (16-29 years), middle-aged (30-49 years) and old (more than 49 years) workers and their expected effects on firm productivity. Using detailed matched employer-employee data, we find that a higher share of young (old) workers within firms is favourable (harmful) for firm value added per capita. Results also show that age structure effects on productivity are stronger in ICT than in non-ICT firms. |
| Keywords: | Firm performance, Workforce age structure, Demographic changes |
| JEL: | J21 J31 L25 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:09-02rs&r=bec |
| By: | Albert Park; Dean Yang; Xinzheng Shi; Yuan Jiang |
| Abstract: | We ask how export demand shocks associated with the Asian financial crisis affected Chinese exporters. We construct firm-specific exchange rate shocks based on the pre-crisis destinations of firms' exports. Because the shocks were unanticipated and large, they are a plausible instrument for identifying the impact of exporting on firm productivity and other outcomes. We find that firms whose export destinations experience greater currency depreciation have slower export growth, and that export growth leads to increases firm productivity and other firm performance measures. Consistent with "earning-by-exporting", the productivity impact of export growth is greater when firms export to more developed countries. |
| JEL: | D24 F10 F31 L60 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14632&r=bec |
| By: | Heli Koski; Luigi -Mäkinen Marengo |
| Abstract: | ABSTRACT : Our study aims at shedding light on the organizational mechanisms that produce differences in the firms´ innovation performance. We use a survey data collected from 398 Finnish manufacturing firms for the years 2002 and 2005 to empirically explore whether and which organizational factors explain why certain firms produce larger innovative research output than others, and whether the incentives to innovate that certain organizational practices generate differ between the SME’s and large firms, and between those firms that are operating in low-tech and high-tech industries. Our study indicates that one size does not fit all when it comes to the selection of organizational practices creating a business environment that is fruitful for innovation. There are vast differences in the organizational practices leading to more innovation both between the small and large firms, and between the firms that are functioning in high- and low-tech industries. While innovation in the small firms tend to benefit from the practices that enhance employee participation in the decision-making, the large firms that have more decentralized decision-making patterns do not seem to perform better in terms of innovation than those with a more bureaucratic decision-making structure. The most efficient incentive-based compensation means encouraging innovation among the sampled companies seems to be the ownership of a firm’s stocks by the employees and/or managers. Performance based wages also relates positively to innovation, but only when it is combined with a systematic monitoring of the firm´s performance. |
| Keywords: | innovation, firm size, organizational practices, HRM practices |
| JEL: | L25 M54 O31 |
| Date: | 2009–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1176&r=bec |
| By: | Christian Roessler (Rice University, and University of Queensland, Australia); Philipp Koellinger (Erasmus University Rotterdam, The Netherlands) |
| Abstract: | We model the emergence of organization forms in a game between prospective entrepreneurs. Complementary roles arise endogenously in a way that admits a stable assignment of workers to firms. This contrasts with existing work on job matching, where stability typically requires workers to be substitutes. Our approach demonstrates that the labor market selection of entrepreneurs and their profit-maximizing choices lead to specific technologies in which certain workers are substitutes and others are complements. We give a simple characterization of equilibrium firm memberships and organizations. We show that payoffs in our non-cooperative solution lie in the core of the corresponding cooperative game, and can be obtained in a decentralized process that reduces information and planning requirements for the entrepreneur. |
| Keywords: | Entrepreneurship; job matching; occupational choice; firm formation; firm organization |
| JEL: | L26 J24 C78 D44 |
| Date: | 2008–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20090003&r=bec |
| By: | Garcia-serrano C (Universidad de Alcalá) |
| Abstract: | Using a Spanish survey, this paper investigates the relationship between firm size and working conditions, and whether firm size differences in workersÂ’ job satisfaction can be accounted for by differences in their work environment. The results indicate that: (1) workers in larger firms have a significantly lower level of autonomy and, in general, face worse working conditions; (2) working in large firms has no statistically significant effect on job satisfaction after controlling for working conditions; and (3) no systematic differences exist in worker mobility across firm-size categories. We conclude that observed wage differentials by firm size are utility-equalizing, so they are due to differences in working conditions. |
| Date: | 2008–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2008-30&r=bec |
| By: | David Autor; David Dorn |
| Abstract: | High- and low-wage occupations are expanding rapidly relative to middle-wage occupations in both the U.S. and the E.U. We study the reallocation of workers from middle-skill occupations towards the tails of the occupational skill distribution by analyzing changes in age structure within and across occupations. Because occupations typically expand by hiring young workers and contract by curtailing such hiring, we posit that growing occupations will get younger while shrinking occupations will 'get old.' After verifying this proposition, we apply this observation to local labor markets in the U.S. to test whether markets that were specialized in middle-skilled occupations in 1980 saw a differential movement of both older and younger workers into occupations at the tails of the skill distribution over the subsequent 25 years. Consistent with aggregate trends, employment in initially middle-skill-intensive labor markets hollowed-out between 1980 and 2005. Employment losses among non-college workers in the middle of the occupational skill distribution were almost entirely countered by employment growth in lower-tail occupations. For college workers, employment losses at the middle were offset in roughly equal measures by gains in the upper- and lower-tails of the occupational skill distribution. But gains at the upper-tail were almost entirely limited to young college workers. Consequently, older college workers are increasingly found in lower-skill, lower-paying occupations. |
| JEL: | E24 J11 J21 J24 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14652&r=bec |
| By: | Joseph P.H. Fan; Jun Huang; Randall Morck; Bernard Yeung |
| Abstract: | Where legal systems and market forces enforce contracts inadequately, vertical integration can circumvent these transaction difficulties. But, such environments often also feature highly interventionist government, and even corruption. Vertical integration might then enhance returns to political rent-seeking aimed at securing and extending market power. Thus, where political rent seeking is minimal, vertical integration should add to firm value and economy performance; but where political rent seeking is substantial, firm value might rise as economy performance decays. China offers a suitable background for empirical examination of these issues because her legal and market institutions are generally weak, but nonetheless exhibit substantial province-level variation. Vertical integration is more common where legal institutions are weaker and where regional governments are of lower quality or more interventionist. In such provinces, firms led by insiders with political connections are more likely to be vertically integrated. Vertical integration is negatively associated with firm value if the top corporate insider is politically connected, but weakly positively associated with public share valuations if the politically connected firm is independently audited. Finally, provinces whose vertical integrated firms tend to have politically unconnected CEOs exhibit elevated per capita GDP growth, while provinces whose vertically integrated firms tend to have political insiders as CEOs exhibit depressed per capita GDP growth. |
| JEL: | G38 L22 P14 P16 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14650&r=bec |
| By: | Michiel van Leuvensteijn |
| Abstract: | Boone (2008) introduces a new theory based measure of competition, the so-called Boone-indicator. The indicator is based on the relationship between performance, in terms of profits, and efficiency, measured as marginal costs. Whether the indicator is able to correctly measure competition in practice is an unanswered question yet. In this paper, I provide empirical evidence that the Boone-indicator appropriately is measuring levels of competition. To this purpose, I follow a seminal paper by Genesove and Mullin (1998) where they show that the elasticity-adjusted Lerner index is able to identify regimes of price wars from nonprice wars by comparing the outcomes of this index with independent reports on the regimes of competition for the American sugar industry for the period 1890-1914. Using their data, I construct a proxy for profits. I calculate both the elasticity-adjusted Lerner index as the Boone-indicator for a single firm, the American Sugar Refining Company. Using the same data, I am able to demonstrate empirically that the Boone-indicator is better able to identify the different regimes of competition than the elasticity-adjusted Lerner index. The Boone-indicator, therefore, adds value to the insights provided by the elasticity-adjusted Lerner index. Several robustness checks are performed that show that the results are insensitive for alterations in the profit proxy. |
| Keywords: | competition, measures of competition, sugar industry |
| JEL: | D43 L13 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0837&r=bec |
| By: | Massimiliano Mazzanti (University of Ferrara); Giulio Cainelli (University of Bari); Roberto Zoboli (Catholic University of Milan & CERIS CNR) |
| Abstract: | This paper investigates the empirical link between emission intensity and economic growth, using a very large data set of 61,219 Italian manufacturing firms over the period 2000-2004. As a measure of lagged environmental performance (efficiency) at firm level we exploit NAMEA sector for CO2, NOx, SOx data over 1990-1999. The paper tests the extent to which (past) environmental efficiency/intensity, which is driven by structural features and firm strategic actions, including responses to policies, influences firms growth. Our results show, first, a typical trade off generally appearing for the three core environmental emissions we analyse: lower environmentally efficiency in the recent past allows higher degrees of freedom to firms and relax the constraints for growth, at least in this short/medium term scenario. Nevertheless, the size of the estimated coefficients is not large. Trade off are significant for two emission indicators out of two, but quite negligible in terms of impacts, besides the case of CO2. For example, growth is reduced by far less than 0.1% in association to a 1% increase of environmental efficiency. Environmental efficiency does not seem a primary cost factor and constraint to growth if compared to other factors affecting firm targets and firm competitiveness. In addition, non-linearity seems to characterise the economic growth-environmental performance relationship. Signals of inverted U shape appears: this may be a signal that both firm strategies and recent policy efforts are affecting the dynamic relationship between environmental efficiency and economic productivity, turning it from an usual trade off to a possible joint complementary/co-dynamics, where bad environmental performances hamper firm growth and investments in greener technologies may be associated to positive economic performances of firms and sectors. |
| Keywords: | Firm growth, Manufacturing, Emission intensity, Economic performance, Environmental performance |
| JEL: | C23 D21 O32 Q55 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.99&r=bec |
| By: | Harold Houba (VU University Amsterdam); Evgenia Motchenkova (VU University Amsterdam); Quan Wen (Vanderbilt University, Nashville (TN), USA) |
| Abstract: | For a general class of oligopoly models with price competition, we analyze the impact of ex-ante leniency programs in antitrust regulation on the endogenous maximal-sustainable cartel price. This impact depends upon industry characteristics including its cartel culture. Our analysis disentangles the effects of traditional antitrust regulation and the leniency program. Ex-ante leniency programs are effective if and only if these offer substantial rewards to the self-reporting firm. This is in contrast to currently employed programs that are therefore ineffective. |
| Keywords: | Cartel; Antitrust Policy; Antitrust Law; Antitrust regulation; Leniency program; Self-reporting; repeated game |
| JEL: | L41 K21 C72 |
| Date: | 2008–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080120&r=bec |
| By: | José Pedro Pontes |
| Abstract: | This paper studies the issue of agglomeration versus fragmentation of vertically related industries. While the downstream industry works under perfect competition, the upstream industry is a duopoly where each firm supplies a differentiated input to the competitive firms. These process the inputs under a quadratic production function entailing decreasing returns as in PENG, THISSE and WANG (2006). It is found that fragmentation occurs if the transport cost of final goods is medium to high, while the transport cost of inputs is low. Otherwise, agglomeration prevails. Multiple agglomerated equilibria are possible if the transport cost of intermediate goods is either medium or high. |
| Keywords: | Oligopoly; Vertically-Linked Firms; Location; Spatial Fragmentation. |
| JEL: | L13 R10 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp302008&r=bec |
| By: | Anu Virovere (Institute of Business Administration at Tallinn University of Technology); Merle Rihma (Institute of Business Administration at Mainor Business School) |
| Abstract: | This paper deals with management tools like conflict analysis and ethics auditing. Ethics auditing is understood as an opportunity and agreement to devise a system to inform on ethical corporate behaviour. This system essentially aims to increase the transparency and credibility of a company’s commitment to ethics. At the same time, the process of elaborating this system allows us to introduce the moral dimension into the company’s actions and decisions, thereby completing a key dimension of the production, maintenance and development of trust capital. Conflicts in organizations are directly or indirectly caused by violation of ethical principles. Both conflict analysis and ethics auditing help to lower the number of conflicts. In the first chapter we give an overview of different ethical management instruments. In the next chapters the ethics auditing process and conflict analysis as a management tool are described. Also their use in managing organizations plus raising levels of motivation and effectiveness is shown. |
| Keywords: | business ethics, corporate social responsibility, ethics, ethics auditing, conflict, conflicts analyses, social audits, social reporting, organizational effectiveness. |
| JEL: | M10 M14 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ttu:wpaper:184&r=bec |
| By: | Gautam Bose (School of Economics, The University of New South Wales); Sudipto Dasgupta (Department of Finance, Hong Kong University of Science and Technology); Arghya Ghosh (School of Economics, The University of New South Wales) |
| Abstract: | This paper analyzes the optimality of policy specifications used to regulate the acquisition and operation of local firms by multinational enterprises (MNE). We emphasize the consequence of such regulation on the price of the domestic firm in the market for corporate control. We show that it is optimal to impose ceilings on foreign ownership of domestic firms when the government's objective is to maximize domestic shareholder profits. While the optimal ceiling is high enough for the MNE to gain control of the domestic firm, it nevertheless influences the price that the MNE must pay for the domestic firm's shares to the advantage of the domestic shareholders. Restrictions on transfer pricing are either irrelevant or strictly suboptimal. The consequences of alternative specifications of the government's objective function are also analyzed. |
| Keywords: | Acquisition; Control; Multinational Enterprises; Transfer pricing |
| JEL: | F23 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2008-22&r=bec |
| By: | Filip De Beule; Ilke Van Beveren |
| Abstract: | Using the cluster definitions of the European Cluster Observatory, this paper investigates the link between cluster membership and firm-level product innovation and renewal,using data from the Community Innovation Survey for Belgium. Clustered firms account for 71 percent of total product renewal generated in 2004 and for 53 percent of product innovators; compared to 29 and 47 percent for non-clustered firms, respectivily. Furthermore, cluster membership is shown to be conducive to firm-level product innovation and renewal once firm size, export intensity and reseach inputs are taken into account. Foreign firms are not more prone to carry out product innovation, except for subsidiaries in clusters. |
| Keywords: | Product Innovation, Clusters, Community Innovation Survey, Multinational Firms |
| JEL: | D21 F23 O31 O33 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lic:licosd:22708&r=bec |
| By: | Poonam Mehra |
| Abstract: | This paper tries to analyze the interrelationship between possibilities of conflict in cross border mergers and acquisitions and firm and market characteristics in a two country three firm model. The interaction of asymmetry in firm and market size with the distribution of firms across countries and its effect on the possibilities of conflict is also analysed. |
| Keywords: | mergers, economy, domestic, conflict, cross broader, model, asymmetry, market size, countries, distribution, firms, market size |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:1838&r=bec |
| By: | van Quaquebeke, N.; Zenker, S.; Eckloff, T. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Two large online surveys were conducted among employees in Germany to explore the importance employees and organizations place on aspects of interpersonal respect in relation to other work values. The first study (N = 589) extracted a general ranking of work values, showing that employees rate issues of respect involving supervisors particularly high. The second study (N = 318) replicated the previous value ranking. Additionally, it is shown that the value priorities indicated by employees do not always match their perceptions of actual organizational practices. Particularly interpersonal respect issues that involve employees’ supervisors diverge strongly negative. Consequences and potentials for change in organizations are discussed. |
| Keywords: | work values;interpersonal respect;organizational culture;organizational practices |
| Date: | 2008–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765014311&r=bec |
| By: | Michael Fritsch (Friedrich Schiller University Jena, School of Economics and Business Administration); Florian Noseleit (Friedrich Schiller University Jena, School of Economics and Business Administration) |
| Abstract: | Recent empirical research has found that the effect of new business formation on employment emerges over a period of about ten years and has identified a 'wave' pattern of these effects. In this study, we decompose the overall contribution of new business formation on employment change into direct and indirect effects. The results indicate that indirect effects of new business formation are quantitatively much more important than the direct effects. Furthermore, we find that regional differences of the employment change generated by new business formation can to a large part be explained by respective differences of the indirect effects. Hence, the interaction of the start-ups with their regional environment plays a great role for explaining their impact on regional development. |
| Keywords: | Entrepreneurship, new business formation, regional development, direct and indirect effects |
| JEL: | L26 M13 O1 O18 R11 |
| Date: | 2009–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2009-001&r=bec |
| By: | Jesús Rodríguez (Universidad Pablo de Olavide); José L.Torres (Universidad de Málaga) |
| Abstract: | This paper studies the contribution of Information and Communication Technologies (ICT) on economic growth and labor productivity across the three leading economies in the world: Japan, Germany and the US. We use a dynamic general equilibrium growth model with investment-specific technological change to quantify the contribution to productivity growth in the three countries from different technological progress. We find that contribution to productivity growth due to ICT capital assets is about 0.40 percentage points for Japan and Germany, whereas it is about 0.65 percentage points in the case of the US. Neutral technological change is the main source of productivity growth in Japan and Germany. For the US, the main source of productivity growth derives from investment-specific technological change, mainly associated to ICT. |
| Keywords: | Productivity growth; Investment-specific technological change; Neutral technological change; Information and communication technology. |
| JEL: | O3 O4 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:cea:doctra:e2008_15&r=bec |
| By: | Ljubica Nedelkoska (DFG Research Training Group "Economics of Innovative Change" at the Friedrich Schiller University and the Max Planck Institute of Economics, Jena); Florian Noseleit (DFG Research Training Group "Economics of Innovative Change" at the Friedrich Schiller University and the Max Planck Institute of Economics, Jena) |
| Abstract: | The literature on knowledge spillovers offers substantial evidence that workers, as main carriers of knowledge, play a role in the diffusion of knowledge among firms. One of the channels through which knowledge is diffused is the job-to-job mobility of workers. The purpose of this study is to empirically explore the industry-specific factors that influence the level of job-to-job mobility of highly qualified workers (HQWs) within three-digit industrial sectors. We use panel data from the German social security notifications to explore our research question. We find that HQW job-to-job mobility is dependent on technology-specific and industry's evolution-specific factors. The results show a significant and positive effect of the technological regime and the level of job destruction on the level of voluntary and overall HQW mobility. The intra-industry mobility of this group is also affected by establishment-size effects, the inflow of HQWs from other industries, and the type of industry (service or manufacturing). |
| Keywords: | job-to-job mobility of highly qualified workers, technological and organizational change, knowledge transmission |
| JEL: | D83 J44 J62 O33 |
| Date: | 2008–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2008-095&r=bec |
| By: | Peter Gottschalk (Boston College); Erika McEntarfer (U.S. Department of the Treasury); Robert Moffitt (Johns Hopkins University) |
| Abstract: | We estimate the trend in the transitory variance of male earnings in the U.S. from 1991 to 2005 using an administrative data set of Unemployment Insurance wage reports, the Longitudinal Employer-Employer Dynamics data set (LEHD), and compare the findings to those of Moffitt and Gottschalk (2008) obtained from the Michigan Panel Study of Income Dynamics (PSID). Despite substantial differences between the LEHD and the PSID in the levels of cross- sectional variances of male earnings, the changes over time in transitory variances obtained from estimating two of the models in Moffitt and Gottschalk are quite similar in the two data sets. Specifically, over the 1991-2003 period, transitory variances fell slightly, and then rose slightly, returning in 2003 to the same approximate level they had obtained in 1991. Overall, the analysis of the LEHD data confirms the findings based on the PSID that the transitory variance did not show a trend net of cycle over this period. |
| Date: | 2008–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:696&r=bec |
| By: | Indrit Hoxha; Sebnem Kalemli-Ozcan; Dietrich Vollrath |
| Abstract: | We compare welfare in a calibrated neoclassical model of consumption under autarky to welfare under financial integration. The estimated welfare gains of integration depend intimately on the assumed speed of convergence between domestic and world rates of return. Using observed data from 1960-2000 to derive the initial fundamental characteristics for each of 92 countries, we parameterize the convergence process and calculate welfare under different assumptions regarding rates of convergence. Allowing for realistic rates, we calculate that welfare is nearly six times larger than previously found. Expanding our analysis to include the productivity gains from the inflow of FDI implies welfare gains twelve times larger than found before. Our results indicate substantial gains from international financial integration arising from persistent differences in fundamentals across nations. |
| JEL: | F36 F41 F43 O4 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14636&r=bec |