nep-bec New Economics Papers
on Business Economics
Issue of 2012‒02‒08
fourteen papers chosen by
Christian Calmes
Universite du Quebec en Outaouais

  1. Equilibrium strategic overbuying By Éric Avenel, University of Rennes 1 - CREM-CNRS, France; Clémence Christin, Düsseldorf Institute for Competition Economics, Deutschland
  2. The Determinants of Intrafirm Trade: Evidence from French Firms By Gregory Corcos; Delphine M. Irac; Giordano Mion; Thierry Verdier
  3. Does Labor Diversity Promote Entrepreneurship? By Marianna Marino; Pierpaolo Parrotta; Dario Pozzoli
  4. Economic Performance of U.S. Multinational Agribusinesses: Foreign Direct Investment and Firm Strategy By Garcia-Fuentes, Pablo; Ferreira, Gustavo; Kennedy, P. Lynn
  5. WP 115 - More flexibility for more innovation? Evidence from the Netherlands By Eva Wachsen; Blind, K.
  6. Trade Liberalization, Mergers and Acquisitions, and Intra-Industry Reallocations By Peter Arendorf Bache; Anders Laugesen
  7. Team Incentives: Evidence from a Firm Level Experiment By Bandiera, Oriana; Barankay, Iwan; Rasul, Imran
  8. Accruals Anomaly in Agriculture Financial Economics By Arthur, Bruno; Katchova, Ani L.
  9. Who Starts a Business and Who Is Self-Employed in Germany By Michael Fritsch; Alexander Kritikos; Alina Rusakova
  10. The Provision of Relative Performance Feedback Information: An Experimental Analysis of Performance and Happiness By Ghazala Azmat; Nagore Iriberri
  11. Coffee Differentiation: Demand Analysis at Retail Level in the US Market By Alamo, Carmen I.; Malaga, Jaime
  12. Analysis of Fruit Consumption in the U.S. with a Quadratic AIDS Model By Mekonnen, Dawit K.; Huang, Chung L.; Greg, Fonsah
  13. Determinants of E-commerce adoption by franchisors: Insights from the U.S. market By Rozenn Perrigot, Graduate School of Management (IGR-IAE), University of Rennes 1 & ESC Rennes School of Business - CREM-CNRS, France; Thierry Pénard, University of Rennes 1 - CREM-CNRS, France
  14. Peer Effects and Social Preferences in Voluntary Cooperation By Thöni, Christian; Gächter, Simon

  1. By: Éric Avenel, University of Rennes 1 - CREM-CNRS, France; Clémence Christin, Düsseldorf Institute for Competition Economics, Deutschland
    Abstract: We consider two firms competing both to sell their output and purchase their input from an upstream firm, to which they offer non-linear contracts. Firms may engage in strategic overbuying, purchasing more of the input when the supplier is capacity constrained than when it is not in order to exclude their competitor from the final market. Warehousing is a special case in which a downstream firm purchases more input than it uses and disposes of the rest. We show that both types of overbuying happen in equilibrium. The welfare analysis leads to ambiguous conclusions.
    Keywords: entry deterrence, overbuying, vertical contracting
    JEL: L12
    Date: 2011–12
  2. By: Gregory Corcos; Delphine M. Irac; Giordano Mion; Thierry Verdier
    Abstract: How well does the theory of the firm explain the choice between intrafirm and arms' length trade? This paper uses firm-level import data from France to look into this question. We find support for three key predictions of property-rights theories of the multinational firm. Intrafirm imports are more likely: (i) in capital- and skill-intensive firms; (ii) in highly productive firms; (iii) from countries with well-functioning judicial institutions. We further bridge previous aggregate findings with our investigation by decomposing intrafirm imports into an extensive and intensive margin. Doing so we uncover interesting patterns in the data that require further theoretical investigation.
    Keywords: intrafirm trade, outsourcing, firm heterogeneity, incomplete contracts, internationalization strategies, quality of institutions, extensive margin, intensive margin
    JEL: F23 F12 F19
    Date: 2012–01
  3. By: Marianna Marino (École Polytechnique Fédérale de Lausanne,); Pierpaolo Parrotta (Department of Economics and Business, Aarhus University, Denmark); Dario Pozzoli (Department of Economics and Business, Aarhus University, Denmark)
    Abstract: We find evidence that workforce educational diversity promotes entrepreneurial behavior of employees as well as the formation of new firms, whereas diversity in demographics hinders transitions to selfemployment. Ethnic diversity favors entrepreneurship in financial and business services.
    Keywords: Labor diversity, entrepreneurship, transitions to self-employment
    JEL: C26 J24 L26
    Date: 2012–01–04
  4. By: Garcia-Fuentes, Pablo; Ferreira, Gustavo; Kennedy, P. Lynn
    Abstract: This paper empirically assesses the sequential relationships among firm strategic factors, FDI activity, and economic performance for a sample of U.S.-based Multinational agribusinesses. The most important findings of this research is a positive direct effect of FDI on performance, the complementary effect between FDI and firm strategic factors (positive and significant interaction terms) on performance, and the positive effect of FDI on performance given some thresholds of firm strategic factors. Specifically, it provides insights about the direct effect of FDI on performance, as well as about the joint effect of firm size and FDI, marketing intensity and FDI, and capital intensity and FDI on performance. These findings provide evidence that FDI activity is an important factor for U.S. agribusiness financial strength.
    Keywords: Economic performance, Foreign direct investment, Firm strategic factors, Agribusiness, Agribusiness, International Relations/Trade, Marketing, F230, L250,
    Date: 2012
  5. By: Eva Wachsen (Faculty of Economics and Management, Innovation Economics, Berlin University of Technology); Blind, K.
    Abstract: Labor market flexibility continues to be one of economics, politics and society highly debated topic. In recent years, the impact of increased labor market flexibility on research and innovation has gained more and more attention. Previous studies have shown, depending on the measurement of flexibility as well as on the data that both positive and negative influences can be found. However, the financial flexibility in terms of wage rigidities has hardly been explored empirically. With the use of a unique dataset combining comprehensive information from both employers and employees we can accomplish variables not only to numerical and functional, but also to financial wage flexibility. In a panel probit model, we show that the influences of most of the indicators of wage flexibility are positive and vary by type of innovation. While the variables of wage bargaining has a higher impact on process innovations, information about specific wage levels, however, affects in particular the development of new products. The same applies to a separate consideration of wage bargaining levels. Aspects of numerical and functional labor market flexibility, in contrast, act negative on all types of innovation. Thereby, part time employees affect particularly processes, while flexible employment contracts have a stronger influence on product innovations. It seems that new products depend more on employment status and the resulting motivation of the employees.
    Keywords: Labor market flexibility, innovation, wages, collective bargaining
    Date: 2011–12
  6. By: Peter Arendorf Bache (Department of Economics and Business, Aarhus University, Denmark); Anders Laugesen (Department of Economics and Business, Aarhus University, Denmark)
    Abstract: This paper presents a Melitz-type model of international trade in final goods and Grossman-Hart-Antràs input sourcing by heterogeneous firms. We show how firms self-select into different organizational forms in a continuum of industries with different characteristics. Next, we show how a liberalization of trade leads to short run increases in the number of firm mergers and acquisitions and potentially new gains from trade. Finally, we show how the relative prevalence of integrating firms is increasing in some industries while constant in all others.
    Keywords: international trade, firm heterogeneity, make-or-buy decision, export behavior, productivity gains, M&As
    JEL: D23 F12 F14 F15 L2
    Date: 2012–01–26
  7. By: Bandiera, Oriana (London School of Economics); Barankay, Iwan (University of Pennsylvania); Rasul, Imran (University College London)
    Abstract: Many organizations rely on teamwork, and yet field evidence on the impacts of team-based incentives remains scarce. Compared to individual incentives, team incentives can affect productivity by changing both workers' effort and team composition. We present evidence from a field experiment designed to evaluate the impact of rank incentives and tournaments on the productivity and composition of teams. Strengthening incentives, either through rankings or tournaments, makes workers more likely to form teams with others of similar ability instead of with their friends. Introducing rank incentives however reduces average productivity by 14%, whereas introducing a tournament increases it by 24%. Both effects are heterogeneous: rank incentives only reduce the productivity of teams at the bottom of the productivity distribution, and monetary prize tournaments only increase the productivity of teams at the top. We interpret these results through a theoretical framework that makes precise when the provision of team-based incentives crowds out the productivity enhancing effect of social connections under team production.
    Keywords: rank incentives, team-based incentives, teams, tournaments
    JEL: D23 J33 M52
    Date: 2012–01
  8. By: Arthur, Bruno; Katchova, Ani L.
    Abstract: This study investigates the stock prices of the US agriculture industries with regard to anomalous abnormal returns. Do the Accrual Anomaly documented for the entire US stock market less the financial institutions persists in the US Agriculture Industries? Using the risk-free trading strategy of Sloan (1996), which takes a long position on firms with low accruals and a short position on firms with high accruals, we compare ten portfolios formed by sorting the firms on increasing magnitude of accruals for each main component of the US agriculture. We use the SIC and NAICS codes on the U.S. Department of Agriculture (USDA) classification of the six agricultural industries to merge the balance sheet and income statement data from Standard & Poorâs COMPUSTAT with the farms and farm related firms stock prices from the Center for research in Security Prices (CRSP). We find no convincing evidence of positive abnormal returns for the stocks of US farm and farm related firms, agricultural input firms, food supply chain firms and indirect agribusiness firms. This result suggests that more scrutiny of the stock prices for the US agriculture related firms with regards to the
    Keywords: stock returns, financial assets in agriculture, accrual anomaly, Agricultural Finance, Q14, G11,
    Date: 2012–02
  9. By: Michael Fritsch; Alexander Kritikos; Alina Rusakova
    Abstract: Based on representative data, the German Micro-Census, we provide an overview of the development of self-employment and entrepreneurship in Germany between 1991 and 2010, the first two decades after reunification. We investigate the socioeconomic background of these individuals, their education, previous employment status, and their income level. We observe a unique increase in self-employment in Germany by 40 percent which can partly be attributed to the transformation process of East Germany and to the shift to the service sector. We notice a yearly start-up rate of 1 percent among the working population (almost 20 percent of them being restarters), a decision that pays for the majority of individuals in terms of income. Contrary to other countries, in Germany there is a positive relationship between educational levels and the probability of starting a business.
    Keywords: Entrepreneurship, self-employment, start-ups, Germany
    JEL: L26 D22
    Date: 2012
  10. By: Ghazala Azmat; Nagore Iriberri
    Abstract: This paper studies the effect of providing relative performance feedback information on individuals' performance and affective response, under both piece-rate and flat-rate incentives. In a laboratory setup, agents perform a real effort task and when receiving feedback, they are asked to rate their happiness, arousal and feeling of dominance. Control subjects learn only their absolute performance, while the treated subjects additionally learn the average performance in the session. Under piece-rate, performance is 17 percent higher when relative performance feedback is provided. Furthermore, although feedback increases the performance independent of the content (i.e., performing above or below the average), the content is determinant for the affective response. When subjects are treated, the inequality in the happiness and the feeling of dominance between those subjects performing above and below the average increases by 8 and 6 percentage points, respectively. Under flat-rate, we do not find any effect on either of the outcome variables.
    Keywords: Relative performance, feedback, piece-rate, flat-rate, happiness
    JEL: C91 M52 D03
    Date: 2012–01
  11. By: Alamo, Carmen I.; Malaga, Jaime
    Abstract: Scanned data was used to estimate US coffee demand using an AIDS model. The estimated elasticities have the expected signs and magnitude. Differentiated coffees are complements for regular and unclassified while regular and unclassified coffees are substitutes. These results could be useful in designing marketing strategies by coffee suppliers.
    Keywords: demand, coffee, differentiation, Demand and Price Analysis,
    Date: 2012
  12. By: Mekonnen, Dawit K.; Huang, Chung L.; Greg, Fonsah
    Abstract: The Quadratic AIDS model was estimated to analyze the U.S. fruit consumption using annual per capita consumption data and prices for a demand system consisting of fresh fruit, fruit juice and other processed fruit. All Marshallian own price elasticities are found to be negative and the demand system is dominated by complementarity relationships. Both own and cross price Marshallian elasticities are less than one. Fruit juices are found to be expenditure elastic conditional on the total expenditure on fruits while fresh fruits and other processed fruits are found to be expenditure inelastic. However, fresh fruit is close to being unitary expenditure elastic. After allowing for curvature in the Engel function, U.S. fresh fruit demand is found to be more responsive to changes in income than in previous studies.
    Keywords: Demand estimation, U.S fruit consumption, Quadratic AIDS, AIDS, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Marketing,
    Date: 2012–02
  13. By: Rozenn Perrigot, Graduate School of Management (IGR-IAE), University of Rennes 1 & ESC Rennes School of Business - CREM-CNRS, France; Thierry Pénard, University of Rennes 1 - CREM-CNRS, France
    Abstract: E-commerce has grown tremendously over the past decade. This paper focuses on E-commerce adoption within the franchising sector. We formulate various hypotheses on the factors that influence the adoption of an E-commerce strategy by franchisors, namely the percentage of company-owned stores in the network, network size and age, franchisor resources (franchising fees and franchising royalties), and the allocation of exclusive territories to franchisees. The empirical study relies on a sample of 486 franchise networks in the U.S. market. Our findings suggest that the percentage of company-owned stores and the brand image, as represented by network size, both exert a significant and positive impact on the adoption of an E-commerce strategy, whereas network age and franchising royalties exert a significant and negative impact on the adoption of such a strategy. These findings are discussed with respect to previous research results.
    Keywords: E-commerce, franchising, determinants, plural form, brand image, franchisors' resources
    Date: 2012–01
  14. By: Thöni, Christian (University of St. Gallen); Gächter, Simon (University of Nottingham)
    Abstract: Substantial evidence suggests the behavioral relevance of social preferences and also the importance of social influence effects ("peer effects"). Yet, little is known about how peer effects and social preferences are related. In a three-person gift-exchange experiment we find causal evidence for peer effects in voluntary cooperation: agents' efforts are positively related despite the absence of material payoff interdependencies. We confront this result with major theories of social preferences which predict that efforts are unrelated, or negatively related. Some theories allow for positively-related efforts but cannot explain most observations. Conformism, norm following and considerations of social esteem are candidate explanations.
    Keywords: social preferences, voluntary cooperation, peer effects, reflection problem, gift exchange, conformism, social norms, social esteem
    JEL: C92 D03
    Date: 2012–01

This nep-bec issue is ©2012 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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