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on Business Economics |
| By: | Julian di Giovanni; Andrei A. Levchenko; Isabelle Mejean |
| Abstract: | This paper uses a database covering the universe of French firms for the period 1990--2007 to provide a forensic account of the role of individual firms in generating aggregate fluctuations. We set up a simple multi-sector model of heterogeneous firms selling to multiple markets to motivate a theoretically-founded decomposition of firms' annual sales growth rate into different components. We find that the firm-specific component contributes substantially to aggregate sales volatility, mattering about as much as the components capturing shocks that are common across firms within a sector or country. We then decompose the firm-specific component to provide evidence on two mechanisms that generate aggregate fluctuations from microeconomic shocks highlighted in the recent literature: (i) when the firm size distribution is fat-tailed, idiosyncratic shocks to large firms directly contribute to aggregate fluctuations; and (ii) aggregate fluctuations can arise from idiosyncratic shocks due to input-output linkages across the economy. Firm linkages are approximately three times as important as the direct effect of firm shocks in driving aggregate fluctuations. |
| JEL: | E32 F12 F41 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20061&r=bec |
| By: | Dr Alex Bryson |
| Abstract: | Does the introduction of ‘high-performance work systems’ really make a difference to business performance? Using representative data from British workplaces, Michael White and Alex Bryson assess the value of human resource management – and ask whether it is possible for firms to have ‘too little’ or ‘too much. |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:11728&r=bec |
| By: | Tanaka, Yasuhito |
| Abstract: | We study the Stackelberg equilibrium in a symmetric duopoly with differentiated goods in which each firm maximizes its relative profit that is the difference between its profit and the profit of the rival firm. We show that the equilibrium output and price of the good of the leader and those of the follower are equal, that is, the role of leader or follower is irrelevant to the equilibrium, and the equilibrium outputs and prices do not change between the case where the firms are quantity setting firms and the case where the firms are price setting firms. We assume that demand functions are linear and symmetric, the marginal costs of the firms are common and constant, and the fixed costs are zero. |
| Keywords: | differentiated duopoly, relative profit maximization, Stackelberg model, irrelevance of leadership |
| JEL: | D43 |
| Date: | 2014–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55887&r=bec |
| By: | Doan Thi Thanh Ha (International Graduate School of Social Sciences, Yokohama National University and Faculty of International Economics and Business, Foreign Trade University); Kozo KIYOTA (Keio Economic Observatory, Keio University) |
| Abstract: | This paper examines the relationship between productivity differentials and firm turnover in Vietnamese manufacturing. We utilize firm-level data between 2000 and 2009, including the year 2007, when Vietnam joined the World Trade Organization (WTO). Our major findings are twofold. First, the productivity of entrants, survivors, and exiters increased simultaneously from 2006 to 2007. This result suggests that the cutoff productivity level increased after trade liberalization. Second, the resource reallocation between firms was facilitated after the liberalization. These findings are consistent with the implications of the recent models of international trade and firm heterogeneity. |
| Keywords: | Total factor productivity, Aggregate productivity, Trade Liberalization, Firm turnover, Vietnam |
| JEL: | O12 D22 O47 F14 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2014-07&r=bec |
| By: | Satoh, Atsuhiro; Tanaka, Yasuhito |
| Abstract: | We consider a simple model of the choice of strategic variables under relative profit maximization by firms in an asymmetric oligopoly with differentiated substitutable goods such that there are three firms, Firm 1, 2 and 3, demand functions are linear and symmetric, marginal costs are constant, there is no fixed cost, Firm 2 and 3 have the same cost function, but Firm 1 has a different cost function. In such a model we show that there are two pure strategy sub-game perfect equilibria. One is such that all firms choose the outputs as their strategic variables, and the other is such that Firm 2 and 3 choose the outputs as their strategic variables, and Firm 1 chooses the price as its strategic variable. |
| Keywords: | relative profit maximization; asymmetric oligopoly; choice of strategic variables |
| JEL: | D43 |
| Date: | 2014–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55886&r=bec |
| By: | Larry Qiu (University of Hong Kong); Miaojie YU (Peking University) |
| Abstract: | This paper provides a theoretical and empirical analysis of the effects of one-sided tariff cuts on firms’ export product scope. The theoretical model explicitly incorporates cost of management in addition to the commonly used production cost. The analysis predicts that the home country’s tariff cut, a home firm’s export product scope expands (shrinks) if the firm’s management cost is low (high). These predictions are supported by our empirical analysis based on data on Chinese firms from 2000 to 2006. |
| Keywords: | Multiproduct firm, Management cost, Managerial efficiency, Export product scope, Trade liberalization, China |
| JEL: | F12 F13 F15 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2014-06&r=bec |
| By: | Nicholas Bloom; Renata Lemos; Raffaella Sadun; Daniela Scur; John Van Reenen |
| Abstract: | Over the last decade the World Management Survey (WMS) has collected firm-level management practices data across multiple sectors and countries. We developed the survey to try to explain the large and persistent TFP differences across firms and countries. This review paper discusses what has been learned empirically and theoretically from the WMS and other recent work on management practices. Our preliminary results suggest that about a quarter of cross-country and within-country TFP gaps can be accounted for by management practices. Management seems to matter both qualitatively and quantitatively. Competition, governance, human capital and informational frictions help account for the variation in management. |
| JEL: | E23 M1 M11 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20102&r=bec |
| By: | Tanaka, Yasuhito |
| Abstract: | We study the choice of strategic variables by firms in a duopoly in which two firms produce differentiated substitutable goods and each firm maximizes its relative profit that is the difference between its profit and the profit of the rival firm. We consider a two stage game such that in the first stage the firms choose their strategic variables and in the second stage they determine the values of their strategic variables. We show that when the firms maximize their relative profits, the choice of strategic variables is irrelevant to the outcome of the game in the sense that the equilibrium outputs, prices and profits of the firms are the same in all situations, and so any combination of strategy choice by the firms constitutes a sub-game perfect equilibrium in the two stage game. We assume that demand functions for the goods are symmetric and linear, the marginal costs of the firms are common and constant, and the fixed costs are zero. |
| Keywords: | duopoly, relative profit maximization, choice of strategic variables |
| JEL: | D43 |
| Date: | 2014–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55891&r=bec |
| By: | Anyadike-Danes, Michael (Aston Business School and Enterprise Research Centre, UK); Bjuggren, Carl Magnus (Research Institute of Industrial Economics (IFN)); Gottschalk, Sandra (ZEW, Germany); Hölzl, Werner (WIFO, Austria); Johansson, Dan (HUI Research); Maliranta, Mika (ETLA); Myrann, Anja (Ragnar Frisch Centre for Economic Research, Norway) |
| Abstract: | The contribution of different-sized businesses to job creation continues to attract policymakers’ attention, however, it has recently been recognized that conclusions about size were confounded with the effect of age. We probe the role of size, controlling for age, by comparing the cohorts of firms born in 1998 over their first decade of life, using variation across half a dozen northern European countries Austria, Finland, Germany, Norway, Sweden, and the UK to pin down size effects. We find that a very small proportion of the smallest firms play a crucial role in accounting for cross-country differences in job growth. A closer analysis reveals that the initial size distribution and survival rates do not seem to explain job growth differences between countries, rather it is a small number of rapidly growing firms that are driving this result. |
| Keywords: | Birth cohort; Firm age; Firm size; Firm survival; Firm growth |
| JEL: | E24 L25 M13 |
| Date: | 2014–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1019&r=bec |
| By: | Sari Pekkala Kerr; William R. Kerr; William F. Lincoln |
| Abstract: | Firms play a central role in the selection, sponsorship, and employment of skilled immigrants entering the United States for work through programs like the H-1B visa. This role has not been widely recognized in the literature, and the data to better understand it have only recently become available. This chapter discusses the evidence that has been assembled to date in understanding the impact of high skilled immigration from the perspective of the firm and the open areas that call for more research. Since much of the U.S. immigration process for skilled workers rests in the hands of employer firms, a stronger understanding of these implications is essential for future policy analysis, particularly for issues relating to fostering innovation. |
| JEL: | F15 F22 F23 J15 J31 J44 L14 L26 O31 O32 O33 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20069&r=bec |
| By: | Satoh, Atsuhiro; Tanaka, Yasuhito |
| Abstract: | We study the relation between a Cournot equilibrium and a Bertrand equilibrium in an \emph{asymmetric} duopoly with differentiated goods in which each firm maximizes its relative profit that is the difference between its profit and the profit of the rival firm. Both demand and cost functions are linear but asymmetric, that is, demand functions for the goods are asymmetric and the firms have different marginal cots. We will show that a Cournot equilibrium and a Bertrand equilibrium coincide even in an asymmetric duopoly. |
| Keywords: | asymmetric duopoly, relative profit maximization, equivalence of Cournot and Bertrand equilibria |
| JEL: | D43 |
| Date: | 2014–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55895&r=bec |
| By: | Holger Görg; Marina-Eliza Spaliara |
| Abstract: | Using a large panel of UK manufacturing firms over the period 2000—2009, we consider how firms responded during the most recent financial crisis, estimating models for export market participation decisions and firm growth and survival. The results indicate that financial variables are highly important in predicting export market entry, especially in the midst of the global financial crisis. With respect to firm growth and survival, we find that starters and continuous exporters are more likely to perform well in and out of the crisis than non-exporters |
| Keywords: | Exports, financial crisis, financial health |
| JEL: | F1 L2 G3 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1919&r=bec |