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on Business Economics |
| By: | Guiso, Luigi; Sapienza, Paola; Zingales, Luigi |
| Abstract: | We study which dimensions of corporate culture are related to a firm’s performance and why. We find that proclaimed values appear irrelevant. Yet, when employees perceive top managers as trustworthy and ethical, firm’s performance is stronger. We then study how different governance structures impact the ability to sustain integrity as a corporate value. We find that publicly traded firms are less able to sustain it. Traditional measures of corporate governance do not seem to have much of an impact. |
| Keywords: | Corporate culture; Going Public; Integrity |
| JEL: | G30 Z1 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9716&r=bec |
| By: | Dahl, Michael S. (Aalborg University); van Praag, Mirjam (Copenhagen Business School); Thompson, Peter (Georgia Institute of Technology) |
| Abstract: | We study possible motivations for co-entrepreneurial couples to start up a joint firm, using a sample of 1,069 Danish couples that established a joint enterprise between 2001 and 2010. We compare their pre-entry characteristics, firm performance and post-dissolution private and financial outcomes with a selected set of comparable firms and couples. We find evidence that couples often establish a business together because one spouse – most commonly the female – has limited outside opportunities in the labor market. However, the financial benefits for each of the spouses, and especially the female, are larger in co-entrepreneurial firms, both during the life of the business and post-dissolution. The start-up of co-entrepreneurial firms seems therefore a sound in-vestment in the human capital of both spouses as well as in the reduction of income inequality in the household. We find no evidence of non-pecuniary benefits or costs of co-entrepreneurship. |
| Keywords: | entrepreneurship, motives, performance, couples, co-entrepreneurship |
| JEL: | J12 L26 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8186&r=bec |
| By: | Aiello, Francesco; Ricotta, Fernanda |
| Abstract: | This paper analyses the TFP heterogeneity of a sample of manufacturing firms operating in seven EU countries (Austria, France, Germany, Hungary, Italy, Spain and UK). TFP data refer to 2008. The empirical setting is based on the multilevel modelling which provides two main results. Firstly, we show that TFP heterogeneity is largely due to firm-specific features (85% of TFP variability in the empty-model). Interestingly, we find that some key-drivers of TFP (size, family-management, group membership, innovations and human capital) influence heterogeneity in productivity with the expect sign, but do not, on the whole, absorb much of firm-TFP variance, implying that differences in productivity are due to sizable yet unobservable firm characteristics. Secondly, as far the role of localization is concerned, we demonstrate that country-effect is more influential than region-effect in explaining individual productivity. Net of the country-effect, the localisation in different European regions explains about 5% of TFP firm heterogeneity. When considering the case of three individual countries (France, Italy and Spain), location in different regions explains 4.7% of TFP heterogeneity in Italy, while this proportion is lower (2.9%) in France and higher (7.6%) in Spain. |
| Keywords: | TFP heterogeneity, firm-behavior, localization, European countries, multilevel model |
| JEL: | C30 D22 D24 L60 R11 R15 |
| Date: | 2014–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:56222&r=bec |
| By: | Elena Santanera (Ceris - Institute for Economic Research on Firms and Growth,Turin, Italy) |
| Abstract: | An essential part of any firm’s corporate strategy is the choice of the business portfolio through which to compete. When the portfolio’s decision involves more than one business, firms are said to implement a diversification strategy, which is put into action through the firms concomitant entry in different market segments. It implies that the nature of the market segmentation affects the firms’ differentiation degree. The aim of this paper consists in exploring a method for determining the market segmentation that is most informative to understand firms’ diversification strategies, or in other words the market segmentation that most clearly reveals about firms’ main diversification drivers. Given that each business can be described according to a set of business characteristics and by using different levels of detail, in the perspective of understanding firm diversification strategies, it is fundamental to determine the directions in the space of business characteristics along which it is “mostly convenient” to claim the business diversity and which is the “best” level of aggregation at which assess the businesses boundaries. This paper proposes an experimental method to do it. In particular, it empirically discerns which of two particular criteria – functional versus technological – mostly enrich our understanding of the diversification strategies adopted by Italian plastic processing machinery suppliers, finding out the most instructive level of aggregation of the market segmentation – namely the best segment dimension – to investigate the firms diversification strategies. |
| Keywords: | firm diversification, technology, market segmentation, simulation process |
| JEL: | L1 L6 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:csc:cerisp:201317&r=bec |
| By: | Sarah Ben Yahmed (IEP Aix-en-Provence - Sciences Po Aix - Institut d'études politiques d'Aix-en-Provence - Institut d'Études Politiques [IEP] - Aix-en-Provence - Aix Marseille Université - Fondation Nationale des Sciences Politiques [FNSP], GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - École des Hautes Études en Sciences Sociales (EHESS) - CNRS : UMR7316); Sean Dougherty (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, OCDE - Organisation de coopération et de développement économiques - OCDE) |
| Abstract: | This paper examines how import penetration affects firms' productivity growth taking into account the heterogeneity in firms' distance to the efficiency frontier and country differences in product market regulation. |
| Keywords: | Firm productivity growth ; Behind-the-border regulatory barriers ; Product market regulation ; Import competition, international trade |
| Date: | 2014–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00959389&r=bec |
| By: | Cosar, Kerem; Guner, Nezih; Tybout, James R |
| Abstract: | This paper explores the combined effects of reductions in trade frictions, tariffs, and firing costs on firm dynamics, job turnover, and wage distributions. It uses establishment-level data from Colombia to estimate an open economy dynamic model that links trade to job flows in a new way. The fitted model captures key features of Colombian firm dynamics and labor market outcomes, as well changes in these features during the past 25 years. Counterfactual experiments imply that integration with global product markets has increased both average income and job turnover in Colombia. In contrast, the experiments find little role for this country's labor market reforms in driving these variables. The results speak more generally to the effects of globalization on labor markets in Latin America and elsewhere. |
| Keywords: | firm dynamics; inequality; International trade; labor market frictions; size distribution |
| JEL: | E24 F12 F16 J64 L11 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9732&r=bec |
| By: | Agrawal, Ajay; Cockburn, Iain M; Galasso, Alberto; Oettl, Alexander |
| Abstract: | Large firms spawn spin-outs caused by innovations deemed unrelated to the firm's overall business. Small firms generate demand for specialized services that lower entry costs for others. We study the interplay of these two localized externalities and their impact on regional innovation. We examine MSA-level patent data during the period 1975-2000 and find that innovation output is higher in regions where large and small firms coexist. The finding is robust to across-region as well as within-region analysis and the effect is stronger in certain subsamples in a manner that is consistent with our explanation. |
| Keywords: | cities; externalities; firm size diversity; innovation; patents; spin-outs |
| JEL: | L16 O18 O47 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9766&r=bec |
| By: | Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This paper uses a tailor-made newly available data set for enterprises from manufacturing industries in Germany to investigate for the first time the links between the extensive margins of imports (the number of imported goods and the number of countries imported from) and firm profitability. While both extensive margins are highly positively linked with firm productivity, profits are not higher in firms that import more goods and from more countries. This demonstrates that productivity advantages of importers are eaten up by extra costs related to buying more goods in more countries. |
| Keywords: | Imports, intensive margins, profitability, Germany |
| JEL: | F14 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:298&r=bec |
| By: | Felbermayr, Gabriel; Impullitti, Giammario; Prat, Julien |
| Abstract: | Increasing wage inequality between similar workers plays an important role for overall inequality trends in industrialized societies. To analyze this pattern, we incorporate directed labor market search into a dynamic model of international trade with heterogeneous firms and homogeneous workers. Wage inequality across and within firms results from their different hiring needs along their life cycles and the convexity of their adjustment costs. The interaction between wage posting and firm growth explains some recent empirical regularities on firm and labor market dynamics. Fitting the model to capture key features obtained from German linked employer-employee data, we investigate how falling trade costs and institutional reforms interact in shaping labor market outcomes. Focusing on the period 1996-2007, we find that neither trade nor key features of the Hartz labor market reforms account for the sharp increase in residual inequality observed in the data. By contrast, inequality is highly responsive to the increase in product market competition triggered by domestic regulatory reform. |
| Keywords: | Directed Search; Firm Dynamics; International Trade; Product and Labor Market Regulation; Wage Inequality |
| JEL: | E24 F12 F16 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9855&r=bec |
| By: | Giovanni Cerulli (Ceris - Institute for Economic Research on Firms and Growth,Rome,Italy); Bianca Potì (Ceris - Institute for Economic Research on Firms and Growth,Rome,Italy) |
| Abstract: | This paper studies at firm level the relation between managerial capacity in doing innovation and profitability. Moving along the intersection between the evolutionary/neo-Schumpeterian theory and the Resource-Based-View of the firm, we prove econometrically that managerial efficiency in mastering the production of innovation is an important determinant of firm innovative performance and market success, and that it complements traditional Schumpeterian drivers. By using a Stochastic Frontier Analysis, we provide a “direct” measure of innovation managerial capacity, then plugged into a profit margin equation augmented by the traditional Schumpeterian drivers of profitability (size, demand, market size and concentration, technological opportunities, etc.) and other control-variables. We run both a OLS and a series of Quantile Regressions to better stress the role played by companies’ heterogeneous response of profitability to innovative managerial capacity at different points of the distribution of the operating profit margin.Results find evidence of an average positive effect of the innovation managerial capacity on firm profitability, although quantile regressions show that this “mean effect” is mainly driven by a stronger magnitude of the effect for lower quantiles (i.e., for firms having negative or low positive profitability). It means that lower profitable firms might gain more from an increase of managerial efficiency in doing innovation than more profitable businesses. |
| JEL: | O31 D22 C22 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:csc:cerisp:201301&r=bec |
| By: | Behrens, Kristian; Pokrovsky, Dmitry; Zhelobodko, Evgeny |
| Abstract: | We develop a monopolistic competition model with two sectors and heterogeneous agents who self-select into entrepreneurship, depending on entrepreneurial ability. The effect of market size on the equilibrium share of entrepreneurs crucially hinges on properties of the lower-tier utility function for differentiated varieties – its elasticity of substitution and its Arrow-Pratt index of relative risk aversion. We show that the share of entrepreneurs, and the cutoff for self-selection into entrepreneurship, can increase or decrease with market size. The properties of the underlying ability distribution largely determine how income inequality changes with market size. |
| Keywords: | entrepreneurship; heterogeneous agents; income inequality; market size; monopolistic competition |
| JEL: | D31 D43 L11 L26 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:9831&r=bec |
| By: | Nicholas Bloom (Stanford); Renata Lemos; Raffaella Sadun (Harvard); Daniela Scur; John Van Reenen |
| Abstract: | Over the last decade the World Management Survey (WMS) has collected firmlevel 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. |
| Keywords: | Keywords: management, organization, and productivity |
| JEL: | L2 M2 O14 O32 O33 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:sip:dpaper:13-031&r=bec |