nep-bec New Economics Papers
on Business Economics
Issue of 2014‒08‒02
ten papers chosen by
Vasileios Bougioukos
Bangor University

  1. Does Rising Import Competition Harm Local Firm Productivity in Less Advanced Economies? Evidence from Vietnam's Manufacturing Sector By Tinh Doan; Son Nguyen; Tuyen Tran; Huong Vu; Steven Lim
  2. Capital Market Financing, Firm Growth, Firm Size Distribution By Tatiana Didier; Ross Levine; Sergio L. Schmukler
  3. Regional structural change and small firms’ adaptabilities: Evidence from Italian firm-level data. By Paolo Seri; Tommaso Ciarli
  4. Relative profit maximization in asymmetric oligopoly By Satoh, Atsuhiro; Tanaka, Yasuhito
  5. Does corporate transparency pay off for European listed real estate companies? By Ke, Qiulin; McAllister, Patrick
  6. The role of proximity in retrospective: organizations, ICT and human resources in Italian traditional districts’ firms. By Paolo Seri
  7. Export diversity or focus? What strategy is best for first-time internationalizing SMEs from an emerging market? By Desislava Dikova; Andreja Jaklic; Anze Burger; Aliaz Kuncic
  8. Employment and Wage Insurance within Firms: Worldwide Evidence By Andrew Ellul; Marco Pagano; Fabiano Schivardi
  9. Trade, Wages, and Collective Bargaining: Evidence from France. By J. Carluccio; D. Fougère; E. Gautier
  10. Property and Asset Management in United Kingdom:The REMark study By Thompson, Bob; Yates, Steph

  1. By: Tinh Doan (University of Waikato); Son Nguyen (VNU University of Economics and Business); Tuyen Tran (VNU University of Economics and Business); Huong Vu (University of Waikato); Steven Lim (University of Waikato)
    Abstract: This paper examines whether rising import penetration has an effect on the productivity of domestic firms. The study uses data on a 10-year unbalanced panel of firms in the manufacturing sector in Vietnam from 2000 to 2009. Panel and instrumental variable methods are used to control for firm heterogeneity and endogeneity of import penetration. We find significantly negative effects of import competition on local firms’ productivity. Further investigation on the basis of firm size and industry technology levels shows that SMEs are more adversely affected, but that industry technology level does not matter.
    Keywords: import penetration; productivity; Vietnam
    JEL: F19 L25 P45
    Date: 2014–07–11
  2. By: Tatiana Didier; Ross Levine; Sergio L. Schmukler
    Abstract: Which firms issue equity and debt in domestic and international markets and what happens to their assets, sales, and number of employees? To answer these questions, we assemble a new dataset on firm-level capital raising activity during 1991-2011, which we match with firm attributes for 45,527 listed firms from 51 economies during 2003-2011. We find that only a few of the largest firms issue securities in the median country. Firms issuing bonds are even larger than those issuing equity. Moreover, issuers grow much faster than non-issuers, particularly (a) during the year of issuance, (b) among smaller and younger firms, and (c) in countries with market-based financial systems. Furthermore, the firm size distribution (FSD) of issuers behaves differently from that of non-issuers. Among issuers, smaller firms grow faster than larger ones, tightening their FSD; but among non-issuers, larger firms grow faster than smaller ones, widening their FSD.
    JEL: G15 G30 L25
    Date: 2014–07
  3. By: Paolo Seri (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo"); Tommaso Ciarli (SPRU - Science Policy Research Unit)
    Abstract: The paper analyzes both internal (to the firm) and external (geographical) determinants and obstacles to small firms’ relational and organizational adaptability in mature Italian industries. While presenting a review of the literature accounting for the two dominant typologies of adaptation in Italian mature industries, the chapter emphasizes the lack of systematic analysis on the influences of negative agglomeration externalities on both typologies of small firms’ adaptability. The empirical section distinguishes between district and non-district firms and controls for internal and external determinant to firms adaptabilities. Some interesting results follows regarding the influences played by Italian industrial districts.
    Keywords: Regional Structural Change, Firms Behaviour, Cognitive Anchoring.
    JEL: R11 D21 D22
    Date: 2014
  4. By: Satoh, Atsuhiro; Tanaka, Yasuhito
    Abstract: We analyze Bertrand and Cournot equilibria in an asymmetric oligopoly in which the firms produce differentiated substitutable goods and seek to maximize their relative profits instead of their absolute profits. Assuming linear demand functions and constant marginal costs we show the following results. If the marginal cost of a firm is lower (higher) than the average marginal cost over the industry, its output at the Bertrand equilibrium is larger (smaller) than that at the Cournot equilibrium, and the price of its good at the Bertrand equilibrium is lower (higher) than that at the Cournot equilibrium.
    Keywords: relative profit maximization, asymmetric oligopoly, Cournot and Bertrand equilibria
    JEL: D43 L13
    Date: 2014–07–27
  5. By: Ke, Qiulin; McAllister, Patrick
    Abstract: The objective of the research is to investigate the relationship between financial reporting disclosure and the financial performance of European publicly traded real estate companies. Information risks and agency costs are key issues for investors. Agency costs arise when managers have incentives to pursue their own interests at the expense of investors. A lack of transparent financial information can result in greater information risk for investors who experience increased uncertainty about the true economic value of the firm creating potential adverse selection problems. Without sufficient controls and monitoring, investors will tend to pay the same prices for ‘lemons’ and ‘good’ companies. The topic of corporate governance has attracted major attention in the professional sphere and across different areas of academic research. In real estate sector, there is a body of work; most of them look at US REITS on the relationship between corporate governance and firm performance (e.g , Ghosh and Sirmans, 2001,and 2003; Feng, et al. 2005, Bauer, et. al. 2010; Bianco, et. al. 2007; Hartzell, 2008). In most of these studies, the researchers tended to focus on individual governance variables to find out which of the conventional corporate governance mechanisms, be it board size and independence, insider ownership, ownership concentration play a significant role in the governance structure of US REITS and the REITs performance and market value. Results have been mixed. In these studies, the financial disclosure transparency by REITs as one of corporate governance variables was not explicitly examined, though it is an important governance issue of a firm. In this study, we investigate whether enhanced level of financing reporting disclosure and transparency of European listed real estate companies will reduce the information asymmetry, minimise firm risk and enhance firm’s performance. The level of disclosure and transparency will be proxied by the winners of the EPRA’s best annual report survey conducted by Deloitte. To assess the linkages, a dynamic ordinary least squares model will be employed to test a range of factors that affect corporate disclosure transparency as a corporate governance variable and its impact on firm’s performance.
    Date: 2014
  6. By: Paolo Seri (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo")
    Abstract: The existence of strong complementarities between ICT diffusion, investment in human capital and organizational innovations has been recently stressed both by theoretical and empirical literature on industrial organization and economic growth. For many scholars, one of the reasons of the delay of Italian industries in addressing rising global competitiveness and improving productivity can be traced back to the inability to create the right environment for the synergetic coevolution of the three above-mentioned variables. This paper tests the hypothesis that the coevolution within the firm of the three variables, could have been influenced by the belonging of the firms to industrial districts’ environments. In particular it controls whether firms which have made more use of proximity in their activity express retards or even “lock-in” phenomena in organizational innovations with respect to the two other complementary variables. After discussing the issue of coevolution for the three variables and the role that district environments can play for the formation of phenomena of organizational inertia, we test the hypothesis of co-evolution between organisations, ICT, and human resources through a survey of 223 ‘district’ and ‘non-district’ Italian small firms.
    Keywords: Coevolution, ICT, Human Capital, Organizational Change, Geographical Proximity.
    JEL: R11 D21 O30
    Date: 2014
  7. By: Desislava Dikova; Andreja Jaklic; Anze Burger; Aliaz Kuncic (Institute for International Business/WU Vienna; Faculty of Social Sciences/University of Ljubliana; Faculty of Social Sciences/University of Ljubliana; Economic Development and Globalization Division/United Nations Economic and Social Commission for Western Asia)
    Abstract: The question how much internationalization is beneficial for emerging-market small and medium enterprises (EM SMEs) remains challenging for both international business (IB) scholars and managers. We explore export strategies of first time exporters and focus on the scope of EM SMEs internationalization activities. We tackle the question whether more focused or more diversified internationalization through exporting is beneficial for EM SMEs. We examine the impact of foreign market (geographic) diversification, product diversification and export intensity on firm performance of an entire population of EM SMEs from an emerging east European economy. In addition, we test whether a complex export strategy - an export strategy of simultaneous product- and geographic export diversification - is beneficial for EM SMEs. We use a panel population data of first time Slovenian exporters in the period 1994-2012. We find that diversified internationalization, both in terms of product- and foreign market diversity, and export intensity significantly improve productivity and sales performance for EM SMEs. Furthermore, EM SMEs with complex export strategies enjoy significantly improved productivity and sales performance.
    Keywords: first-time exporters, export performance, export diversification
    Date: 2014–07
  8. By: Andrew Ellul (Indiana University); Marco Pagano (Università di Napoli Federico II CSEF, EEIF, CEPR and ECGI); Fabiano Schivardi (LUISS, EIEF and CEPR)
    Abstract: We investigate the determinants of firms’ implicit employment and wage insurance to employees against industry-level and idiosyncratic shocks. We rely on differences between family and non-family firms to identify the supply of insurance, and between national public insurance programs to gauge workers’ demand for insurance. Using firm-level data from 41 countries, we find that family firms provide greater employment protection but less wage stability. Employment protection comes at a price: family firms pay 5 percent lower wages, controlling for country, industry and time effects. The additional protection afforded by family firms is greater, and the wage discount larger, the less generous the public unemployment insurance program, indicating that firm and government employment insurance are substitutes. The cross-country evidence is broadly confirmed by Italian employee-employer matched data, which also show that in family firms the adjustment to shocks occurs mostly through the hiring margin, while separations are not responsive to shocks. JEL Classification: G31, G32, G38, H25, H26, M40.
    Keywords: risk-sharing, insurance, social security, unemployment, wages, family firms.
    Date: 2014–07–22
  9. By: J. Carluccio; D. Fougère; E. Gautier
    Abstract: Using a unique French firm-level dataset, we study how international trade affects the wage bargaining process at the firm level. Using instrumental variables techniques, we find that exports shocks have a positive effect on the probability that a firm-level wage agreement is signed, while shocks increasing imports of finished goods have the opposite effect. Exports increase wages for all occupational categories, whereas offshoring has heterogeneous effects. In firms where wage agreements are frequently signed, the export wage premium is larger, and blue-collar workers are protected against the negative impact of offshoring on wages.
    Keywords: trade, wages, collective bargaining.
    JEL: F16 J51 E24
    Date: 2014
  10. By: Thompson, Bob; Yates, Steph
    Abstract: The objective of this paper is to look at the performance of Property and Asset Management (PAM) in the UK over the past five years. This part of the property industry suffers from extreme cost pressure to the point where profitability is in question. The paper discusses different business models for PAM and uses a detail process model to pull out the key metrics for the industry. Using the REMark survey of property managers and funds it reports upon the performance of property and asset managers with respect to efficiency and collection performance over a five year period, drawing out key trends.
    Date: 2013

This nep-bec issue is ©2014 by Vasileios Bougioukos. 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.