nep-bec New Economics Papers
on Business Economics
Issue of 2014‒10‒17
twelve papers chosen by
Vasileios Bougioukos
Bangor University

  1. Firms´ Entry, Monetary Policy and the International Business Cycle By Lilia CAVALLARI
  2. Inward Foreign Investment, Corruption and Firm's Ability: Firm-level Evidence from the Transition Economies By Simin SEURY
  3. Reframing outsourcing through social networks: evidence from Infocert's case study By Giovanni Vaia; Anna Moretti
  4. Redundancy and Firm Characteristics in Chinese State-owned Enterprises Creation Date: 1998 By Y. Wu
  5. "Relaxing the Financial Constraint: The Impact of Banking Sector Reform on Firm Performance - Emerging Market Evidence from Turkey" By Can ERBIL; Ferhan SALMAN
  6. Accounting for Estimation Risk in CAPM-generated Forecasts of Firm Earnings Growth By Salvatore TERREGROSSA
  7. Is More Less? Propensity to diversify via M&A and market reactions By Abigail S. Hornstein; Zachary Nguyen
  8. Financial Intermediaries, Leverage Ratios, and Business Cycles By Yasin MIMIR
  9. What’s in it for the firms? Living wage adoption as signal of ethical practice By Paul Schweinzer; Joanna K. Swaffield
  10. Heterogeneous Firms and Homogenising Standards in Agri-Food Trade - the Polish Meat Case By Frank VAN TONGEREN; Marie-Luise RAU
  11. Horizontal Mergers in the Presence of Capacity Constraints By Zhiqi Chen; Gang Li
  12. Firms’ Strategies and the Effects of Antidumping Policy By CHEN Kun-Ming; CHEN Tsai-Chia

  1. By: Lilia CAVALLARI
  2. By: Simin SEURY
  3. By: Giovanni Vaia (Dept. of Management, Università Ca' Foscari Venice); Anna Moretti (Dept. of Management, Università Ca' Foscari Venice)
    Abstract: In an over-connected world where ICTs dominate firms' development and evolution, outsourcing is an increasingly adopted practice by IT firms facing a third-generation of inter-firm interactions: after the IT and business processes' outsourcing, and then the offshore outsourcing, now we face a sourcing ecosystem tagged as human cloud, where the online work and virtual workers are the center of the new system. Notwithstanding some relevant contributions to the literature about IT outsourcing, still few is known about how coordination between client and supplier can achieve superior outcomes through the development of collaborative practices. In particular, the use of IT tools devoted to sociality as a coordination mechanism has been under-investigated. This research provides insights about how a company can change attitudes and behaviors of client and supplier thanks to an IT tool deputed to collaboration: the social collaboration system. Through an explorative case study, our paper provides two main contributions to the literature about IT outsourcing: i) we show how the adoption of a social collaboration system improves ITO governance and performance, providing further empirical evidence on the role of social mechanisms in ITO relationships; ii) we show how the introduction of a social collaboration system in outsourcing management can influence and change the building blocks of its life-cycle.
    Keywords: IT outsourcing, governance, social collaboration, relational view, outsourcing lifecycle
    JEL: L24 M55
    Date: 2014–04
  4. By: Y. Wu
  5. By: Can ERBIL; Ferhan SALMAN
  6. By: Salvatore TERREGROSSA
  7. By: Abigail S. Hornstein (Department of Economics, Wesleyan University); Zachary Nguyen (Charles River Associates)
    Abstract: Mergers and acquisitions (M&As) could lead to a firm diversifying into new industries, and the impact of this may be related to the firm's prior diversification. Using a panel of 1030 M&A transactions from 2000 to 2010, we find that previously diversified firms are more likely to pursue industrially diversifying M&As. Both previous and contemporary diversification measures are not associated with the firm's cumulative abnormal returns (CARs) at time of announcement but have a lasting effect on various performance measures up to two years later. We find evidence supporting both a diversification discount and premium, which can be predicted by the sign of the CAR at the time of announcement. This suggests that while diversification is necessary to explain firm value, it is not sufficient.
    Keywords: M&A, diversification, event study, operating performance
    JEL: G34 G32
    Date: 2014–03
  8. By: Yasin MIMIR
  9. By: Paul Schweinzer; Joanna K. Swaffield
    Abstract: We analyse the effect of the voluntary adoption of a living wage on firms operating in product markets in which consumption behaviour is at least partly determined by reputational concerns for ethical firm behaviour. We show without recourse to morality or efficiency-wage theories that the adoption of a living wage policy may increase consumer welfare as well as producer surplus through the segmentation of a previously homogenous product market. In particular, we demonstrate that it may serve a firm’s profit maximisation interest to voluntarily adopt a living wage.
    Keywords: Living wage, Signalling, Reputation
    JEL: J31 J38
    Date: 2014–10
  10. By: Frank VAN TONGEREN; Marie-Luise RAU
  11. By: Zhiqi Chen (Department of Economics, Carleton University); Gang Li (School of Economics, Nanjing University)
    Abstract: We analyze the effects of a merger between two competitors in a Bertrand-Edgeworth model. The merger has no effect on equilibrium prices if a pure strategy equilibrium prevails both before and after the merger. Otherwise, the merger leads to higher prices. In the case where a mixed strategy equilibrium prevails before and after the merger, for example, the support of the price distributions shifts rightward after the merger and the post-merger price distribution of each firm stochastically dominates its pre-merger counterpart. The pre-merger capacity level of each firm plays a crucial role in determining the effects of the merger.
    Keywords: Merger, capacity constraints, Bertrand-Edgeworth model
    JEL: L13 L40
  12. By: CHEN Kun-Ming; CHEN Tsai-Chia

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.