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on Business Economics |
| By: | Bischoff, Oliver; Buchwald, Achim |
| Abstract: | This paper sheds new light on the assessment of firm networks via multiple directorships in terms of corporate firm performance. Using a large sample of European listed firms in the period from 2003 to 2011 and system GMM we find a significant compensation effect on corporate firm performance for the initial negative effect of horizontal multiple directorships by product market competition. In markets with effective competition, horizontal multiple directorships turn out to be an efficient mechanism to increase firm performance and thus assure competitive advantages. By contrast, linkages between up- and downstream firms have no significant influence on financial performance, irrespective of the level of competition intensity. |
| Keywords: | Horizontal and Vertical Firm Networks, Multiple Directorships, Corporate Governance, Product Market Competition, Dynamic Panel |
| JEL: | C23 G32 G34 L14 L25 L40 |
| Date: | 2015–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63413&r=bec |
| By: | MAYNERIS, Florian (Université catholique de Louvain, CORE & IRES, Belgium); PONCET, Sandra (Paris School of Economics (University of Paris 1), CEPII and FERDI); ZHANG, Tao (Shangai University of International Business and Economics) |
| Abstract: | We here consider how Chinese firms adjust to higher minimum wages and how these affect aggregate productivity, exploiting the 2004 minimum-wage reform in China. We find that higher city-level minimum wages reduced the survival probability of firms which were the most exposed to the reform. For the surviving firms, thanks to significant productivity gains, wage costs rose without any negative employment effect. At the city-level, our results show that higher minimum wages affected aggregate productivity growth via both productivity growth in incumbent firms and the net entry of more productive firms. Hence, in a fast-growing economy like China, there is a cleansing effect of labor-market standards. |
| Keywords: | minimum wages, firm-level performance, aggregate TFP, China |
| JEL: | O14 J38 O47 |
| Date: | 2014–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2014044&r=bec |
| By: | Michele Imbruno |
| Abstract: | This paper highlights the crucial role played by international access to intermediate inputs to explain firm-level performance, via two channels simultaneously: trade and FDI. We develop a simple theoretical model showing that trade integration of input market entails an efficiency improvement within firms able to import (gains from input switching) and an efficiency decline within other firms (losses from domestic input availability). At the same time, FDI integration of input market implies non-importers’ efficiency enhancement (gains from input switching) and some ambiguous effects on importers’ efficiency (due to additional losses from foreign input availability). Using firm-level data from the Chinese manufacturing sector over the period 2002-2006, we find some results coherent with our theoretical predictions. |
| Keywords: | Heterogeneous firms, Trade liberalization, FDI, Intermediate inputs, Productivity |
| JEL: | F12 F14 F23 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:wpaper:y:2015:i:154&r=bec |
| By: | Bianchini, Stefano; Krafft, Jackie; Quatraro, Francesco; Ravix, Jacques (University of Turin) |
| Abstract: | This paper investigates the relationship between corporate governance (CG) and innovation according to firms’ age by combining insights from the recent strand of contributions analysing CG and innovation with the lifecycle literature. We find a negative relationship between CG and innovation which is stronger for young firms than for mature ones. The empirical analysis is carried out on a sample of firms drawn from the ISSR isk Metrics database and observed over the period 2003 -2008. The parametric methodology provides results that are consistent with the literature and supports the idea that mature firms are better off than young ones. We check for possible non-linearities by implementing a non-parametric analysis and suggest that the negative relationship between CG and innovation is mostly driven by higher values of CG. |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:uto:labeco:201502&r=bec |
| By: | Elwyn Davies; Andrew Kerr |
| Abstract: | How did Ghanaian manufacturing firms change in the period between 2003 and 2013? This paper presents results from a survey of 1000 firms in Ghana, conducted in 2013, which were randomly selected from the 2003 Ghanaian National Industrial Census. This survey allows us to track survival and exit of firms between 2003 and 2013. We find strong regional differences and also differences for small, medium and large firms. The exit rate of firms in Kumasi, the second city, is lower than in Accra, but the growth rate of firms in Kumasi was also lower. Small firms were more likely to exit than large firms. Overall, the picture we paint of manufacturing in Ghana is not a positive one: total employment by firms operating before 2003 decreased from 134 863 in 2003 to 74 319 in 2013. It remains a question to what extent this was compensated by new employment by firms that entered after 2003, who were not surveyed. We also consider the firm size distribution evolution, and show that selection plays some role in explaining the positive correlation between firm size and age, but that this is less strong than in earlier studies. |
| Keywords: | Firm survival, Firm growth, Ghana, Firm size, Firm size distribution, Selection |
| JEL: | L25 O11 O14 O55 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:csa:wpaper:2015-06&r=bec |
| By: | Do, Quoc-Anh; Lee, Yen-Teik; Nguyen, Bang Dang |
| Abstract: | Using the regression discontinuity design of close gubernatorial elections in the U.S., we identify a significant and positive impact of the social networks of corporate directors and politicians on firm value. Firms connected to elected governors increase their value by 3.89%. Political connections are more valuable for firms connected to winning challengers, for smaller and financially dependent firms, in more corrupt states, in states of connected firms’ headquarters and operations, and in closer, smaller, and active networks. Post-election, firms connected to the winner receive significantly more state procurement contracts and invest more than do firms connected to the loser. |
| Keywords: | close gubernatorial election; corruption; firm value; political connection; procurement; regression discontinuity design; social networks |
| JEL: | D72 D73 G28 G30 G34 G38 H57 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10526&r=bec |
| By: | Andrzej Cieslik (University of Warsaw); Jan Michalek (University of Warsaw); Iryna Nasadiuk (University of Warsaw) |
| Abstract: | Following the new strand in the new trade theory literature that focuses on firm heterogeneity in this paper we investigate determinants of firm export performance in Ukraine. The study is based on the BEEPS firm level data compiled by EBRD and the World Bank. The study covers the period starting in 2005 and ending in 2013. We estimate probit regressions for each year of our sample as well as for the pooled dataset that includes all years. Our pooled estimation results indicate that the probability of exporting is related to the level of productivity, the firm size, R&D expenditure, the share of university graduates in productive employment, as well as the internationalization of firms. The estimation results obtained for particular countries reveal some degree of heterogeneity. In particular, the firm age is significant only in the last years of our sample. |
| Keywords: | Export activity, firm heterogeneity, Ukraine |
| JEL: | F14 P33 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2015:no41&r=bec |
| By: | Gabriel Ulyssea (Department of Economics PUC-Rio) |
| Date: | 2014–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:rio:texdis:632&r=bec |
| By: | Kerai, Anita; Sharma, Sunil |
| Abstract: | Extant research on influence of ownership structure on innovation suggests a positive relationship between business group affiliation and innovation. While it is true that firms affiliated to business groups seem to benefit from availability of internal capital, determinants that influence the process of innovation have not been examined. This Paper aims to study the influence of network diversity on innovation for firms affiliated to a business group. We draw upon literature on resource based and principal-agency literature to study nature of knowledge exploration and exploitation by business group firms. We argue that network diversity impacts nature of innovation by business group firms. |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:13335&r=bec |
| By: | Primo Autore (ISTAT, Istituto Nazionale di Statistica); Secondo Autore (DISCE, Università Cattolica) |
| Abstract: | This paper provides an empirical investigation of the impact of innovation on firms' economic performance pinpointing complementarities between product and marketing innovation during the period 1998-2008. Firms' profitability and productivity are simultaneously estimated, thus allowing for consistent and robust estimates of the relationship being tested. The conceptual framework in which we have developed the analysis bridges the gap between the management (organization) approach, from which we grasp the notion of a firm's market orientation to innovation, and the economics of innovation perspective. The results show that being a persistent product-innovating and market-oriented firm significantly affects profitability, although the estimated impact is relatively mild. The gain in productivity determined by investing in R&D is relatively small and in line with the corresponding gain attributable to investing in marketing and organizational innovations. Conversely, capital deepening as measured by the capital-labor ratio-exerts a larger impact on productivity, thus underlining how knowledge capital plays a less relevant role. This result emphasizes a crucial weakness of Italian manufacturing firms, because knowledge investment is the key to future economic growth. The estimates we have presented cover a sufficiently long time interval, thus enabling us to perform different robustness tests. |
| Keywords: | Product Innovation, Market Orientation, European Community Innovation Survey, Profitability, Productivity |
| JEL: | L25 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie2:dises1505&r=bec |
| By: | Jan Hanousek (CERGE-EI, Charles University and the Czech Academy of Sciences, Prague); Evžen Kočenda; Anastasiya Shamshur |
| Abstract: | Using a stochastic frontier model and a comprehensive dataset, we study factors that affect corporate efficiency in Europe. We find that (i) larger firms are less efficient than smaller firms, (ii) greater leverage contributes to corporate efficiency, and (iii) high competition is less conductive to efficiency than moderate or low competition. In terms of ownership, we find that (iv) efficiency increases when a majority owner must deal with minority shareholders and that (v) domestic majority owners improve efficiency more than foreign majority owners when no minority shareholders are present, but (vi) the opposite is true when minority shareholders hold a substantial fraction of the firm’s equity. In the analysis, we distinguish between a pre-crisis period (2001–2008) and a post-crisis period (2009–2011), and find that our results are sensitive to the period of observation. |
| Keywords: | efficiency; ownership structure; firms; panel data; stochastic frontier; Europe |
| JEL: | C33 D24 G32 L60 L80 M21 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:346&r=bec |