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on Business Economics |
| By: | IZUMI Atsuko; KWON Hyeog Ug |
| Abstract: | The objective of running the corporation is a crucial determinant of firm performance. This study investigates the direction of corporate management in the United States and Japan where internal governance structures distinctively differ. Top managers in U.S. firms are exposed strongly to the pressure of maximizing firm value with outsider-dominant boards and market-based shareholders. On the other hand, the target of corporate management in Japanese firms might deviate from performance maximization due to insider-dominant boards and relation-based shareholders.We explore the change in corporate performance and policies surrounding chief executive officer (CEO) forced turnover events from 2000 to 2007. Replacement of CEOs is directed by internal governance force such that the outcomes by CEO forced turnover are likely to reflect the target of corporate management. We find that CEO forced turnover is led by return on assets (ROA) deterioration in both the United States and Japan, and is followed by ROA improvement only in the United States. Post-turnover ROA pickup is accompanied by substantial consolidation: U.S. firms reduce their assets and labor force by a magnitude of 6-8 times more than Japanese firms. Leverage drops significantly after CEO forced turnovers in Japanese firms. Overall results imply that internal governance in U.S. firms is more subject to firm performance maximization. |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:15032&r=bec |
| By: | Quoc-Anh Do (Département d'économie); Yen-Teik Lee (Singapore Management University); Bang Dang Nguyen (University of Cambridge) |
| 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 Nteworks |
| JEL: | D72 D73 G28 G30 G34 G38 H57 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/65rged1j6o9gl9jvp8a09o3eue&r=bec |
| By: | Akhmetova, Zhanar (Department of Economics); Ferguson, Shon (Research Institute of Industrial Economics (IFN)) |
| Abstract: | The paper answers two questions simultaneously. What is the effect of offshoring on firms' total factor productivity? What is the effect of offshoring on skill-biased technological change? We estimate a model of firm production that allows for the effect of offshoring on both total factor productivity and relative skilled labor productivity, and for spillovers between the two. The model is fitted to Swedish firm-level data between 2001–2011. We find positive effects of offshoring intensity on total factor productivity, particularly of small domestic firms and large foreign-owned firms, and on skill-biased technological change in production of firms with low offshoring intensity. Initiating offshoring results in skill-biased technological change in non-production activities of large domestic firms. We show that evaluating the impact of offshoring in a unified framework has implications for the estimation results. |
| Keywords: | Offshoring; Total factor productivity; Skill-biased technological change; Relative skilled labor demand |
| JEL: | D24 F14 F16 |
| Date: | 2015–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1074&r=bec |
| By: | Sydor, Aaron; Tang, Jianmin; Couture, Lydia |
| Abstract: | Two sources of industry productivity growth are firm productivity improvements and the reallocation of productive resources from less productive to more productive firms. This paper studies the role of offshoring in improving industry productivity through these two channels, using a new Canadian manufacturing data base that links the Annual Survey of Manufactures and the Importer Register database at the commodity level. The database provides information on direct imports of intermediate inputs by firms. This allows us to estimate offshoring intensity in Canada at the firm level, and to differentiate those imports by region of origin. |
| Keywords: | Economic accounts, Manufacturing, Productivity accounts |
| Date: | 2015–06–22 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp5e:2015098e&r=bec |
| By: | Hu, Cui; Tan, Yong |
| Abstract: | In this paper, we investigate how the degree of export participation and product differentiation affect firms’ productivity growth through learning-by-exporting. We extend the model of Melitz and Ottaviano (2008) to endogenize the effort firms allocate to learning. This choice depends on both the degree to which firms enter export markets and the extent to which products are differentiated across producers. Using a firm-level dataset from China’s manufacturing industries, we implement propensity score matching methods to test the model’s predictions. Our results indicate that the degree of export participation is positively correlated with TFP improvements. Simultaneously, we empirically verify that firms exporting less differentiated products experience faster TFP growth than those exporting more differentiated products. |
| Keywords: | Export participation, Product differentiation, TFP, Learning-by-exporting. |
| JEL: | D24 F1 L1 |
| Date: | 2015–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65343&r=bec |
| By: | Jaewon Jung (Université de Cergy-Pontoise, THEMA) |
| Abstract: | This paper develops an endogenous growth model based on a Roy-like assignment model in which heterogeneous workers endogenously sort into different technologies/tasks according to their comparative advantage. By modeling explicit distinction between worker skills and tasks, as well as incorporating taskspecific technologies, worker skill distribution and heterogeneous firms, we analyze in depth the technology-skill-growth and offshoring-growth links that are absent in traditional models of endogenous growth. The model provides therefore richer predictions on the relationship between labor market changes and growth due to technology up- and downgrading mechanism at both individual worker and firm levels. |
| Keywords: | Endogenous growth, Technology-augmented skill distribution,Worker/firm heterogeneity, Offshoring, Skill upgrading/polarization |
| JEL: | F43 J24 O4 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2015-08&r=bec |
| By: | Demian, Calin-Vlad; di Mauro, Filippo |
| Abstract: | The elasticity of exports to exchange rate fluctuations has been the subject of a large literature without a clear consensus emerging. Using a novel sector level dataset based on firm level information, we show that exchange rate elasticities double in size when the country and sector specific firm productivity distribution is taken into account in empirical estimates. In addition, exports appear to be sensitive to appreciation episodes, but rather unaffected by depreciations. Finally, only rather large changes in the exchange rate appear to matter. JEL Classification: F14, F41, F31 |
| Keywords: | bilateral trade, exchange rate elasticity, productivity dispersion, TFP |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20151801&r=bec |
| By: | Longley, Dylan |
| Abstract: | This paper explores the needs of small IT firms in Wellington related to staff recruitment and retention. It identifies the critical factors that influence the location, sourcing and matching of candidates’ and their skills and behavioural qualities to the strategic technical, business and human resource management needs of these firms. Successful recruitment into Wellington’s IT industry is a critical sustainable growth factor for many small IT firms. Wellington is considered to be a national hub for the IT services sector. Limits in small firms’ ability to spend for recruitment and salary hamper their productivity and growth due to competition for talent in the sector. Innovations to solve the shortage related problems are taking place. Three alternative approaches are proposed that could contribute to a more stable equilibrium between supply of and demand for skilled IT professionals in Wellington. |
| Keywords: | IT, Industry, Strategic, Human Resource Management, Information Technology, Critical factors, Recruitment, Sustainable growth, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwmba:4463&r=bec |
| By: | Bouattour, Fatma |
| Abstract: | Despite the growing role of Brazil in international trade, exports still face challenges. Following the theoretical framework of Manova (2013), this paper provides firm-level evidence that financial constraints hamper the export performances. Using customs data from Brazil, I show through a probability model, that Large firms exhibit more probability to have export performances when compared with Small and Medium-sized firms, and that this advantage tends to decrease in industries with high external funding needs. The sectors financial vulnerability is proxied with two measures borrowed from Rajan and Zingales (1998) and computed for Brazilian industries over the recent period of the 2000s. The results are globally robust to the modification of the proxies of sectoral external finance dependence, used in the literature. Other tests demonstrate that Brazilian subsidiaries have greater chances to be export performant, and that there is a "regional effect" that makes some Brazilian regions export more than others. This paper also provides an insight of the effects of the global crisis of 2008 on the export patterns. |
| Keywords: | Export; firms; international trade; |
| JEL: | F10 F14 G30 L25 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/15256&r=bec |
| By: | Jitao Tang (Ernst&Young LLP); Rosanne Altshuler (Rutgers University) |
| Abstract: | Most studies of foreign direct investment (FDI) spillovers focus on externalities of inward FDI to host country firms. However, spillovers may also be generated from outward FDI and flow to home country firms. We test for the presence of spillovers from U.S. multinational corporations to domestic U.S. firms in the same industry, downstream industries and upstream industries using firm level information from Standard and Poor’s Compustat data and industry level data on U.S. outward FDI from the U.S. Bureau of Economic Analysis. We find evidence of positive and significant spillovers flowing from multinational customers to their domestic suppliers. This is consistent with most previous studies of spillovers from inward FDI and may suggest a role for domestic policies that subsidize outward FDI. We also find that the presence of beneficial spillovers depends on several firm characteristics in |
| Keywords: | Multinational enterprises, Foreign direct investment, Productivity spillovers, Absorptive capacity |
| JEL: | F21 F23 |
| Date: | 2015–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:rut:rutres:201501&r=bec |
| By: | Nawaz, Ahmad; Iqbal, Sana |
| Abstract: | This paper models the two-way relationship between corporate governance and financial performance of microfinance institutions of Asia. Unlike previous studies, the phenomena of better corporate governance mechanisms present in more financially oriented microfinance institutions is worth investigating. Using a panel of 173 microfinance institutions in 18 Asian countries between 2007 and 2011, a comprehensive corporate governance index (CGI) based on seven corporate governance variables is being constructed as a proxy for the overall corporate governance mechanism of MFIs. Our results suggest that corporate governance has no significant impact on financial stability of MFIs of Asia. However, financial performance to some extent does drives corporate governance mechanisms in MFIs after controlling for MFI related characteristics. We find greater operating expenses and higher portfolio yield to be associated with improved governance practices in microfinance institutions. Study opens new avenues of research in corporate governance and financial performance literature for the academia. Given the revealing results of financial performance as a determinant of better corporate governance practices, policy makers and regulators in Asia should devise corporate governance policies and guidelines in a way not undermining the financial objectives of microfinance. |
| Keywords: | Microfinance; Corporate Governance; Financial Performance; Endogeneity; Asia |
| JEL: | G21 G3 |
| Date: | 2015–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:65327&r=bec |
| By: | Reint E. Gropp; A. Guettler; Vahid Saadi |
| Abstract: | In the wake of the recent financial crisis, many governments extended public guarantees to banks. We take advantage of a natural experiment, in which long-standing public guarantees were removed for a set of German banks following a lawsuit, to identify the real effects of these guarantees on the allocation of credit (“allocative efficiency”). Using matched bank/firm data, we find that public guarantees reduce allocative efficiency. With guarantees in place, poorly performing firms invest more and maintain higher rates of sales growth. Moreover, firms produce less efficiently in the presence of public guarantees. Consistently, we show that guarantees reduce the likelihood that firms exit the market. These findings suggest that public guarantees hinder restructuring activities and prevent resources to flow to the most productive uses. |
| Keywords: | banking, public guarantees, allocative efficiency |
| JEL: | D22 D61 G21 G28 G31 G32 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:7-15&r=bec |
| By: | Yann Algan (Département d'économie); Pierre Cahuc (Department of Economics) |
| Abstract: | This survey reviews the recent research on trust, institutions, and economic development. It discusses the various measures of trust and documents the substantial heterogeneity of trust across space and time. The conceptual mechanisms that explain the influence of trust on economic performance and the methods employed to identify the causal impact of trust on economic performance are reviewed. We document the mechanisms of interactions between trust and economic development in the realms of finance, innovation, the organization of firms, the labor market, and the product market. The last part reviews recent progress to identify how institutions and policies can affect trust. |
| Keywords: | Trust; Growth; Economic Development; Institutions; Well-being |
| JEL: | O11 O43 Z13 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/33o86cn6qp83dot08iir97915s&r=bec |