nep-bec New Economics Papers
on Business Economics
Issue of 2015‒08‒07
twelve papers chosen by
Vasileios Bougioukos
Bangor University

  1. Do exporting firms benefit from retail internationalization? Evidence from France By Cheptea, Angela; Emlinger, Charlotte; Latouche, Karine
  2. Economic and Financial Determinants of Firm Bankruptcy: Evidence from the French Food Industry By Aleksanyan, Lilia; Huiban, Jean-Pierre
  3. The Effect of Mergers, Divestitures, and Board Composition on CEO Compensation Before and After the Financial Crisis By Ralph Sonenshine; Nathan Larson; Michael Cauvel
  4. Seniority Wages and the Role of Firms in Retirement By Frimmel, Wolfgang; Horvath, Gerard Thomas; Schnalzenberger, Mario; Winter-Ebmer, Rudolf
  5. Bargaining, Sorting, and the Gender Wage Gap: Quantifying the Impact of Firms on the Relative Pay of Women By David Card; Ana Rute Cardoso; Patrick Kline
  6. Exporter Heterogeneity and Price Discrimination: A Quantitative View By Jae Wook Jung; Ina Simonovska; Ariel Weinberger
  7. Red tape reduction and firm entry: evidence from an Italian reform By Monica Amici; Silvia Giacomelli; Francesco Manaresi; Marco Tonello
  8. Share of exports to low-income countries, productivity, and innovation: A replication study with firm-level data from six European countries By Joachim Wagner
  9. Export decision under risk By de Sousa, José; Disdier, Anne-Célia; Gaigné, Carl
  10. The Impact of Agricultural Subsidies on the Corn Market with Farm Heterogeneity and Endogenous Entry and Exit By Devadoss, Stephen; Gibson, Mark J.; Luckstead, Jeff
  11. Debt and farm performance By Langton, Steve
  12. The Impact of Innovation in the Multinational Firm By Eduardo Morales; Kamran Bilir

  1. By: Cheptea, Angela; Emlinger, Charlotte; Latouche, Karine
    Abstract: In this paper, we explore the link between globalization of the retail sector and the export activity of firms from their origin country. In a previous paper (Cheptea et al. (2015)), we showed that exporting firm from countries with internationalized retail companies benefit more from this process than firms from other countries. The underlying assumption of this paper is that the main benefits are grasped by the retailers' domestic suppliers. In other words, firms that sell their products under retailers' brands benefit more from the overseas expansion of retailers than other firms. We employ French firm-level data to evaluate the effect for the two types of firms. We identify retailers' suppliers using the certification of French agri-food firms with the private IFS standard, granting them the right to sell their products under a retailer's brand. Our empirical objective is to estimate whether firms with IFS certification have better export performance on markets where French retail companies have established outlets. We find that certified French firms export more than non-certified firms to markets where IFS retailers established outlets (mainly outside Europe). The difference is statistically significant and robust to the use of firm- and country-specific fixed effects. Results are similar for the extensive and the intensive margin of exports.
    Keywords: Multinational retailers, Firm-level exports, Private standards., International Relations/Trade, F12, F14, F23.,
    Date: 2015
  2. By: Aleksanyan, Lilia; Huiban, Jean-Pierre
    Abstract: Despite the strong resilience of the French food industry during the recent economic crisis, the bankruptcy rate for this sector has dramatically increased since 2010. This paper focuses on the economic and financial determinants of firm exit due to bankruptcy in the French food industry and compares them with those for other manufacturing industries. Based on a large sample of firm level data for the period 2001-2012, we show that the bankruptcy risk pattern differs between food industry firms and other manufacturing firms. Firm productivity is an important determinant of a firm's probability of going bankrupt; productivity begins deteriorating 3 years before a failure. Controlling for firm productivity, we also show that credit cost has a positive and significant impact on the probability of bankruptcy. However, firm financing conditions have a lower effect on bankruptcy than productivity.
    Keywords: firm exit, firm bankruptcy, cost of credit, productivity, food industry, Agribusiness, Financial Economics, Industrial Organization, Productivity Analysis, G33, G21, D24,
    Date: 2015
  3. By: Ralph Sonenshine; Nathan Larson; Michael Cauvel
    Abstract: This paper revisits the determinants of CEO compensation using recent data (covering 125 firms from 2003 to 2012) spanning the 2008 financial crisis. Overall, consistent with earlier studies, we find firm size and board composition to be the most consistent indicators of CEO pay. However, pay becomes more performance-oriented in the years after the financial crisis, which may reflect tighter governance. We give particular attention to the role played by changes in the CEO’s scope due to mergers and divestitures – the latter has seldom been considered before. We also investigate how these factors differ by industry.
    JEL: G34 G3 M12 M41
    Date: 2015
  4. By: Frimmel, Wolfgang; Horvath, Gerard Thomas; Schnalzenberger, Mario; Winter-Ebmer, Rudolf
    Abstract: In general, retirement is seen as a pure labor supply phenomenon, but firms can have strong incentives to send expensive older workers into retirement. Based on the seniority wage model developed by Lazear (1979), we discuss steep seniority wage profiles as incentives for firms to dismiss older workers before retirement. Conditional on individual retirement incentives, e.g., social security wealth or health status, the steepness of the wage profile will have different incentives for workers as compared to firms when it comes to the retirement date. Using an instrumental variable approach to account for selection of workers in our firms and for reverse causality, we find that firms with higher labor costs for older workers are associated with lower job exit age.
    Keywords: firm incentives; retirement; seniority wages
    JEL: H55 J14 J26 J31
    Date: 2015–07
  5. By: David Card; Ana Rute Cardoso; Patrick Kline
    Abstract: There is growing evidence that firm-specific pay premiums are an important source of wage inequality. These premiums will contribute to the gender wage gap if women are less likely to work at high-paying firms or if women negotiate (or are offered) worse wage bargains with their employers than men. Using longitudinal data on the hourly wages of Portuguese workers matched with income statement information for firms, we show that the wages of both men and women contain firm-specific premiums that are strongly correlated with simple measures of the potential bargaining surplus at each firm. We then show how the impact of these firm-specific pay differentials on the gender wage gap can be decomposed into a combination of sorting and bargaining effects. We find that women are less likely to work at firms that pay higher premiums to either gender, with sorting effects being most important for low- and middle-skilled workers. We also find that women receive only 90% of the firm-specific pay premiums earned by men. Importantly, we find the same gender gap in the responses of wages to changes in potential surplus over time. Taken together, the combination of sorting and bargaining effects explain about one-fifth of the cross-sectional gender wage gap in Portugal.
    JEL: J16 J31 J71
    Date: 2015–07
  6. By: Jae Wook Jung; Ina Simonovska; Ariel Weinberger
    Abstract: We quantify a class of commonly-employed general equilibrium models of international trade and pricing-to-market that feature firm-level heterogeneity and consumers with nonhomothetic preferences. We demonstrate theoretically that the models lack the flexibility to match salient features of US firm-level data. Consequently, we outline a theoretical framework that can reconcile the documented price dispersion across firms and markets, while maintaining consistency with cross-sectional observations on firm productivity and sales. We calibrate the model’s parameters to match bilateral trade flows across 71 countries as well as the productivity and sales advantages of US exporters over non-exporters. We find that the calibrated model accounts for the majority of the dispersion in prices of tradables across countries of different income levels, while maintaining a tight quantitative fit to firm-level data. Given its additional flexibility, the model quantitatively outperforms the existing alternatives and yields welfare gains for the US that are 14-54% higher, but at the cost of loss of tractability.
    JEL: F12 F14 F17
    Date: 2015–07
  7. By: Monica Amici (Bank of Italy); Silvia Giacomelli (Bank of Italy); Francesco Manaresi (Bank of Italy); Marco Tonello (Bank of Italy)
    Abstract: We estimate the effects of a simplification in the bureaucratic regulation for doing business on firm demographics in Italy, where a 2011 legislation reform required all municipalities to institute a one-stop shop for doing business. We use data for all Italian firms active in private non-financial industries and exploit the staggered implementation of the policy by municipalities in order to identify its causal effect. The results indicate that the one-stop shop increased entry rates and survival probability at one year. This effect is due essentially to sole proprietorships, which are plausibly those that benefit the most from reductions in red tape.
    Keywords: red tape costs, firm entry, one-stop shop
    JEL: L11 M13 L51
    Date: 2015–07
  8. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: Crinò and Epifani (2012) report and discuss two empirical regularities they find in a representative sample of Italian manufacturing firms. First, there is a negative correlation between firms’ productivity and their export share to low-income destinations. Second, there is a negative correlation between firms’ innovation activity and their export share to low-income destinations. This note uses recently available comparable high quality firm level data for six European countries (including Italy) and similarly specified empirical models in an attempt to replicate these results. Replication failed completely. The link found between the share of exports to lowincome countries and either productivity or R&D intensity is never in line with the results from Crinò and Epifani (2012).
    Keywords: Exports, low-income destinations, productivity, innovation, EFIGE data
    JEL: F14
    Date: 2015–07
  9. By: de Sousa, José; Disdier, Anne-Célia; Gaigné, Carl
    Abstract: Does demand volatility matter for exports? How do exporting firms deal with skewed demand? A simple model of downside risk aversion shows that on average exporters increase export prices and reduce export volumes when demand volatility in destination markets increases. They behave the opposite way when demand skewness rises. We find that the moments of the demand distribution also affect the number of exporting firms and the industry supply. These adjustments may lead some firms to increase their exports when demand volatility increases. These theoretical predictions are put to the test by using French firm-level exports across destination markets with different levels of demand volatility and skewness. The firm-level results, over the period 2000-2009, are consistent with our predictions.
    Keywords: Uncertainty, Demand volatility, Firm exports, Skewness, International Relations/Trade, Risk and Uncertainty, D81, F12, L25,
    Date: 2015
  10. By: Devadoss, Stephen; Gibson, Mark J.; Luckstead, Jeff
    Keywords: Agricultural subsidies, Heterogeneous firms, Entry and exit, Agricultural and Food Policy, Industrial Organization, Production Economics,
    Date: 2015
  11. By: Langton, Steve
    Keywords: Demand and Price Analysis, Farm Management,
    Date: 2015–04
  12. By: Eduardo Morales (Princeton University); Kamran Bilir (University of Wisconsin - Madison)
    Abstract: What is the private return to innovation? When firms operate production sites in multiple countries, improvements developed at one site may be shared across others for efficiency gain. We develop a dynamic model that explicitly accounts for such transfer within the firm, and apply it to measure innovation returns for a comprehensive panel of U.S. multinationals during 1989--2009. We find that the data, which include detailed measures of affiliate production and innovation, are consistent with innovation generating returns at firm locations beyond the innovating site. Accounting for cross-plant effects of innovation, our estimates indicate the average firm realizes between 10 and 30 percent of the return to its U.S. parent R&D abroad, suggesting single-plant estimates may understate firms' gain from innovation.
    Date: 2015

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