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on Business Economics |
| By: | Tang, Bo |
| Abstract: | This study investigates the exchange rate exposure of Chinese firms at the industry and firm level based on the conventional capital asset pricing model (CAPM) framework. At the industry level, the dynamic conditional correlation MGARCH (DCC MGARCH) estimates demonstrate that the market model and three-factor model are appropriate for exposure measurements, and industry returns are more likely to be exposed to unanticipated changes in the real exchange rate and the trade-weighted effective exchange rate, particularly for manufacturing industries. At the firm level, although the seemingly unrelated regression (SUR) estimates vary across markets, it is apparent that there is a relationship between firm size and exposure effects, which also show that lagged exchange rate changes have significant exposure effects on firm returns. This study finally suggests that non-financial firms should set up special commissions to hedge currency risks of their future cash flows. |
| Keywords: | exchange rate exposure, Chinese firms, industry and firm level, dynamic conditional correlation MGARCH (DCC MGARCH), seemingly unrelated regression (SUR). |
| JEL: | C58 F31 G12 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:66008&r=bec |
| By: | Moritz Meyer-ter-Vehn (UCLA); Simon Board (University of California - Los Angeles) |
| Abstract: | We propose a firm lifecycle model in which the firm privately invests in its quality and thereby its reputation. Over time, both the firm and the market learn about the firm's evolving quality via infrequent breakthroughs. The firm can also exit if its value becomes negative, giving rise to selection effects. In a pure-strategy equilibrium, incentives are single-peaked: the firm shirks immediately following a breakthrough, works for intermediate levels of reputation and shirks again when it is about to exit. This investment behavior yields predictions for the distribution of firm productivity and the survival rate. Finally, we compare the model to two variants: one in which the firm's investment is publicly observed, and a second in which the firm has private information about its product quality. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:427&r=bec |
| By: | Juan Carluccio (Banque de France - Banque de France, University of Surrey); Denis Fougère (LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques - Sciences Po, CEPR, CNRS, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique, Banque de France - Banque de France); Erwan Gautier (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes, Banque de France - Banque de France) |
| Abstract: | We estimate the impact of international trade on wages using detailed data for French manufacturing firms. We instrument firm-level trade flows with firm-specific instrumental variables based on world demand and supply shocks. Both export and offshoring shocks have a positive effect on wages. Exports increase wages similarly for all occupational categories while offshoring has heterogeneous effects. The impact of trade shocks on wages is heterogeneous across bargaining regimes. In firms with collective bargaining, the elasticity of wages with respect to both exports and offshoring is higher than in firms with no collective bargaining. The wage gains associated with collective bargaining are similar across worker categories. |
| Date: | 2014–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01093629&r=bec |
| By: | Mckenzie,David J. |
| Abstract: | Almost all firms in developing countries have fewer than 10 workers, with the modal firm consisting of just the owner. Are there potential high-growth entrepreneurs with the ability to grow their firms beyond this size? And, if so, can public policy help alleviate the constraints that prevent these entrepreneurs from doing so? A large-scale national business plan competition in Nigeria is used to help provide evidence on these two questions. The competition was launched with much fanfare, and attracted almost 24,000 entrants. Random assignment was used to select some of the winners from a pool of semi-finalists, with US$36 million in randomly allocated grant funding providing each winner with an average of almost US$50,000. Surveys tracking applicants over three years show that winning the business plan competition leads to greater firm entry, higher survival of existing businesses, higher profits and sales, and higher employment, including increases of over 20 percentage points in the likelihood of a firm having 10 or more workers. These effects appear to occur largely through the grants enabling firms to purchase more capital and hire more labor. |
| Keywords: | E-Business,Business Environment,Microfinance,Competitiveness and Competition Policy,Business in Development |
| Date: | 2015–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7391&r=bec |
| By: | Tomasz Brodzicki (University of Gdansk, Faculty of Economics; Institute for Development); Tomasz Jurkiewicz (University of Gdańsk, Faculty of Management, Department of Statistics); Stanislaw Uminski (Institute for Development; Faculty of Economics, University of Gdansk); Krystyna Gawlikowska-Hueckel (Institute for Development; Faculty of Economics, University of Gdansk) |
| Abstract: | Evidence from recent empirical micro-level surveys such as Bernard & Jensen (1995, 2001), Clerides et al. (1998) or Eaton et al. (2004) indicates large firm heterogeneity. Following a seminal contribution by Melitz (2003) theoretical models started to include firm heterogeneity by incorporating the actual distribution of productivity between firms. The models prove that only very productive firms are able to enter and remain on more demanding foreign markets. Export status is linked to productivity advantage. Apart from several studies the literature on the role of firm heterogeneity in Poland's trade is in its infancy. The goal of this article is to present the initial results of a large survey of Polish exporting and non-exporting firms aimed at filling this important gap. The survey included numerous questions in the area of firm competitiveness, innovation potential, export performance and strategies as well as barriers to exporting and policy expectations. The results of the survey have been supplemented with analysis of detailed financial data provided by InfoCredit allowing us to estimate numerous indices linked to economic and financial performance of enterprises including: capital and labour productivity, overall productivity measured by TFP and profitability. |
| Keywords: | exporters, non-exporters, Poland's trade, firms' survey |
| JEL: | F12 F14 C83 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:iro:wpaper:1505&r=bec |
| By: | Yann Algan (ECON - Département d'économie - Sciences Po); Pierre Cahuc (ECON - Département d'économie - Sciences Po) |
| 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. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01169659&r=bec |
| By: | Aoife Brophy Haney |
| Abstract: | Firms have developed climate change strategies over the last decade in response to rising regulatory, social and competitive pressures. Increasingly, these strategies include the development of new products and services (P&S) to reducing the environmental impact of the firm and its customers. In this paper, I explore how managerial interpretation of climate change has evolved over time and how these changes in interpretation are associated with innovation outcomes. The existing literature suggests that interpreting environmental challenges as opportunities is more likely to lead to open and innovative strategies. Using qualitative survey data on 99 Global 500 firms over the period 2003 to 2009, I find that threat-based interpretation can in fact lead to positive innovation outcomes at early stages of new P&S development. I identify three main mechanisms through which the detailed identification of threats encourages innovation in response to climate change. Furthermore, I develop a temporal dimension to the relationship between interpretation and stages of P&S development. I find that at advanced stages of P&S development, a balanced and opportunity-focused interpretation becomes more important. The results imply that managerial interpretation can provide firms with added flexibility to provide innovative responses to social and environmental challenges. But the relationship between interpretation and innovation is not static, nor is it a question of threat or opportunity interpretation but a combination of the two at different times that provides flexibility. |
| Keywords: | climate change, dynamic managerial capability, innovation, interpretation, environmental strategy |
| JEL: | M10 M14 L80 |
| Date: | 2015–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1524&r=bec |
| By: | Marin Falk and Eva Hagsten |
| Abstract: | This study investigates the patterns and trends of e-commerce activities as well as their impact on labour productivity growth in a group of European countries. At hand for the exercise is a unique panel of micro-aggregated firm-level data for 14 European countries spanning over the years 2002 to 2010. The empirical approach is twofold: A static specification and a dynamic panel data model. The former is a difference specification estimated by OLS and the latter uses system GMM to account for endogeneity of e-commerce activities. For the impact analysis e-commerce is narrowed down to e-sales, measured as the percentage of firms receiving orders online (EDI or websites) or as the share of total sales in firms. Descriptive statistics reveal that the proportion of firms engaging in e-sales activities is slowly growing over time starting from a low level. The OLS estimates, controlling for industry, time and country effects, show that the change in e-sales activities and labour productivity growth are significantly positively related. Specifically, an increase in e-sales raises the rate of labour productivity by 0.3 percentage points over a two-year period for the total sample. Services industries experience a larger impact than manufacturing. In addition, dynamic panel data estimates demonstrate that smaller firms gain the most from increases in e-sales. Overall, for the total business sector, these estimates reveal that the increase in e-sales activities during the period studied accounts for 17 per cent of the total growth in labour productivity. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unc:dispap:220&r=bec |
| By: | Patrice Fontaine (Eurofidai (Grenoble), CERAG - Centre d'études et de recherches appliquées à la gestion - Grenoble 2 UPMF - Université Pierre Mendès France - CNRS); Sujiao Zhao (CERAG - Centre d'études et de recherches appliquées à la gestion - Grenoble 2 UPMF - Université Pierre Mendès France - CNRS, Eurofidai (Grenoble)) |
| Abstract: | The current paper examines the driving forces of debt maturity dynamics. This is the first attempt ever made to explain debt maturity dynamics from the perspectives of variations in conventional debt maturity determinants, firm's incentive to approach the target debt maturity and the influence of the existence of exxtreme of extreme debt maturity users. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01181200&r=bec |
| By: | Brown, J. David (U.S. Census Bureau); Earle, John S. (George Mason University); Shpak, Solomiya (George Mason University); Vakhitov, Volodymyr (Kyiv School of Economics) |
| Abstract: | This paper estimates the relative multi-factor productivity (MFP) of privatized and state-owned enterprises using a long panel on all initially state-owned manufacturing firms in Ukraine. The large size and length of the time series in the data permit us to track the privatization process and to estimate the impact of privatization within industry-year cells and with controls for firm fixed effects and trends. Results with these methods imply an average 5-10% relative MFP for majority privatized versus state-owned firms. The gap increases with time since privatization, reaching about 15-17% five years after privatization. It also increases with calendar time although recent privatizations are associated with smaller relative MFP. We find no evidence of "sequencing" of privatization based on 1992 relative MFP, but the data suggest a higher survival rate for privatized versus state firms and one that is more closely linked to 1992 MFP. The results also imply that MFP gains from privatization are decreasing in pre-privatization MFP. The relatively few cases in which foreign investors take control result in much higher relative MFP, 22-40% on average, compared to domestic private ownership, but the gap is much lower when the foreign source country is "offshore" – an indirect channel for Ukrainian nationals – and it is also lower when the source is Russia. Privatization of 100% ownership has much larger effects than partial privatization of either minority or majority stakes, ownership structures that have largely disappeared since the early 2000s, as Ukraine has sold off remaining shares. Nevertheless, our database contains more than 1000 majority state-owned manufacturing firms as of 2013 that could be considered for privatization in the future. |
| JEL: | D24 G34 L33 P31 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9261&r=bec |
| By: | Findik, Derya (Middle East Technical University); Tansel, Aysit (Cornell University) |
| Abstract: | This study examines the impact of firm resources on ICT adoption by the Turkish business enterprises using firm level data. ICT adoption is measured at three levels: The first level is technology ownership. The second level is the presence of enterprise resource planning (ERP) and customer resource management (CRM), and the third level is the use of narrowband and broadband technologies. The effects of the three main features of each technology level, which are complementarity, specificity, and the complexity, are analyzed by using firm level data in Turkey. This study has three main conclusions. As for the complementarity, firm's resources play an important role in the adoption of technology while advancing from single technology to the multiple ones. Further, in the use of specific technologies such as ERP and CRM, firm resources generate differential effects between those technologies. Finally, the use of simple technologies does not require the same amount of firm resources as complex technologies. |
| Keywords: | adoption, ICT, complementarity, specificity, complexity |
| JEL: | D22 D24 O30 O47 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9263&r=bec |
| By: | Damien Sans (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université); Sonia Schwartz (CERDI - Centre d'études et de recherches sur le developpement international - CNRS - Université d'Auvergne - Clermont-Ferrand I); Hubert Stahn (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université) |
| Abstract: | In this article we introduce a polluting eco-industry. Depending on the level of the damage, we find one of two optimal equilibria. If the damage is low, we generalize the usual results of the economic literature to the polluting eco-industry: the dirty firm partially abates their emissions, only efficient eco-industry firms produce and the abatement level increases with the damage. However, we obtain very specific results if the damage is high. In this case, not all efficient eco-industry firms produce. The abatement level and the number of active eco-industry firms both decrease as the damage increases. We finally show that a well-designed Pigouvian tax implements these equilibria in a competitive economy. |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01083464&r=bec |
| By: | Naciba Haned (ESDES - École de management de Lyon - Université Catholique de Lyon); Caroline Mothe (IREGE - Institut de Recherche en Gestion et en Economie - Université de Savoie); Nguyen-Thi Thuc Uyen (CEPS/INSTEAD - Centre d'Etudes de Populations, de Pauvreté et de Politiques Socio-Economiques / International Networks for Studies in Technology, Environment, Alternatives, Development - Centre d'Etudes de Populations, de Pauvreté et de Politiques Socio-Economiques / International Networks for Studies in Technology, Environment, Alternatives, Development) |
| Abstract: | Organizational innovation favors technological innovation, but does it also influence persistence in technological innovation? This article empirically investigates the pattern of technological innovation persistence and tests the potential impact of organizational innovation using firm-level data from three waves of French Community Innovation Surveys. The evidence indicates a positive effect of organizational innovation on persistence in technological innovation, according to various measures of organizational innovation. Moreover, this impact is more significant for complex innovators, i.e. those who innovate in both products and processes. The results highlight the complexity of managing organizational practices with regard to the technological innovation of firms. They also add to understanding of the drivers of innovation persistence through the focus on an often-forgotten dimension of innovation in a broader sense. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01133555&r=bec |
| By: | Iacovone,Leonardo; Ramachandran,Vijaya; Schmidt,Martin |
| Abstract: | Many countries in Africa suffer high rates of underemployment or low rates of productive employment; many also anticipate large numbers of people to enter the workforce in the near future. This paper asks the question: Are African firms creating fewer jobs than those located elsewhere? And, if so, why? One reason may be that weak business environments slow the growth of firms and distort the allocation of resources away from better-performing firms, hence reducing their potential for job creation. The paper uses data from 41,000 firms across 119 countries to examine the drivers of firm growth, with a special focus on African firms. African firms, at any age, tend to be 20-24 percent smaller than firms in other regions of the world. The poor business environment, driven by limited access to finance, and the lack of availability of electricity, land, and unskilled labor have some value in explaining this difference. Foreign ownership, the export status of the firm, and the size of the market are also significant determinants of firm size. However, even after controlling for the business environment and for characteristics of firms and markets, about 60 percent of the size gap between African and non-African firms remains unexplained. |
| Keywords: | Labor Policies,E-Business,Environmental Economics&Policies,Small Scale Enterprise,Microfinance |
| Date: | 2013–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6727&r=bec |
| By: | Li, Xi Hao; Gallegati, Mauro |
| Abstract: | We consider a two-sector economy with a low-technology agriculture sector (sector A) and a high-technology manufacture sector (sector M). We investigate the scenario with mobility constraint that worker in sector A, when unemployed, has to afford the migration cost in order to move to sector M. By developing an agent-based two-sector model with computational simulation, we show that productivity growth localized at agriculture sector with mobility constraint leads to a decrease of agricultural market price, sectoral imbalance that workers are trapped unemployed in agriculture sector, and the overall economy experiencing economic downturn. In particular, localized productivity growth leads to both sectors bearing with high unemployment, low level of aggregate output, and low level of aggregate real wage income. Regarding remedy for the economic downturn under this scenario, we investigate the policy of firm migration such that agriculture firms can migrate to manufacture sector together with their employed workers. Agent-based study shows that this policy restores employment in both sectors, with a side effect of an increase of agricultural market price. |
| Keywords: | two-sector model, agent-based economic modeling, productivity growth, sectoral imbalance, economic downturn, mobility constraint |
| JEL: | C63 E17 E24 L5 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:66002&r=bec |
| By: | Zafer; Emin (Department of Management, Ipek University) |
| Abstract: | In this paper, we experimentally investigate how goal setting and feedback policies affect work performance. In particular, we study the effects of (i) absolute performance feedback, (ii) self-specified goals and (iii) exogenous goals and relative performance feedback. Our results show that the average performance of the subjects who are provided self-performance feedback is 11% lower than the ones who get no feedback. Moreover, setting a non-binding personal goal does not affect performance. Finally, assigning an exogenous goal and providing relative performance feedback decreases performance by 8%. We discuss the insights our findings offer for the optimal design of goal setting and feedback mechanisms. |
| Keywords: | Feedback, Goal, Relative Performance, Piece-rate, Motivation |
| JEL: | M50 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:ipk:wpaper:1506&r=bec |