nep-bec New Economics Papers
on Business Economics
Issue of 2016‒01‒29
twelve papers chosen by
Vasileios Bougioukos
Bangor University

  1. Trade, finance and endogenous firm heterogeneity By Alessandra Bonfiglioli; Rosario Crinò; Gino Gancia
  2. The impact of post-IPO changes in corporate governance mechanisms on firm performance: evidence from young Australian firms By Chowdhury, Biplob; Dungey, Mardi; Pham, Thu Phuong
  3. The Extensive Margin of Exporting Products: A Firm-level Analysis By Costas Arkolakis; Sharat Ganapati; Marc-Andreas Muendler
  4. Firm survival, uncertainty and financial frictions: Is there a financial uncertainty accelerator? By Joseph P. Byrne; Marina-Eliza Spaliara; Serafeim Tsoukas
  5. Impacts of TTIP on Processed Food Trade under Monopolistic Competition and Firm Heterogeneity By Luckstead, Jeff; Devadoss, Stephen
  6. Entry and exit in recent US business cycles By Mikel Casares
  7. Backstage – the play within a play: Utilising a dramaturgical metaphor to consider the rapid development of team culture in short-term stage crews By Sealy-O’Donnell, Sue
  8. How Exporters Grow By Fitzgerald, Doireann; Haller, Stephanie; Yedid-Levi, Yaniv
  9. Eco-Labeling and Gains from Agricultural and Food Trade: A Ricardian Approach By Heerman, Kari; Sheldon, Ian
  10. Firm Heterogeneity, Non-Tariff Measures, and International Trade Agreements: The Case of US-EU TTIP Agreement on Beef Trade By Akgul, Zeynep
  11. Air transport liberalisation and airline network dynamics: Investigating the complex relationships By Frédéric Dobruszkes; Anne Graham
  12. Pronuclear migration: no attachment? No union, but a futile cycle! By Nguyen, P. A.; Ishihara, K.; Wühr, M.; Mitchison, T. J.

  1. By: Alessandra Bonfiglioli; Rosario Crinò; Gino Gancia
    Abstract: We study how financial frictions affect firm-level heterogeneity and trade in a model where productivity differences across monopolistically competitive firms are endogenous and depend on investment decisions at the entry stage. By increasing entry costs, financial frictions soften competition and lower the value of investing in bigger projects with more dispersed outcomes. Hence, credit frictions make firms more homogeneous and hinder the volume of exports both along the intensive and the extensive margin. Export opportunities, instead, shift expected profits to the tail and increase the value of technological heterogeneity. We test these predictions using comparable measures of sale dispersion within 365 manufacturing industries in 119 countries, built from highly disaggregated US import data. Consistent with the model, financial development increases sale dispersion, especially in more financially vulnerable industries; sale dispersion is also increasing in measures of comparative advantage. These results are quantitatively important for explaining the effect of financial development and factor endowments on export sales.
    Keywords: Financial Development, Firm Heterogeneity, International Trade
    JEL: F12 F16 E24
    Date: 2015–12
  2. By: Chowdhury, Biplob (University of Tasmania, Tasmanian School of Business and Economics); Dungey, Mardi (University of Tasmania, Tasmanian School of Business and Economics); Pham, Thu Phuong (University of Tasmania, Tasmanian School of Business and Economics)
    Abstract: This paper examines the potential impact of governance mechanisms (top management team structure and board composition) on post-IPO performance of young Australian firms from 2002-2007. We find that change in board of directors and TMT membership significantly affects firm performance. The higher proportion of the IPO original board remains, the better performance. An analogous relationship between the proportion of original TMT members and firm performance is also documented. Our study reveals that both original TMT and board members have a significant effect on both short-term and long-term IPO performance. We conclude that the retention of both the original directors and TMT members is favourable to young IPO firms and their post-IPO performance.
    Keywords: Corporate governance, board composition, top management teams, young firms, post-IPO performance
    JEL: G30 G32 L25
    Date: 2014–10–04
  3. By: Costas Arkolakis (Cowles Foundation, Yale University); Sharat Ganapati (Dept. of Economics, Yale University); Marc-Andreas Muendler (University of California, San Diego)
    Abstract: We examine multi-product exporters and use firm-product-destination data to quantify export entry barriers. Our general-equilibrium model of multi-product firms generalizes earlier models. To match main facts about multi-product exporters, we estimate our model with rich demand and access cost shocks for Brazilian firms. The estimates document that additional products farther from a firm’s core competency incur higher unit costs, but face lower market access costs. We find that these market access costs differ across destinations and evaluate a scenario that standardizes market access between countries. The resulting welfare gains are similar to eliminating all current tariffs.
    Keywords: International trade; Heterogeneous firms; Multi-product firms; Firm and product panel data; Brazil
    JEL: F12 L11 F14
    Date: 2016–01
  4. By: Joseph P. Byrne; Marina-Eliza Spaliara; Serafeim Tsoukas
    Abstract: Using a large panel of unquoted UK firms over the period 2000-09, we examine the impact of firm-specific uncertainty on corporate failures. In this context we also distinguish between firms which are likely to be more or less dependent on bank finance as well as public and non-public companies. Our results document a significant effect of uncertainty on firm survival. This link is found to be more potent during the recent financial crisis compared with tranquil periods. We also uncover significant firm-level heterogeneity since the survival chances of bank-dependent and non-public firms are most affected by changes in uncertainty, especially during the recent global financial crisis.
    JEL: E44 F32 F34 G32
    Date: 2015–02
  5. By: Luckstead, Jeff; Devadoss, Stephen
    Abstract: Food processing firms vary in size, exhibit productivity differences, engage in monopolistic competition, and produce highly differentiated products. As the TTIP negotiation is gaining momentum and trade in processed food is becoming more important, it is worth analyzing the impact of this potential trade liberalization on the US and EU processed food markets. This study develops a three-region (United Staates, European Union, and ROW) monopolistic competition trade model with heterogeneous firms to analyze the effects of US-EU bilateral tariff elimination and non-tariff barrier harmonization on prices, domestic production, consumption, bi-lateral trade, cutoff productivity levels, and aggregate productivity in the processed food sector. The empirical results show that this trade liberalization expands cross hauling, with US exports to the European Union increasing b 113.58% and EU exports to the United States rising by 96.19%. This increased cross hauling displaces exports from ROW to the United States and European Union by 47.26% and 16.10%, respectively. US and EU processed food production increases by 4.89% and 3.91%, respectively. Consequently, aggregate utility expands in all three regions.
    Keywords: Cross hauling, heterogeneous firms, Imperfect competition, Non-tariff barriers, Processed food trade, Tariffs, TTIP, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, F12, F13, F15,
    Date: 2015
  6. By: Mikel Casares (Departamento de Economía-UPNA)
    Abstract: I show evidence indicating that the variability of the total number of business units (establishments) has significantly increased in recent US business cycles, accounting for nearly 2/3 of real GDP fluctuations during the 2003-2012 decade. Next, I examine the role of business creation and destruction in an estimated DSGE-style model extended with endogenous entry and exit. Shocks on both entry and, especially, exit have played a crucial role on explaining the latest boom-bust cycle in the US economy. I also find that the estimated innovations of total factor productivity are positive and high in 2010-2012, which might be the consequence of the dramatic increase in the exit rates observed during the recession of 2008-2009.
    Keywords: Entry and exit, DSGE models, US business cycles
    Date: 2015
  7. By: Sealy-O’Donnell, Sue
    Abstract: This research project asks the question of how short-term theatre production teams (stage-crew), are able to rapidly develop a strong team culture within an environment which does not allow the luxury of time for the standard stages of team culture formation. Utilising a dramaturgical metaphor as a methodological framework, allowed consideration of how these groups create trust, shared rituals and behaviours and establish self-governing tools that may benefit both the individual and the group. The research results showed evidence of four key practices which are critical to their ability to rapidly develop team culture; specific context, individual strategies, techniques that aid self-governance and emotional management. This research is beneficial not only to those studying the formation of team culture, but also the study of temporary, project and mobile teams. In addition practitioners will benefit from this research within a number of areas including, those within the creative industry, (particularly those with similar extreme time limitations), those interested in roles where physical safety necessitates the rapid development of trust and those interested in the collective nature of team development and group efficacy.
    Keywords: Dramaturgical metaphor, Team culture, Rapid team culture development, Group efficacy, Invisible workforce, Self-governance, Rituals, Emotional management, Creative industries, Theatre,
    Date: 2015
  8. By: Fitzgerald, Doireann (Federal Reserve Bank of Minneapolis); Haller, Stephanie (University College Dublin); Yedid-Levi, Yaniv (University of British Columbia)
    Abstract: We show that after firms enter new export markets, there are striking dynamics of quantities, but no dynamics of prices, controlling for both costs and selection. This points to an important role for demand in the growth of successful exporters, and to a nonprice mechanism through which quantity demanded grows. A model where firms engage in costly investment in customer base through marketing and advertising, and learn about their idiosyncratic demand, can qualitatively match these facts, along with a declining exit hazard. We structurally estimate the model and find that costs of adjusting customer base are key to explaining how exporters grow.
    Keywords: Firm dynamics; Exporter dynamics; Customer base
    JEL: E20 F10 L10
    Date: 2016–01–21
  9. By: Heerman, Kari; Sheldon, Ian
    Keywords: Agricultural and Food Policy, International Relations/Trade,
    Date: 2015–12
  10. By: Akgul, Zeynep
    Keywords: Agricultural and Food Policy, International Relations/Trade,
    Date: 2015–12
  11. By: Frédéric Dobruszkes; Anne Graham
    Date: 2016
  12. By: Nguyen, P. A.; Ishihara, K.; Wühr, M.; Mitchison, T. J.
    Abstract: How do pronuclei migrate towards each other? The zebrafish futile cycle gene is shown to encode a maternally expressed membrane protein required for nuclear attachment and migration along the sperm aster.
    Keywords: Animals; Cell Nucleus/*physiology; Centrosome/*physiology; Female; Male; Membrane Proteins/*genetics; Zebrafish Proteins/*genetics; Zebrafish/*genetics; Zygote/*physiology

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