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on Business Economics |
| By: | Adam Jaffe (Motu Economic and Public Policy Research); Trinh Le (Motu Economic and Public Policy Research); Nathan Chappell (Motu Economic and Public Policy Research) |
| Abstract: | This study draws on firm-level data from the Longitudinal Business Database to examine productivity in the New Zealand construction industry. It finds that over the period 2001–2012, on average labour productivity in this industry grew by 1.7 percent annually and multi-factor productivity by 0.5 percent annually, compared with 0.5 and 0.1 percent annually respectively for firms in the overall measured sector. Within the construction industry, productivity growth rates vary markedly by sub-industry and other firm characteristics. Labour productivity is more widely dispersed across the construction industry than is multi-factor productivity. High-productivity firms tend to be younger, more likely to be a new start-up, to belong to a business group, and to locate in Auckland than low-productivity firms. Working-proprietor-only firms are slightly less productive on average than employing firms, and also exhibit much greater productivity variation. Overall, however, productivity variation or dispersion is no greater in construction than in other industries. We decompose productivity changes over time into that due to changes at continuing firms, to reallocation of output from low- to high-productivity firms, and to entry and exit. In the ‘Building construction’ and ‘Heavy and civil engineering and construction’ industries, productivity was enhanced by net entry and reallocation, but reduced by an overall decline in the productivity of continuing firms. In the ‘Construction services’ industry, net entry, reallocation, and productivity improvement of continuing firms all contributed to positive productivity growth. |
| Keywords: | Construction industry, labour productivity, multi-factor productivity |
| JEL: | D24 L74 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:16_08&r=bec |
| By: | Takauchi, Kazuhiro |
| Abstract: | We show that under a fixed-price contract where an upstream firm first sets the input price and downstream firms subsequently invest in R&D, all firms can become worse off when considering two-way trade with firm-specific carriers. |
| Keywords: | Fixed-price contract; Firm-specific carriers; R&D; Two-way trade |
| JEL: | F12 L13 O31 R40 |
| Date: | 2016–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71413&r=bec |
| By: | Bender, Stefan; Bloom, Nicholas; Card, David; van Reenen, John; Wolter, Stefanie (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Recent research suggests that much of the cross-firm variation in measured productivity is due to differences in use of advanced management practices. Many of these practices - including monitoring, goal setting, and the use of incentives - are mediated through employee decision-making and effort. To the extent that these practices are complementary with workers' skills, better-managed firms will tend to recruit higher-ability workers and adopt pay practices to retain these employees. We use a unique data set that combines detailed survey data on the management practices of German manufacturing establishments with longitudinal earnings records for their employees to study the relationship between productivity, management, worker ability, and pay. As documented by Bloom and Van Reenen (2007) there is a strong partial correlation between management practice scores and firm-level productivity in Germany. In our preferred TFP estimates only a small fraction of this correlation is explained by the higher human capital of the average employee at better-managed firms. A larger share (about 13%) is attributable to the human capital of the highestpaid workers, a group we interpret as representing the managers of the firm. And a similar amount is mediated through the pay premiums offered by better-managed firms. Looking at employee inflows and outflows, we confirm that better-managed firms systematically recruit and retain workers with higher average human capital. Overall, we conclude that workforce selection and positive pay premiums explain just under 30% of the measured impact of management practices on productivity in German manufacturing." (Author's abstract, IAB-Doku) ((en)) |
| JEL: | L2 M2 O32 O33 |
| Date: | 2016–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201614&r=bec |
| By: | Marco de Pinto (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Laszlo Goerke (Institute for Labour Law and Industrial Relations in the EU, University of Trier) |
| Abstract: | If input markets are competitive and output per firm declines with the number of firms (business stealing effect), there will be excessive entry into a Cournot oligopoly for a homogeneous commodity. However, input markets are often imperfectly competitive and the price of labor is determined by collective bargaining. The resulting rise in wages reduces output and profits and can deter entry. We analyze under which conditions greater bargaining power by the trade union reduces entry and raises welfare. Furthermore, we show that collective bargaining loosens the linkage between business stealing and excessive entry. |
| Keywords: | Endogenous Entry, Oligopoly, Trade Unions, Wage Bargaining, Welfare |
| JEL: | D43 J51 L13 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201603&r=bec |
| By: | Cenk Gokce ADAS (Istanbul University, Faculty of Economics) |
| Abstract: | It is believed that export firms are more productive than non-export firms. The reasons for that exporting firms have to endure additional cost because of transport costs, marketing research, advertising, local regulations etc. Export firms are also inclined to pay higher wages than non-export firms, because they use a higher skilled and more productive labours. Hence, export firms have to be more productive due to these additional costs. The aim of this study is to explain whether the productivity advantage of export firms does lead to a profitability advantage of exporters compared to non-export firms. For this reason, this paper attempts to summarise previous empirical studies on the firm level data considering the relationship between exporting firms, productivity, and profitability. |
| Keywords: | Productivity; Profitability; Exporting Firms; Manufacturing Sectors; Firm Level Data. |
| JEL: | D22 F14 L60 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:3606362&r=bec |
| By: | Alberto Cavaliere (Department of Economics and Management, University of Pavia); Giovanni Crea (Department of Economics and Management, University of Pavia) |
| Abstract: | We consider vertical differentiation with quality uncertainty and information disparities, in a duopoly where firms supply a product with credence attributes. Consumers choice is affected by misperceptions, but equilibrium prices and qualities depend also on the behavior and the share of informed consumers. With optimistic misperceptions uninformed consumers are cheated in equilibrium as we observe less price competition and minimum differentiation. Alternatively some product differentiation is provided when informed consumers buy high quality goods and the incentive to increase quality is positively affected by optimistic misperceptions. With more informed consumers we find more price competition but less incentive to product differentiation. In most cases the share of informed consumers asymmetrically affects equilibrium prices, to the detriment of the high quality firm. Pessimistic misperceptions prevent more product differentiation and adverse selection arises, but it can be eliminated if the share of informed consumers is high enough. However with pessimistic consumers, information disparities can also lead to inelastic demands and market segmentation, such that externalities |
| Keywords: | Asymmetric information, Brand premium, Quality uncertainty |
| JEL: | L15 L13 D82 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:pav:demwpp:demwp0122&r=bec |
| By: | Hattori, Masahiko; Tanaka, Yasuhito |
| Abstract: | We consider choice of options for a foreign innovating firm to license its technology for producing the high quality good to a domestic firm, or to enter the market of the domestic country with or without license. Under the assumption of uniform distribution about taste parameters of consumers; when cost functions are linear, if the low quality good’s quality is sufficiently high, license without entry strategy is optimum; if the low quality good’s quality is low, both of entry without license strategy and license without entry strategy are optimum; when cost functions are quadratic, if the high quality good’s quality is high, license without entry strategy is optimum; if the high quality good’s quality is low, entry with license strategy is optimum. |
| Keywords: | license, entry, duopoly, vertical differentiation, foreign innovating firm |
| JEL: | D4 D43 |
| Date: | 2016–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71043&r=bec |
| By: | Manuel García-Santana (UPF, Barcelona GSE and CEPR); Josep Pijoan-Mas (CEMFI and CEPR); Enrique Moral-Benito (Banco de España); Roberto Ramos (Banco de España) |
| Abstract: | Spanish GDP grew at an average rate of 3.5% per year during the 1995-2007 expansion, well above the EU average of 2.2%. However, this growth was based on factor accumulation rather than productivity gains as TFP fell at an annual rate of 0.7%. Using firm-level administrative data for all sectors we show that deterioration in the allocative efficiency of productive factors across firms was at the root of the low TFP growth in Spain, while misallocation across sectors played only a minor role. We show that within-industry misallocation of production factors increased substantially over the period in all industries. Absent such deterioration, average TFP growth would have been around 0.8% per year, in line with the growth of the technological frontier. Cross-industry variation reveals that the increase in misallocation was more severe in sectors where the incidence of regulations is greater. In contrast, sectoral differences in financial dependence, skill intensity, innovative content, tradability and the intensity of capital structures appear to be unrelated to changes in allocative efficiency. All in all, the observed high output growth together with increasing firm-level misallocation in all sectors is consistent with an expansion driven by a demand boom rather than by structural reforms |
| Keywords: | TFP, misallocation, Spain. |
| JEL: | D24 O11 O47 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1609&r=bec |
| By: | Wagner, Joachim (Leuphana University Lueneburg, Germany, & Centre of Excellence for Science and Innovation Studies (CESIS), KTH, Sweden) |
| Abstract: | This paper looks at a hitherto neglected extensive margin of international trade by investigating for the first time the frequency at which German exporters and importers trade a given good with a given country. Imports and exports show a high degree of lumpiness. In a given year about half of all firm-good-country combinations are recorded only once or twice for trade with EU-countries, and this is the case for more than 60 percent of all firm-good-country combinations in trade with non-EU countries. The frequency of recorded transactions tends to decline with an increase in the number of transactions per year. This is in accordance with the presence of per-shipment fixed costs that provide an incentive for trading firms to engage in cross-border transactions infrequently. Empirical models show that for Germany the frequency of transactions at the firm-good-country level tends to decrease with an increase in per-shipment costs when unobserved firm and goods characteristics are controlled for. |
| Keywords: | Lumpiness of trade; imports; exports; Germany |
| JEL: | F14 |
| Date: | 2016–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0438&r=bec |
| By: | McKenzie, David J. |
| Abstract: | A survey of participants in a large-scale business plan competition experiment, in which winners received an average of US$50,000 each, is used to elicit beliefs about what the outcomes would have been in the alternative treatment status. Participants are asked the percent chance they would be operating a firm, and the number of employees and monthly sales they would have, had their treatment status been reversed. The study finds the control group to have reasonably accurate expectations of the large treatment effect they would experience on the likelihood of operating a firm, although this may reflect the treatment effect being close to an upper bound. The control group dramatically overestimates how much winning would help them grow the size of their firm. The treatment group overestimates how much winning helps their chance of running a business, and also overestimates how much winning helps them grow their firms. In addition, these counterfactual expectations appear unable to generate accurate relative rankings of which groups of participants benefit most from treatment. |
| Keywords: | business growth; counterfactual elicitation; randomized experiment; subjective expectations |
| JEL: | C31 C80 C93 D22 O12 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11280&r=bec |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Sandra Kublina (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | This paper investigates the effect of related and unrelated variety on regional growth in West Germany. In particular, we analyze the role of regional absorptive capacity and new business formation for these effects. We find that West German regions benefit from both types of varieties. The positive effect of unrelated variety on growth is more pronounced in regions with higher levels of absorptive capacity in terms of R&D activities and with higher levels of new business formation. Such moderating effects cannot be found for related variety. |
| Keywords: | Related variety, unrelated variety, knowledge spillovers, regional absorptive capacity, entrepreneurship, regional growth |
| JEL: | R11 R12 D62 |
| Date: | 2016–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2016-009&r=bec |
| By: | Laya, Andres (Department of Communication Systems, KTH Royal Institute of Technology); Jocevski, Milan (Department of Industrial Economics and Management, KTH Royal Institute of Technology & Department of Management, Economics and Industrial Engineering, Politecnico di Milano); Ghezzi, Antonio (Department of Management, Economics and Industrial Engineering, Politecnico di Milano); Markendahl, Jan (Department of Communication Systems, KTH Royal Institute of Technology) |
| Abstract: | Bringing up services based on Information and Communication Technologies shows to be a complex process for everyone involved in it. Dynamic ecosystem of businesses participating in creation of the value proposition of the services requires a specific way of reasoning and simplified guidance to implementation. We discuss how industrial relationships evolve in terms of value dimensions, through a lens of a business model. This discussion has been done through four streams of literature starting from Activities, Resources and Actors Model and value literature, and continues through value networks and ecosystem literature, so as to round up in discussion on different views on business models. Out of this discussion a conceptual framework has been presented. On the other side, we present basis for the division of the analysis of services based on ICT into two different views and actually offer a table of separation of concerns (into these two views). |
| Keywords: | Ecosystem; Business Model; ICT services; Value dimensions; Relationships |
| JEL: | L80 M15 |
| Date: | 2016–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:kthind:2016_014&r=bec |
| By: | Heim, Sven; Hüschelrath, Kai; Schmidt-Dengler, Philipp; Strazzeri, Maurizio |
| Abstract: | We estimate the causal impact of restructuring aid granted by the European Commission between 2003 and 2012 on the survival and financial viability of aided firms. Using a comprehensive dataset we find that restructuring aid increases a firm's average survival time by 8 to 15 years and decreases the hazard rate by 58 to 68 percent, depending on the definition of firm survival. Further analysis finds strong support that, in the longer run, aid receiving firms have a significantly higher probability to improve their financial viability than the counterfactual group. |
| Keywords: | government policy,state aid,ex-post evaluation,survival,European Union |
| JEL: | C41 D62 D73 G33 G38 H23 L52 L98 O52 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16035&r=bec |
| By: | Emanuele Forlani; Ralf Martin; Giordano Mion; Mirabelle Muuls |
| Abstract: | We develop a new econometric framework that simultaneously allows recovering heterogeneity in demand, TFP and markups across firms while leaving the correlation among the three unrestricted. We do this by systematically exploiting assumptions that are implicit in previous firm-level productivity estimation approaches. We use Belgian firms production data to quantify TFP, demand and markups and show how they are correlated among them, across time and with measures obtained from other approaches. We also show to what extent our three dimensions of heterogeneity allow us to gain deeper and sharper insights on two key firm-level outcomes: export status and size. |
| Keywords: | Demand; productivity; markups; production function estimation; export status; firm size |
| JEL: | J1 N0 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66413&r=bec |
| By: | Mckenzie,David J. |
| Abstract: | A survey of participants in a large-scale business plan competition experiment, in which winners received an average of US$50,000 each, is used to elicit beliefs about what the outcomes would have been in the alternative treatment status. Participants are asked the percent chance they would be operating a firm, and the number of employees and monthly sales they would have, had their treatment status been reversed. The study finds the control group to have reasonably accurate expectations of the large treatment effect they would experience on the likelihood of operating a firm, although this may reflect the treatment effect being close to an upper bound. The control group dramatically overestimates how much winning would help them grow the size of their firm. The treatment group overestimates how much winning helps their chance of running a business, and also overestimates how much winning helps them grow their firms. In addition, these counterfactual expectations appear unable to generate accurate relative rankings of which groups of participants benefit most from treatment. |
| Keywords: | Business in Development,E-Business,Business Environment,Microfinance,Competitiveness and Competition Policy |
| Date: | 2016–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7668&r=bec |