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on Business Economics |
| By: | Giordano Mion; Luca David Opromolla; Alessandro Sforza |
| Abstract: | Better managers and managerial practices lead to better firm performance. Yet, little is known about what happens when managers move across firms. Does a firm hiring a good manager improve its performance? If yes is there some valuable knowledge the manager has acquired and successfully difused to the new firm? In order to answer these questions we use information related to specific activities the manager was involved in when working for previous firms. More specifically, we use information on whether the manager has worked in the past for firms exporting to a specific destination country or a specific product. Our data is rich enough to allow controlling for both manager and firm unobservables and wash out any time-invariant ability of the manager as well as overall firm performance.We find that the export experience gained by managers in previous firms leads their current firm towards higher export performance, and commands a sizable wage premium for the manager. We use several strategies to deal with endogeneity including an exogenous event study: the sudden end of the Angolan civil war in 2002. We further refine our analysis by looking at diferent types of managers (general, production, financial and sales) and show how specific export experience interacts with the degree of product diferentiation and/or the financial vulnerability of a firm's products as well as with rising import competition from China. |
| JEL: | M2 L2 F16 J31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201701&r=bec |
| By: | Sandro Montresor (Kore University of Enna, IT); Antonio Vezzani (JRC) |
| Abstract: | This paper provides some new theoretical speculations and empirical evidence on the relationship between design, innovation and economic performance at the firm level. We posit that design investments may provide firms with a higher capacity of introducing product/process innovations, but that the ensuing economic performance is rather associated to the role of design within the firm. Moreover, once controlled for the firm’s non-technological innovativeness and other knowledge-production inputs, the role of design does also relate to the introduction of innovative products and/or processes. We provide a systematic empirical test for these arguments on a sample of more than 12,000 European firms from the last EC Innobarometer survey. The econometric estimates are consistent with our expectations. However, while a higher innovativeness is also associated with a non-systematic resort to design, a higher innovation-based performance is coupled with an increasingly more central role of design, providing this is at least non-occasional. Innovations do actually look “design-led” overall, but innovating successfully apparently requires the firm to retain such a driver central to its business model. |
| Keywords: | Design, Innovation, Firm performance |
| JEL: | O31 O32 O33 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:wpaper:201701&r=bec |
| By: | Iwasaki, Ichiro; Mizobata, Satoshi; Muravyev, Alexander A. |
| Abstract: | This paper provides a meta-analysis of studies on the effect of ownership on the performance of Russian firms over 20 years of rapid institutional and economic changes. We review 29 studies extracted from the EconLit and Web of Science databases with a total of 877 relevant estimates. We find that the government negatively affects company management regardless of its administrative level. In contrast, private ownership is positively associated with firm performance. The effect size and statistical significance are notably varied among different types of private ownership. While the effect of insider (employee and management) ownership is comparable to that of foreign investors, the effect of domestic outsider investors is considerably smaller. Our assessment of publication selection bias reveals that the existing literature does not contain genuine evidence for a series of ownership types and, therefore, some of the findings have certain limitations. |
| Keywords: | Privatization, Corporate Ownership, Firm Performance, Meta-analysis, Publication Selection Bias, Russia |
| JEL: | D22 G32 H32 P26 P31 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:65&r=bec |
| By: | Aksel Erbahar (Erasmus School of Economics and Tinbergen Institute, The Netherlands) |
| Abstract: | Previous firm-level literature established that there are substantial costs of entry into new export markets. Chaney (2014) opens the black-box of entry costs by building a dynamic network model of international trade where firms acquire customers in new destinations through their existing customers in other destinations. Following his conjecture, this paper examines whether firms use their existing suppliers in a destination to find their first clients in those markets. I use a disaggregated dataset on Turkish firms' exports and imports for the 2003-08 period, and investigate the effect and the channels that import experience might have on export entry. By identifying import experience using instrumental variables, and shutting down productivity channels with firm-year fixed effects, I find that having a supplier in the destination country raises the probability of exporting to that country by 5.5 percentage points on average, revealing a "market knowledge" phenomenon. The paper's main contribution to the literature is finding for the first time that firms' country-specific import experience increases the likelihood of exporting to that country. Digging further to explore heterogeneous effects, I find that this effect increases with the destination country's size, proximity, language similarity, and the size of its Turkish community. Moreover, the strength of the firm's relationship with its supplier as proxied by several variables such as the share of imported products that are differentiated increases the probability of export market entry. |
| Keywords: | market entry; export diversification; learning by importing; networks |
| JEL: | F1 F14 F61 L20 |
| Date: | 2017–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170012&r=bec |
| By: | Bernd Frick (Paderborn University); Anica Rose (Paderborn University); André Kolle (Paderborn University) |
| Abstract: | We contribute to the inconclusive empirical research on the relationship between team gender diversity and team performance by investigating the returns to gender diversity in academia. Using a unique sample with 164 randomly formed student teams, we show that gender heterogeneity adversely affects team performance in a business strategy game. Both all-female and all-male teams outperform gender-heterogeneous teams in terms of financial success. We find evidence for the detrimental gender diversity effect to increase with task complexity. Our findings suggest that all-men and all-women teams do not differ in their strategic management behavior. |
| Keywords: | Gender; Diversity; Teams; Performance; Business strategy game |
| JEL: | J16 C93 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:dispap:23&r=bec |
| By: | Tadashi Ito (Faculty of International Social Science, Gakushuin University); Toshiyuki Matsuura (Keio Economic Observatory, Keio University); Chih-Hai Yang (National Central University) |
| Abstract: | The concern regarding the hollowing out by FDI has re-emerged in Japan, with both large and small firms relocating their plants to China since the late 1990s. This study sheds lights on the effects of agglomeration and firm characteristics upon the complementary relationship between FDI and import of intermediate input from home country, which has been overlooked in the literature. Estimating the duration model of Japanese affiliates' input trade by using parent?affiliate, productlevel data from 2000 to 2006, we found while firms in agglomerated regions with more foreign affiliates shorten its duration, small firms import for a longer duration. |
| Keywords: | FDI by SMEs, Trade duration, Intermediate goods, Agglomeration |
| JEL: | F14 F21 F23 |
| Date: | 2016–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2016-025&r=bec |
| By: | Hattori, Masahiko; Tanaka, Yasuhito |
| Abstract: | In Proposition 4 of Kamien and Tauman(1986), assuming linear demand and cost functions with fixed fee licensing it was argued that for the outside innovating firm under oligopoly when the number of firms is small (or very large), strategy to enter the market with license of its cost-reducing technology to the incumbent firm (entry with license strategy) is more profitable than strategy to license its technology to the incumbent firm without entering the market (license without entry strategy). However, their result depends on their definition of license fee, and it is inappropriate if the innovating firm can enter the market. If we adopt an alternative more appropriate definition based on the threat by entry of the innovating firm, license without entry strategy is more profitable in the case of linear demand and cost functions. Also we investigate the problem in the case of quadratic cost functions in which entry with license strategy may be optimal. Further we will show that the optimal strategies for the innovating firm when license fees are determined under the assumption that the licensor takes all benefit of new technology and its optimal strategies when license fees are determined according to Nash bargaining solution are the same. |
| Keywords: | entry, license, duopoly, cost-reducing innovation, innovating firm, incumbent firm |
| JEL: | D43 L13 |
| Date: | 2017–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76444&r=bec |
| By: | Lee, Sang-Ho; Matsumura, Toshihiro; Sato, Susumu |
| Abstract: | This study formulates a new model of mixed oligopolies in free entry markets. A state-owned public enterprise is established before the game, private enterprises enter the market, and then the government chooses the degree of privatization of the public enterprise (Entry-then-Privatization Model). We find that under general demand and cost functions, the timing of privatization does not affect consumer surplus or the output of each private firm, while it does affect the equilibrium degree of privatization, number of entering firms, and output of the public firm. The equilibrium degree of privatization is too high (low) for both domestic and world welfare if private firms are domestic (foreign). |
| Keywords: | timing of privatization, commitment, state-owned public enterprises; foreign competition |
| JEL: | H42 L13 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76450&r=bec |
| By: | Augier, Patricia; Cadot, Olivier; Dovis, Marion |
| Abstract: | This paper combines a new database on non-tariff measures (NTMs) with Morocco's firm census to explore the effect of regulatory harmonization with the E.U. on firm-level outcomes. Exploiting cross-sectoral variation in the timing and extent of regulatory harmonization, we find that harmonization waves correlate with rises in labor productivity and with higher markups, allowing self-financing of the adaptation process at the firm level. We identify an induced market-structure change that made the observed rise in markups possible. Namely, harmonization temporarily sheltered the Moroccan market from competition from low-end producers in other developing countries, who took time to adapt. We identified this effect through changes in both trade patterns and firm-level outcomes. Thus, harmonization apparently generated a self-financing adaptation process by affecting both firm-level incentives and market structure. |
| Keywords: | firms; Harmonization; Morocco; Non-Tariff Measures; productivity; Profit; Trade |
| JEL: | F13 F15 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11799&r=bec |
| By: | Moon, Wanki |
| Abstract: | Building on the long tradition of diverse schools of thought underlining the importance of institutions in determining economic outcomes, the paper develops an eclectic institutional political economy framework that views the economy as consisting of the four decision-making units including the firm, the market, the state, and foreign states. They represent major institutional arrangements accountable for resource allocation decisions at the firm, industry, national, and global levels. The paper restructures disciplinary and interdisciplinary schools/theories/approaches into a unified framework centered around the four principal decision-making units. |
| Keywords: | Institutional Economics, Political Economy, Institutional and Behavioral Economics, Political Economy, |
| Date: | 2017–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea17:252532&r=bec |
| By: | Adriana Peluffo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Juan Ignacio Scasso (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | In this work we explore the link between export and import products quality and the level of income of destination and source countries. As proxy to quality we use a firm-level measure calculated from the unit value prices of both exports and imports of Uruguayan manufacturing firms. Previous works argue that high quality products are exported to and imported from high income countries. Moreover, it is also argued that firms that export to high income countries upgrade their quality by using imports from high income countries. We test these hypotheses using a rich database for Uruguay over the period 1997-2008. This dataset combines firm level data and detailed customs data of exports and imports by destination or origin country. To analyze causal associations we use instrumental variable techniques, and utilize real exchange rate fluctuation to construct the instruments. Our results show that exporting to high income countries has a negative effect on the quality of imported goods and that importing from high income countries has a positive effect on our measure of import quality. |
| Keywords: | exports, imports, quality, international trade |
| JEL: | F1 L1 O1 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-10-16&r=bec |