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on Business Economics |
| By: | Bischoff, Oliver; Buchwald, Achim |
| Abstract: | This paper sheds new light on the assessment of firm networks via multiple directorships in terms of corporate firm performance. Using a large sample of European listed firms in the period from 2003 to 2011 and system GMM we find a significant compensation effect on corporate firm performance for the initial negative effect of horizontal multiple directorships by product market competition. In markets with effective competition, horizontal multiple directorships turn out to be an efficient mechanism to increase firm performance and thus assure competitive advantages. By contrast, linkages between up- and downstream firms have no significant influence on financial performance, irrespective of the level of competition intensity. |
| Keywords: | Horizontal and Vertical Firm Networks,Multiple Directorships,Corporate Governance,Product Market Competition,Dynamic Panel |
| JEL: | C23 G32 G34 L14 L25 L40 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145730&r=bec |
| By: | Colonnello, Stefano |
| Abstract: | I study the relation between internal governance and creditor governance. A deterioration in creditor governance may increase the agency costs of debt and managerial opportunism at the expense of shareholders. I exploit the introduction of credit default swaps (CDS) as a negative shock to creditor governance. I provide evidence consistent with shareholders pushing for a substitution effect between internal governance and creditor governance. Following CDS introduction, CDS firms reduce managerial risk-taking incentives relative to other firms. At the same time, after the start of CDS trading, CDS firms increase managerial wealth-performance sensitivity, board independence, and CEO turnover performance-sensitivity relative to other firms. |
| Keywords: | creditor governance,credit default swaps,empty creditors |
| JEL: | G32 G34 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:62017&r=bec |
| By: | Joel M. David; Venky Venkateswaran |
| Abstract: | We study a model of investment in which both technological and informational frictions as well as institutional/policy distortions lead to capital misallocation, i.e., static marginal products are not equalized. We devise an empirical strategy to disentangle these forces using readily observable moments in firm-level data. Applying this methodology to manufacturing firms in China reveals that adjustment costs and uncertainty have significant aggregate consequences but account for only a modest share of the observed dispersion in the marginal product of capital. A substantial fraction of misallocation stems from firm-specific distortions, both productivity/size-dependent as well as permanent. For large US firms, adjustment costs are relatively more salient, though permanent firm-level factors remain important. These results are robust to the presence of liquidity/financial constraints. |
| JEL: | E0 O11 O4 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23129&r=bec |
| By: | Caroline Freund (Peterson Institute for International Economics); Dario Sidhu (Peterson Institute for International Economics) |
| Abstract: | Using firm level data, the authors examine how global industrial concentration has changed over the last decade in relation to the rise of China. Between 2006 and 2014, global concentration has declined in most industries and is falling on average across all industries, while firms at the top of the distribution are experiencing significant churning. The resulting enhanced industrial competition is partly attributable to the rising market shares of firms from China and other emerging markets at the expense of incumbent industry leaders. The authors further show evidence of global allocative efficiency—highly productive firms tend to be larger and grow faster. Global concentration has, however, risen significantly in several industries where Chinese state-owned enterprises (SOEs) dominate, and China’s SOEs are on average too large and expanding too fast given their low levels of productivity. |
| Keywords: | big business, multinational enterprise, state-owned enterprise, concentration |
| JEL: | D22 F23 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp17-3&r=bec |
| By: | Camille Cornand; Rodolphe Dos Santos Ferreira |
| Abstract: | The paper provides a micra-founded differentiated duopoly illustration of a beauty contest, in which the weight put on the strategic vs. the fundamental motive of the pay offs is not exogenous but may be manipulated by the players. We emphasize the role of the competition component of the strategic motive as a source of conflict with the fun damental motive. This conflict, already present in an oligopolistic setting under perfect information, is only exacerbated when information is imperfect and dispersed. We show how firm owners ease such conflict by opting for sorne cooperation, thus moderating the competitive toughness displayed by their managers. By doing so, they also influence the managers' strategic concern for coordination and consequently the weight put on public relative to private information. |
| Keywords: | beauty contest, competition, cooperation, coordination, differentiated duopoly, dispersed information, public information. |
| JEL: | D43 D82 L13 L21 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2017-05&r=bec |
| By: | Viete, Steffen; Erdsiek, Daniel |
| Abstract: | Mobile information and communication technologies (ICT) have started to diffuse rapidly in the business sector. This study tests for the complementarity between the use of mobile ICT and organizational practices providing workplace flexibility. We hypothesize that mobile ICT can create value if organizational practices grant employees appropriate autonomy over when, where and how to perform work-related tasks. Our data set comprises 1132 German service firms and provides information on the share of employees that have been equipped with mobile devices which allow for wireless internet access, such as notebooks, tablets and smartphones. Workplace flexibility is measured in terms of firms’ use of working from home arrangements, working time accounts, and trust-based working time. Within a production function framework, we find that the use of mobile ICT is associated with a productivity premium only in firms granting workplace flexibility by means of trust-based working time. Robustness checks suggest that our results are not driven by ICT-skill complementarity or by complementarity of mobile ICT with multiple alternative modern management practices. |
| JEL: | D22 L22 O33 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145624&r=bec |
| By: | Buchholz, Manuel; Tonzer, Lena; Berner, Julian |
| Abstract: | This paper analyzes how firm-specific uncertainty affects firms’ propensity to invest. We measure firm-specific uncertainty as firms’ absolute forecast errors derived from survey data of German manufacturing firms over 2007-11. In line with the literature, our empirical findings reveal a negative impact of firm-specific uncertainty on investment. Yet, further results show that the investment response is asymmetric depending on the size and direction of the forecast error: The investment propensity declines significantly if the realized situation is worse than expected. However, firms do not adjust their investment if the realized situation is better than expected, which suggests that the uncertainty effect counteracts the positive effect due to unexpectedly favorable business conditions. This can be one explanation behind the phenomenon of slow recovery in the aftermath of financial crises. Additional results show that the forecast error is highly concurrent with an ex-ante measure of firm-specific uncertainty that we obtain from the survey data. Furthermore, the effect of firm-specific uncertainty is enforced for firms that face a tighter financing situation. |
| JEL: | D22 D84 E32 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc16:145563&r=bec |
| By: | Ugur, Mehmet; Trushin, Eshref; Solomon, Edna |
| Abstract: | Existing evidence on the relationship between R&D intensity and firm survival is varied and often conflicting. We argue that this may be due to overlooking R&D scale effects and complementarity between R&D intensity and market concentration. Drawing on Schumpeterian models of competition and innovation, we address these issues by developing a formal model of firm survival and using a panel dataset of 37,930 of R&D-active UK firms over 1998–2012. We report the following findings: (i) the relationship between R&D intensity and firm survival follows an inverted-U pattern that reflects diminishing scale effects; (ii) R&D intensity and market concentration are complements in that R&D-active firms have longer survival time if they are in more concentrated industries; and (iii) creative destruction as proxied by median R&D intensity in the industry and the premium on business lending have negative effects on firm survival. Other findings concerning age, size, productivity, relative growth, Pavitt technology classes and the macroeconomic environment are in line with the existing literature. The results are strongly or moderately robust to different samples, stepwise estimations, and controls for frailty and left truncation |
| Keywords: | R&D; Innovation; Firm dynamics; Survival analysis |
| Date: | 2016–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:gpe:wpaper:15510&r=bec |
| By: | Schaefer, Daniel; Singleton, Carl |
| Abstract: | Using a dataset covering a large sample of employees and their mostly very large employers, we study the dynamics of British wage inequality over the past two decades. Contrary to other studies, we find little evidence that recent increases in inequality have been driven by differences in the average wages paid by firms. Instead greater dispersion within firms can account for the majority of changes to the wage distribution. After controlling for the changing occupational content of employee wages, the role of average firm residual differences is approximately zero; the modestly increasing trend in between-firm wage inequality is explained by a combination of changes in between-occupation inequality and the occupational specialisation of firms. It is possible that previous studies, which assign some of the importance of changes in the between-firm component to industry, have misrepresented a significant role for occupations. These results are robust across measures of hourly, weekly and annual wages. |
| Keywords: | wage inequality, within-firm inequality, occupational wage premiums |
| JEL: | E24 J31 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76744&r=bec |
| By: | Marchal, Léa; Nedoncelle, Clément |
| Abstract: | We investigate the export-enhancing effect of foreign workers at the firm level. We first develop a theoretical framework of heterogeneous firms, assuming that foreign workers allow for productivity gains and convey valuable information on foreign markets. We illustrate that foreign workers foster exports at the extensive and the intensive margins. This effect can be decomposed in a general effect - to which any foreign worker contributes - and a destination-specific effect - to which only foreign workers who were born in the export destination contribute. We test these theoretical predictions using French firm-level data over the 1997-2008 period and a propensity score matching method to address endogeneity concerns. We find that foreign-born workers, and especially skilled individuals, foster exports at both margins. On average, a firm employing foreign-born workers exports 30% more in value than a control firm. We find evidence that this increase is spread over all destinations, suggesting that the effect of foreign-born workers goes beyond a destination-specific informational channel. |
| Keywords: | Foreign-born workers,Exports,Firms,Heterogeneity,Productivity |
| JEL: | F14 F22 F16 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:2071&r=bec |
| By: | Kou, Kou; Kroll, Henning |
| Abstract: | China has experienced a surge in innovation output in which state-owned enterprises (SOE) play an essential role. Using panel data of Chinese listed firms, this paper examines the influence of the state ownership on innovation output at the firm level. Controlling for size, we analyse the effects of central and local government control on the number of firms' patent applications in different time periods. Doing so, standard assumptions on state ownership's inhibiting character are confirmed. However, we then qualify these finding by running separate models for different regions and sectors find that the impact of state-control on innovation performance depends on a number of conditions. More precisely, state control of firms has a negative impact on innovation output in particular in China's Northeast region and in mid-tech sectors whereas under other circumstances it does either not matter or can even exert a positive influence. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisidp:55&r=bec |