nep-bec New Economics Papers
on Business Economics
Issue of 2017‒03‒12
thirteen papers chosen by
Vasileios Bougioukos
Bangor University

  1. Occupational Choice and Matching in the Labor Market By Mak, Eric; Siow, Aloysius
  2. Declining Dynamism, Allocative Efficiency, and the Productivity Slowdown By Ryan A. Decker; John Haltiwanger; Ron S. Jarmin; Javier Miranda
  3. Gains from trade due to within-firm productivity: Does services exporting matter? By Dincer, N. Nergiz; Tekin-Koru, Ayca
  4. Multi-Product Firms and Product Quality By Manova, Kalina; Yu, Zhihong
  5. Cost and Product Advantages: A Firm-level Model for the Chinese Exports and Industry Growth By Jaumandreu, Jordi; Yin, Heng
  6. Female firm leadership. Extent and performance in 14 EU member states By Theune, Katja; Behr, Andreas
  7. Emigration and Firm Productivity: Evidence from the Sequential Opening of EU Labour Markets By Giesing, Yvonne; Laurentsyeva, Nadzeya
  8. Ceding Control: An Experimental Analysis of Participatory Management By Mellizo, Philip; Carpenter, Jeffrey P.; Matthews, Peter Hans
  9. Wage rigidities and business cycle fluctuations: A linked employer-employee analysis By Effrosyni Adamopoulou; Emmanuele Bobbio; Marta De Philippis; Federico Giorgi
  10. Institutional Difference and FDI Location Choice: Evidence from China By Che, Yi; Du, Julan; Lu, Yi; Tao, Zhigang
  11. Gender matters: Private sector training in Vietnamese SMEs By Benedikte Bjerge; Nina Torm; Neda Trifkovic
  12. Mortality and the Business Cycle: Evidence from Individual and Aggregated Data By van den Berg, Gerard J.; Gerdtham, Ulf-G.; von Hinke, Stephanie; Lindeboom, Maarten; Lissdaniels, Johannes; Sundquist, Jan; Sundquist, Kristina
  13. Firms in international trade By Diez, Federico J.; Mora, Jesse; Spearot, Alan C.

  1. By: Mak, Eric (Shanghai University of Finance and Economics); Siow, Aloysius (University of Toronto)
    Abstract: Integrating Roy with Becker, this paper studies occupational choice and matching in the labor market. Our model generates occupation earnings distributions which are right skewed, have firm fixed effects, and large changes in aggregate earnings inequality without significant changes in within firm inequality. The estimated model fits the earnings distribution both across and within firms in Brazil in 1999. It shows that the recent decrease in aggregate Brazilian earnings inequality is largely due to the increase in her educational attainment over the same years. A simulation of skilled biased technical change in the model also qualitatively fits the recent changes in earnings inequality in the United States.
    Keywords: occupational choice, matching, earnings distribution, inequality
    JEL: J31
    Date: 2017–02
  2. By: Ryan A. Decker; John Haltiwanger; Ron S. Jarmin; Javier Miranda
    Abstract: A large literature documents declining measures of business dynamism including high-growth young firm activity and job reallocation. A distinct literature describes a slowdown in the pace of aggregate labor productivity growth. We relate these patterns by studying changes in productivity growth from the late 1990s to the mid 2000s using firm-level data. We find that diminished allocative efficiency gains can account for the productivity slowdown in a manner that interacts with the within- firm productivity growth distribution. The evidence suggests that the decline in dynamism is reason for concern and sheds light on debates about the causes of slowing productivity growth.
    Date: 2017–01
  3. By: Dincer, N. Nergiz; Tekin-Koru, Ayca
    Abstract: This paper focuses on gains from trade due to rising within-firm productivity in presence of services exporting. The complementarity between exporting and investing in productivity enhancements is investigated by using descriptive regressions using rich, firm-level data for the period 2003-2011 for Turkey. The authors use three productivity measures for robustness purposes. The results show that firms that export both goods and services throughout the sample have higher productivity compared to all other firms in the sample. Another important result of the paper is related to the firms that switch from being goods exporters to goods and services exporters, which exhibit higher productivity than firms that export only goods or firms that switch from services exporting to exporting both goods and services. Finally, within-firm gains from trade as measured by the productivity growth of firms is insensitive to the services exporting status. More importantly, the authors observe no effect of any of export status of firms considered in this paper on their productivity growth.
    Keywords: services trade,productivity,exporting status
    JEL: F10 F14
    Date: 2017
  4. By: Manova, Kalina; Yu, Zhihong
    Abstract: We examine the global operations of multi-product firms. We present a flexible heterogeneous-firm trade model with either limited or strong scope for quality differentiation. Using customs data for China during 2002-2006, we empirically establish that firms allocate activity across products in line with a product hierarchy based on quality. Firms vary output quality across their products by using inputs of different quality levels. Their core competence is in varieties of superior quality that command higher prices but nevertheless generate higher sales. In markets where they offer fewer products, firms concentrate on their core varieties by dropping low-quality peripheral goods on the extensive margin and by shifting sales towards top-quality products on the intensive margin. The product quality ladder also governs firms' export dynamics, both in general and in response to the exogenous removal of MFA quotas on textiles and apparel. Our results inform the drivers and measurement of firm performance, the effects of trade reforms, and the design of development policies.
    Keywords: export prices; multi-product firms; product quality; Trade; trade reforms
    JEL: D22 F10 F12 F14 L10 L11 L15
    Date: 2017–02
  5. By: Jaumandreu, Jordi; Yin, Heng
    Abstract: We use data from 70,000 Chinese manufacturing firms, which are both domestic sellers and exporters, to estimate the joint distribution of unobserved productivity (cost advantages) and unobserved demand heterogeneity (product advantages) from 1998 to 2008. Product advantages are negatively correlated with cost advantages (positively correlated with marginal cost). We characterize growth and sketch examples to show that splitting the advantages produces useful analytical insights. The state is not good at developing product advantages. A fraction of firms specialize in low-cost-low-quality exports. Many marginal cost differences across firms come from heterogeneous output-embodied levels of quality and technology, not "price distortions."
    Keywords: cost advantages; demand heterogeneity; product advantages; productivity
    JEL: C33 D24 L11 O30 O47
    Date: 2017–02
  6. By: Theune, Katja; Behr, Andreas
    Abstract: Evidence on female firm leadership is scarce and often confined to a small number of firms included in share price indices. Our large firm level data set from 2011 contains 441287 firms from 14 EU states. Based on management information, we provide evidence for the extent and the performance of female-led firms. We find strong differences in the extent of female firm leaders between the 14 states but for most countries no evidence for significant performance differences between male- and female-led firms, neither for the whole country samples nor within six broadly defined sectors. This result is confirmed when applying a matching approach to account for potential selection problems.
    JEL: J16 L25 M12
    Date: 2016
  7. By: Giesing, Yvonne; Laurentsyeva, Nadzeya
    Abstract: This paper establishes a causal link between the emigration of skilled workers and firm performance. We exploit time, country, and industry differences in the opening of EU labour markets from 2004 to 2014 as a source of exogenous variation in the emigration rates from new EU member states. Using firm-level panel data from ten East European countries, we show that the outflow of skilled workers reduces firm total factor productivity and increases personnel costs. One explanation for this effect is the increased job turnover, which lowers firm-specific human capital. We find that the most productive firms adapt more easily to emigration as they are better able to retain and train their workers.
    JEL: F22 O15 D24
    Date: 2016
  8. By: Mellizo, Philip (College of Wooster); Carpenter, Jeffrey P. (Middlebury College); Matthews, Peter Hans (Middlebury College)
    Abstract: We use an experiment to evaluate the effects of participatory management on firm performance. Participants are randomly assigned roles as managers or workers in firms that generate output via real effort. To identify the causal effect of participation on effort, workers are exogenously assigned to one of two treatments: one in which the manager implements a compensation scheme unilaterally or another in which the manager cedes control over compensation to the workers who vote to implement a scheme. We find that output is between seven and twelve percentage points higher in participatory firms.
    Keywords: voice, control, intrinsic motivation, participatory management, real effort, experiment
    JEL: C92 J33 J53 J54 M50
    Date: 2017–02
  9. By: Effrosyni Adamopoulou (Bank of Italy); Emmanuele Bobbio (Bank of Italy); Marta De Philippis (Bank of Italy); Federico Giorgi (Bank of Italy)
    Abstract: This paper analyses wage dynamics in Italy in the last 25 years with special focus on the recent recession. Using linked employer-employee data we document the presence of a trade-off between wage and employment adjustments: firms experiencing more wage rigidities exhibit more employment adjustments. Over time, the average amount of nominal wage rigidities was subdued during the recession years. Most of the adjustments took place through the part of wages that is not negotiated at the national level. In a rather rigid institutional context, a larger share of temporary workers, whose contractual relationship may be terminated without cost and whose wages are more frequently renegotiated, served instead as a significant flexibility enhancing margin. More broadly, we find that larger firms, with a greater share of blue-collar workers or belonging to a sector in which firm bonuses represent a large part of annual earnings, were the ones displaying a higher level of wage flexibility.
    Keywords: wage dynamics, negotiated wages
    JEL: J31 J33
    Date: 2016–07
  10. By: Che, Yi; Du, Julan; Lu, Yi; Tao, Zhigang
    Abstract: Rest upon an extensive data set on Foreign Invested Enterprises (FIEs) in China, we investigate the role of institutional difference in determining the locational choice of foreign direct investment (FDI). Estimation results using firm-level discrete choice model suggest that FIEs from source countries that are more remote institutionally from the Chinese mainland exhibit a higher degree of sensitivity toward regional economic institutions in their choice of FDI location. Furthermore, we find that FIEs coming from countries with better institutions than China are more sensitive to institutional difference. Interestingly, we find that the deterrent effct of institutional distance on FDI entry is mitigated for FIEs coming from countries with more ethnic Chinese in their overall populations.
    Keywords: Institutional Difference; FDI Location Choice; China
    JEL: F23 P16
    Date: 2017–02–26
  11. By: Benedikte Bjerge; Nina Torm; Neda Trifkovic
    Abstract: In many developing countries the skill base is a cause of concern with respect to international competition. Firm-provided training is generally seen as an important tool for bridging the skills gap between labour force and private sector demand. Yet little is known about how successful such training may be in closing the gender wage gap. We use a matched employer–employee panel dataset to assess why firms train and whether formal training affects wage outcomes in Vietnamese SMEs. Training is generally found to be firm-sponsored and specific in nature. We find that training is associated with a wage increase of 7–22 per cent for female workers only, depending on the analytical approach taken. We also show evidence that the wage increase is associated only with on-the-job training and that lower ability workers are more likely to be trained. Our findings indicate that, at least in Viet Nam, firm-sponsored on-the-job training helps close the gender wage gap.
    Keywords: training; wage, SME, Viet Nam
    Date: 2016
  12. By: van den Berg, Gerard J. (University of Mannheim); Gerdtham, Ulf-G. (Department of Economics, Lund University); von Hinke, Stephanie (Department of Economics, Bristol University); Lindeboom, Maarten (Tinbergen Institute, VU Amsterdam); Lissdaniels, Johannes (Department of Clinical Science, Lund University); Sundquist, Jan (Center for Primary Health Care Research, Lund University); Sundquist, Kristina (Center for Primary Health Care Research, Lund University)
    Abstract: There has been much interest recently in the relationship between economic conditions and mortality, with some studies showing that mortality is pro-cyclical, while others find the opposite. Some suggest that the aggregation level of analysis (e.g. individual vs. regional) matters. We use both individual and aggregated data on a sample of 20-64 year-old Swedish men from 1993 to 2007. Our results show that the association between the business cycle and mortality does not depend on the level of analysis: the sign and magnitude of the parameter estimates are similar at the individual level and the aggregate (county) level; both showing pro-cyclical mortality.
    Keywords: Mortality; Recessions; Business Cycle; Health; Unemployment; Income.
    JEL: E03 I10 I12
    Date: 2017–03–07
  13. By: Diez, Federico J. (Federal Reserve Bank of Boston); Mora, Jesse (Occidental College); Spearot, Alan C. (University of California, Santa Cruz)
    Abstract: Firms play a critical role in the global economy. In this paper, we survey the behavior of firms in the international economy, both in theory and in the data. We first summarize the key empirical facts that motivate the study of firms in trade. Then, we detail recent theoretical developments on the micro-foundations of firm behavior in an international context, focusing on how firms select into exporting, and how firms respond to international shocks. Finally, we turn to a “real world,” empirically focused view of exporting, beginning with the growth dynamics of firms expanding to global markets, and then addressing the critical financing decisions firms make when engaging in international commerce. We conclude with directions for future research.
    Keywords: firm heterogeneity; international trade; exporters
    JEL: F10 F12 F14
    Date: 2016–12–01

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