nep-bec New Economics Papers
on Business Economics
Issue of 2018‒01‒01
eight papers chosen by
Vasileios Bougioukos
Bangor University

  1. Human Capital, Firm Capabilities, and Innovation By Ajay Bhaskarbhatla; Deepak Hegde; Thomas (T.L.P.R.) Peeters
  2. Patent licensing in the presence of a differentiated good By Jiyun Cao; Uday Bhanu Sinha
  3. Family firms and financial analyst activity By Eugster, Nicolas
  4. Labor Market Flows: Evidence from Chile Using Micro Data from Administrative Tax Records By Elías Albagli; Alejandra Chovar; Emiliano Luttini; Carlos Madeira; Alberto Naudon; Matías Tapia
  5. Migration and FDI: The role of job skills By Ana Cuadros; Joan Martín-Montaner; Jordi Paniagua
  6. Two-sided strategy-proofness in many-to-many matching markets By Triossi, Matteo; Romero-Medina, Antonio
  7. Team Structure and the Effectiveness of Collective Performance Pay By Marisa Ratto; Emma Tominey; Thibaud Vergé
  8. Does Import Competition Induce R&D Reallocation? Evidence from the U.S. By Rui Xu; Kaiji Gong

  1. By: Ajay Bhaskarbhatla (Erasmus School of Economics, ERIM); Deepak Hegde (New York University); Thomas (T.L.P.R.) Peeters (Erasmus School of Economics, ERIM; Tinbergen Institute, The Netherlands)
    Abstract: Are differences in inventor productivity due to differences in inventors’ skills or differences in the capabilities of the firms they work for? We analyze a 37-year panel that tracks the patenting of U.S. inventors and find strong evidence for serial correlation in inventors’ productivity. We apply an econometric technique developed by Abowd, Kramarz, and Margolis (1999) to decompose the contributions of inventors’ human capital and firm capabilities for productivity. Our estimates suggest human capital is 4-5 times more important than firm capabilities for explaining the variance in inventor productivity. High human capital inventors work for firms that have (i) other high human capital inventors, (ii) superior financial performance, and (iii) weak firm-specific invention capabilities. On the margins, managers should emphasize selecting talent rather than training workers to enhance innovation performance.
    Keywords: Human Capital; Capabilities; Innovation; Matching; Competitive Advantage
    JEL: O30 O31 O32 J24
    Date: 2017–12–08
  2. By: Jiyun Cao (The School of Economics, Nankai University and Collaborative Innovation Center for China Economy, Tianjin, China); Uday Bhanu Sinha (Department of Economics, Delhi School of Economics)
    Abstract: The existing literature has considered licensing of a patented innovation either in a homogenous good industry or in a differentiated goods industry. We consider the licensing problem between two firms i.e., licensor and licensee producing the homogenous goods when there is a third firm producing a differentiated good in the market. We find that when the costs of non-innovators are not high, the optimal licensing contract depends on the degree of product differentiation and the innovator has more incentive for innovation when it is an insider than when it is an outsider of this market.
    Keywords: licensing, two-part tariff, Cournot oligopoly, homogenous and differentiated goods, incentive for innovation.
    JEL: D43 D45 L13
    Date: 2017–12
  3. By: Eugster, Nicolas
    Abstract: This paper examines the relationship between ownership structure, analyst coverage, and forecast error for the entire population of non-financial companies listed on the Swiss Exchange for the period 2003-2013. The results show a negative association between concentrated ownership and analyst coverage for both family firms and firms held by a nonfamily blockholder. Furthermore, forecasts of analysts are shown to be more accurate for family firms than for other firms. These results suggest that family ownership improves the quality of the firm’s information environment. This situation can be explained by a better alignment of interests between majority and minority shareholders among family firms.
    Keywords: Ownership structure; concentrated ownership; family firms; nonfamily blockholder; widely held firms; analyst coverage; forecast error; information environment
    JEL: G32 G34
    Date: 2017–12–18
  4. By: Elías Albagli; Alejandra Chovar; Emiliano Luttini; Carlos Madeira; Alberto Naudon; Matías Tapia
    Abstract: Using administrative tax records for all formal Chilean firms and employees, we compute and characterize several labor flow measures. Our results show that labor mobility in Chile is large for international standards, with the reallocation rate averaging 37% over the last decade, the highest value among the 25 OECD countries with comparable data. The magnitude of labor reallocation is highly heterogeneous among firms and industries, being highest in Agriculture and Construction. Job reallocation is also high for smaller companies, especially due to high rates of firm creation and destruction, and for firms that pay lower wages. Finally, there is a significant procyclical behavior of workers’ entry rate, and, in smaller magnitude, a countercyclical reaction of the exit rate, which is consistent with international evidence that shows job creation to be the main adjustment mechanism over the business cycle.
    Date: 2017–12
  5. By: Ana Cuadros (IIE and Economics Department, Universitat Jaume I, Castellón, Spain); Joan Martín-Montaner (IIE and Economics Department, Universitat Jaume I, Castellón, Spain); Jordi Paniagua (IIE and Department of Economic Structure, University of Valencia, Spain)
    Abstract: This paper models and quantifies the role played by migrants occupying a variety of jobs positions (managers, professional and non-qualified) in Foreign Direct Investment (FDI). Higher shares of migrants with management skills are expected to mitigate management and transaction costs of foreign affiliates. We test our model on a global panel data set of Greenfield bilateral investment with wide variety of gravity specifications, both at the extensive and intensive margins. The paper provides a novel rationale for the heterogeneous effects of low-skilled migration and new insights into the mechanisms by which migration operates in the firm’s FDI decisions, with particular attention to the relevance of firm size and activity.
    Keywords: migration; foreign Direct Investment; FDI; job skills; gravity equation; extensive margin
    JEL: F21 F22 F23
    Date: 2017
  6. By: Triossi, Matteo; Romero-Medina, Antonio
    Abstract: We study the existence of group strategy-proof stable rules in many to-many matching markets. We show that when firms have acyclical preferences over workers the set of stable matchings is a singleton, and the worker-optimal stable mechanism is a stable and group strategy-proof rule for firms and workers. Furthermore, acyclicity is the minimal condition guaranteeing the existence of stable and strategy-proof mechanisms in many-to-many matching markets.
    Keywords: Singleton core; Two-sided Group Strategy-proofness; Stability; Acyclicity; Many-to-many markets
    JEL: D78 D71 C78 C71
    Date: 2017–12–18
  7. By: Marisa Ratto (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Emma Tominey (York University - Dept. Phys.); Thibaud Vergé (CREST-LEI - Hebrew University)
    Keywords: Incentives,teams performance,sub-teams,cooperation
    Date: 2017–12–01
  8. By: Rui Xu; Kaiji Gong
    Abstract: We analyze the impact of rising import competition from China on U.S. innovative activities. Using Compustat data, we find that import competition induces R&D expenditures to be reallocated towards more productive and more profitable firms within each industry. Such reallocation effect has the potential to offset the average drop in firm-level R&D identified in the previous literature. Indeed, our quantitative analysis shows no adverse impact of import competition on aggregate R&D expenditures. Taking the analysis beyond manufacturing, we find that import competition has led to reallocation of researchers towards booming service industries, including business and repairs, personal services, and financial services.
    Keywords: Western Hemisphere;Asia and Pacific;United States;Chinese Import Competition, R&D Expenditures, Reallocation, R&D Expenditures, Country and Industry Studies of Trade, Trade and Labor Market Interactions
    Date: 2017–11–16

This nep-bec issue is ©2018 by Vasileios Bougioukos. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.