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on Business Economics |
| By: | Christopher Hansen; Joern H. Block; Matthias Neuenkirch |
| Abstract: | The financial performance of family firms has been widely studied in the literature. Combining the results of 172 primary studies from 38 countries with data about business cycles, we investigated how family firm performance changes over the business cycle. Using meta-analytic estimation methods, we found that family firms slightly outperform nonfamily firms in both economically good and economically difficult times. For non-OECD countries, we found evidence for a countercyclical effect where the relative outperformance of family firms is higher in economically difficult times. No such cyclical effect was found for family firms in OECD countries. Our study extends the literature on how family firm performance depends on macroeconomic factors. |
| Keywords: | family firms, financial performance, meta-analysis, business cycle |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:trr:wpaper:201806&r=bec |
| By: | Rossi-Hansberg, Esteban; Sarte, Pierre-Daniel; Trachter, Nicholas |
| Abstract: | Using U.S. NETS data, we present evidence that the positive trend observed in national product-market concentration between 1990 and 2014 becomes a negative trend when we focus on measures of local concentration. We document diverging trends for several geographic definitions of local markets. SIC 8 industries with diverging trends are pervasive across sectors. In these industries, top firms have contributed to the amplification of both trends. When a top firm opens a plant, local concentration declines and remains lower for at least 7 years. Our findings, therefore, reconcile the increasing national role of large firms with falling local concentration, and a likely more competitive local environment. |
| JEL: | E23 L11 R12 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13174&r=bec |
| By: | Aghion, Philippe; Bergeaud, Antonin; Cette, Gilbert; Lecat, Rémy; Maghin, Helene |
| Abstract: | In this paper we identify two counteracting effects of credit access on productivity growth: on the one hand, better access to credit makes it easier for entrepreneurs to innovate; on the other hand, better credit access allows less efficient incumbent firms to remain longer on the market, thereby discouraging entry of new and potentially more efficient innovators. We first develop a simple model of firm dynamics and innovation-base growth with credit constraints, where the above two counteracting effects generate an inverted-U relationship between credit access and productivity growth. Then we test our theory on a comprehensive French manufacturing firm-level dataset. We first show evidence of an inverted-U relationship between credit constraints and productivity growth when we aggregate our data at sectoral level.. We then move to firm-level analysis, and show that incumbent firms with easier access to credit experience higher productivity growth, but that they also experienced lower exit rates, particularly the least productive firms among them. To confirm our results, we exploit the 2012 Eurosystem's Additional Credit Claims (ACC) program as a quasi-experiment that generated exogenous extra supply of credits for a subset of incumbent firms. |
| Keywords: | credit constraint; firms; growth; interest rate; productivity |
| JEL: | G21 G32 O40 O47 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13212&r=bec |
| By: | Bisztray, Marta; Koren, Miklós; Szeidl, Adam |
| Abstract: | We use firm-level data from Hungary to estimate knowledge spillovers in importing through fine spatial and managerial networks. By identifying from variation in peers' import experience across source countries, by comparing the spillover from neighboring buildings with a cross-street placebo, and by exploiting plausibly exogenous firm moves, we obtain credible estimates and establish three results. (1) There are significant knowledge spillovers in both spatial and managerial networks. Having a peer which has imported from a particular country more than doubles the probability of starting to import from that country, but the effect quickly decays with distance. (2) Spillovers are heterogeneous: they are stronger when firms or peers are larger or more productive, and exhibit complementarities in firm and peer productivity. (3) The model-implied social multiplier is highly skewed, implying that targeting an import-encouragement policy to firms with many and productive neighbors can make it 26% more effective. These results highlight the benefit of firm clusters in facilitating the diffusion of business practices. |
| Keywords: | Imports; manager networks; peer effects; social multiplier; spatial spillovers |
| JEL: | D22 F14 R32 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13200&r=bec |
| By: | Giannakopoulosa, Nicholas; Laliotis, Ioannis |
| Abstract: | Decentralised bargaining is an important wage setting mechanism that promotes wage flexibility which in turn determines how earnings and employment are affected by economic shocks. We investigate the impact of the 2011 industrial relations reform in Greece that allowed firms with less than 50 employees to participate in firm-level bargaining. Matching administrative contractual data with longitudinal firm-level data we identify treated and non-treated firms. We find that during the first post-reform year, treated firms with less than 50 employees experienced a 4.8 percent increase in firm-level bargaining and a 12 percent drop in wage floors relative to non-treated firms. We also document a positive employment impact. |
| Keywords: | Firm-level bargaining,Wages,Reform,Greece |
| JEL: | J31 J41 J52 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:275&r=bec |
| By: | Marija Becic (Department of Economics and Business Economics, University of Dubrovnik); Perica Vojinic (Department of Economics and Business Economics, University of Dubrovnik) |
| Abstract: | The aim of this paper is to explore whether the gender of top manager plays an important role in innovation activities in selected CEE countries. For this purpose, a framework of logistic binary regressions is applied to the firm-level data from Business Environment and Enterprise Performance Survey (BEEPS). The research assesses the differences in firm innovation activities in CEECs considering the gender structure of the top management. Findings indicate that, on average, there is a lower possibility that a firm innovates when it is governed by a female manager. However, women in top management are underrepresented in all the industries but this is specially the case in highly innovative sectors such as IT industry. |
| Keywords: | process innovation, product innovation, gender diversity, top management, CEECs firms |
| JEL: | J16 O30 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:6909790&r=bec |
| By: | Panagiotou, Dimitrios; Stavrakoudis, Athanassios |
| Abstract: | The present work analyzes free-on-board against uniform delivered strategic prices in pure and mixed duopolistic spatial markets with reference to the food sector. Along with investor owned firms (IOFs) that maximize profits, we introduce member welfare maximizing cooperatives (COOPs) and examine their impact on the strategic pricing choices. Demand is price responsive. We use a two stage game between two IOFs, between an IOF and a COOP, and between two COOPs. The findings indicate that the introduction of COOPs acts as a disciplinary factor regarding the pricing behavior of the IOFs. As competition in the spatial market escalates, we move from the quasi--collusive (FOB,FOB) Nash equilibrium, where there are only IOFs in the market, to the more aggressive (UD,UD) strategic pricing configuration where COOPs replace one or both IOFs in the market. |
| Keywords: | oligopoly spatial competition; mixed; free-on-board; uniformly delivered |
| JEL: | C72 D40 L13 Q13 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:89801&r=bec |
| By: | Bellmann, Lutz (Institute for Employment Research (IAB), Nuremberg); Hübler, Olaf (Leibniz University of Hannover); Leber, Ute (Leibniz University of Hannover) |
| Abstract: | This paper investigates the role of works councils in job satisfaction. Using the recently developed Linked Personnel Panel, we consider both the direct and indirect impact via further training. Basic estimates on an individual level do not reveal clearly direct effects, but on an establishment level, the existence of a works council increases the average job satisfaction in a company. In more extended approaches, we also find a positive, weakly significant link on an individual level accompanied by positive training with regard to job satisfaction if we control for personal characteristics, working conditions, firm size, collegiality variables and industry dummies. Firms with industry-wide bargaining agreements drive this result. The effects are stronger if the firm carries the training costs and if the share of trained workers within the firm measures training. The direct impact of works councils remains positive but becomes insignificant if Lewbel's instrumental variables estimator is applied. |
| Keywords: | job satisfaction, training, works councils |
| JEL: | J24 J28 J53 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11871&r=bec |
| By: | Wael Bousselmi; Patrick Sentis; Marc Willinger |
| Abstract: | We examine how the Brexit announcement influenced the long-run market performance of British and European listed firms. Using daily data and a sample composed of 3,015 European listed firms (805 UK and 2,210 non-UK), we find that, over a 12-month horizon, the Brexit announcement negatively affected the long-run market performance of UK firms (regardless of their business activities) and European non-British (non-UK hereafter) firms that conduct most of their business activities within the British area. We also provide evidence that, after the Brexit announcement, analysts’ earnings forecasts and the realized accounting decreased and the return volatility increased for UK firms. |
| Keywords: | Brexit, Macroeconomic news, Financial market, Buy-and-hold, Event study. |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpceem:18-23&r=bec |
| By: | Lekfuangfu, Warn N. (Chulalongkorn University); Lordan, Grace (London School of Economics) |
| Abstract: | We consider the extent to which societal shifts have been responsible for an increased tendency for females to sort into traditional male roles over time, versus childhood factors. Drawing on three cohort studies, which follow individuals born in the UK in 1958, 1970 and 2000, we compare the magnitude of the shift in the tendency of females in these cohorts to sort into traditionally male roles as compared to males, to the combined effect of a set of childhood variables. For all three cohorts we find strong evidence of sorting along gendered lines which has decreased substantively over time. We also find that there has been no erosion of the gender gap in the tendency to sort into occupations with the highest share of males. Within cohort, we find little evidence that childhood variables change the tendency for either the average or highest ability female to sort substantively differently. Our work underlines the importance of societal shifts, over and above childhood variables, in determining the sorting patterns we have seen over the last number of decades, and also those that remain today. |
| Keywords: | occupational choice, gender, societal change, childhood influences |
| JEL: | J16 J4 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11872&r=bec |
| By: | Maria Molina-Domene |
| Abstract: | This paper investigates why labor specialization brings additional frictions to the labor market. The intuition is that labor specialized firms rely on complementarity and firm-specific human capital, assigning high value to the worker-employer match. Consistent with employees' importance, the findings show that specialized firms preserve their workforce: these firms labor hoard and increase wages during slow-downs. Additionally, when specialized firms unexpectedly face a labor supply shock | albeit managing to decrease the wages of the remaining co-workers, they become less productive. Overall, the empirical evidence suggests that frictions introduce bilateral monopoly rents. |
| Keywords: | labor specialization, market frictions, division of labor, human capital |
| JEL: | J24 J42 J63 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1580&r=bec |
| By: | Andam, Kwaw S.; Asante, Seth |
| Abstract: | This paper uses data from a sample of 679 food processing firms in Ghana to estimate changes in employment by the food processing sector from 2014 to 2017, to analyze the determinants of firm exit during the same period, and to analyze the determinants of firm growth from the firm’s establishment up to 2017. In modeling the determinants of firm growth, the focus is on the effects of formal status as a food processing firm, which is defined in this paper as registration as a business for tax purposes and registration with the national food regulator, the Food and Drugs Authority (FDA). |
| Keywords: | GHANA; WEST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; employment; food safety; food policies; food processing; enterprises; firms; firm exit ; small enterprise development |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1755&r=bec |
| By: | Kalnins, Arturs; Lin, Stephen; Thomas, Catherine |
| Abstract: | This paper analyzes how firms are organized in the U.S. hotel management industry. For most hotel brands, properties with intermediate room occupancy rates are relatively more likely to be managed by company employees rather than by independent franchisees. Properties with the lowest and the highest occupancy rates tend to be managed by franchisees, at arm's length from the hotel chain. This variation in organizational form is consistent with a model in which the incentives embodied in management contracts vary with property-level productivity. We infer that most hotel chains franchise low productivity relationships to keep property-level fixed costs low and franchise the most productive relationships to create high powered incentives for franchisees. Franchisees of high-productivity properties work harder than the managers of both chain-managed properties and low-productivity franchises because the performance incentives in franchise contracts are proportional to hotel revenues and complement the incentives arising from having control over the property. |
| Keywords: | Firm Heterogeneity; firm structure; Incomplete Contracts; Outsourcing |
| JEL: | D22 D23 F12 L23 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13190&r=bec |
| By: | Mona Yaghoubi (University of Canterbury); Reza Yaghoubi; Graeme Guthrie |
| Abstract: | In this paper we investigate the financing behaviour of Hospital Corporation of America (HCA) for the years 1990 to 2013. We study the variations in HCA’s market and book leverage ratios due to 1) mergers and acquisitions, and divestitures that change a firm’s total assets, 2) buybacks, and 3) leveraged buyouts and public o˙erings that change the firm’s ownership. We scrutinize HCA’s market and book leverage ratios’ variations independently as well as relative to each other during the same periods of time. We find that i) HCA’s management team used HCA’s excess cash from divestitures to repurchase $1.7 billion of HCA’s stocks and they also called about $1.35 billion of HCA’s debt, ii) HCA’s market leverage ratio tends to stay in a target leverage zone, and iii) in some years HCA’s management team used the book leverage ratio as a tool to keep the market leverage ratio inside a target leverage zone. |
| Keywords: | Capital structure dynamics, share buyback, leveraged buyout, mergers and acquisitions, initial public offerings |
| JEL: | G32 |
| Date: | 2018–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:18/21&r=bec |