nep-bec New Economics Papers
on Business Economics
Issue of 2019‒04‒01
twelve papers chosen by
Vasileios Bougioukos
Bangor University

  1. Use and sharing of big data, firm networks and their performance By KIM YoungGak; MOTOHASHI Kazuyuki
  2. Concentration in International Markets: Evidence from US Imports By Alessandra Bonfiglioli; Rosario Crinò; Gino Gancia
  3. Firms and Economic Performance: A View from Trade By Alessandra Bonfiglioli; Rosario Crinò; Gino Gancia
  4. Digitalization of manufacturing process and open innovation: Survey results of small and medium sized firms in Japan By MOTOHASHI Kazuyuki
  5. Innovative Events By Max Nathan; Anna Rosso
  6. Impact of the Brexit vote announcement on long-run market performance By Wael Bousselmi; Patrick Sentis; Marc Willinger
  7. The conditional effect of technological change on collective bargaining coverage By Meyer, Brett; Biegert, Thomas
  8. Geography, Competition and Optimal Multilateral Trade Policy By Antonella Nocco; Gianmarco I. P. Ottaviano; Matteo Salto
  9. An Analysis on the Domestic Sales and Exports: A Dynamic Model for the Turkish Manufacturing Firms By Selcuk Gul
  10. Globalization, Job Tasks and the Demand for Different Occupations By Heyman, Fredrik; Sjöholm, Fredrik
  11. Corporate Capture of Blockchain Governance By Daniel Ferreira; Jin Li; Radoslawa Nikolowa
  12. Firms' Price, Cost and Activity Expectations: Evidence from Micro Data By Lena Boneva; James Cloyne; Martin Weale; Tomasz Wieladek

  1. By: KIM YoungGak; MOTOHASHI Kazuyuki
    Abstract: RIETI conducted the Survey of Big Data Use and Innovation in Japanese Manufacturing Firms in 2015. This paper uses this survey data, linked with TSR data of inter-firm transactions, to examine the relationship between supplier and customer (business partner) network structures and the data sharing with these business partners. It is found that, in general, the number of suppliers is positively correlated with the likelihood of internal use of data and data sharing with suppliers, customers, and other third-party firms. On the contrary, the number of customers is negatively correlated with data use and sharing, especially with customers. The analysis results also show that long-term relationships with suppliers contribute negatively to data sharing, but contribute positively to data sharing with customers. Interestingly, the more customers a firm's suppliers have, or the more suppliers a firm's customers have in their transaction networks, the less likely it is that the firm shares big data with other third-party firms. We find that data sharing has a positive and significant impact on firm productivity. However, we find no positive contribution of data sharing to attracting new customers or suppliers. We do not find any significant effect of data sharing on the extensive margin of transactions.
    Date: 2019–03
  2. By: Alessandra Bonfiglioli (Queen Mary University of London and CEPR); Rosario Crinò (Università Cattolica del Sacro Cuore, Dept. of Economics and Finance, CEPR and CESifo); Gino Gancia (Queen Mary University of London, CREi and CEPR)
    Abstract: We use transaction-level data to study changes in the concentration of US imports. Concentration has fallen in the typical industry, while it is stable by industry and country of origin. The fall in concentration is driven by the extensive margin: the number of exporting firm has grown, and the number of exported products has fallen more for top firms. Instead, average revenue per product of top firms has increased. At the industry level, top firms are converging, but top firms within country are diverging. These facts suggest that intensified competition in international markets coexists with growing concentration among national producers.
    Keywords: Superstar Firms, Concentration, US Imports, Firm Heterogeneity, International Trade
    JEL: E23 F12 F14 L11 R12
    Date: 2019–02–28
  3. By: Alessandra Bonfiglioli (Queen Mary University of London); Rosario Crinò (Università Cattolica del Sacro Cuore); Gino Gancia (Queen Mary University of London)
    Abstract: We use transaction-level US import data to compare firms from virtually all countries in the world competing in a single destination market. Guided by a simple theoretical framework, we decompose countries' market shares into the contribution of the number of firm-products, their average attributes (quality and efficiency) and heterogeneity around the mean. To further explore the role of exceptional firms, we also develop a novel decomposition that separates the contribution of heterogeneity from that of granularity. Our results show that the number of firm-products explains half of the variation in sales, while the remaining part is equally accounted for by average attributes and their dispersion. Quality is the main driver of firm heterogeneity. While individual firms matter, we find that heterogeneity is more important than granularity for explaining sales. We then study how the distribution of firm-level characteristics varies across countries, and we explore some of its determinants. Countries with a larger market size tend to be characterized by a more dispersed distribution of firms' sales, especially due to heterogeneity in quality. These countries also tend to be more likely to host superstar firms, although this is not the only source of higher heterogeneity.
    Keywords: US Imports, Firm Heterogeneity, International Trade, Prices, Quality, Variety, Granularity
    JEL: F12 F14
    Date: 2018–11–08
  4. By: MOTOHASHI Kazuyuki
    Abstract: Digitalization has a transformative impact on innovation in firms and industry. In this paper, the results of the Survey on the Changing Nature of Manufacturing Processes and New Product Development are presented to show how the nature of Japanese SMEs in manufacturing industry is changing in the new IT era (AI, big data and IoT). It is found that a firm applying new IT, such as data analytics by machine learning, is likely to be involved in delivering digital services as well as new products (servitalization) and innovation ecosystem, interacting with multiple firms. Such firms address wider customer needs, instead of just meeting existing customer requirements, meaning that its product innovation is likely to happen in new business fields. In addition, a firm which extensively uses its customer data gains more sales and profit contributions from its new product.
    Date: 2019–03
  5. By: Max Nathan; Anna Rosso
    Abstract: We take a fresh look at firms' innovation-productivity linkages, using novel data capturing new aspects of innovative activity. We combine UK administrative microdata, media and website content to develop experimental metrics - new product/service launches - for a large panel of SMEs. Extensive validation and descriptive exercises show that launches complement patents, trademarks and innovation surveys. We also establish connections between launches and previous innovative activity. We then link IP, launches and productivity, controlling for media exposure and firm heterogeneity. Launch activity is associated with higher SME productivity, especially in the service sector. High-quality launches and medium-size firms help drive this result.
    Keywords: innovation, productivity, ICT, data science
    JEL: L86
    Date: 2019–03
  6. By: Wael Bousselmi (CREST - Centre de Recherche en Economie et Statistique [Bruz] - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz]); Patrick Sentis (MRM - Montpellier Research in Management - UM1 - Université Montpellier 1 - UM3 - Université Paul-Valéry - Montpellier 3 - UM2 - Université Montpellier 2 - Sciences et Techniques - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - UM - Université de Montpellier); Marc Willinger (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    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: financial market,event study,Brexit,buy-and-hold,macroeconomic news
    Date: 2018–12–14
  7. By: Meyer, Brett; Biegert, Thomas
    Abstract: Recent work in labor economics has shown that technological change has induced labor market polarization, an increase in demand for both high and low skill jobs, but declining demand for middle skill routine task jobs. We argue that labor market polarization should affect firms’ participation in collective agreements, but only in countries where laws automatically extending collective agreements to nonparticipating firms are weak. We develop an argument in which labor market polarization increases the distance between different skill groups of workers in both preferences for unionization and leverage to realize those preferences. Because of this, an increase in labor market polarization should be associated with a decline in collective bargaining coverage. We test our hypothesis about collective agreement extension and collective bargaining coverage in a cross-national sample of 21 Organisation for Economic Co-operation and Development countries from 1970 to 2010 and our hypothesis about labor market polarization in German firm-level and industry-level data from 1993–2007. We find a negative relationship in the Organisation for Economic Co-operation and Development sample between technological change and collective bargaining coverage only in countries that make little or no use of extension procedures. We find that higher workforce skill polarization is associated with lower collective agreement participation in both German firm-level and industry-level samples.
    Keywords: Germany; labor market polarization; Technological change; trade unions
    JEL: R14 J01
    Date: 2019–02–07
  8. By: Antonella Nocco; Gianmarco I. P. Ottaviano; Matteo Salto
    Abstract: How should multilateral trade policy be designed in a world in which countries differ in terms of market access and technology, and firms with market power differ in terms of productivity? We answer this question in a model of monopolistic competition in which variable markups increasing in firm size are a key source of misallocation across firms and countries. We use `disadvantaged' to refer to countries with smaller market size, worse state of technology (in terms of higher innovation and production costs), and worse geography (in terms of more remoteness from other countries). We show that, in a global welfare perspective, optimal multilateral trade policy should: promote the sales of low cost firms to all countries, but especially to disadvantaged ones; trim the sales of high cost firms to all countries, but especially to disadvantaged ones; reduce firm entry in all countries, but especially in disadvantaged ones. This would not only restore efficiency but also reduce welfare inequality between advantaged and disadvantaged countries if their differences in market size, state of technology and geography are large enough.
    Keywords: International trade policy, monopolistic competition, firm heterogeneity, pricing to market, multilateralism
    JEL: D4 D6 F1 L0 L1
    Date: 2019–03
  9. By: Selcuk Gul
    Abstract: This study examines the relation between real domestic sales and real exports for Turkish manufacturing firms. Dynamic panel data estimations based on firm level data for the period 2004 to 2014 suggest that the two variables are substitutes. Holding other factors constant, we estimate that a 10 percent decline in real domestic sales increases the real exports by about 2.6 percent, on average. However, this correlation differs among manufacturing sub-sectors, which are defined according to 2-digit NACE classification. Results indicate that substitutability between domestic and foreign sales is stronger for export-oriented, low-leveraged and younger firms. In addition, we observe that the degree of substitution between real domestic sales and exports strengthens significantly when the domestic demand conditions are weak. This shows that exporter firms in manufacturing industry have the elasticity to shift from domestic to international markets as a response to domestic demand shocks.
    Keywords: Domestic sales, Exports, Domestic demand, Dynamic panel data
    JEL: C23 D22 F14
    Date: 2019
  10. By: Heyman, Fredrik (Research Institute of Industrial Economics (IFN)); Sjöholm, Fredrik (Department of Economics, Lund University)
    Abstract: Globalization has increased in recent decades, resulting in structural changes of production and labor demand. This paper examines how the increased global engagement of firms affects the structure of the workforce. We find that the aggregate distribution of occupations in Sweden has become more skilled between 1997 and 2013. Moreover, firms with a high degree of international orientation have a relatively skilled distribution of occupations and firms with low international orientation have a relatively unskilled distribution of occupations. High- and low-skilled occupations have increased in importance whereas middle-skilled occupations have declined with a resulting job polarization. We also discuss and analyze the role played by new technology and automatization.
    Keywords: Occupations; Job polarization; Globalization; Multinational enterprises; Exporter; Automatization
    JEL: F10 F16 F23
    Date: 2019–03–25
  11. By: Daniel Ferreira (London School of Economics, CEPR and ECGI); Jin Li (Hong Kong University, CEP); Radoslawa Nikolowa (Queen Mary University of London)
    Abstract: We develop a theory of blockchain governance. In our model, the proof-of-work system, which is the most common set of rules for validating transactions in blockchains, creates an industrial ecosystem with specialized suppliers of goods and services. We analyze the two-way interactions between blockchain governance and the market structure of the industries in the blockchain ecosystem. Our main result is that the proof-of-work system leads to a situation where the governance of the blockchain is captured by a large firm.
    Keywords: Governance, Blockchain, Proof-of-Work, Industrial Ecosystem
    JEL: G30 L13 M20
    Date: 2019–01–22
  12. By: Lena Boneva (Bank of England; CEPR); James Cloyne (CEPR; UC Davis; NBER); Martin Weale (Centre for Macroeconomics (CFM); Kings College London); Tomasz Wieladek (CEPR; Barclays)
    Abstract: Firms’ expectations play a central role in modern macroeconomic models, but little is known empirically about how these are formed or whether they matter for economic outcomes. Using a novel panel data set of manufacturing firms’ expectations about prices and wage rates, new orders, employment and unit costs for the United Kingdom, we document a range of stylized facts about the properties of firms’ expectations and their relationship with recent experience. There is wide dispersion of expectations across firms. Expected future price and wage growth are influenced by firm-specific factors but macroeconomic factors also matter. Expectations of employment and new orders are influenced by firm-specific measures of past orders while expected unit costs seem to be influenced more by firm-specific cost pressures and aggregate import prices. After controlling for a wide range of variables we find a significant connection between past expected price and wage increases and their out-turns. But there is also strong evidence that firms’ expectations are clearly not rational.
    Keywords: Firm exceptions, Price setting, Rationality, Survey data, Inflation expectations
    JEL: C23 C26 E31
    Date: 2019–02

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