nep-bec New Economics Papers
on Business Economics
Issue of 2019‒07‒22
ten papers chosen by
Vasileios Bougioukos
Bangor University

  1. Gender Quotas in the Boardroom: New Evidence from Germany By Alexandra Fedorets; Anna Gibert; Norma Burow
  2. Identifying US business cycle regimes using dynamic factors and neural network models By Soybilgen, Baris
  3. Business Dynamics in the National Establishment Time Series (NETS)/Leland Crane, Ryan Decker By Leland Crane; Ryan Decker
  4. Slow Convergence in Economies with Organization Capital By Luttmer, Erzo G. J.
  5. Upstreamness, Wages and Gender: Equal Benefits for All? By Gagliardi, Nicola; Mahy, Benoît; Rycx, Francois
  6. Worker flows, entry, and productivity in New Zealand’s construction industry By Jaffe, Adam; Chappell, Chappell
  7. What drives the gender wage gap? Examining the roles of sorting, productivity differences, and discrimination. By Sin, Isabelle; Stillman, Steven; Fabling, Richard
  8. Absorptive capacity in New Zealand firms: Measurement and importance By Harris, Richard; Le, Trinh
  9. Skill Complementarity in Production Technology: New Empirical Evidence and Implications By Stoyanov, Andrey; Zubanov, Nick
  10. Training, Soft Skills and Productivity: Evidence from a Field Experiment By Prada, Maria; Rucci, Graciana; Urzua, Sergio

  1. By: Alexandra Fedorets; Anna Gibert; Norma Burow
    Abstract: We examine the introduction of a gender quota law in Germany, mandating a minimum 30% of the underrepresented gender on the supervisory boards of a particular type of firms. We exploit the fact that Germany has a two-tier corporate system consisting of the affected supervisory boards and unaffected management boards within the same firm. We find a positive effect on the female share on supervisory boards of affected firms, but no effect on presidency of the board or its size. We also study whether the increased female representation has had an effect on the financial performance of the firm and conclude that, unlike some previous studies in other countries, there has not been any negative effect on the profitability of the firm, neither at the time when the law was announced nor when it was passed.
    Keywords: Gender quota, Economics of gender, Labor discrimination, Personnel economics, Firm performance
    JEL: J78 J16 M51 L25
    Date: 2019
  2. By: Soybilgen, Baris
    Abstract: We use dynamic factors and neural network models to identify current and past states (instead of future) of the US business cycle. In the first step, we reduce noise in data by using a moving average filter. Then, dynamic factors are extracted from a large-scale data set consisted of more than 100 variables. In the last step, these dynamic factors are fed into the neural network model for predicting business cycle regimes. We show that our proposed method follows US business cycle regimes quite accurately in sample and out of sample without taking account of the historical data availability. Our results also indicate that noise reduction is an important step for business cycle prediction. Furthermore using pseudo real time and vintage data, we show that our neural network model identifies turning points quite accurately and very quickly in real time.
    Keywords: Dynamic Factor Model; Neural Network; Recession; Business Cycle
    JEL: C38 E32 E37
    Date: 2018–07–05
  3. By: Leland Crane; Ryan Decker
    Abstract: Business microdata have proven useful in a number of fields, but the main sources of comprehensive microdata are subject to significant confidentiality restrictions. A growing number of papers instead use a private data source seeking to cover the universe of U.S. business establishments, the National Establishment Time Series (NETS). Previous research documents the representativeness of NETS in terms of the distribution of employment and establishment counts across industry, geography, and establishment size. But there exists considerable need among researchers for microdata suitable for studying business dynamics---birth, growth, decline, and death. We evaluate NETS in terms of its ability to corroborate key insights from the business dynamics literature with a particular focus on the behavior of new and young firms. We find that NETS microdata exhibit patterns of business dynamics that are markedly different from official administrative sources, limiting the usefuln ess of NETS for studying these topics.
    Keywords: Business Microdata ; Economic Measurement ; Entrepreneurship ; Firm Dynamics ; High-Growth Firms ; Job Flows
    JEL: C81 M13 D22 L26
    Date: 2019–05–13
  4. By: Luttmer, Erzo G. J. (Federal Reserve Bank of Minneapolis)
    Abstract: Most firms begin very small, and large firms are the result of typically decades of persistent growth. This growth can be understood as the result of some form of organization capital accumulation. In the US, the distribution of firm size k has a right tail only slightly thinner than 1/k. This is shown to imply that incumbent firms account for most aggregate organization capital accumulation. And it implies potentially extremely slow aggregate convergence rates. A benchmark model is proposed in which managers can use incumbent organization capital to create new organization capital. Workers are a specific factor for producing consumption, and they require managerial supervision. Through the lens of the model, the aftermath of the Great Recession of 2008 is unsurprising if the events of late 2008 and early 2009 are interpreted as a destruction of organization capital, or as a belief shock that made consumers want to reduce consumption and accumulate more wealth instead.
    Keywords: Business cycles; Firm size distribution; Slow recoveries; Zipf’s law
    JEL: E32 L11
    Date: 2019–06–26
  5. By: Gagliardi, Nicola (Free University of Brussels); Mahy, Benoît (University of Mons); Rycx, Francois (Free University of Brussels)
    Abstract: This paper provides first evidence on the impact of a direct measure of firm-level upstreamness (i.e. the steps before the production of a firm meets final demand) on workers' wages. It also investigates whether results vary along the earnings distribution and by gender. Findings, based on unique matched employer-employee data relative to the Belgian manufacturing industry for the period 2002-2010, show that workers earn significantly higher wages when employed in more upstream firms. Yet, the gains from upstreamness are found to be very unequally shared among workers. Unconditional quantile estimates suggest that male top-earners are the main beneficiaries, whereas women, irrespective of their earnings, appear to be unfairly rewarded. Quantile decompositions further show that these differences in wage premia account for a substantial part of the gender wage gap, especially at the top of the earnings' distribution.
    Keywords: upstreamness, global value chains, wages, gender
    JEL: J16 J31
    Date: 2019–06
  6. By: Jaffe, Adam; Chappell, Chappell
    Abstract: We use administrative data on the population of New Zealand construction firms from 2001-2012, along with linked data on their employees and working proprietors, to study the relationships among worker flows, entry, and firm productivity. We find that job churn is prevalent in construction, with around 60 percent of firm-worker pairs not existing previously or not existing subsequently. Firms with new employees are more productive than those with no change in workforce, in part because of knowledge flows from other construction firms. In our preferred specification, with firm fixed effects, a standard deviation increase in the productivity of new employees’ previous firms is associated with a 0.6 percent increase in productivity. Entrants are more productive than pre-existing firms. Firms that enter briefly and disappear exhibit high productivity for that brief period, and firms that enter and stay exhibit a persistent productivity advantage that averages about 6 percent, but which grows as experience accumulates. The entry and worker-knowledge-flow phenomena are distinct, in that the entry effect is not explained by employee composition, and non-entrant firms also benefit from worker knowledge flows.
    Keywords: Productivity Analysis
    Date: 2018–03
  7. By: Sin, Isabelle; Stillman, Steven; Fabling, Richard
    Abstract: As in other OECD countries, women in New Zealand earn substantially less than men with similar observable characteristics. In this paper, we use a decade of annual wage and productivity data from New Zealand’s Linked Employer-Employee Database to examine different explanations for this gender wage gap. Sorting by gender at either the industry or firm level explains less than one-fifth of the overall wage gap. Gender differences in productivity within firms also explain little of the difference seen in wages. The relationships between the gender wage-productivity gap and both age and tenure are inconsistent with statistical discrimination being an important explanatory factor for the remaining differences in wages. Relating across industry and over time variation in the gender wage-productivity gap to industry-year variation in worker skills, and product market and labour market competition, we find evidence that is consistent with taste discrimination being important for explaining the overall gender wage gap. Explanations based on gender differences in bargaining power are less consistent with our findings.
    Keywords: Labor and Human Capital
    Date: 2017–08
  8. By: Harris, Richard; Le, Trinh
    Abstract: To the best of our knowledge, this paper reports the first set of nationally representative results on the importance of ‘absorptive capacity’ for firms operating in New Zealand between 2005-15. Absorptive capacity is generally defined as a firm's ability to internalise external knowledge. Using data principally from the Business Operations Survey, we measure absorptive capacity across a 10-year period and investigate if it remains stable in the long term. This is followed by considering how firms’ characteristics vary across levels of absorptive capacity and most importantly whether such capacity determines firms’ productivity performance across the primary, manufacturing and service sectors. Our results show that relative to other influences, absorptive capacity as measured here has a substantial influence on exporting, innovation, and undertaking R&D, and consequently on firm-level productivity. Set against relatively poor productivity performance, the paper concludes with a discussion of how government should consider helping firms to boost their levels of absorptive capacity in New Zealand.
    Keywords: International Relations/Trade
    Date: 2018–02
  9. By: Stoyanov, Andrey (York University, Canada); Zubanov, Nick (University of Konstanz)
    Abstract: Matched worker-firm data from Danish manufacturing reveal that 1) industries differ in within-firm worker skill dispersion, and 2) the correlation between within-firm skill dispersion and productivity is positive in industries with higher average skill dispersion. We argue that these patterns are a manifestation of technological differences across industries: firms in the "skill complementarity" industries profit from hiring workers of similar skill level, whereas firms in the "skill substitutability" industries benefit from hiring workers of different skill levels. An empirical method we devise produces a robust classification of industries into the distinct complementarity and substitutability groups. Our study unveils hitherto unnoticed technological heterogeneity between industries within the same economy, and demonstrates its importance. Specifically, we show through simulations on a simple general equilibrium model that failing to take technological heterogeneity into account results in large prediction errors.
    Keywords: skill dispersion, complementarity, production technology, firm productivity
    JEL: D24 D58 J2
    Date: 2019–06
  10. By: Prada, Maria (University of Maryland); Rucci, Graciana (IADB); Urzua, Sergio (University of Maryland)
    Abstract: This paper examines a training intervention aimed at boosting leadership and communication skills among employees of a large Latin American retailer. The identification exploits an experimental design in the context of a difference-in-difference strategy. Using longitudinal information obtained from the firm and two skills surveys, we document large positive effects of the training on store- and individual- level productivity. The intervention was more effective in boosting leadership than communication skills. Spillovers from trained managers to untrained sales representatives also contribute to the main effects. Our findings confirm the possibility of increasing productivity through training targeting critical soft-skills.
    Keywords: socio-emotional skills, training, productivity, experiments with firms
    JEL: C93 J24 M53 O15
    Date: 2019–06

This nep-bec issue is ©2019 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.