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on Business Economics |
| By: | Lemos, Renata; Scur, Daniela |
| Abstract: | This paper investigates the impact of family CEOs on firm organizational choices and the causes and consequences of these decisions. We focus on second-generation (dynastic) family firms, collect new data on CEO successions for over 900 firms in Latin America and Europe and merge it with unique data on organizational choices, specifically, structured management practices. We use variation in the gender composition of the outgoing CEOs' children for identification. There is clear preference for male heirs: conditional on number of children, having at least one son is correlated with a 30pp higher likelihood of dynastic family succession. As the gender composition of the outgoing CEO's children is unlikely to affect decisions on mid-level managerial practices, we use it as an instrumental variable for family succession. Dynastic CEO successions lead to almost one standard deviation lower adoption of structured management practices, with an implied productivity decrease of about 10%. We rationalize this finding with a new conceptual framework that accounts for the importance of implicit employment commitments to employees of dynastic firms in determining the adoption of monitoring technologies. We find empirical evidence that, controlling for lower levels of knowledge and skills of family CEOs, concerns for reputation and ''family name'' can play a role in constraining investment in structured management practices. Overall, our empirical results shed new light on dynastic firms' persistent performance deficit and apparent lag in the adoption of structured management practices. |
| JEL: | D22 M11 M12 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13794&r=all |
| By: | Cornwell, Christopher; Schmutte, Ian M.; Scur, Daniela |
| Abstract: | Firms' hiring and firing decisions affect the entire labor market. Managers often make these decisions, yet the effects of management on labor allocation remains largely unexplored. To study the relationship between a firm's management practices and how it recruits, retains and dismisses its employees, we link a survey of firm-level management practices to production and employee records from Brazil. We find that firms using structured management practices consistently hire and retain better workers, and fire more selectively. Good production workers match with firms using structured personnel management practices. By contrast, better managers match with firms using structured operations management practices. |
| Keywords: | labor allocation; Management Practices; Managers; productivity |
| JEL: | D22 J31 M11 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13908&r=all |
| By: | Aghion, Philippe; Guriev, Sergei; Jo, Kangchul |
| Abstract: | We study firm dynamics in Korea before and after the 1997-98 Asian crisis and pro-competitive reforms that reduced the dominance of chaebols. We find that in industries that were dominated by chaebols before the crisis, labor productivity and TFP of non-chaebol firms increased markedly after the reforms (relative to other industries). Furthermore, entry of non-chaebol firms increased significantly in all industries after the reform. Finally, after the crisis, the non-chaebol firms also significantly increased their patenting activity (relative to non-chaebol firms). These results are in line with a neo-Schumpeterian view of transition from a growth model based on investment in existing technologies to an innovation-based model. |
| Keywords: | Asian crisis; chaebols; Schumpeterian Growth |
| JEL: | L25 O43 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13825&r=all |
| By: | Francesca Di Iorio (Università di Napoli Federico II); Maria Letizia Giorgietti (Università di Milano) |
| Abstract: | Recent literature on the role of patents in shaping competition between incumbents and new entrants shows mixed evidence, as patents can discourage entry into markets but may also encourage potential entrants by increasing profitability from research and development. The increasing use of patents as strategic weapons motivates this investigation of the impact of innovation on competition. In a case study of US pharmaceutical cardiovascular submarkets over the period 1988-1998, we use a panel probit model to study the impact of a firm’s patents and rivals’ patents in the firm’s decision to launch new products. Our results show that the number of a firm’s lagged patents encourages the firm’s entry with new products, while rivals’ initial stock of patents discourages entry, but more recent patents promote entry by opening new technological opportunities. |
| Keywords: | Entry, Patents, Panel data, Probit model, Submarkets |
| JEL: | L11 L65 C11 C23 C25 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:pav:demwpp:demwp0169&r=all |
| By: | John Haltiwanger; Ron Jarmin; Robert Kulick; Javier Miranda; Veronika Penciakova |
| Abstract: | This document describes the data contained in the firm level revenue-augmented Longitudinal Business Database (RE-LBD) and provides background on the construction of the data. The revenue-augmented LBD is a firm level data created by adding revenue data from the detailed tax receipts variables contained in the Standard Statistical Establishment List (SSEL) and the Business Register (BR). Key variables for the construction of the revenue variable include the FIRMID identifying the firm, revenue measures collected from income tax filings, industry classification codes detailing the activities of the employer, the legal form of organization and the year associated with that filing. The RE-LBD starts in year 1997 and ends in 2015. |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:cen:tnotes:19-02&r=all |
| By: | Hsieh, Chang-Tai; Rossi-Hansberg, Esteban |
| Abstract: | The rise in national industry concentration in the US between 1977 and 2013 is driven by a new industrial revolution in three broad non-traded sectors: services, retail, and wholesale. Sectors where national concentration is rising have increased their share of employment, and the expansion is entirely driven by the number of local markets served by firms. Firm employment per market has either increased slightly at the MSA level, or decreased substantially at the county or establishment levels. In industries with increasing concentration, the expansion into more markets is more pronounced for the top 10\% firms, but is present for the bottom 90\% as well. These trends have not been accompanied by economy-wide concentration. Top U.S. firms are increasingly specialized in sectors with rising industry concentration, but their aggregate employment share has remained roughly stable. We argue that these facts are consistent with the availability of a new set of fixed-cost technologies that enable adopters to produce at lower marginal costs in all markets. We present a simple model of firm size and market entry to describe the menu of new technologies and trace its implications. |
| JEL: | E23 E24 L16 L22 R12 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13797&r=all |
| By: | Lee, Hanbin; Sumner, Daniel A. |
| Keywords: | Marketing |
| Date: | 2019–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea19:290869&r=all |
| By: | Bar-Isaac, Heski; Levy, Raphaël |
| Abstract: | Firms have discretion over task allocations, which may dampen employees' career prospects, and, hence, motivation. Task assignments and worker motivation interact through the extent of labor market competition; that is, the possibility of moving to another firm. More competition enhances motivation but decreases firms' incentives to assign workers to informative tasks. One consequence is that competitive firms sometimes choose strategies that lead to intermediate competition. When the employee pool is heterogeneous, firms might choose different human resources practices that attract different kinds of workers, and differentiate themselves through the career opportunities within and beyond the firms that they offer. |
| Keywords: | career concerns; Labour market competition; professional service firms; task assignments |
| JEL: | J32 J33 M12 M5 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13828&r=all |
| By: | Liudmila Kitrar (National Research University Higher School of Economics); Tamara Lipkind (National Research University Higher School of Economics) |
| Abstract: | The paper presents the Business Climate Indicator (BCI) in the Russian manufacturing including the medium and high-tech (MHT) manufacturing industries. The authors explain the feasibility of a new alternative measure that summarizes common information of business tendency surveys cleared up of specific fluctuations in individual variables, and give arguments to prove its effectiveness. The resulting BCI reflects the quantitative changes in manufacturing growth more accurately and with a lead compared to the traditional confidence indicator. Identification of the BCI cyclic profile and its visualization through a tracer demonstrate all significant waves of manufacturers’ optimism and pessimism for the period from January 2005 to January 2019. To construct BCI-MHT, the units of observation and the input information are divided into three groups according to the technological level of industries. The dynamics of BCI-MHT is close to those of BCI; however, during the protracted recession in 2016-2018, the sentiments of manufacturers of medium- and high-tech products were less pessimistic compared with the sentiments of all manufacturers. |
| Keywords: | business tendency surveys, business climate indicator, medium- and high-tech industries, short-term cycle |
| JEL: | C38 E32 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:96sti2019&r=all |