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on Business Economics |
| By: | Ewens, Michael (California Institute of Technology); Malenko, Nadya |
| Abstract: | Venture capital (VC) backed firms face neither the governance requirements nor a major separation of ownership and control of their public peers. These differences suggest that independent directors could play a unique role on private firm boards. This paper explores the dynamics of VC-backed startup boards using new data on over 7,200 startups, along with board member entry, exit, and individual director characteristics. We document several new facts about board size, the allocation of control, and composition dynamics. At formation, a typical board has four members and is entrepreneur-controlled. Independent directors are found on the median board after the second financing event, when control over the board becomes shared, with independent directors holding the tie-breaking vote. These patterns are consistent with independent directors playing both a mediating and advising role over the startup lifecycle, and thus representing another potential source of value-add to entrepreneurial firm performance. |
| Date: | 2020–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:t96yq&r=all |
| By: | Sergey G. Kokovin; Shamil Sharapudinov; Alexander Tarasov; Philip Ushchev |
| Abstract: | Our novel approach to modeling monopolistic competition with heterogeneous consumers involves a space of characteristics of a differentiated good (consumers’ ideal points), alike Hotelling (1929). Firms have heterogeneous costs à la Melitz (2003). In addition to price setting, each firm also chooses its optimal location/niche in this space. We formulate conditions for positive sorting: more efficient firms serve larger market segments and face tougher competition in the equilibrium. Our framework entails rich equilibrium patterns displaying non-monotonic markups, high in the most and least populated niches, and the unequal gains from trade across different consumers. |
| Keywords: | firm heterogeneity, product space, positive sorting, product niches |
| JEL: | F10 L11 L13 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8082&r=all |
| By: | Cirera,Xavier; Cusolito,Ana Paula |
| Abstract: | This paper describes and benchmarks innovation activities for a sample of countries in the South Asia region, as well as the impact of these activities on firm-level productivity. The evidence gathered suggests that countries in the South Asia region can be divided into two groups, in terms of the magnitude and composition of the innovation activities: leaders (Bangladesh and India) and laggards (Nepal and Pakistan). Leaders present higher rates of innovation activities than laggards and focus more on process innovation than product innovation. Differences across firms within all countries tend to present similar patterns when considering leaders and laggards, with the acquisition of knowledge capital (for example, research and development investments in equipment, and training) highly concentrated in a few firms, and mature, exporter, and foreign-owned firms as the most innovative of the region. The evidence also suggests a positive impact of innovation on productivity, primarily via incremental innovation, especially in India. |
| Keywords: | Legislation,Real&Intellectual Property Law,Social Policy,Intellectual Property Rights,Legal Products,Common Property Resource Development,Legal Reform,Regulatory Regimes,Judicial System Reform,Inequality,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,Food&Beverage Industry,Common Carriers Industry,Plastics&Rubber Industry,General Manufacturing,Construction Industry,Business Cycles and Stabilization Policies,Innovation,International Trade and Trade Rules |
| Date: | 2019–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8876&r=all |
| By: | Braese,Johannes Michael; Maruyama Rentschler,Jun Erik; Hallegatte,Stephane |
| Abstract: | This review examines the literature on the role of infrastructure in determining the productivity and competitiveness of firms. It shows that the existing evidence base is clear in concluding that reliable and high-quality infrastructure is a crucial foundation for enabling businesses to thrive. It demonstrates that the provision of electricity, transport, water, and telecommunications systems increases firm-level productivity. It also shows that providing infrastructure per se is not enough to boost productivity, unless it offers reliable service. Disruptions and irregular service have substantial adverse effects on firms, not least due to disrupted supply chains, underutilization of production capacity, and costly adaptation measures. |
| Keywords: | Energy Policies&Economics,Transport Services,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,Food&Beverage Industry,Plastics&Rubber Industry,General Manufacturing,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Hydrology,Economic Theory&Research,Industrial Economics,Economic Growth |
| Date: | 2019–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:8895&r=all |
| By: | Gunardi, Hery; Primiana, Ina; Effendi, Nury; Herwany, Aldrin; Satyakti, Yayan |
| Abstract: | This paper tests the interrelationships among risk, competition, and efficiency in the Indonesian private banking industry between 2014 and 2018. We examines asymmetric rivalry within and between strategic groups defined according to the size of their members. We hypothesize that, owing to several forms of group-level effects, including price difference and efficiency, strategic groups comprising large firms expect to experience a large amount of retaliation from firms within their group and accommodation from the group comprising smaller firms. The competition of private banking is dominated by incumbent firm. The risk and efficiency evolved over time enjoyed by incumbent with fat cat taxonomy and quiet life hypothesis. The entrant play lean and hungry strategy in different market segment within strategic group, whereas foreign bank deter incumbent with higher prices to enter between strategic group. The competition of private banking in Indonesia dominated by risk appetite and fragmented market |
| Keywords: | Market Structure, Risk, Efficiency, Indonesian Private Banking |
| JEL: | G24 G32 |
| Date: | 2020–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:98451&r=all |
| By: | Aghion, Philippe; Bergeaud, Antonin; Blundell, Richard; Griffith, Rachel |
| Abstract: | Matched employee-employer data from the UK are used to analyze the wage premium to working in an innovative firm. We find that firms that are more R&D intensive pay higher wages on average, and this is particularly true for workers in some low-skilled occupations. We propose a model in which a firm’s innovativeness is reflected in the degree of complementarity between workers in low-skill and highskilled occupations, and in which non-verifiable soft skills are an important determinant of the wages of workers in low-skilled occupations. The model yields additional predictions on training, tenure and outsourcing which we also find support for in data. |
| Keywords: | innovation; skill-based technological change; wage; complementarity |
| JEL: | O33 L23 J31 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:103452&r=all |
| By: | Enrico De Monte |
| Abstract: | This paper analyzes productivity dynamics based on French firm-level data covering nine key 2-digit industries for the period 1994 - 2016. I estimate firm-level productivity through the estimation of a translog production function and investigate the following main aspects: (i) aggregate productivity change with firm entry and exit by applying the Dynamic OlleyPakes Productivity Decomposition (DOPD), (ii) firms’ ability to improve productivity and productivity persistence, and (iii) productivity differences between different firm groups such as survivors, entrants and exitors as well as small, medium and big firms by applying the concept of stochastical dominance. My results show that aggregate productivity has increased for most the considered 2-digit industries and that in many cases surviving firms’ have contributed significantly to these positive improvements. Entering firms contribute in many cases positively to aggregate productivity while the contribution of exitors shows varying signs. Furthermore, I find that firms’ reveal a high degree of productivity persistence. Analysing productivity difference between firm groups the results suggest that the productivity distribution of surviving firms stochastically dominates the distribution of entering and exiting firms. Surprisingly, the results reveal that big firms do not stochastically dominate the productivity distribution of small firms. |
| Keywords: | production function estimation, productivity decomposition, technological change, productivity differences, firm entry and exit. |
| JEL: | C13 C14 D24 D30 L60 O47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2020-07&r=all |
| By: | Chung Tran; Sebastian Wende |
| Abstract: | We study the incidence of capital income taxation in a dynamic general equilibrium model with heterogeneous firms and lifecycle households. In this incomplete market setting, marginal excess burdens of three capital taxes, namely corporate income, dividend and capital gains taxes, are vastly different due to heterogeneous responses of firms and households, and heterogeneous effects of general equilibrium adjustments. It is indeed important to account for firm heterogeneity in productivity and investment financing as well as household heterogeneity in age and skill. Overall, taxing capital with a corporate income tax at the firm level results in higher excess burden than taxing capital with dividend and capital gains taxes at the household level. Given the existing U.S. tax treatment for capital income, reforms that shift tax burden from the firm to household side potentially result in efficiency gains and overall welfare improving. However, the welfare benefits of the tax reforms are quite different across households and generations over transition time, depending on skill, age-cohort and budget balancing tax instruments. In particular, majority of currently alive households, especially retirees, experience welfare gains under moderate corporate income tax cuts, but suffer from welfare losses under more radical tax cuts. |
| Keywords: | Excess burden; Tax incidence; Distributional eects; Overlapping generations; Dynamic general equilibrium |
| JEL: | D21 E62 H21 H22 H25 |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:acb:cbeeco:2019-670&r=all |
| By: | Athreye, Suma (Essex Business School); Fassio, Claudio (CIRCLE, Lund University); Roper, Stephen (Warwick Business School) |
| Abstract: | In order to observe a patent application at the firm level two conditions need to be met: new products need to be of patentable quality, which depends both on the degree of novelty of innovations and on the total number (portfolio) of innovations; and the benefits of patents need to be higher than the costs of owning them. Analyzing the patent propensity of small and large UK firms using a novel innovation-level survey (the SIPU survey) linked to Community Innovation Survey data we find that when we consider the whole innovation portfolio smaller firms do patent less than larger firms. However, using data on individual innovations, we find that smaller firms are no less likely to patent any specific innovation than larger firms. We argue that size differences in the probability to patent relate primarily to the ‘portfolio effect’, i.e. larger firms generate more innovations than smaller firms and therefore are more likely to create one or more which are patentable. As for the decision to patent a patentable innovation, we find that cost barriers, more than issues of innovation quality or enforceability, deter small firms from patenting specific innovations. Measures to address the costs of patenting for smaller firms – perhaps by considering patents as eligible costs for R&D tax credits – and/or subsidizing SMEs’ participation in IP litigation schemes may both encourage patent use by smaller firms. |
| Keywords: | Patenting; SME; small firms; UK |
| JEL: | O32 O34 O38 |
| Date: | 2020–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2020_002&r=all |