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on Business Economics |
| By: | Villena, Mauricio |
| Abstract: | We formally study Pigouvian taxation in a duopoly market in which a CSR firm interacts with a profit maximizing firm. Unlike previous literature, we consider three different scenarios: (i) the CSR firm acts as a consumer-friendly firm, cares for not only its profits but also consumer surplus, as a proxy of its concern for its "stakeholders" or consumers; (ii) the CSR firm main objective is a combination of its own profit and the environment, caring for the environmental damage produced by the market in which it interacts; and (iii) the CSR firm is both consumer and environmental friendly. Finally, we compare the different Pigouvian rules derived with the first best competitive market solution and the monopoly/duopoly second best solutions. |
| Keywords: | Corporate social responsibility, consumer-friendly firm, environment-friendly firm, Mixed Duopoly, Emission Taxation |
| JEL: | H23 L13 L31 Q5 Q50 |
| Date: | 2019–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100035&r=all |
| By: | Marie Le Mouel; Alexander Schiersch |
| Abstract: | Understanding the causes of the slowdown in aggregate productivity growth is key to maintaining the competitiveness of advanced economies and ensuring long-term economic prosperity. This paper is the first to provide evidence that investment in Knowledge-Based Capital (KBC), despite having a positive effect on productivity at the micro level, is a driver of the weak productivity performance at the aggregate level, by accentuating divergence between a group of “frontier” firms and the rest of the economy. Using detailed firm-level administrative data for Germany, we find evidence that the effect of KBC on productivity is heterogeneous across firms within industries: this effect is 3 times larger for firms in the top quintile of the KBC distribution compared to firms in the bottom quintile of the KBC distribution. We document the existence of divergence in productivity growth between top KBC users and the rest of firms at the industry level, and find that industries where this gap is larger are also those industries where the heterogeneity in the effect of KBC is highest and where average productivity growth was lower. The evidence hence supports the view that the use of KBC plays a role in explaining weak productivity growth, by accentuating differences between firms. |
| Keywords: | Knowledge-Based Capital, firm dynamics, productivity divergence |
| JEL: | D24 L25 O14 O30 O47 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1868&r=all |
| By: | Oliver Rehbein; Santiago Carbo-Valverde |
| Abstract: | The decision to change or terminate a bank-firm relationship has been demonstrated to be crucial to firm performance following bank mergers. We investigate what determines this decision and find both bank competition and the available firm collateral to be important factors. We additionally provide new evidence that firms that are able to add a bank rela- tionship following a merger exhibit much stronger post-merger performance. Our findings are consistent with the interpretation that bank mergers cause a reduction in lending to most firms, leading them to search for alternative sources of finance. |
| Keywords: | bank mergers, relationship banking, competition |
| JEL: | G21 G34 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2018_044v2&r=all |
| By: | Tarek A. Hassan (Boston University); Stephan Hollander (Tilburg University); Laurence van Lent (Frankfurt School of Finance and Management); Ahmed Tahoun (London Business School) |
| Abstract: | Using tools described in our earlier work (Hassan et al., 2019, 2020), we develop text- based measures of the costs, benefits, and risks listed firms in the US and over 80 other countries associate with the spread of Covid-19 and other epidemic diseases. We identify which firms expect to gain or lose from an epidemic disease and which are most affected by the associated uncertainty as a disease spreads in a region or around the world. As Covid-19 spreads globally in the first quarter of 2020, we find that firms’ primary concerns relate to the collapse of demand, increased uncertainty, and disruption in supply chains. Other important concerns relate to capacity reductions, closures, and employee welfare. By contrast, financing concerns are mentioned relatively rarely. We also identify some firms that foresee opportunities in new or disrupted markets due to the spread of the disease. Finally, we find some evidence that firms that have experience with SARS or H1N1 have more positive expectations about their ability to deal with the coronavirus outbreak. |
| Keywords: | Epidemic diseases, pandemic, exposure, virus, firms, uncertainty, sentiment, ma- chine learning |
| JEL: | I15 I18 D22 G15 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:inetwp119&r=all |
| By: | Buchheim, Lukas (University of Munich); Dovern, Jonas (University of Erlangen-Nuremberg); Krolage, Carla (Ifo Institute for Economic Research); Link, Sebastian (Ifo Institute for Economic Research) |
| Abstract: | This paper studies the determinants of firms' business outlook and managerial mitigation strategies in the wake of the COVID-19 crisis using a representative panel of German firms. We first demonstrate that the crisis amplifies pre-crisis weaknesses: Firms that appear relatively weak before the crisis are harder hit initially, and, on top of the initial impact, expect more difficulties for their businesses going forward. Consequently, such firms are first to cut employment and investment. Second, our results highlight that expectations regarding the duration of the shutdown—which, at this point of the crisis, exhibit plausibly random variation—are an important determinant of the chosen mitigation strategies: Firms that expect the shutdown to last longer are more likely to lay off workers and to cancel or postpone investment projects. |
| Keywords: | expectations, firm behavior, COVID-19, shutdown, employment, investment |
| JEL: | D22 D84 E23 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13253&r=all |
| By: | Mohamed Ali Marouani; Michelle Marshalian |
| Abstract: | Large-scale business subsidies tied to national industrial development promotion programmes are notoriously difficult to study and are often inseparable from the political economy of large government programmes. We use the Tunisian national firm registry panel database, data on treated firms, and a perceptions survey administered by the National Research Institute to measure the impact of Tunisia's Industrial Upgrading Program. Using inverse propensity score re-weighted differences-in-differences regressions, we find that small treated firms hire more and higher-skilled labour. |
| Keywords: | firm subsidies, Fiscal policy, Industrial policy, Firm size, impact analysis, Labour |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2020-21&r=all |
| By: | Nils Grashof (University of Bremen); Dirk Fornahl (University of Bremen) |
| Abstract: | In the 21st century clusters can be observed in most developed economies. However, the scientific results regarding the effect of clusters on firm performance are highly contradictive. This inconsistency in the empirical results makes it difficult to infer general conclusions about the firm-specific cluster effect, referring to the effect from being located in a cluster on firm performance, e.g. derived through the externalities within clusters. Therefore, this paper aims to reconcile the contradictory empirical findings. It investigates whether the still prevalent assumption that clusters are a beneficial location for firms is unconditionally true or whether doubts about the alleged positive effect of clusters on firm performance are justified. By conducting a descriptive meta-analysis of the empirical literature, based on four different performance variables from four separate publication databases, the study investigates the actual effect direction as well as possible moderating influences. We find evidence for a rather positive firm-specific cluster effect. However, we identify several variables from the micro-, meso- and macro-level that directly or interactively moderate the relationship between clusters and firm success. The corresponding results demonstrate, for example, that a negative firm-specific cluster effect occurs more frequently in low-tech industries than in high-tech industries. ‘To be or not to be’ located in a cluster is therefore not the question, but it rather depends on the specific conditions. |
| Keywords: | : meta-analysis, cluster effect, firm performance |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2020-01&r=all |
| By: | Ufuk Akcigit; Stefanie Stantcheva |
| Abstract: | Tax policies are a wide array of tools, commonly used by governments to influence the economy. In this paper, we review the many margins through which tax policies can affect innovation, the main driver of economic growth in the long-run. These margins include the impact of tax policy on i) the quantity and quality of innovation; ii) the geographic mobility of innovation and inventors across U.S. states and countries; iii) the declining business dynamism in the U.S., firm entry, and productivity; iv) the quality composition of firms, inventors, and teams; and v) the direction of research effort, e.g., toward applied versus basic research, or toward dirty versus clean technologies. We give ideas drawn from research on how the design of policy can allow policy makers to foster the most productive firms without wasting public funds on less productive ones. |
| JEL: | H21 H23 H25 O31 O33 O34 O38 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27109&r=all |