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on Business Economics |
| By: | Rey Đặng (ISTEC - Institut supérieur des Sciences, Techniques et Economie Commerciales - ISTEC); L’hocine Houanti (Sup de Co La Rochelle - Ecole Supérieure de Commerce de la Rochelle - Groupe Sup de Co La Rochelle); Krishna Reddy (Toi Ohomai Institute of Technology); Michel Simioni (UMR MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - CIHEAM-IAMM - Centre International de Hautes Etudes Agronomiques Méditerranéennes - Institut Agronomique Méditerranéen de Montpellier - CIHEAM - Centre International de Hautes Études Agronomiques Méditerranéennes - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | We investigate the relation between board gender diversity and firm profitability using the control function (CF) approach recently suggested by Wooldridge (2015). The CF method takes account of the problem of endogenous explanatory variables that have potential to bias the results. Using a sample of firms that made up the S&P 500 over the period 2004–2015, we find that the presence of women on corporate boards (measured either by the percentage of female directors on corporate boards or the Blau index of heterogeneity) has a positive and significant (at the 1% level) effect on firm profitability (measured by the return on assets). We compare our results to more traditional approaches (such as pooled OLS or the fixed-effects model). Through this study, we shed light on the effect of women on corporate boards on firm performance, as it is still a controversial issue (Post and Byron, 2015). |
| Keywords: | Women,Board of directors,Econometrics,Control function,Firm performance |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02618276&r=all |
| By: | Giovanni Dosi (LEM - Laboratory of Economics and Management - Sant'Anna School of Advanced Studies); Mauro Napoletano (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po); Andrea Roventini; Tania Treibich (OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po) |
| Abstract: | In this work we study the granular origins of business cycles and their possible underlying drivers. As shown by Gabaix (Econometrica 79:733–772, 2011), the skewed nature of firm size distributions implies that idiosyncratic (and independent) firm-level shocks may account for a significant portion of aggregate volatility. Yet, we question the original view grounded on "supply granularity", as proxied by productivity growth shocks – in line with the Real Business Cycle framework–, and we provide empirical evidence of a "demand granularity", based on investment growth shocks instead. The role of demand in explaining aggregate fluctuations is further corroborated by means of a macroeconomic Agent-Based Model of the "Schumpeter meeting Keynes" family Dosi et al. (J Econ Dyn Control 52:166–189, 2015). Indeed, the investigation of the possible microfoundation of RBC has led us to the identification of a sort of microfounded Keynesian multiplier. |
| Keywords: | Business cycles,Granular residual,Granularity hypothesis,Agent-based models,Firm dynamics,Productivity growth,Investment growth |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02557845&r=all |
| By: | Argente, David; Baslandze, Salomé; Hanley, Douglas; Moreira, Sara |
| Abstract: | We study the relationship between patents and actual product innovation in the market, and how this relationship varies with firms' market share. We use textual analysis to create a new data set that links patents to products of firms in the consumer goods sector. We find that patent filings are positively associated with subsequent product innovation by firms, but at least half of product innovation and growth comes from firms that never patent. We also find that market leaders use patents differently from followers. Market leaders have lower product innovation rates, though they rely on patents more. Patents of market leaders relate to higher future sales above and beyond their effect on product innovation, and these patents are associated with declining product introduction on the part of competitors, which is consistent with the notion that market leaders use their patents to limit competition. We then use a model to analyze the firms' patenting and product innovation decisions. We show that the private value of a patent is particularly high for large firms as patents protect large market shares of existing products. |
| Keywords: | creative destruction; growth; Innovation; patent value; patents; productivity |
| JEL: | O3 O4 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14692&r=all |
| By: | Hassan, Tarek Alexander; Hollander, Stephan; Tahoun, Ahmed; van Lent, Laurence |
| 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; exposure; firms; Machine Learning; Pandemic; sentiment; uncertainty; virus |
| JEL: | D22 E0 F0 G15 I15 I18 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14573&r=all |
| By: | Filippo Pusterla (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Thomas Bolli (KOF Swiss Economic Institute, ETH Zurich, Switzerland) |
| Abstract: | This paper extends and refnes the concept of ICT-driven skills-biased technological change by disentangling the effects of information technologies (IT) and communication technologies (CT). Guided by the theory that IT and CT differently affect firms' production processes, we investigate the complementarities between these two distinct technologies and workers' levels of education in affecting firms' productivity. Exploiting within-firm variation between 2005-2017, we find that the use of IT-measured as use of business management tools - is particularly beneficial for workers with a tertiary vocational education. In contrast, CT - measured as workers' use of the intranet - is especially complementary to workers with a tertiary academic education. While consistent with the ICT-driven skills-biased technological change hypothesis, our results offer evidence on the necessity for differentiating between the effects of IT and CT on firm productivity when differently educated workers use these technologies. |
| Keywords: | skills-biased technological change, information technologies, communication technologies |
| JEL: | J24 O33 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:19-468&r=all |
| By: | Marcela Eslava; John C. Haltiwanger |
| Abstract: | We develop a framework that uses price and quantity information on both firms' outputs and inputs to assess the roles, on firm dynamics and welfare, of efficiency, input prices, demand/quality, idiosyncratic markups, and residual wedges. Our strategy nests previous approaches limited by data availability. In our application, demand/quality is found to dominate the cross sectional variability of sales growth, while quality-adjusted input prices and residual wedges play dampening roles, especially at birth. Markups play only a modest role for cross-sectional variability of sales growth but are important in explaining welfare losses from revenue productivity dispersion. |
| JEL: | E24 L24 O47 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27184&r=all |
| By: | Lins, Karl; Roth, Lukas; Servaes, Henri; Tamayo, Ane |
| Abstract: | During the revelation of the Weinstein scandal and the emergence of the #MeToo movement, firms with a culture of ethical behavior toward women, proxied by having women among their five highest paid executives, earned excess returns of close to 1.5% per highly-paid female executive. These returns were followed by positive revisions in analyst earnings forecasts. Firms in industries with more women executives, or headquartered in states with lower levels of sexism or gender pay gap, also earned excess returns of around 1.5% during these event windows. There is no relation between event returns and female board membership. |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14703&r=all |
| By: | Bose, Udichibarna; Mallick, Sushanta; Tsoukas, Serafeim |
| Abstract: | Financial reforms have been found to be highly important in promoting aggregate productivity. Yet, the linkage between access to finance, firm-level productivity, and exporting performance has been overlooked in the literature. We fill this gap using a rich dataset of 11,612 Indian firms over the period 1988-2014 to study the impact of a unique financial policy intervention on firm performance. We document a significant effect of capital-account liberalization through the lens of an export-oriented policy initiative on firms’ productivity and consequently on their exporting activity. Finally, the beneficial effect of the policy change is more pronounced for financially vulnerable firms, as measured by high debt dependence and low levels of liquidity. |
| Keywords: | Productivity; Exporting; Financing; FX market liberalization |
| Date: | 2019–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:esy:uefcwp:27830&r=all |
| By: | Maria Cecilia Bustamante (University of Maryland - Department of Finance); Laurent Frésard (University of Lugano; Swiss Finance Institute) |
| Abstract: | We study whether, how, and why the investment of a firm depends on the investment of other firms in the same product market. Using an instrumental variable based on the presence of local knowledge externalities, we find a sizeable complementarity of investment among product market peers, holding across a large majority of sectors. Peer effects are stronger in concentrated markets, featuring more heterogeneous firms, and for smaller firms with less precise information. Our findings are consistent with a model in which managers are imperfectly informed about fundamentals and use peers' investments as a source of information. Product market peer effects in investment could amplify shocks in production networks. |
| Keywords: | investment, peer effect, competition, agglomeration economies |
| JEL: | G31 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2043&r=all |
| By: | Amore, Mario Daniele; Pelucco, Valerio; Quarato, Fabio |
| Abstract: | Prompted by the shakeup of Covid-19 on financial markets, scholars have begun to explore the corporate traits that can make firms more resilient to a pandemic. In this paper, we test how the involvement of families in ownership and governance positions influences the financial performance of Italian listed firms during the spread of Covid-19. Our results indicate that firms with controlling family shareholders fared significantly better than other firms in the pandemic period. This effect is particularly pronounced among firms in which a family is both the controlling shareholder and holds the CEO position. Collectively, our results expand existing knowledge on the determinants of organizational resilience in the wake of adverse events. |
| Keywords: | CEOs; COVID-19; Family Business; Financial Performance |
| JEL: | D10 G34 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14759&r=all |
| By: | Evans Macheroochego (kenyatta University); Job Omagwa (kenyatta University); Stephen Muathe (kenyatta University) |
| Abstract: | Firm value is dependent on Corporate governance which leads to increased value. High valued firms attract more investors. Towards firm value protection, minimum capital requirements were raised by the Central Bank of Kenya from 250 million to 1 billion shillings on commercial banks to cushion bank shareholders value. Despite the increased oversight and regulatory efforts on corporate governance to protect and enhance firm value, some commercial banks have recorded low firm value. Hence, this study sought to investigate the effect of corporate governance on firm value of commercial banks in Kenya. |
| Keywords: | Corporate Governance,Firm Value,Commercial Banks in Kenya |
| Date: | 2020–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02542954&r=all |