|
on Business Economics |
| By: | Ester Manna (Universitat de Barcelona and BEAT) |
| Abstract: | The paper investigates how product market competition affects the firms' decision to hire altruistic or selfish employees in a mixed duopoly where a public and a private firm compete against each other on prices and quality. When firms offer similar services, so that product competition is fierce, both firms benefit from hiring altruistic employees even if it leads to lower prices. Conversely, when firms offer sufficiently differentiated services, the private firm prefers to hire selfish employees as starting a price war with the public firm is not profitable. However, the private firm would hire altruistic employees if it faced another private firm. Therefore, when firms offer differentiated products, customers may benefit from the privatization of the public firm, especially when the employees' degree of altruism is high. |
| Keywords: | Firms’ ownership, Altruism, Hiring Decision, Quality Choice, Privatization, Vertical and Horizontal Differentiation. |
| JEL: | D03 D21 L13 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ewp:wpaper:392web&r=all |
| By: | Ginja, Rita (University of Bergen); Karimi, Arizo (Uppsala University); Xiao, Pengpeng (Yale University) |
| Abstract: | Search frictions make worker turnover costly to firms. A three-month parental leave expansion in Sweden provides exogenous variation that we use to quantify firms' adjustment costs upon worker absence and exit. The reform increased women's leave duration and likelihood of separating from pre-birth employers. Firms with greater exposure to the reform hired additional workers and increased incumbent hours, incurring additional wage costs. These adjustment costs varied by firms' availability of internal and external substitutes. Economy-wide analyses show that a higher reform exposure is correlated with fewer hires and lower starting wages of young women compared to men and older women. |
| Keywords: | parental leave, firm-specific human capital, statistical discrimination |
| JEL: | J13 J16 J21 J22 J31 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13833&r=all |
| By: | Vivien Lefebvre (LARGE - Laboratoire de Recherche en Gestion et Economie - UNISTRA - Université de Strasbourg) |
| Abstract: | This article studies the relationship between working capital management and firm operating performance and focuses on the moderating effect of size. We use a large sample of 56,221 small, medium, and large firms from France, Germany, and Italy, and our results indicate that the impact of working capital management on performance strongly depends on size. We identify a higher sensitivity of performance to underinvestment in net operating working capital for small firms, but no higher sensitivity to overinvestment. These findings suggest that small firms experience high opportunity costs from lost sales when their net operating working capital is low. Financial constraints and lack of financial management are discussed as potential explanations because both are expressions of the liability of smallness. |
| Date: | 2020–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02968569&r=all |
| By: | Luis Dau; Randall Morck; Bernard Yeung |
| Abstract: | Every firm in a developed economy relies on the mere existence of countless other firms to keep prices competitive up and down all supply chains. Without this network externality, no firm forms; and without many firms, no network forms; locking in a low-income trap. Business group governance supersedes corporate governance in most developing economies and in the rapid catch-up development phases of most high-income economies by hierarchically coordinating firms in multiple industries, internalizing this network externality. High-income economies grow via creative destruction - creative firms imposing a negative externality upon firms they destroy or disrupt, but a larger positive innovation-related externality upon the whole economy. Business groups avoid creative self-destruction, innovation by one group firm that disrupts another. Corporate governance supersedes business group governance in high-income economies to facilitate productivity growth. If business group governance does not retreat, productivity growth is impaired and a middle-income trap can result. |
| JEL: | B26 G3 N20 O1 P12 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28069&r=all |
| By: | Susanto, Stefanny Magdalena |
| Abstract: | Strategic Orientation berpengaruh secara langsung terhadap firm performance suatu perusahaan. Teknologi Informasi menawarkan cara baru untuk menjangkau pelanggan dengan informasi pasar yang substansial. Dengan memanfaatkan Information Technology (IT), Perusahaan mendapatkan keuntungan dari pengaruh sosial terhadap pemasaran secara langsung, yang bertujuan untuk mengumpulkan informasi di jejaring sosial pelanggan. |
| Date: | 2020–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:uwstz&r=all |
| By: | Mitkova, Mariya |
| Abstract: | This paper develops a search and matching model with hierarchical firms, human capital accumulation, internal promotions and on-the-job search. At the time of their market entry firms maximize present value of profits with respect to their promotion rule. Workers who are eligible for promotion but cannot be promoted because the senior position in the firm is taken start searching on-the-job. The decentralized equilibrium is then compared to the socially optimal one. The welfare analysis is conducted in two steps: in the first one fixed firm entry is assumed, while in the second firm entry is determined by a free-entry condition. Under fixed firm entry, the social planner can induce aprrox. 5% welfare gain by imposing earlier promotion timing compared to the one firms choose in the decentralized equilibrium. The inefficiency of the decentralized equilibrium is caused by strategic complementarity in firms' promotion choices. If a firm delays internal promotions it creates a negative externality on all other firms by reducing the pool of potential candidates to the high productivity senior jobs. However, due to strategic complementarity the competitors respond by also increasing their promotion requirement. Imposing a free-entry condition further reveals that in the decentralized equilibrium firm entry is biased downwards which exacerbates the allocative inefficiency in the economy. |
| Keywords: | promotions,on-the-job search,human capital,efficiency |
| JEL: | D21 D61 D63 J63 J64 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224589&r=all |
| By: | Hiroyuki Kasahara; Yoichi Sugita |
| Abstract: | Commonly used methods of production function estimation assume that a firm’s output quantity can be observed as data, but typical datasets contain only revenue, not output quantity. We examine the nonparametric identification of production function from revenue data when a firm faces a general nonparametric demand function under imperfect competition. Under standard assumptions, we provide the constructive nonparametric identification of various firm-level objects: gross production function, total factor productivity, price markups over marginal costs, output prices, output quantities, a demand system, and a representative consumer’s utility function. |
| Keywords: | nonparametric identification, production function, markup, total factor productivity, revenue |
| JEL: | C14 L11 L25 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8667&r=all |
| By: | Duc Anh Dang; Hai Anh La |
| Abstract: | The literature shows that political connections have different effects on firms' activities. However, the question of how political connections affect firms' formalization has not been explored. Using data from three waves of the Vietnam Small and Medium Enterprise Survey for the period from 2007 to 2011, this paper aims to examine the relationship between political connections and firms' formalization in Viet Nam. We find that firms with political connections increase their share of formal workers. |
| Keywords: | Political connections, formalization, Viet Nam |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2020-147&r=all |
| By: | Hiroyuki Kasahara; Yoichi Sugita |
| Abstract: | Commonly used methods of production function and markup estimation assume that a firm's output quantity can be observed as data, but typical datasets contain only revenue, not output quantity. We examine the nonparametric identification of production function and markup from revenue data when a firm faces a general nonparametri demand function under imperfect competition. Under standard assumptions, we provide the constructive nonparametric identification of various firm-level objects: gross production function, total factor productivity, price markups over marginal costs, output prices, output quantities, a demand system, and a representative consumer's utility function. |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2011.00143&r=all |
| By: | Zou, Na |
| Abstract: | This study examines whether and how anticorruption efforts may mitigate the risk of corporate fraud. Based on a sample of Chinese publicly listed firms over the period of 2008 to 2017, we find that anticorruption efforts reduce the likelihood of fraud commission and increase the likelihood of detection given fraud. These effects are driven by state-owned enterprises and politically connected firms through politician board members. We also find that firms located in regions with well-developed market and legal institutions are less likely to commit fraud in the post anticorruption period. Firms increasing internal monitoring by appointing local independent directors with accounting background help to explain the reduction of fraud in these regions. This study contributes to the literature on corporate wrongdoing and the design of strategies to mitigate the risk of corporate fraud in an emerging economy context. |
| Keywords: | Corporate fraud,Anticorruption,Corporate governance,Firm heterogeneity,Internal monitoring |
| JEL: | G30 G34 K22 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc20:224619&r=all |
| By: | Matthew Read |
| Abstract: | Do firm dynamics matter for the transmission of monetary policy? Empirically, the startup rate declines following a monetary contraction, while the exit rate increases, both of which reduce aggregate employment. I present a model that combines firm dynamics in the spirit of Hopenhayn (1992) with New-Keynesian frictions and calibrate it to match cross-sectional evidence. The model can qualitatively account for the responses of entry and exit rates to a monetary policy shock. However, the responses of macroeconomic variables closely resemble those in a representative-firm model. I discuss the equilibrium forces underlying this approximate equivalence, and what may overturn this result. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2011.03514&r=all |