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on Business Economics |
| By: | Julian di Giovanni; Andrei A. Levchenko; Isabelle Mejean |
| Abstract: | This paper uses a data set covering the universe of French firm-level sales, imports, and exports over the period 1993-2007 and a quantitative multi-country model to study the international transmission of business cycle shocks at both the micro and the macro levels. The largest firms are both important enough to generate aggregate fluctuations (Gabaix 2011), and most likely to be internationally connected. This implies that foreign shocks are transmitted to the domestic economy primarily through the largest firms. We first document a novel stylized fact: larger French firms are significantly more sensitive to foreign GDP growth. We then implement a quantitative framework calibrated to the full extent of observed heterogeneity in firm size, exporting, and importing. We simulate the propagation of foreign shocks to the French economy and report one micro and one macro finding. At the micro level, heterogeneity across firms predominates: 40-85 percent of the impact of foreign fluctuations on French GDP is accounted for by the “foreign granular residual”—the term capturing the fact that larger firms are more affected by the foreign shocks. At the macro level, firm heterogeneity dampens the impact of foreign shocks, with the GDP responses 10-20 percent larger in a representative firm model compared to the baseline model. |
| Keywords: | granularity; shock transmission; aggregate fluctuations; input linkages; international trade |
| JEL: | E32 F15 F23 F44 F62 L14 |
| Date: | 2020–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:89060&r=all |
| By: | Thomas Grebel; Mauro Napoletano; Lionel Nesta |
| Abstract: | We study the productivity level distributions of manufacturing firms in France and Germany, and how these distributions evolved across the Great Recession. We show the presence of a systematic productivity advantage of German firms over French ones in the decade 2003-2013, but the gap has narrowed down after the Great Recession. Convergence is explained by the better growth performance of French firms in the post-recession period, especially of those located in the top percentiles of the productivity distribution. We also highlight the role of sectoral growth, firm size and export intensity in explaining the above convergence. In contrast, the contribution of allocative efficiency was small. |
| Keywords: | International productivity gaps; productivity distributions; firm level comparisons. |
| Date: | 2020–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2020/36&r=all |
| By: | Ginja, Rita (Uppsala Center for Labor Studies); Karimi, Arizo (Uppsala Center for Labor Studies); Xia, Pengpeng (Yale University) |
| Abstract: | Search frictions make worker turnover costly to firms. A three-month parental l eave 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 prebirth 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: | 2020–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2020_018&r=all |
| By: | Julian di Giovanni; Andrei A. Levchenko; Isabelle Mejean |
| Abstract: | This paper uses a dataset covering the universe of French firm-level sales, imports, and exports over the period 1993-2007 and a quantitative multi-country model to study the international transmission of business cycle shocks at both the micro and the macro levels. The largest firms are both important enough to generate aggregate fluctuations (Gabaix, 2011), and most likely to be internationally connected. This implies that foreign shocks are transmitted to the domestic economy primarily through the largest firms. We first document a novel stylized fact: larger French firms are significantly more sensitive to foreign GDP growth. We then implement a quantitative framework calibrated to the full extent of observed heterogeneity in firm size, exporting, and importing. We simulate the propagation of foreign shocks to the French economy and report one micro and one macro finding. At the micro level heterogeneity across firms predominates: 40 to 85% of the impact of foreign fluctuations on French GDP is accounted for by the "foreign granular residual" - the term capturing the fact that larger firms are more affected by the foreign shocks. At the macro level, firm heterogeneity dampens the impact of foreign shocks, with the GDP responses 10 to 20% larger in a representative firm model compared to the baseline model. |
| Keywords: | granularity, shock transmission, aggregate fluctuations, input linkages, international trade |
| JEL: | E32 F15 F23 F44 F62 L14 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1218&r=all |
| By: | Mattia Guerini; Philipp Harting; Mauro Napoletano |
| Abstract: | We develop a model to study the impact of corporate governance on firm investment decisions and industry competition. In the model, governance structure affects the distribution of shares among short- and long-term oriented investors, the robustness of the management regarding possible stockholder interference, and the managerial remuneration scheme. A bargaining process between firm's stakeholders determines the optimal allocation of financial resources between real investments in R&D and financial investments in shares buybacks. We characterize the relation between corporate governance and firm's optimal investment strategy and we study how different governance structures shape technical progress and the degree of competition over the industrial life cycle. Numerical simulations of a calibrated set-up of the model show that pooling together industries characterized by heterogeneous governance structures generate the well-documented inverted-U shaped relation between competition and innovation. |
| Keywords: | governance structure; industry dynamics; competition; technical change. |
| Date: | 2020–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2020/35&r=all |
| By: | David Boto-Garcìa (University of Oviedo); Alessandro Bucciol (Department of Economics (University of Verona)); Luca Zarri (Department of Economics (University of Verona)) |
| Abstract: | Using detailed field data covering ten seasons of the Italian soccer premier league, we provide the first evidence on the key role played by managerial beliefs in firm performance in a high-powered incentives natural setting where managers receive frequent feedback. We show that managers’ confidence and risk tolerance positively affect performance. Next, we document asymmetrically biased belief updating, in line with prior laboratory work on non-managers. By shedding light on overlooked features of manager-firm interplays and managers’ information processing, our findings corroborate and help qualify the “managers matter” view advanced in recent fieldwork based on low-frequency data. |
| Keywords: | Managerial Beliefs, Firm performance, Professional Soccer, Field data |
| JEL: | D01 D22 D81 D91 L20 Z20 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:19/2020&r=all |
| By: | Holger Breinich; Harald Fadinger; Volker Nocke; Nicolas Schutz |
| Abstract: | We evaluate the consequences of oligopolistic behavior for the estimation of gravity equations for trade ows. With oligopolistic competition, firm-level gravity equations based on a standard CES demand framework need to be augmented by markup terms that are functions of firms' market shares. At the aggregate level, the additional term takes the form of the exporting country's market share in the destination country multiplied by an exporter-destination-specific Herfindahl-Hirschman index. For both cases, we show how to construct appropriate correction terms that can be used to avoid problems of omitted variable bias. We illustrate the quantitative importance of our results for combined French and Chinese firm-level export data as well as for a sample of product-level imports by European countries. Our results show that correcting for oligopoly bias can lead to substantial changes in the coefficients on standard gravity regressors such as distance or the impact of currency unions. |
| Keywords: | Gravity Equation, Oligopoly, CES Demand, Aggregative Game |
| JEL: | F12 F14 L13 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_236&r=all |
| By: | Albert Banal-Estañol; Melissa Newham; Jo Seldeslachts |
| Abstract: | We investigate patterns in common ownership networks between firms that are active in the US pharmaceutical industry for the period 2004-2014. Our main findings are that “brand firms” —i.e. firms that have R&D capabilities and launch new drugs— exhibit relatively dense common ownership networks with each other that further increase significantly in density over time, whereas the network of “generic firms” —i.e. firms that primarily specialize in developing and launching generic drugs— is much sparser and stays that way over the span of our sample. Finally, when considering the common ownership links between brands firms, on the one hand, and generic firms, on the other, we find that brand firms have become more connected to generic firms over time. We discuss the potential antitrust implications of these findings. |
| Keywords: | common ownership networks, pharmaceutical companies, competition, innovation |
| JEL: | G23 K21 L11 L41 L65 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:bge:wpaper:1216&r=all |
| By: | Josh De Lyon; Swati Dhingra |
| Abstract: | Investments in both human and physical capital are key drivers of economic growth and productivity gains. The United Kingdom has had a turbulent recent history, being strongly affected by the Global Financial Crisis of 2008 and more recently voting to leave the European Union, its largest trading partner. We use firm-level survey data for the UK services sector to show that firms were less likely to increase expenditure on worker training in the periods following each event. In the period following the EU Referendum, firms were 9% less likely to increase expenditure on worker training relative to the period before the referendum. The effects were most severe for larger firms and for those located in London and the South East. The impacts also varied across industries, with firms in real estate, professional, scientific and technical activities among those most negatively affected, while administrative activities and accommodation services were least negatively affected. We see similar changes in expenditure on all forms of physical capital available in the data: IT; vehicles, plants and machinery; and land and buildings. Following the EU Referendum, firms were also more likely to reduce training expenditure, although the magnitudes of the changes were smaller than those following the Financial Crisis of 2008. |
| Keywords: | EU exit, Financial Crisis, Human capital, physical capital, training |
| JEL: | E22 F66 M53 |
| Date: | 2020–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1632-en&r=all |
| By: | Vuong, Quan-Hoang; Huyen, Nguyen Thanh Thanh; Pham, Thanh-Hang; Phuong, Luong Anh; Nguyen, Minh-Hoang |
| Abstract: | The current review, employing the bibliometric analysis of 224 documents extracted from the Web of Science database, aims to examine the growth trajectory, most influential documents, intellectual and conceptual structure of the literature regarding gender issues in family business research. The review identifies three major research lines: "Women’s challenges and opportunities in the family business", "Gender diversity in the family business corporate board", and "Gender and family SMEs management". By reviewing prominent cited references and documents which cited them in each research line, we provide the landscapes and research gaps of three major lines of research for further development. |
| Date: | 2020–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:jgnrw&r=all |
| By: | Moritz Drechsel-Grau; Felix Holub |
| Abstract: | This paper investigates the contribution of managers to gender gaps and analyzes whether the over-representation of men in management positions puts women at a disadvantage. Relying on personnel data from one of the largest European manufacturing firms, we separate out the factors explaining gender gaps. Adjusted pay gaps are positive, which means that men earn more than observationally equivalent women. A significant share of pay gaps can be explained by the sorting of men and women to different managers. More importantly, gender gaps in bonus payments causally depend on the manager's gender. Accounting for worker and manager heterogeneity, bonus gaps are larger when the manager is male. This is driven by the fact that performance ratings are more favorable to men if handed out by a male manager. We present suggestive evidence that the relevance of manager gender for pay gaps is driven by discrimination rather than same-gender complementarities in productivity. However, independent of the root cause of these differences in evaluations by manager gender, the findings imply that a lower number of female managers increases gender gaps and thus constitutes a structural disadvantage for women. |
| Keywords: | gender wage gap, performance ratings, managers, manager gender, sorting, personnel data, unconscious discrimination |
| JEL: | J16 J31 J33 J71 M5 D83 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_237&r=all |
| By: | Albert Banal-Estanol; Melissa Newham; Jo Seldeslachts |
| Abstract: | We investigate patterns in common ownership networks between firms that are active in the US pharmaceutical industry for the period 2004-2014. Our main findings are that “brand firms” — i.e. firms that have R&D capabilities and launch new drugs — exhibit relatively dense common ownership networks with each other that further increase significantly in density over time, whereas the network of “generic firms” — i.e. firms that primarily specialize in developing and launching generic drugs — is much sparser and stays that way over the span of our sample. Finally, when considering the common ownership links between brands firms, on the one hand, and generic firms, on the other, we find that brand firms have become more connected to generic firms over time. We discuss the potential antitrust implications of these findings. |
| Keywords: | Common ownership networks, pharmaceutical companies, competition, innovation |
| JEL: | G23 K21 L11 L41 L65 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1918&r=all |
| By: | Li, Haoran; Wan, Xibo; Zhang, Wendong |
| Abstract: | Political and economic tensions, which often jeopardize trade, are rising among the world’s major powers. Previous literature largely focuses on how brief, short-lived political tensions affect bilateral trade; however, little is known about firm-level trade responses to long-term political tensions. This paper investigates how firms respond to long-term political tensions by examining the Norway-China political tensions that lasted for six years. In particular, we use an event study approach to examine China's seafood importers' response to China's 2010 sanction on Norwegian fresh salmon after Norway awarded Liu Xiaobo, a Chinese political dissident, a Nobel Peace Prize. Our results reveal firm-level responses at both the extensive and intensive margins. At the intensive margin, firms that imported Norwegian fresh salmon before the sanction saw a dramatic and persistent decline in their imports of fresh salmon products from Norway ranging from 89% to 96%. At the extensive margin, we not only find a trade diversion effects of firms importing from other countries and less firms importing fresh salmon from Norway, but also a permanent "political hedging" effect with a decline in the maximum import share from any particular country, even if not Norway. |
| Date: | 2020–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:202011250800001118&r=all |
| By: | Pierre Bachas; Anne Brockmeyer; Tom Harris; Camille Semelet |
| Keywords: | Macroeconomics and Economic Growth - Business Cycles and Stabilization Policies Macroeconomics and Economic Growth - Taxation & Subsidies Private Sector Development - Private Sector Economics |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:34393&r=all |