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on Business Economics |
| By: | Thomas Grebel (Technische Universität Ilmenau, Germany); Mauro Napoletano (OFCE Sciences-Po; SKEMA Business School); Lionel Nesta (Université Côte d'Azur, France; GREDEG CNRS; OFCE, SciencesPo; SKEMA Business School) |
| 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 |
| JEL: | L10 N10 D24 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2020-50&r=all |
| By: | David Chor; Kalina Manova; Zhihong Yu |
| Abstract: | Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992-2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, and fixed cost levels and shares. It is also associated with higher profits though not with changing profit margins. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed. |
| Keywords: | Global value chains, production line position, upstreamness, firm heterogeneity, firm lifecycle, China. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2020-11&r=all |
| By: | Mattia Guerini (Université Côte d'Azur, CNRS, GREDEG, France; Sant'Anna School of Advanced Studies; Sciences Po., OFCE); Philipp Harting (Bielefeld University); Mauro Napoletano (OFCE Sciences-Po; SKEMA Business School) |
| 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 |
| JEL: | G34 L22 M12 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2020-49&r=all |
| By: | Andrea Ciani; Joel Stiebal |
| Abstract: | This paper investigates the effect of import protection on export performance at the firm-product level. We exploit product-specific information on anti-dumping (AD) measures imposed by Peru along with several indicators on the performance of Peruvian exporting firms across and within destination markets. Findings indicate that the impact of protection on export performance depends on which economies are targeted by domestic AD protection. Duties towards China are associated with significantly higher prices, especially among small exporting firms. These firms also reduce their shipments, as suggested by frameworks stressing the role of adjustment costs. In contrast, when AD measures are imposed on competitors from middle- and high-income countries, exporters decrease prices and increase quantities, consistent with the presence of learning curves and economies of scale. |
| Keywords: | Anti-dumping, Export Prices, Emerging Economies |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2020-08&r=all |
| By: | Sourafel Girma; Holger Goerg |
| Abstract: | China’s policy of encouraging export processing has been the topic of much discussion in the academic literature and policy debate. We use a recently developed econometric approach that allows for time varying “treatments” and estimate economically and statistically significant positive causal effects of entering into export processing on subsequent firm level productivity. These productivity effects are shown to be larger than those accruing to firms who enter into ordinary exporting. Interestingly, the estimation of quantile treatment effects shows that the positive effects do not accrue similarly to all types of firms, but are strongest for those at the low to medium end of the distribution of the productivity variable. We also find that export processors gain more when entering the industrialised North rather than the South, while this does not appear to matter much for ordinary exporting. |
| Keywords: | export processing; firm performance, China; time varying treatments |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2020-18&r=all |
| By: | Dorra Ellouze; Khadija Mnasri (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine) |
| Abstract: | Using a unique database of 87 Tunisian non-financial firms over the period 1998-2014, we analyse risk-taking behaviour of family firms. We find evidence that family ownership is positively related to corporate risk-taking. But family firms undertake less risky projects when the manager is not a member of the family or when the founder is no longer active in the firm. Our results show also that in these cases, family ownership becomes negatively associated to risk-taking. Finally, we find that family firms take more risk only when they belong to diversified groups, especially those operating in several industries. |
| Keywords: | family ownership,corporate governance,group affiliation,risk-taking |
| Date: | 2019–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02999642&r=all |
| By: | David Martinez Turegano (European Commission - JRC) |
| Abstract: | Labour productivity growth in developed economies has slowed down during the last decade relative to the pre-Great Recession period. The EU27 has been no exception to this trend, keeping both a large negative gap relative to the US and strong country heterogeneity following an uneven convergence process between Member States. Based on these stylized facts, in this paper we investigate which are the main explanatory variables accounting for productivity heterogeneity within the EU, both in level and growth terms. From a policy perspective, our findings suggest a number of areas in which action seems to be warranted, improving technological adoption, increasing innovation intensity, boosting the capital triad (human, tangible and intangible assets), and, with respect to the two micro-structural characteristics we put a focus on, eliminating barriers to growth in firm size and facilitating the entry and exit of enterprises. These same recommendations are even more valid in the specific case of business services, for which productivity performance and convergence seem more sensitive to progress in those policy areas. |
| Keywords: | Productivity, convergence, sectoral heterogeneity, firm structure, business demographics. |
| JEL: | E24 J24 L11 O47 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc122059&r=all |
| By: | Adam Hal Spencer |
| Abstract: | This paper develops a quantitative open economy framework with dynamics, firm heterogeneity and financial frictions to study the impact of corporate tax reforms targeted at multinationals. The model quantities their impact on productivity, GDP and welfare. Firms draw idiosyncratic shocks, invest in capital, choose optimal financing and select endogenously into servicing an overseas market, either through exporting or FDI. I apply this framework to the removal of the U.S. repatriation tax, an aspect of the Tax Cuts and Jobs Act. The reform's impact trades-off two selection effects more offshoring versus greater business dynamism from increased proftability. The reform leads to higher U.S. welfare and revenue neutrality. A series of exercises illustrate that the novel features of this framework have signifcant quantitative implications. The reform's beneficial effects are mitigated considerably when financial frictions are removed and it appears to be welfare reducing when using a static analogue of the model. |
| Keywords: | dynamics, financial frictions, productivity, corporate tax, firm heterogeneity, FDI, repatriation tax |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2020-25&r=all |
| By: | Timothy DeStefano; Richard Kneller; Jonathan Timmis |
| Abstract: | Cloud computing enables a shift in the costs of ICT adoption from investment in fixed capital to pay-on-demand services allowing firms to scale and reorganize. Using new firm-level data we examine the impact of cloud on firm growth, using zip-code-level instruments of the timing of high-speed fiber availability and speeds. Cloud leads to the growth of employment and revenue for young firms, but they become concentrated in fewer establishments. For incumbents, we find smaller scale effects but dispersed activity through closing establishments and moving employment farther from the headquarters. Moreover, cloud adoption leads to worker relocation across establishments within firms. |
| Keywords: | firm growth; the cloud; ICT use; employment; productivity |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:not:notgep:2020-02&r=all |
| By: | CERQUA, AUGUSTO; LETTA, MARCO |
| Abstract: | Impact evaluations of the microeconomic effects of the COVID-19 upheavals are essential but nonetheless highly challenging. Data scarcity and identification issues due to the ubiquitous nature of the exogenous shock account for the current dearth of counterfactual studies. To fill this gap, we combine up-to-date quarterly local labor markets (LLMs) data, collected from the Business Register kept by the Italian Chamber of Commerce, with the machine learning control method for counterfactual building. This allows us to shed light on the pandemic impact on the local economic dynamics of one of the hardest-hit countries, Italy. We document that the shock has already caused a moderate drop in employment and firm exit and an abrupt decrease in firm entry at the country level. More importantly, these effects have been dramatically uneven across the Italian territory and spatially uncorrelated with the epidemiological pattern of the first wave. We then use the estimated individual treatment effects to investigate the main predictors of such unbalanced patterns, finding that the heterogeneity of impacts is primarily associated with interactions among the exposure of economic activities to high social aggregation risks and pre-existing labor market fragilities. These results call for immediate place- and sector-based policy responses. |
| Keywords: | impact evaluation; counterfactual approach; machine learning; local labor markets; firms; COVID-19; Italy |
| JEL: | C53 D22 E24 R12 |
| Date: | 2020–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:104404&r=all |
| By: | Martínez Matute, Marta; Martins, Pedro S. |
| Abstract: | Social partners (trade unions and employers' associations) shape labour institutions and economic and social outcomes in many countries. In this paper, we argue that, when examining social partners' representativeness, it is important to consider both affiliation and dissimilarity measures. The latter concerns the extent to which affiliated and non- affiliated firms or workers are distributed similarly across relevant dimensions, including firm size. In our analysis of European Company Survey data, we find that affiliation and dissimilarity measures correlate positively across countries, particularly in the case of employers' associations. This result also holds across employers' associations when we use firm population data for Portugal. Overall, we conclude that higher affiliation rates do not necessarily equate to more representative social partners as they can involve greater dissimilarity between affiliated and non-affiliated firms. |
| Keywords: | Employers' Associations,Social Dialogue,Collective Bargaining |
| JEL: | J50 J23 L22 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:718&r=all |