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on Business Economics |
| By: | W. Andersson, Fredrik (Statistics Sweden); Lodefalk, Magnus (Örebro University School of Business) |
| Abstract: | Business angels dominate early-stage investment in firms, but research on their investment effects is scarce and is limited by sample selection. Therefore, we propose an algorithm for identifying business angel investments from total population data. We apply the algorithm to study business angels’ effects on firm performance, using detailed and longitudinal total population data for individuals and firms in Sweden. Employing these data and a quasi-experimental estimator, we find that business angels invest in firms that already perform above par. There is also a positive effect on subsequent growth compared with control firms. Firms with business angel investments perform better in terms of sales growth, employment growth and the likelihood of becoming a high-growth firm. However, contrary to previous research, we cannot find any impact on firm survival. Overall, our results underline the need to address sample selection issues both in identifying business angels and in evaluating their effects on firm performance. |
| Keywords: | business angels; firm performance; sample selection; population data |
| JEL: | C23 G24 G32 L25 |
| Date: | 2020–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2020_015&r=all |
| By: | Hanna Berkel; Finn Tarp |
| Abstract: | Using a novel panel survey of enterprises in Myanmar, we compare the performance of manufacturing firms by three different informality definitions. The first is binary, based on whether firms pay taxes. The second captures five categories of registration with the authorities, and the third definition relates to three groupings of the informality status of a firm's workers. Depending on the informality concept used, formalization has positive, insignificant, and negative performance outcomes. |
| Keywords: | firms, Informality, Myanmar, Business, business registration, Manufacturing |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2020-173&r=all |
| By: | Alessandro Fedele (Free University of Bolzano‐Bozen, Faculty of Economics and Management); Cristian Roner (Free University of Bolzano‐Bozen, Faculty of Economics and Management) |
| Abstract: | Cybersecurity has gained prominence in the decision-making of firms. Due to the increasing occurrences of threats in the cyberspace, investments in cybersecurity have become critical to mitigate the operational disruption of businesses. This paper surveys the theoretical literature on the firms’ incentives to invest in cybersecurity. A taxonomy of the existing contributions is provided to frame them in a common reference scheme and a model is developed to encompass such contributions and discuss their main findings. Papers that investigate the investment problem of an isolated firm are distinguished from those that consider interdependent firms. In turn, interdependent cybersecurity is analyzed in three different contexts: (i) firms that operate their business via a common computer network, but are not competitors in the product market; (ii) firms that are competitors in the product market, but run their business using non-interconnected computer systems; (iii) firms that are competitors and rely on a common computer network. Promising avenues for future research are discussed in the conclusions. |
| Keywords: | Cybersecurity investments; interdependent cybersecurity; computer networks; product market competition |
| JEL: | L86 M15 D81 C72 D62 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:bzn:wpaper:bemps75&r=all |
| By: | Jiang Li; Benoit Dostie; Gäelle Simard-Duplain |
| Abstract: | Using data from the Canadian Employer-Employee Dynamics Database between 2001 and 2015, we examine the impact of firms’ hiring and pay-setting policies on the gender earnings gap in Canada. Consistent with the existing literature and following Card, Cardoso, and Kline (2016), we find that firm-specific premiums explain nearly one quarter of the 26.8% average earnings gap between female and male workers. On average, firms’ hiring practices – due to difference in the relative proportion of women hired at high-wage firms, or sorting – and pay-setting policies – due to differences in pay by gender within similar firms – each explain about one half of this firm effect. The compositional difference between the two channels varies substantially over the life-cycle, by parental and marital status, and across provinces. |
| Keywords: | Gender Wage Gap,Firm Effects,Marital Status,Linked Employer-Employee Data,Pay-Setting,Sorting, |
| JEL: | J16 J31 J51 J71 |
| Date: | 2020–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2020s-67&r=all |
| By: | Elisabetta Raguseo (Polito - Politecnico di Torino [Torino]); Claudio Vitari (AMU - Aix Marseille Université); Federico Pigni (GEM - Grenoble Ecole de Management) |
| Abstract: | Big data has gained momentum as an Information Technology that is capable of supporting organizational efforts to generate new and better business value. We here contribute to the emerging literature on big data analytic (BDA) solutions by investigating the moderating roles of firm size and industry concentration in the relationship between BDA solutions and firm profitability. Using a unique panel data set that covers 13 years, from 2004 to 2016, which contains information about 176 firms, we provide robust econometric empirical evidence of the negative moderating effects of industry concentration and the positive moderating effects of firm size on the relationship between the use of BDA solutions and firm profitability. Our findings provide strong empirical evidence on the business value of BDA as well as the essential role played by contextual conditions that managers should consider. |
| Keywords: | IT business value,big data analytics,firm profitability,econometric analysis,industry concentration,firm size |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:gemptp:hal-03032504&r=all |
| By: | Christine Blandhol; Magne Mogstad; Peter Nilsson; Ola Lotherington Vestad |
| Abstract: | Do employees benefit from worker representation on corporate boards? Economists and policymakers are keenly interested in this question – especially lately, as worker representation is widely promoted as an important way to ensure the interests and views of the workers. To investigate this question, we apply a variety of research designs to administrative data from Norway. We find that a worker is paid more and faces less earnings risk if she gets a job in a firm with worker representation on the corporate board. However, these gains in wages and declines in earnings risk are not caused by worker representation per se. Instead, the wage premium and reduced earnings risk reflect that firms with worker representation are likely to be larger and unionized, and that larger and unionized firms tend to both pay a premium and provide better insurance to workers against fluctuations in firm performance. Conditional on the firm’s size and unionization rate, worker representation has little if any effect. Taken together, these findings suggest that while workers may indeed benefit from being employed in firms with worker representation, they would not benefit from legislation mandating worker representation on corporate boards. |
| Keywords: | worker compensation, worker representation, corporate governance, unions |
| JEL: | G34 G38 J31 J54 J58 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8794&r=all |
| By: | Gropp, Reint; McShane, William |
| Abstract: | Young entrepreneurial firms are of critical importance for innovation. But to bring their new ideas to the market, these startups depend on investors who understand and are willing to accept the risk associated with a new firm. Perhaps the key reason as to why the US has succeeded in producing nearly all the most successful new firms of the 21st century is the economy's ability to supply vast sums of capital to promising startups. The volume of venture capital (VC) invested in the US is more than 60 times that of Germany (OECD, 2017). In this policy note, we argue that differences in the regulatory and structural context of institutional investors, in particular life insurance companies, is a central driver of the relative lack of VC - and thereby successful startups - in Germany. |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhonl:62020&r=all |
| By: | Markus Dertwinkel-Kalt; Christian Wey |
| Abstract: | We analyze oligopolistic third-degree price discrimination relative to uniform pricing when markets are always covered. Pricing equilibria are critically determined by supply-side features such as the number of firms and their marginal cost differences. It follows that each firm’s Lerner index under uniform pricing is equal to the weighted harmonic mean of the firm’s relative margins under discriminatory pricing. Uniform pricing then decreases average prices and raises consumer surplus. We provide an intriguingly simple approach to calculate the gain in consumer surplus and loss in firms’ profits from uniform pricing only based on market data of the discriminatory equilibrium (prices and quantities). |
| Keywords: | third-degree price discrimination, oligopolistic competition, market integration |
| JEL: | D43 L13 L41 K21 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8785&r=all |
| By: | Alessandra Bonfiglioli; Rosario Crinò; Harald Fadinger; Gino Gancia |
| Abstract: | We use French data over the 1994-2013 period to study how imports of industrial robots affect firm-level outcomes. Compared to other firms operating in the same 5-digit sector, robot importers are larger, more productive, and employ a higher share of managers and engineers. Over time, robot import occurs after periods of expansion in firm size, and is followed by improvements in efficiency and a fall in demand for labor. Guided by a simple model, we develop various empirical strategies to identify the causal effects of robot adoption. Our results suggest that, while demand shocks generate a positive correlation between robot imports and employment, exogenous changes in automation lead to job losses. We also find that robot imports increase productivity and the employment share of high-skill professions, but have a weak effect on total sales. The latter result suggests that productivity gains from automation may not be entirely passed on to consumers in the form of lower prices. |
| Keywords: | automation, displacement, firms, robots |
| JEL: | J23 J24 O33 D22 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8741&r=all |
| By: | Javier D. Donna; Gregory F. Veramendi |
| Abstract: | We document gender differences in the price paid for work-related air travel among similar workers within a firm. We show that women pay consistently less per ticket than men, after accounting for a large set of covariates that include the characteristics of the trips, the employers, and the employees. A large proportion of the lower fares paid by women is explained by women booking flights earlier than men. We investigate potential mechanisms that could explain the observed gender differences. We find that gender differences increase with age, but we find no deviation from this trend during the childbearing years. We also find significant variation in gender differences across the regions of the world. Using country-level data on preference differences, we report that positive and negative reciprocity are factors associated with the documented gender differences, although this result is only suggestive. The documented gender differences have important monetary implications for firms and suggest a potentially important role for workers’ morale within a firm. |
| Keywords: | gender differences, worker gender differences, airline industry |
| JEL: | D91 J16 F00 L93 M50 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8725&r=all |
| By: | Mounir Amdaoud (CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord - USPC - Université Sorbonne Paris Cité - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UP - Université de Paris - Université Sorbonne Paris Nord); Christian Le Bas |
| Abstract: | This paper aims to account for the determinants of firm patenting behaviour in developing countries. The literature has accumulated numerous evidence and trends as far as developed countries' firm patenting is concerned. However, only a small amount of information concerning least developed countries' firm patenting is available. With the present study we wish to fill this gap creatively. The core assumption of this paper is that the occurrence of firm patenting is positively related with innovation strategies. As a result we place the emphasis on the diverse ways to innovate and account for the effects on a firm's probability to patent. Our findings indicate that despite the weaknesses of their patenting system in least developed countries (LDCs) there is no huge gap between the determinants of patenting behaviour from firms in these countries, and those the literature considers to be important for developed countries firms. |
| Keywords: | Patent,appropriation,innovation,developing economies. JEL Codes : O31,O32,O33,O34 |
| Date: | 2020–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03059466&r=all |
| By: | Mounir Amdaoud (CEPN - Centre d'Economie de l'Université Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord - USPC - Université Sorbonne Paris Cité - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UP - Université de Paris - Université Sorbonne Paris Nord); Christian Le Bas |
| Abstract: | This paper aims to account for the determinants of firm patenting behaviour in developing countries. The literature has accumulated numerous evidence and trends as far as developed countries' firm patenting is concerned. However, only a small amount of information concerning least developed countries' firm patenting is available. With the present study we wish to fill this gap creatively. The core assumption of this paper is that the occurrence of firm patenting is positively related with innovation strategies. As a result we place the emphasis on the diverse ways to innovate and account for the effects on a firm's probability to patent. Our findings indicate that despite the weaknesses of their patenting system in least developed countries (LDCs) there is no huge gap between the determinants of patenting behaviour from firms in these countries, and those the literature considers to be important for developed countries firms. |
| Keywords: | Patent,appropriation,innovation,developing economies. JEL Codes : O31,O32,O33,O34 |
| Date: | 2020–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cepnwp:hal-03059466&r=all |