nep-bec New Economics Papers
on Business Economics
Issue of 2021‒11‒29
ten papers chosen by
Vasileios Bougioukos
London South Bank University

  1. Firm Size and the Task Content of Jobs: Evidence from 47 Countries By De Vera, Micole; Garcia-Brazales, Javier
  2. Aggregate dynamics and microeconomic heterogeneity: the role of vintage technology. By Giuseppe Fiori; Filippo Scoccianti
  3. Uncertainty and Change: Survey Evidence of Firms's Subjective Beliefs By Ruediger Bachmann; Kai Carstensen; Stefan Lautenbacher; Martin Schneider
  4. Value without Employment By Simcha Barkai; Stavros Panageas
  5. Trade, Jobs, and Inequality By Ms. Kimberly Beaton; Metodij Hadzi-Vaskov; Ms. Valerie Cerra
  6. The Market for CEOs: Building Legacy and Feeling Empowered Matter By Dupuy, Arnaud; Kennes, John; Lyng, Ran Sun
  7. News from the frontier: Increased productivity dispersion across firms and factor reallocation By Paul Bouche; Gilbert Cette; Rémy Lecat
  8. Trade Intermediation by Producers By Erbahar, Aksel; Rebeyrol, Vincent
  9. Innovation pattern heterogeneity: A data-driven retrieval of the firms' approaches to innovation By Marco Capasso; Marina Rybalka
  10. Multilevel analysis of firms’ performance in Emerging Economies: The role of transport infrastructures and logistics as contextual factors By Bergantino, Angela Stefania; Capozza, Claudia; Spiru, Ada

  1. By: De Vera, Micole; Garcia-Brazales, Javier
    Abstract: Using a mix of household- and employer-based survey data from 47 countries, we provide novel evidence that workers in larger firms perform more non-routine analytical and interpersonal tasks, even within narrowly defined occupations. Moreover, workers in larger firms rely more on the use of information and communications technologies (ICT) to perform these tasks. We also document a 17% wage premium that workers in larger firms enjoy relative to their counterparts in smaller firms. We find evidence that the firm size gradient in the task content of jobs accounts for around 10% of the large firm wage premium.
    Keywords: Tasks,Occupations,Firm size,Cross-country evidence,Wage differential
    JEL: J24 J31 L25
    Date: 2021
  2. By: Giuseppe Fiori (Board of Governors of the Federal Reserve System); Filippo Scoccianti (Bank of Italy)
    Abstract: We study how the timing of technology adoption through capital accumulation shapes firm-level productivity dynamics and quantify its aggregate implications in a model of heterogeneous firms. Using data on the census of incorporated Italian firms and exploiting the lumpiness of capital accumulation, we document that large investment episodes lead to productivity gains at the firm and sectoral level due to vintage effects. In a general equilibrium model of firm heterogeneity, we find that the presence of vintage technology constitutes a powerful microeconomic-based amplification mechanism of aggregate shocks relative to a benchmark real business cycle model.
    Keywords: business cycles, (S,s) policies, vintage effects, firm heterogeneity.
    JEL: D24 E22 E32
    Date: 2021–11
  3. By: Ruediger Bachmann; Kai Carstensen; Stefan Lautenbacher; Martin Schneider
    Abstract: This paper studies how managers plan under uncertainty. In a new survey panel on German manufacturing firms, we show that uncertainty reflects change: Planning incorporates higher subjective uncertainty about future sales growth when the firm has just experienced unusual growth, and more so if the experience was negative. At the quarterly frequency, subjective uncertainty closely tracks conditional volatility of shocks: Both exhibit an asymmetric V-shaped relationship with past growth. In the cross section of firms, however, subjective uncertainty differs from conditional volatility: planning in successful firms—either large or fast-growing—reflects lower subjective uncertainty than in unsuccessful firms even when the size of the shocks is the same.
    Keywords: expectation formation, firms, measurement, subjective uncertainty, survey data
    JEL: C83 D22 E20 E23
    Date: 2021
  4. By: Simcha Barkai; Stavros Panageas
    Abstract: Young firms' contribution to aggregate employment has been underwhelming. However, a similar trend is not apparent in their contribution to aggregate sales or aggregate stock market capitalization. We study the implications of the arrival of “low marginal - high average” revenue-product-of-labor firms in a stylized model of dynamic firm heterogeneity, and show that the model can account for a large number of facts related to the decline in “business dynamism”. We study the long-term implications of the decline in business dynamism on the economy by providing analytical results that connect the decline in dynamism to the eventual decline of consumption.
    JEL: D24 E23 E24 E25 G24
    Date: 2021–10
  5. By: Ms. Kimberly Beaton; Metodij Hadzi-Vaskov; Ms. Valerie Cerra
    Abstract: This paper examines the impact of trade on employment, wages, and other outcomes across countries and explores the conditions and policies that help spread the gains from trade more evenly throughout the population. We exploit a large global firm-level dataset to examine the impact of import competition on employment, wages, and firm performance, as well as the firm, industry, and country factors that mitigate any negative impact of an import shock. In contrast to the results of some well-known single-country studies, we find limited adverse impact of import competition. In some countries and industries, import competition actually strengthens employment growth. In addition, import competition tends to improve average wages, investment, and firm profitability. Country characteristics, such as educational attainment, can also improve employment prospects in response to trade shocks. Finally, we find that firms experiencing greater import competition start with higher average wages; thus any relatively slower employment growth in this group of firms could lead to lower inequality.
    Keywords: import competition; employment growth; import shock; firm investment; firm profitability; Imports; Employment; Competition; Wages; Income inequality; Global
    Date: 2021–07–01
  6. By: Dupuy, Arnaud (University of Luxembourg); Kennes, John (Aarhus University); Lyng, Ran Sun (University of Toronto)
    Abstract: We develop a two-sided multidimensional matching model of the market for CEOs that allows for both pecuniary and non-pecuniary (amenity) compensation. The model is estimated by maximum likelihood estimation using matched CEO-firm data from Denmark. We show that CEOs have preferences for building legacy and gaining empowerment. The legacy mechanism explains why there is low mobility in the CEO market, even though firms demand general CEO skills. The empowerment mechanism explains why CEOs are willing to sacrifice significant pecuniary income to manage high equity firms. The overall conclusion is that job amenities matter in the market for CEOs.
    Keywords: multidimensional matching, observed transfers, structural estimation, value of job amenities, taxation, CEO compensation, CEO performance
    JEL: G30 M12 C78 C35 D22 D31 J3
    Date: 2021–10
  7. By: Paul Bouche; Gilbert Cette; Rémy Lecat
    Abstract: Analysing French firms over 1991-2016, we find first that since the beginning of the century, one or two downward significant productivity breaks have occurred in all industries, both at the frontier and for laggard firms, suggesting a decline in the contribution of technological progress to productivity growth. Second, the median labour share is always higher for the laggard firms than for the frontier firms, with a sharp decrease from the mid-1990s to 2008, and an increase from 2008 onwards. Third, factor reallocation decreased significantly in the 2000s, at the time when we observed an increase in productivity dispersion, with a growing productivity gap between frontier and laggard firms. It appears also that reallocation has been lower on average over the whole period for sectors with a high import share, which can be related to the impact of global value chains.
    Keywords: Productivity, Frontier Firms, Reallocation
    JEL: D24 E24 J23 L25
    Date: 2021
  8. By: Erbahar, Aksel; Rebeyrol, Vincent
    Abstract: This paper shows that Turkish manufacturing exporters export goods that they have not pro-duced and thus also act as trade intermediaries. This exporting of “sourced” products is ubiquitous across firms, products, and destinations. Beyond these facts, the main contribution of the paper is to show that sourced exports are more sensitive to gravity determinants than produced exports at the aggregate level, but at the firm level, this relationship is reversed. We rationalize these findings by allowing producers to act as intermediaries in a model where profitability at the product-destination level is stochastic and correlated across markets. We provide empirical evidence for the model’s core mechanism.
    Keywords: international trade; intermediaries; carry-along trade; multi-product firms
    JEL: F12 F14 L2
    Date: 2021–11–18
  9. By: Marco Capasso; Marina Rybalka
    Abstract: Innovation is one of the usual suspects in defining differences in performance among firms, according to a strong and diverse theoretical framework. Understanding the diversity that exists within the population of innovative firms is essential to elaborate appropriate innovation policies. Our study explores the diversity of innovation patterns among Norwegian firms included in the 2018 Community innovation survey (CIS2018). By applying factor analysis on a wide array of survey variables and on a large sample of firms, we identify eleven typical approaches to innovation, which recurrently connect innovation inputs and outputs at firm level. A main outcome of our study is a renewed fine-grained view on innovation as a multifaceted concept.
    Keywords: Technological change; Innovation survey; Factor analysis; Business strategies; Intra-industry heterogeneity.
    Date: 2021–11–07
  10. By: Bergantino, Angela Stefania; Capozza, Claudia; Spiru, Ada
    Abstract: Firms as part of an ecosystem are constrained by many context facets, having different dimensions and effects on their performance. In this work, we explore differences in firm performance in emerging economies by introducing contextual factors at country-level along with firm-level factors into the analysis. Especially, our focus is on a country's transport infrastructure endowment and logistics services as a source of heterogeneity in firm performance. We perform a multilevel analysis that allows us to define a two-level hierarchical structure, where firms are nested in countries. The empirical framework adopted allows us not to neglect other contextual bases by relying on their multidimensionality and global diversity. Our results confirm that part of the country-level variability in firm performance is explained by transport infrastructure and logistics services. The impact is, however, heterogeneous across infrastructures: network-type infrastructures, such as roads, railways, and logistics services, have a larger effect on firm-level performance, while transport nodes, such as airports and ports, show little or no effect. This research provides useful implications for both theory and practice, especially for policymakers and organizations.
    Date: 2021

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