|
on Business Economics |
| By: | Olof Åslund (Olof Åslund); Cristina Bratu (Cristina Bratu); Stefano Lombardi (Stefano Lombardi); Anna Thoresson (Anna Thoresson) |
| Abstract: | We study the role of firm productivity in explaining earnings disparities between immigrants and natives using population-wide matched employer-employee data from Sweden. We find substantial earnings returns to working in firms with higher persistent productivity, with greater gains for immigrants from non-Western countries. Moreover, the pass-through of within-firm productivity variation to earnings is stronger for immigrants in low-productive, immigrant-dense firms. But immi grant workers are underrepresented in high-productive firms and less likely to move up the productivity distribution. Thus, sorting into less productive firms decreases earnings in poor-performing immigrant groups that would gain the most from working in high-productive firms |
| Keywords: | Firm productivity; Immigrant-native earnings gaps; Wage inequality |
| JEL: | J15 J31 J62 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:crm:wpaper:2137&r= |
| By: | Heng Geng (Victoria University of Wellington); Harald Hau (University of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)); Roni Michaely (The University of Hong Kong; ECGI); Binh Nguyen (Victoria University of Wellington - Victoria University of Wellington, Students) |
| Abstract: | We investigate how board overlap affects coordination and performance among public firms. Our identification exploits the staggered introduction of Corporate OpportunityWaivers (COWs) in nine U.S. states since 2000. By reducing legal risk to directors serving on multiple boards, the COW legislation increased intra-industry board overlap for those firms that benefit most from the information flow facilitated by board overlap. We find that more board overlap improves firm profitability but also reduces investment, product overlap, and innovation. Our findings support the notion that board overlap curtails firm rivalry. |
| Keywords: | Board overlap, corporate opportunity waivers, firm coordination, market power |
| JEL: | G30 G38 K21 K22 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2179&r= |
| By: | Alessandra Bonfiglioli; Rosario Crinò; Gino Gancia |
| Abstract: | International trade is dominated by a small number of very large firms. Models of trade with heterogeneous firms have been developed to study the causes and consequences of this observation. The canonical model of trade with heterogeneous firms shows that trade leads to between-firm reallocations and selection: it shifts employment towards firms with the best attributes and forces marginal firms to exit. The model also illustrates the role of heterogeneity, and its various sources, in explaining the volume of trade and the firm-level margins of adjustment. Consistent with the model, the empirical literature has documented that exporting is a rare activity, that exporting firms are larger and more productive than other firms, and that trade liberalization reallocates market shares towards the best-performing firms in various countries. Studies using transaction-level data have unveiled additional salient features of trade flows. First, sales by foreign firms are very heterogeneous and highly concentrated. Second, both the extensive margin (number of exporting firms) and the intensive margin (average export per firm) are important in explaining the level of exports and its changes over time. More heterogeneity in sales across firms is associated with a higher volume of trade along both margins. Third, increased foreign competition reallocates market shares towards top firms and hence can increase concentration from any country of origin. Numerous extensions of the benchmark model have been proposed to study other important aspects, such as the relevance of multi-product and multinational firms, the import behavior of firms, and the extent to which heterogeneity is endogenous to firms. choices, but some open challenges still remain. |
| Keywords: | firm heterogeneity, top firms, selection, reallocation, margins of trade |
| JEL: | E23 F12 F14 L11 R12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9423&r= |
| By: | Salomé Baslandze |
| Abstract: | This working paper reviews recent empirical evidence on large firms and nonproductive strategies that hinder creative destruction and reallocation. The focus is on three types of nonproductive strategies: political connections, nonproductive patenting, and anticompetitive acquisitions. Across different contexts using granular micro data sets, we overwhelmingly see that as firms gain market share, they increasingly rely on nonproductive strategies but reduce their productive, innovation-based strategies. I also discuss theoretical channels, aggregate implications, and potentials for some policies. |
| Keywords: | creative destruction; innovation; growth; patents; political connections; firm dynamics |
| JEL: | O3 O4 |
| Date: | 2021–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:93478&r= |
| By: | Samuel Brien |
| Abstract: | This paper examines the effect of wealth concentration on firms’ market powerwhen firm entry is driven by entrepreneurs facing uninsurable idiosyncratic risks. Undergreater wealth concentration, households in the lower end of the wealth distribution aremore risk averse and less willing (or able) to bear the risk of entrepreneurial activities.This has implications for firm entry, competitiveness, and market power.I calibrate a Schumpeterian model of endogenous growth with heterogeneous riskaverse entrepreneurs competing to catch up with firms. This model is unique in thatboth household wealth distribution and a measure of firm markup are endogenouslydetermined on a balanced growth path. I find that a spread in the wealth distributiondecreases entrepreneurial firm creation, resulting in greater aggregate firm marketpower. This result is supported by time series evidence obtained from the estimationof a structural panel VAR with OECD data from eight countries. |
| Keywords: | Wealth inequality, market power, growth, Schumpeterian, endogenous growth, entrepreneur |
| JEL: | E22 E21 L12 O31 O33 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1476&r= |
| By: | Chiara Criscuolo; Peter Gal; Timo Leidecker; Francesco Losma; Giuseppe Nicoletti |
| Abstract: | Motivated by the sudden adoption of telework in the wake of the COVID 19 pandemic, the Global Forum on Productivity (GFP) undertook an online survey among managers and workers in 25 countries about their experience and expectations, with a particular focus on productivity and well-being. This paper presents analysis and results from this endeavour. It finds that managers and workers had an overall positive assessment from teleworking both for firm performance and for individual well-being, and wish to increase substantially the share of regular teleworkers from pre-crisis levels. Respondents, on average, find that the ideal amount of telework is around 2-3 days per week, in line with other recent evidence and with the idea that the benefits (e.g., less commuting, fewer distractions) and costs (e.g., impaired communication and knowledge flows) need to be balanced at an intermediate level of telework intensity. To meet the challenges of this “hybrid” working mode, as the survey finds, further changes from management are needed, such as the co-ordination of schedules to encourage a sufficient degree of in-person interaction, and further investment in ICT tools and skills as well as more soft skills to master online communication. |
| Keywords: | productivity, survey, telework, well-being, working from home |
| JEL: | D24 M1 O3 |
| Date: | 2021–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaac:31-en&r= |
| By: | Catherine Robinson; Christian Siegel; Sisi Liao |
| Abstract: | Does the successful deployment of digital technologies require complementary investment in skills? We conducted a pilot survey to investigate. The survey elicited information on whether the firm was adopting one of the three digital technologies of interest (AI, robotics, big data), provided in-house training, and whether they experienced any problems recruiting workers. We find evidence that new technologies require complementary skill investments and that firms deem both new technologies and training of their workforce important for productivity. While there is some heterogeneity across the type of technologies (Robotics, AI, Big Data) introduced, firms facing difficulties attracting workers with the right skills are more likely to run own training programmes. This might suggest that there is a skills gap that may be holding back productivity and economic growth. Overall, the findings from our pilot survey demonstrate firms's awareness of the need for skills to complement new technologies to realise the productivity benefits in full. |
| Keywords: | capital-skill complementarity; business performance; technology adoption |
| JEL: | J24 M53 O33 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:2114&r= |
| By: | Relinde Colen; Rene Belderbos; Stijn Kelchtermans; Bart Leten |
| Abstract: | While their expertise and scientific excellence make academic star scientists attractive collaboration partners for firms, this study indicates that firms face difficulties in capturing value from collaborations with academic stars. Stars are time constrained, may be less committed to commercialization, and can be a source of undesired knowledge spillovers to other firms. The purpose of this study is to recognize the contingencies under which collaboration with star scientists is positively associated with a firm’s ability to produce valuable patents (invention performance). We analyze a panel dataset on the collaborations in basic research(publication data) and invention performance (patent output) of 60 prominent pharmaceutical firms. We find that basic research collaboration with academic stars is on average not associated with a performance premium above the overall positive influence of collaborating with academia. We only observe this premium if the star scientist abstains from simultaneous collaboration with other firms (‘dedication’) and extend her collaboration with the firm to involvenot only basic but also applied research (‘translation’). Extending prior work that has focused on corporate star scientists, we find that if the collaboration involves an internal firm star scientist, a translational contribution of the academic star is no longer a prerequisite, and may even be detrimental to inventive performance. Our findings inform the literatures on industry-science links and firms’ (scientific) absorptive capacity by revealing the crucial contingencies for firms to benefit from partnering with the best and brightest among academic scientists. Practitioner Points: - Intuitively we may expect that collaborating with the very top among academics benefits firms, yet collaborating with these academic star scientists also entails important challenges. - Organizations seeking to benefit from the extraordinary expertise of academic star scientists should take into account two important conditions: o The top academic should be a dedicated collaboration partner, and avoid simultaneous collaboration with other firms. o The top academic should not only be involved in basic research but also in applied research collaboration with the firm, enhancing her ability to assist the firm in the translation of research into a marketable product. - When the firm also employs a star scientist who is engaged in the collaborative research with an academic star scientist, the translation of the joint research is better performed by the internally employed star scientists instead of the academic star scientist. |
| Keywords: | university-industry collaboration, knowledge transfer, star scientists |
| Date: | 2021–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:ete:msiper:684436&r= |
| By: | Stefano Costa; Federico Sallusti; Claudio Vicarelli; Davide Zurlo |
| Abstract: | In this paper we study the structural robustness of Italian business system, using Covid-19 pandemic as an exogenous event to test it. To this aim, we use the ROC (Receiver Operating Characteristics) methodology, quite new for Economics, to classify Italian firms according to their economic solidity, obtaining a taxonomy based on a wide set of characteristics. Our results show that the number of 'Solid' firms are less than one fifth of the universe of Italian enterprises but they represent the lion share in terms of employment and value added. 'Fragile' and 'Risky' firms, albeit much less relevant for the creation of value added, account for over one third of total employment, so that they are a worrisome issue for policy makers. The pandemic crisis has clearly both a size and sector-related dimension: Risky and Fragile conditions prevail among firms with smaller economic size (a broad definition of firm size) and among those operating in Construction and Other services. Finally, we find that factors such as firms' performance, internal and external organization, although significant, play a less relevant role than economic size and digitalization/innovation in determining Italian firms' solidity to shocks such as the Covid-19 one. |
| Keywords: | Covid-19; ROC analysis; economic solidity to pandemic. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2021/47&r= |