nep-bec New Economics Papers
on Business Economics
Issue of 2022‒07‒11
nine papers chosen by
Vasileios Bougioukos
London South Bank University

  1. Sequential exporting across countries and products By Facundo Albornoz; Hector F. Calvo Pardo; Gregory Corcos; Emanuel Ornelas
  2. Productivity and responses to the pandemic: Firm-level evidence By Harasztosi, Péter; Savšek, Simon
  3. Job Satisfaction, Structure of Working Environment and Firm Size By Aysit Tansel; Saziye Gazioglu
  4. Firm Competition and Cooperation with Norm-Based Preferences for Sustainability By Inderst, Roman; Sartzetakis, Eftichios S.; Xepapadeas, Anastasios
  5. Pareto-Improving Data-Sharing By Ronen Gradwohl; Moshe Tennenholtz
  6. Are EU firms climate-ready? Micro evidence from EIBIS By Kalantzis, Fotios; Dominguez, Sofia
  7. A shot in the arm: stimulus packages and firm performance during Covid-19 By Deniz Igan; Ali Mirzaei; Tomoe Moore
  8. Simplifying the Measure of Concentration from Common Ownership: A Note By Antonio Estache; Maxime Katté; Christophe Kieffer
  9. The impact of German public support transfers on firm finance: Evidence from the Covid-19 crisis By Gärtner, Leo; Marek, Philipp

  1. By: Facundo Albornoz; Hector F. Calvo Pardo; Gregory Corcos; Emanuel Ornelas
    Abstract: How do exporters expand their product scope and geographical presence? We argue that new exporters are uncertain about their profitability in different countries and products, but learn it as they start to export. As a consequence, exporters add products and countries sequentially, in an interdependent process. Exploiting disaggregated data on French exporters, we find empirical support consistent with such a mechanism, where firms learn from their initial export experiences and then adjust their sales, number of products and destination countries accordingly. Our results indicate that part of the learning is firm-specific, and not merely product- or market-specific. Furthermore, we find that firms tend to expand in the sub-extensive margin first by widening product scope within a destination and later by entering new destinations; and that firms' core products are particularly resilient despite being used to "test the waters" when entering additional countries.
    Keywords: export dynamics, experimentation, uncertainty, multiproduct firms, market inter-dependence
    Date: 2021–06–02
  2. By: Harasztosi, Péter; Savšek, Simon
    Abstract: In this paper, we empirically assess repercussions of the pandemic on the firm-level productivity worldwide. COVID-19 shock was very heterogeneous across sectors. Our findings show that firms' responses to the shock also varied within sectors: more productive firms coped with the crisis better in terms of closures and employment adjustments. Besides, they were more likely to speed up some digitalization processes. These findings imply that the recent crisis could amplify the difference between highly productive and less productive firms. As regards the governments' policy measures, we find strong utilization at the firm level, but very little differentiation across productivity quantiles, suggesting room for a more targeted approach in the reminder of the pandemic.
    Keywords: Covid-19,Productivity,Enterprise Survey
    Date: 2022
  3. By: Aysit Tansel (Middle East Technical University); Saziye Gazioglu (Department of Economics, Middle East Technical University, Ankara, Turkey)
    Abstract: Employees’ wellbeing is important to the firms. Analysis of job satisfaction may give insight into various aspect of labor market behavior, such as worker productivity, absenteeism and job turn over. Little empirical work has been done on the relationship between structure of working environment and job satisfaction. This paper investigates the relationship between working environment, firm size and worker job satisfaction. We use a unique data of 28,240 British employees, Workplace Employee Relations Survey. In this data set the employee questionnaire is matched with the employer questionnaire. Four measures of job satisfaction considered are satisfaction with influence over job, satisfaction with amount of pay, satisfaction with sense of achievement and satisfaction with respect from supervisors. They are all negatively related to the firm size implying lower levels of job satisfaction in larger firms. The firm size in return is negatively related to the degree of flexibility in the working environment. The small firms have more flexible work environments. We further find that, contrary to the previous results lower levels of job satisfaction in larger firms can not necessarily be attributed to the inflexibility in their structure of working environment.
    Keywords: Job Satisfactions, Firm Size, Working Environment, Linked Employer-Employee data, Britain
    JEL: J21 J28 J29 J81
    Date: 2022–06
  4. By: Inderst, Roman; Sartzetakis, Eftichios S.; Xepapadeas, Anastasios
    Abstract: We analyze firms incentives to coordinate on the introduction of a more sustainable product variant when consumers preferences for greater sustainability depend on the perceived social norm, which in turn is shaped by average consumption behavior. Such preferences lead to multiple equilibria. If the more sustainable variant allows firms to sufficiently expand their aggregate market share, when a lenient legal regime makes this feasible they will coordinate on the more sustainable outcome. If their aggregate market share however does not expand sufficiently under the more sustainable variant, coordination can forestall a more sustainable outcome. Our analysis thus both confirms and qualifies the notion of a sustainability first-mover disadvantage as a justification for an agreement between competitors, which has gained traction in antitrust. We also provide empirical evidence for norm-based sustainability preferences.
    Keywords: Sustainability,Antitrust,Firm Cooperation
    Date: 2022
  5. By: Ronen Gradwohl; Moshe Tennenholtz
    Abstract: We study the effects of data sharing between firms on prices, profits, and consumer welfare. Although indiscriminate sharing of consumer data decreases firm profits due to the subsequent increase in competition, selective sharing can be beneficial. We show that there are data-sharing mechanisms that are strictly Pareto-improving, simultaneously increasing firm profits and consumer welfare. Within the class of Pareto-improving mechanisms, we identify one that maximizes firm profits and one that maximizes consumer welfare.
    Date: 2022–05
  6. By: Kalantzis, Fotios; Dominguez, Sofia
    Abstract: This study uses unique firm-level data from EIBIS to identify EU firms' climate strategies and their associated factors. To do so, we initially run a clustering analysis that results in five distinct clusters in line with the literature and then investigate the role of various firms' characteristics in their adoption based on a multi-logit regression. Our findings show that almost half of the EU firms adopt either "wait-and-see" strategies or plan to invest in tackling climate change risks. More climate-friendly strategies appear to be positively associated with the awareness of climate-related risks, especially with firms that see the transition to a lowcarbon future as an opportunity. Similarly, those strategies are followed by large firms that are innovative, face fewer credit constraints and operate in an environment where there is a strong push for climate actions from various stakeholders. These findings are valuable as they can guide policymakers on supporting firms' transformation to play their part, as an integral part of our society, in the road to a clean, affordable, and secure energy future.
    Keywords: EIBIS,climate strategies,climate change risks,perception analysis,clustering analysis
    Date: 2022
  7. By: Deniz Igan; Ali Mirzaei; Tomoe Moore
    Abstract: We use firm-level data to provide some early evidence on the effectiveness of COVID-19 economic policy packages. Our empirical strategy relies on the varying degree of vulnerability to the pandemic across industries. We find a robust association of fiscal stimulus with changes in firm performance indicators (as measured by sales-to-assets ratio, profit margin, interest coverage ratio as well as probability of default) in pandemic-prone sectors. We also observe marginal effects of monetary policy on the sales-to-assets ratio and of foreign exchange intervention on the interest coverage ratio in the hardest-hit firms. These results broadly survive a battery of exercises to address endogeneity. Additionally, we show that firms with a better financial position are more likely to take advantage of the stimulus packages to withstand the pandemic shock. Overall, these provide preliminary evidence suggesting that policy interventions have bought time for the hardest-hit industries, by supporting turnover and improving liquidity.
    Keywords: economic stimulus, pandemic-prone, COVID-19, policy effectiveness
    JEL: G01 G14 G28 E65
    Date: 2022–05
  8. By: Antonio Estache; Maxime Katté; Christophe Kieffer
    Abstract: The note presents a simpler alternative to the Modified Herfindahl-Hirschman Index to measure the risks of market concentration in the presence of common owners such as institutional investors owning shares in multiple firms expected to compete in the same market. This new measure, the Amplified Herfindahl-Hirschman Index, delivers the same insights as the MHHI but is less data intensive and less sensitive to outliers. It thus offers a more “user friendly” and more precise alternative to competition and regulatory agencies as a decision trigger for more detailed investigations of market power risks associated with the growing presence of common ownership.
    Keywords: Antitrust, Common Ownership, Institutional Investors, Market Power, Modified Herfindahl-Hirschman Index
    Date: 2022–06
  9. By: Gärtner, Leo; Marek, Philipp
    Abstract: The economic policy response to COVID-19 lockdowns included a variety of measures. Their effects on non-financial firms, however, remain unclear. To shed light on the effect of transfers, we investigate the effect of German emergency aid transfers (November-December aid), a program designed for small and medium sized firms. Using novel survey data, we exploit variation in application status to estimate its effects on the financial situation of firms. We distinguish between firms that had already used aid transfers and those firms with a pending application. Our results show that firms substantially benefited from the November-December aid program. The provision of transfers improved liquidity and access to credit for distressed firms, while decreasing credit demand. The estimates suggest that firms that had received an approval of their application for November-December aid faced a 5-percentage point lower probability of being confronted with a low liquidity buffer. We also find strong evidence, that firms substituted aid with credit, since firms with a pending application status faced an 8-percentage point higher likelihood of starting credit negotiations. Moreover, the provision of November-December aid improved the creditworthiness of firms. We can show that receiving these transfers increased the probability of obtaining a loan at the desired conditions by 14 to 18 percentage points.
    Keywords: SMEs,emergency aid,treatment effects,COVID-19,firm finance
    JEL: C14 G32 G33 H84 L25 J68
    Date: 2022

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