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on Business Economics |
| By: | Leonardo Madio; Aldo Pignataro |
| Abstract: | We study an infinitely repeated oligopoly game in which firms compete on quantity and one of them is capacity constrained. We show that collusion sustainability is non-monotonic in the size of the capacity constrained firm, which has little incentive to deviate from a cartel. We also present conditions for the emergence of a partial cartel, with the capacity constrained firm being excluded by the large firms or self-excluded. In the latter case, we show under which circumstances the small firm induces a partial conspiracy that is Pareto-dominant. Implications for cartel identification and enforcement are finally discussed. |
| Keywords: | antitrust, capacity constraints, collusion, partial cartel |
| JEL: | D21 L13 L41 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10170&r=bec |
| By: | Anthony Savagar |
| Abstract: | I study the effect of dynamic firm entry, scale economies and oligopolistic competition on measured productivity and output amplification. These features cause measured productivity (Solow residual) to exceed pure technology. I decompose measured productivity into pure technology and an endogenous component that is caused by firm-level output variation interacting with increasing returns to scale. In turn, I show that firm-level output variation depends on economic profits and markups that vary in response to dynamic entry and oligopolistic competition. I estimate the pure technology series adjusted for profits and markups and show that it is less volatile and more persistent than a benchmark model, whilst still generating output amplification. |
| Keywords: | Markups, Firm Entry, Productivity, Scale Economies, Oligopolistic Competition |
| JEL: | E32 D21 D43 L13 C62 |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:2110&r=bec |
| By: | Francesco Aiello (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Lidia mannarino (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Valeria Pupo (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)) |
| Abstract: | This study revises the moderating effect of size and age on the relationship between family ownership and innovation. The research hypotheses are tested on a large sample of Italian firms observed over the 2010–2017 period, using a zero-inflated non-linear count model. Results from a three-way interaction approach suggest that the patenting gap between family firms (FFs) and non-family firms is sensitive to size and age. Compared to non-FFs, FFs underperform when they are small and young or large and old, while there are no substantial differences for other types of firms. Much of the evidence is driven by the founder effect which differs over the firm life. |
| Keywords: | innovation, patent, family firms, size, age |
| JEL: | D22 L25 L60 O30 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:202301&r=bec |
| By: | Alvarez, Bruna; Pessoa, João Paulo; Souza, André Portela |
| Abstract: | We study how revenue-dependent tax policies affect wages, productivity, and welfare in an economy where formal and informal firms co-exist. We use a dynamic entrepreneurial choice model and bring it to the data to assess the effects of the Brazilian Simples, a simplified tax scheme that reduces the tax burden of small- and medium-sized firms. We find that the Simples increases firm formalization, raising the demand for labor and benefiting workers. Meanwhile, tax collection falls as some formal firms withhold production to pay lower taxes. Overall, productivity (weighted by firm size), per capita production, and welfare fall. Alternative policies that reduce the tax gap between small and large firms perform better in welfare and tax collection terms. |
| Date: | 2022–12–19 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:561&r=bec |
| By: | Pedro S. Martins; Jonathan P. Thomas |
| Abstract: | This paper studies firm-provided training in a context of potential worker mobility. We argue that such worker mobility may be reduced by employers’ associations (EAs) through no-poach agreements. First, we sketch a simple model to illustrate the impact of employer coordination on training. We then present supporting evidence from rich matched panel data, including firms’ EA affiliation and workers’ individual training levels. We find that workers’ mobility between firms in the same EA is considerably lower than mobility between equivalent firms not in the same EA. We also find that training provision by EA firms is considerably higher, even when drawing on within-employee variation and considering multiple dimensions of training. We argue that these results are consistent with a role played by EAs in reducing worker mobility. |
| Keywords: | Employers organisations, No-poach agreements, Worker mobility |
| JEL: | J53 J62 L40 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp653&r=bec |
| By: | Ida Nervik Hjelseth; Arvid Raknerud; Bjørn H. Vatne |
| Abstract: | We propose an econometric model for predicting the share of bank debt held by bankrupt firms by combining a novel set of firm-level financial variables and macroeconomic indicators. Our firm-level data include payment remarks in the form of debt collections from private agencies and attachments from private and public agencies and cover all Norwegian limited liability companies for the period 2010–2021. We use logistic Lasso regressions to select bankruptcy predictors from a large set of potential predictors, comparing a highly sparse variable selection criterion (“the one standard error rule†) with the minimum cross validation error (CVE) criterion. Moreover, we examine the implications of using debt shares as weights in the estimation and find that weighting has a large impact on variable selection and predictions and, generally, leads to lower out-of-sample prediction errors than alternative approaches. Debt weighting combined with sparse variable selection gives the best predictions of the risk of bankruptcy in firms holding high shares of the bank debt. |
| Keywords: | Bankruptcy prediction, credit risk, corporate bank debt, Lasso, weighted logistic regression |
| JEL: | C25 C33 C53 G33 D22 |
| Date: | 2022–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2022_7&r=bec |
| By: | Pierre Cahuc; Pauline Carry; Franck Malherbet; Pedro S. Martins |
| Abstract: | Estimates of the impact of employment protection heavily rely on reduced-form methods, assuming that there are no indirect effects between firms. This paper exploits a labor law reform implemented in Portugal in 2009 which restricted the use of fixed-term contracts for large firms above a specific size threshold, to investigate and quantify spillover effects. Standardreduced-form estimates based on the hypothesis of the absence of spillover towards firms for which the reform does not apply yield a negative impact on employment of about 1.5%. However, we find evidence of significant spillovers. The estimation of the macroeconomic effects of the reform with a search and matching model accounting for spillovers yields an almost negligible employment impact of the reform, more than ten times smaller than that obtained with the reduced form estimates. This result underlines that the numerous reduced-form estimates of the impact of employment protection that rely on firm size thresholds must be interpreted with caution. |
| Keywords: | Employmentprotection legislation, Spillover effects, Directed search and matching |
| JEL: | J23 J41 J63 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp655&r=bec |
| By: | Julien Grenet (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Hans Grönqvist (Uppsala University, IFAU - Institute for Evaluation of Labour Market and Education Policy); Daniel Jahnson (Uppsala University) |
| Abstract: | The Swedish banking crisis in the early 90s counts as one of the five most severe financial crises in history. We examine how firms more exposed to this event adjusted employment in the longrun and the mechanisms involved. Our analysis draws on matched employer-employee data containing the financial statements for a large sample of firms. Our difference-indifferences estimates show that firms with a greater pre-crisis debt burden experienced more difficulties in accessing external capital during the crisis compared to firms with lower baseline debts. This is consistent with the most exposed firms becoming financially constrained. More exposed firms exhibit stronger downward employment adjustments than less exposed firms, and the reductions are mainly concentrated among low-skilled workers. Employment in more exposed firms started to recover four years after the crisis and had fully recuperated about a decade later. These firms also temporarily saw a larger drop in both productivity and investment. We do not find a significant effect on the wage bill, and the estimates are precise enough to rule out even moderate effect sizes. |
| Keywords: | Financial Crisis, Matched Employer-Employee Data, Macroeconomic Shocks, Labor Demand |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-03920377&r=bec |