nep-bec New Economics Papers
on Business Economics
Issue of 2023‒03‒06
five papers chosen by
Vasileios Bougioukos
London South Bank University

  1. Firm-level productivity growth returns of social capital: Evidence from Western Europe By Roberto Ganau; Andres Rodriguez-Pose; ;
  2. Sequentially Exporting Products across Countries By Facundo Albornoz; Héctor F. Calvo Pardo; Gregory Corcos; Emanuel Ornelas
  3. Sanctions and misallocation. How sanctioned firms won and Russia lost By Nigmatulina, Dzhamilya
  4. Digital Hermits By Jeanine Miklós-Thal; Avi Goldfarb; Avery M. Haviv; Catherine Tucker
  5. Being at the core: firm product specialisation By Filippo Bontadini; Mercedes Campi; Marco Due\~nas

  1. By: Roberto Ganau; Andres Rodriguez-Pose; ;
    Abstract: We analyse the firm-level labour productivity growth returns of social capital —defined as a synthetic measure of ‘generalised trust’, ‘active participation’, and ‘social norms’— using a large sample of manufacturing firms in France, Germany, Italy, Portugal, and Spain. We find that firms’ labour productivity growth is higher in areas with a better social capital endowment. The positive returns of social capital are, nevertheless, unevenly distributed across firms, with smaller, less productive, less capital-endowed, and low-tech firms benefitting the most from operating in strong social capital ecosystems.
    Keywords: Firm labour productivity growth; Social capital; Manufacturing industry; Western Europe.
    JEL: C36 D24 R10 Z13
    Date: 2023–02
  2. By: Facundo Albornoz (University of Nottingham); Héctor F. Calvo Pardo (University of Southampton); Gregory Corcos (Ecole polytechnique); Emanuel Ornelas (Sao Paulo School of Economics-FGV)
    Abstract: Exploiting disaggregated data on French exporters, we show that firms expand their product scope and geographical presence sequentially. This process of internationalization is uneven over time, exhibiting more volatility early than later in the life cycle of exporters. Specifically, young exporters are particularly likely to exit, and if they keep exporting, to expand at the intensive and sub-extensive margins, doing so by widening product scope within a destination before enteringnew destinations. We also find that firms’ core products are particularly resilient despite being used to “test the waters” when entering additional countries. Existing models of firm export dynamics are not designed to explain these empirical regularities. We argue that they can be rationalized by a mechanism where new exporters are uncertain about the profitability of their products in different markets, but learn from their initial export experiences and then adjust their sales, number of products and destination countries accordingly.
    Keywords: Export dynamics, experimentation, uncertainty, multiproduct firms, market inter- dependence.
    JEL: F10 F14 D22 L25
    Date: 2023–02
  3. By: Nigmatulina, Dzhamilya
    Abstract: Using a unique natural experiment of staggered firm-level sanctions against Russia in 2014-2020 and the data on over 900, 000 Russian firms, I estimate the effect of sanctions on targeted firms and on the aggregate economy. Surprisingly, sanctioned firms on average gained 38% more capital inputs after sanctions relative to the industry trends. The effect is in part driven by sanctioned state-owned firms, getting 60% more capital relative to non-sanctioned firms. Using additional data on subsidies and government contracts, I find that this result is explained by the government protection of targeted firms, that more than compensated for a negative sanctions shock. However, the sanctioned firms were already too large and had too much capital prior to sanctions. I use a heterogeneous firm framework to show that the distortions between sanctioned and non-sanctioned firms, which existed before the sanctions, got exacerbated after the joint effect of sanctions and government protection. I combine the causal estimates with the quantitative frame-work and estimate that on the aggregate, the Russian TFP dropped at least by 0.33% reaching 3% in relevant sectors.
    Keywords: misallocation; macro development; state-ownership; poltical connections; SOEs; sanctions; Russia
    JEL: D60 F37 F51 O10 O11 O12 O40
    Date: 2022–11–23
  4. By: Jeanine Miklós-Thal; Avi Goldfarb; Avery M. Haviv; Catherine Tucker
    Abstract: When a user shares multi-dimensional data about themselves with a firm, the firm learns about the correlations of different dimensions of user data. We incorporate this type of learning into a model of a data market in which a firm acquires data from users with privacy concerns. User data is multi-dimensional, and each user can share no data, only non-sensitive data, or their full data with the firm. As the firm collects more data and becomes better at drawing inferences about a user’s privacy-sensitive data from their non-sensitive data, the share of new users who share no data (“digital hermits”) grows. At the same time, the share of new users who share their full data also grows. The model therefore predicts a polarization of users’ data sharing choices away from non-sensitive data sharing to no sharing and full sharing.
    JEL: L5 L51 L86 M3
    Date: 2023–02
  5. By: Filippo Bontadini; Mercedes Campi; Marco Due\~nas
    Abstract: We propose a novel measure to investigate firms' product specialisation: product coreness, that captures the centrality of exported products within the firm's export basket. We study product coreness using firm-product level data between 2018 and 2020 for Colombia, Ecuador, and Peru. Three main findings emerge from our analysis. First, the composition of firms' export baskets changes relatively little from one year to the other, and products far from the firm's core competencies, with low coreness, are more likely to be dropped. Second, higher coreness is associated with larger export flows at the firm level. Third, such firm-level patterns also have implications at the aggregate level: products that are, on average, exported with higher coreness have higher export flows at the country level, which holds across all levels of product complexity. Therefore, the paper shows that how closely a product fits within a firm's capabilities is important for economic performance at both the firm and country level. We explore these issues within an econometric framework, finding robust evidence both across our three countries and for each country separately.
    Date: 2023–02

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