nep-bec New Economics Papers
on Business Economics
Issue of 2023‒04‒10
ten papers chosen by
Vasileios Bougioukos
London South Bank University

  1. Total Factor Productivity: Exploring firms’ dynamics and heterogeneity over the business cycle By Roman Fossati; Heiko Rachinger
  2. Robots and Workers: Evidence from the Netherlands By Acemoglu, Daron; Koster, Hans R.A.; Ozgen, Ceren
  3. A portrait of AI adopters across countries: Firm characteristics, assets’ complementarities and productivity By Flavio Calvino; Luca Fontanelli
  4. Was Robert Gibrat Right? A Test Based on the Graphical Model Methodology By Guerzoni, Marco; Riso, Luigi; Vivarelli, Marco
  5. Growth, Intellectual Capital, Financial Performance And Firm Value : Evidence From Indonesia Automotive Firms By Putri, Indah Ayu Johanda
  6. Firm-level attitudes and actions to the “Twin Transition” challenges of digitalisation and climate change By Kren, Janez; Lawless, Martina
  7. Technical Founders, Digital Transformation and Corporate Technological Innovation: Empirical Evidence from Listed Companies in China’s STAR Market By Zhi-Guang Li; Yanrui Wu; Yao-Kuang Li
  8. Capital Account Liberalization and Wage Inequality: Evidence from Firm Level Data By Kodjovi M. Eklou; Shakeba Foster
  9. Global Sourcing and Firm Inventory during the Pandemic By ZHANG Hongyong; DOAN Thi Thanh Ha
  10. Doing Less, with Less: Capital Misallocation, Investment and the Productivity Slowdown in Australia By Jonathan Hambur; Dan Andrews

  1. By: Roman Fossati; Heiko Rachinger
    Keywords: Total factor productivity, heterogeneity, entry and exit, firm and industry level productivity, productivity decomposition
    JEL: L16 L60 O30 O47
    Date: 2021–11
  2. By: Acemoglu, Daron (MIT); Koster, Hans R.A. (Vrije Universiteit Amsterdam); Ozgen, Ceren (University of Birmingham)
    Abstract: We estimate the effects of robot adoption on firm-level and worker-level outcomes in the Netherlands using a large employer-employee panel dataset spanning 2009-2020. Our firm-level results confirm previous findings, with positive effects on value added and hours worked for robot-adopting firms and negative outcomes on competitors in the same industry. Our worker-level results show that directly-affected workers (e.g., bluecollar workers performing routine or replaceable tasks) face lower earnings and employment rates, while other workers indirectly gain from robot adoption. We also find that the negative effects from competitors' robot adoption load on directly-affected workers, while other workers benefit from this industry-level robot adoption. Overall, our results highlight the uneven effects of automation on the workforce.
    Keywords: robots, workers, technology, productivity, the Netherlands
    JEL: D63 E22 E23 E24 J24 O33
    Date: 2023–03
  3. By: Flavio Calvino; Luca Fontanelli
    Abstract: This report analyses the use of artificial intelligence (AI) in firms across 11 countries. Based on harmonised statistical code (AI diffuse) applied to official firm-level surveys, it finds that the use of AI is prevalent in ICT and Professional Services and more widespread across large – and to some extent across young – firms. AI users tend to be more productive, especially the largest ones. Complementary assets, including ICT skills, high-speed digital infrastructure, and the use of other digital technologies, which are significantly related to the use of AI, appear to play a critical role in the productivity advantages of AI users.
    Keywords: AI, artificial intelligence, productivity, technology adoption
    Date: 2023–04–11
  4. By: Guerzoni, Marco (Università degli Studi di Milano-Bicocca); Riso, Luigi (Catholic University Milan); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: Using both regression analysis and an unsupervised graphical model approach (never applied before to this issue), we confirm the rejection of the Gibrat's law when our firm-level data are considered over the entire investigated period, while the opposite is true when we allow for market selection. Indeed, the growth behavior of the re-shaped (smaller) population of the survived most efficient firms is in line with the Law of Proportionate Effect; this evidence reconciles early and current literature testing Gibrat's law and may have interesting implications in terms of both applied and theoretical research.
    Keywords: Gibrat's Law, firm survival, market selection, firm growth
    JEL: L11
    Date: 2023–03
  5. By: Putri, Indah Ayu Johanda
    Abstract: This study analyzes and explains empirical evidence of the effect of growth and Intellectual Capital respectively on financial performance and firm value, as well as the role of Financial Performance in mediating the influence of company growth and Intellectual Capital respectively on firm value. The benefits of this research are expected to be a reference that enriches the literature of Management Science, especially related to signaling theory and Resource Based Theory. In addition, this research is expected to provide benefits for automotive company managers in developing strategies that can improve financial performance and firm value, investors in automotive companies in making the right decisions in investing in automotive companies and the government in formulating policies related to automotive companies so that more investors invest in automotive companies. To test the hypothesis used Partial Least Square (PLS) analysis. The results of the hypothesis test show that: (1) the company's growth has a positive and insignificant effect on financial performance, (2) Intellectual Capital has a positive and significant effect on financial performance, (3) company growth has a positive and insignificant effect on firm value, (4) Intellectual Capital has a positive and insignificant effect on firm value, (5) financial performance has a positive and significant effect on firm value, (6) financial performance does not mediate the company's growth to the company's value and (7) financial performance mediates Intellectual Capital to the value of the company.
    Date: 2023–03–14
  6. By: Kren, Janez; Lawless, Martina
    Date: 2023
  7. By: Zhi-Guang Li (School of Management, Hefei University of Technology, Hefei, China); Yanrui Wu (Business School, The University of Western Australia); Yao-Kuang Li (School of Management, Hefei University of Technology, Hefei, China)
    Abstract: Technology entrepreneurship and corporate innovation are important for the development of indigenous innovation. In the digital age, founders are subject to fundamental changes in their strategy choices, which in turn affect corporate innovation performance. This paper aims to explore the strategic choices adopted by technical founders of listed companies in China’s STAR market to reap the rewards of innovation in a digital context. Based on the annual reports of 124 listed companies in China’s STAR Market, this paper applies machine learning methods to quantify digital transformation of enterprises, and empirically analyzes the relationship between technical founders and innovation performance by constructing a moderated mediating model. Our results show that companies with technical founders are more likely to adopt digital transformation and thus show better innovation performance. In terms of heterogeneity, the empirical results demonstrate that firms with technical founders show better performance in digital transformation, followed in turn by those with business founders and academic founders. Both the positive relationship between enterprise digital transformation and innovation performance and the mediating effect of digital transformation are positively moderated by venture capital or private equity support. The findings reveal the microscopic mechanism of the role of technology-based founders on corporate innovation performance and hence have practical implications for promoting corporate digital transformation and enhancing firm technological innovation.
    Keywords: Technical founder; Technological Innovation; Technology entrepreneurship; Digital transformation; Innovation performance; STAR Market
    Date: 2023
  8. By: Kodjovi M. Eklou; Shakeba Foster
    Abstract: Firms play an important role in shaping income inequality at the aggregated country level, given that wages represent a significant proportion of household income. We investigate the distributional consequences of capital account liberalization, relying on firm level data to explore the implications for betweenfirms earning inequality in ASEAN5 countries over the period 1995-2019. We find that between-firms wage dispersion alone, accounts for a nontrivial proportion of the variation in the market Gini. Our empirical findings show that capital account liberalization increases between-firms wage inequality, as wages grow faster at initially high-paying firms and slow-down at firms at the lower portion of the wage distribution. These results are robust to a battery of robustness checks. Further, the directions and categories of capital account liberalization matter as results are pronounced for inflow liberalization and equity capital flows. We also show that capital account liberalization induces an increase in Profit-to-Wage ratios. Furthermore, the impact depends on country characteristics (wage setting institutions, the level of financial development and the size of the informal sector) as well as industry characteristics (export orientation and external finance dependence).
    Keywords: Wage Inequality; Firm heterogeneity; Capital Account Liberalization; wage dispersion; inflow liberalization; Shakeba foster; baseline result; Income inequality; Wages; Total factor productivity; Wage adjustments
    Date: 2023–03–03
  9. By: ZHANG Hongyong; DOAN Thi Thanh Ha
    Abstract: Firms hold inventory to manage input shortages and stockout risks. This is particularly true for firms relying on international supply chains and imported inputs. Using a large-scale quarterly government survey of Japanese manufacturing firms (Q1 2015 – Q2 2021), we examine firm-level inventory adjustments to supply chain shocks and focus on firms that sourced inputs globally during the pandemic. We find that before the pandemic, relative to firms that purchase inputs only domestically, importing firms tend to have larger inventories (inventories over sales) in materials, work-in-process (intermediate goods), and finished goods, even after controlling for firm size. After the pandemic, importers significantly and persistently increased their inventories of intermediate inputs, especially in the case of firms with ex-ante higher import intensity and multinational firms that experienced supply chain disruptions in China. These results suggest the possibility of a shift from just-in-time to just-in-case production during the pandemic. We then discuss the role of inventories as a buffer against input shortages and other factors affecting inventory holdings, such as the prefecture-level severity of COVID-19 infections, industry-level input and output prices, and firm-level financial constraints and uncertainties regarding the economic and business outlook.
    Date: 2023–03
  10. By: Jonathan Hambur (Reserve Bank of Australia); Dan Andrews (e61 Institute)
    Abstract: Productivity growth has slowed in Australia in recent decades. Previous research highlighted the roles of persistently weak non-mining investment and a pervasive decline in economic dynamism, including slower reallocation of labour from low- to high-productivity firms. While these facts have so far been considered separately, this paper attempts to connect them by documenting investment patterns for firms with different levels of productivity. We find that more productive firms are more likely to invest and expand their capital stock than less productive firms, but the extent to which this is true has declined over time. This has weighed on productivity, output and incomes through lower aggregate investment, and also through a less efficient allocation of that investment. We find evidence that capital reallocation slowed more in sectors that were more dependent on external finance, pointing to financing frictions as potentially playing a role. Declines have also been more pronounced in sectors with increasing mark-ups, suggesting that weaker competition may have blunted incentives for firms to expand and improve or exit.
    Keywords: productivity; dispersion; firm-level; BLADE
    JEL: C23 C55 D22 D30 E23 E24
    Date: 2023–03

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