nep-bec New Economics Papers
on Business Economics
Issue of 2023‒07‒31
eight papers chosen by
Vasileios Bougioukos, London South Bank University

  1. Till Death Do Us Part: Relationship shocks, supply chain organization and firm performance By Timothy DESTEFANO; ITO Keiko; Richard KNELLER; Jonathan TIMMIS
  2. Science and productivity in European Firms: How do regional innovation modes matter? By Natália Barbosa; Ana Paula Faria
  3. Digitalisation and the labour market: Worker-level evidence from Slovenia By Antonela Miho; Martin Borowiecki; Jens Høj
  4. Repeated Innovations and Excessive Spin-Offs By Mella-Barral, P.; Sabourian, H.
  5. COVID-19 and productivity-enhancing digitalisation: Firm-level evidence from Slovenia By Martin Borowiecki; Federico Giovannelli; Jens Høj
  6. Immigration Enforcement, Entrepreneurship, and Firm Entry/Exit By Shrestha, Samyam; Sant'Anna, Hugo
  7. Employment versus Efficiency: Which Firms Should R&D Tax Credits Target? By Anna Bernard; Rahim Lila; Joana Silva
  8. The evolution of labor share in Poland. New evidence from firm-level data By Hubert Drazkowski; Sebastian Zalas

  1. By: Timothy DESTEFANO; ITO Keiko; Richard KNELLER; Jonathan TIMMIS
    Abstract: Within modern economies firms are embedded in often complex supply chains, creating strong interdependencies between firms. But what happens when these supply chains are disrupted, what changes does this bring about? We answer these questions, focusing on what happens when connections between companies exogenously break because of the unexpected death of the CEO within one of the firms. We rely on detailed data from the TSR which provides firm-level measures of start and exit dates of CEOs along with buyer-supplier linkages. This data is matched to detailed statistics on Japanese firms which enables us to identify the effects of such leadership changes on supplier networks and subsequent performance. We find that such deaths promote the churning of suppliers but not of customers of the firm and therefore that these shocks propagate towards upstream firms through the supply chain. There is also evidence that this affects the short-term performance of indirectly affected firms as the shock propagates backwards along the supply chain.
    Date: 2023–07
  2. By: Natália Barbosa; Ana Paula Faria (Department of Economics and NIPE, University of Minho; Department of Economics and NIPE, University of Minho,)
    Abstract: Productivity disparities in the European regions tend to persist. In order to understand the underlying sources of this phenomenon we assess the importance of science and regional innovation modes on firms’ productivity growth on a sample of 150, 712 firms across 161 NUTSII European regions, over the period 2012-2017. We find that science is a major source of firms’ productivity growth, and it has been particularly important to firms located in Southern Europe and, to less extent, in Eastern EU regions, indicating that a science-push convergence process is at work in the EU peripheral regions. Our findings also show that the fast-growing productivity firms are those who benefit more from external knowledge and innovation. Growth by imitation seems to be a viable strategy restricted to the slow-growing productivity firms. These results help to conciliate contentious evidence regarding firms’ benefits from spillovers, namely from scientific knowledge.
    Keywords: Territorial innovation patterns, Firm productivity, Europe, Quantile regression
    JEL: O33 O38 L25 R11
    Date: 2023–07
  3. By: Antonela Miho; Martin Borowiecki; Jens Høj
    Abstract: This paper provides evidence on the effects of digitalisation on the labour market in Slovenia using a unique dataset of Slovenian workers and firms for the years 2016 to 2020. Results show that at the firm level, digitalisation – measured in terms of ICT investment, is associated with positive and statistically significant effects on employment. However, job growth is not evenly distributed: High-skilled workers and younger workers benefit the most from employment gains, whereas there is little to no employment increases for low- and medium-skilled workers and older workers aged 50 or more. Furthermore, employment effects from digitalisation are strongest for private manufacturing firms. In contrast, ICT investment by state-owned firms is not associated with employment gains.
    Keywords: employment, ICT investment, labour reallocation, wages
    JEL: E22 E24 J62 O33
    Date: 2023–07–10
  4. By: Mella-Barral, P.; Sabourian, H.
    Abstract: Firms can voluntarily create independent firms to implement their technologically distant innovations and capture their value through capital markets. We argue that when firms repeatedly compete to make innovations, there is inefficient external implementation of innovations and “excessive†creation of such firms. This inefficiency is most exacerbated in the early stages of an industry, when the number of firms is still limited.
    Keywords: Repeated Innovations, Spin-Offs, Voluntary Firm Creation
    JEL: M13 O31 O33
    Date: 2023–06–30
  5. By: Martin Borowiecki; Federico Giovannelli; Jens Høj
    Abstract: This paper provides evidence on the impact of digitalisation on productivity in Slovenia during the COVID-19 crisis. The pandemic affected overall labour productivity negatively. Nonetheless, results show that firms that were more ICT-intensive before the pandemic experienced a smaller decline in their labour productivity growth compared to their less ICT-intensive peers in the same 2-digit level sector. This resilience effect was strongest for firms that are integrated in global value chains. A second finding is that COVID-19 resulted in productivity-enhancing reallocation of labour to ICT-intensive firms, reflecting that these firms registered higher employment growth relative to their less ICT-intensive peers during the pandemic. A third finding is that high levels of state ownership in a sector was associated with less productivity-enhancing reallocation. This suggests that state-owned enterprises retained workers that could be redirected to more productive firms. Together, these findings highlight the potential of digitalisation to support resilience and stronger productivity growth, although labour market rigidities and state ownership hamper the positive impact of digitalisation.
    Keywords: digitalisation, labour reallocation, productivity
    JEL: D24 E22 E24 O33
    Date: 2023–07–10
  6. By: Shrestha, Samyam; Sant'Anna, Hugo
    Keywords: Labor and Human Capital, Institutional and Behavioral Economics, Agribusiness
    Date: 2023
  7. By: Anna Bernard; Rahim Lila; Joana Silva (Católica School of Business and Economics, Universidade Católica Portuguesa; Charles Rivers Associate; Católica School of Business and Economics, Universidade Católica Portuguesa)
    Abstract: R&D tax credits, by stimulating private sector innovation, can play a key role in promoting employment and firm performance. This paper examines the program impact on the trajectory of firms in terms of technology adoption, firm performance and workforce composition, and the extent to which it depends on the size of the targeted firms. It uses rich longitudinal micro-data on innovation, firms and their workers. Combining matching with a staggered adoption differences-in-differences, we show that tax credits increase investment in R&D-related activities while funds are being received, but not thereafter. Productivity and efficiency (but not employment) increase in large firms. These effects are driven by structural changes, both in terms of the increased share of skilled individuals within the firm (keeping the overall employment level constant) and enhanced technological adoption. In contrast, small firms mostly respond by increasing employment and production scale. Our results suggest that an important trade-off: R&D tax credit programs that target large firms are likely to lead to efficiency and productivity gains, but limited effects on employment of supported firms. In contrast, R&D tax credit programs that mostly benefit small firms may lead to employment gains in supported firms, but limited effects on structural changes in productivity and efficiency.
    Keywords: R&D tax credits, Innovation, SIFIDE, Matching, Differences-in-Differences
    JEL: O31 O38 H25
    Date: 2023–07
  8. By: Hubert Drazkowski (Group for Research in Applied Economics (GRAPE)); Sebastian Zalas (Group for Research in Applied Economics (GRAPE))
    Abstract: We evaluate the usefulness of non-representative registry data such as Orbis in drawing inferences about economic phenomena in Poland. While firm-level studies of economic phenomena are of key policy relevance, census data and representative samples are scarcely available across countries. We obtain estimates of labor share for the period 1995-2019. For the overlapping period and samples, we compare our estimates to Growiec (2009), who drew on a census of Polish firms employing 50+ employees. We also refer to OECD STAN data. We demonstrate that time patterns are common across data sources. Additionally, we study the potential for various imputation methods to enrich inference.
    Keywords: labor share, firm-level data, missing data
    JEL: C81 E25 D33
    Date: 2023

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