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on Business Economics |
| By: | Colciago, Andrea; Lewis, Vivien; Matyska, Branka |
| Abstract: | We identify the effects of corporate income tax shocks on key US macroeconomic aggregates. In response to a corporate income tax cut, we find that: (i) labor productivity increases; (ii) entry increases with delay; (iii) exit increases; (iv) total labor increases by more than production labor. To rationalize these empirical findings, we build a New Keynesian model with idiosyncratic firm productivity, and entry and exit. Our model features productivity gains due to selection and cleansing along the entry and exit margins. Models with homogeneous firms fail to account for the selection and cleansing process and produce counterfactual results. |
| Keywords: | corporate taxation, productivity, firm entry and exit |
| JEL: | E62 E32 H25 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdps:162023&r=bec |
| By: | Christos Genakos; Ioannis Kaplanis; Maria Theano Tagaraki; Aggelos Tsakanikas |
| Abstract: | The global financial crisis that burst in 2008 adversely affected business performance in many countries, especially in Europe. However, the impact of the crisis on entrepreneurship and business dynamics differed amongst countries, depending on their businesses resilience, the policies implemented, but also their predominant productive structure. The magnitude and length of the Greek depression have no precedent among modern middle and high-income economies. Still, to date, there is no systematic analysis of the impact of the crisis on entrepreneurship and business dynamism. This study attempts to fill this gap by examining individual firm, sectoral and regional level characteristics that might affect existing firm resilience and new firm survival rate. We use two sources of data with the most extensive coverage of small (sole proprietorship) and large (other legal status firms) firms containing information on entry and exit in Greece. Matching data from patents and trademarks allow us to examine the interplay between entrepreneurship and innovation. Our analysis focuses on the factors that help or hinder firm survival and growth. We find that the crisis increased the exit likelihood for a firm by 5% to 16%. Larger firms, with significant fixed assets, lower financial leverage, operating in concentrated industries, but also those that are innovation and export oriented tend to have better chances of survival compared to their counterparts. These results are important for designing business policies not only in Greece but also other countries facing similar crises. |
| Keywords: | Greece, entrepreneurship, business resilience, business dynamism, innovation, growth |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:hel:greese:186&r=bec |
| By: | Schiersch, Alexander; Bertschek, Irene; Niebel, Thomas |
| Abstract: | Our paper contributes to the discussion about Europe's digital sovereignty. We analyze the relationship between firm performance and the diversification of sourcing countries for imported ICT goods. The analysis is based on administrative data for 3888 German manufacturing firms that imported ICT goods in the years 2010 and 2014. We find that firms that diversify the sourcing of ICT goods across multiple countries perform better than similar firms with a less diversified sourcing structure. This result holds for value added as well as for gross operational surplus as performance measures and for two different indicators of diversification. |
| Keywords: | ICT goods imports, global sourcing, digital sovereignty, firm performance |
| JEL: | F14 F23 L14 L23 D24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:23025&r=bec |
| By: | Natália P. Monteiro (NIPE/Center for Research in Economics and Management, University of Minho, Portugal); Odd Rune Straume (NIPE/Center for Research in Economics and Management, University of Minho, Portugal; and Department of Economics, University of Bergen, Norway) |
| Abstract: | We use rich Portuguese data to analyse the relationship between the use of structured management practices and worker pay in a large representative sample of firms. We find that management practices are significantly associated with both higher average wages and higher within-firm wage dispersion.The positive relationship between management practices and average pay is present throughout the wage distribution and for all occupational skill groups, but is stronger for workers higher up in the wage distribution and in higher-skilled occupations. These results are driven by management practices related to incentives, and are also mainly driven by small and medium-sized firms. |
| Keywords: | Management practices, wages, labour productivity |
| JEL: | D22 J31 M11 M54 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:nip:nipewp:05/2023&r=bec |
| By: | Schilling, Linda |
| Abstract: | I present a political economic theory, explaining bailouts for failing firms in the presence of non-voters (foreigners). The governing politician uses the bailout as a tool to sway voters for maximizing re-election chances. Bailouts partially leak to foreigners at the firm and are also financed by tax-paying foreigners outside the firm. I show, larger failing firms are granted larger bailouts even if the additional size is due to having more foreign stakeholders (``too-big-to-fail- lookalike''). Yet, among equally sized firms, the firm with more voting-stakeholders receives the larger bailout, contradicting social optimality. Besides firm size, also voting rights cause bailouts. |
| Keywords: | political finance, bailouts, economic voting, probabilistic voting, vote-share maximization, too-big-to-fail, socially optimal bailouts, partial suffrage |
| JEL: | D72 G3 G32 G33 G35 G38 P16 |
| Date: | 2023–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:118146&r=bec |
| By: | Jean-Paul Décamps (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Stéphane Villeneuve (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | We study a dynamic model of a firm whose shareholders learn about its profitability, face costs of external nancing and costs of holding cash. The shareholders' problem involves a notoriously challenging singular stochastic control problem with a two-dimensional degenerate diffusion process. We solve it by means of an explicit construction of its value function, and derive a corporate life-cycle with two stages: a "probation stage" where it is never optimal for the firm to issue new shares, and a "mature stage" where the firm resorts to the market whenever needed. The cash target level is non-monotonic in the belief about the profitability and reaches its highest value on the edge between the two stages. It follows new insights on the firm's volatility and its payout ratio which depend on the firm's stage in its life cycle. |
| Keywords: | Corporate cash management, Corporate life cycle, Learning, Singular control |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04164661&r=bec |
| By: | Kirui, Oliver K.; Abushama, Hala; Siddig, Khalid; Taffesse, Alemayehu Seyoum |
| Keywords: | REPUBLIC OF THE SUDAN; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; conflicts; agrifood sector; employment; food processing; livelihoods; food security; beverage industry; infrastructure; inputs; Sudan Armed Forces; Rapid Support Forces |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ssspwp:11&r=bec |