nep-bec New Economics Papers
on Business Economics
Issue of 2023‒12‒04
nine papers chosen by
Vasileios Bougioukos, London South Bank University

  1. Opposing firm-level responses to the China shock: output competition versus input supply By Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc J. Melitz; Thomas Zuber
  2. Pay, productivity and management By Nicholas Bloom; Scott W. Ohlmacher; Cristina J. Tello-Trillo; Melanie Wallskog
  3. Exports and firm survival in times of COVID-19: Evidence from eight European countries By Wagner, Joachim
  4. Patents that match your standards: firm-level evidence on competition and innovation By Antonin Bergeaud; Julia Schmidt; Riccardo Zago
  5. The impact of intra- and inter-provincial geographic diversification on real estate firm performance: evidence from China By Yayi Wei
  6. Acquisitions, management and efficiency in Rwanda's coffee industry By Rocco Macchiavello; Ameet Morjaria
  7. Regional productivity differences in the UK and France: From the micro to the macro By Bridget Kauma; Giordano Mion
  8. Lohnungleichheit zwischen Frauen und Männern: In Betrieben mit Gleichstellungsmaßnahmen ist die Verdienstlücke kleiner (Wage Inequality between Women and Men: Firms with Equality Policies exhibit smaller Gender Pay Gaps) By Collischon, Matthias; Zimmermann, Florian
  9. Foreign Competition and Innovation By Elhanan Helpman

  1. By: Philippe Aghion; Antonin Bergeaud; Matthieu Lequien; Marc J. Melitz; Thomas Zuber
    Abstract: We decompose the "China shock" into two components that induce different adjustments for firms exposed to Chinese exports: an output shock affecting firms selling goods that compete with similar imported Chinese goods, and an input supply shock affecting firms using inputs similar to the imported Chinese goods. Combining French accounting, customs, and patent information at the firm-level, we show that the output shock is detrimental to firms' sales, employment, and innovation. Moreover, this negative impact is concentrated on low-productivity firms. By contrast, we find a positive effect - although often not significant - of the input supply shock on firms' sales, employment and innovation.
    Keywords: Competition shock, patent, firms, import
    Date: 2022–11–30
  2. By: Nicholas Bloom; Scott W. Ohlmacher; Cristina J. Tello-Trillo; Melanie Wallskog
    Abstract: Using confidential Census matched employer-employee earnings data we find that employees at more productive firms, and firms with more structured management practices, have substantially higher pay, both on average and across every percentile of the pay distribution. This pay-performance relationship is particularly strong amongst higher paid employees, with a doubling of firm productivity associated with 11% more pay for the highest-paid employee (likely the CEO) compared to 4.7% for the median worker. This pay-performance link holds in public and private firms, although it is almost twice as strong in public firms for the highest-paid employees. Top pay volatility is also strongly related to productivity and structured management, suggesting this performance-pay relationship arises from more aggressive monitoring and incentive practices for top earners.
    Keywords: productivity, management, employer-employee earnings, pay-performance
    Date: 2022–04–04
  3. By: Wagner, Joachim
    Abstract: This paper uses firm level data from the World Bank Enterprise surveys conducted in 2019 and from the COVID-19 follow-up surveys conducted in 2020 in eight European countries to investigate the link between exporting before the pandemic and firm survival until 2020. The estimated effect of exports is positive and statistically significant ceteris paribus after controlling for various firm characteristics that are known to be related to firm survival. Furthermore, the size of this estimated effect can be considered to be large on average. Exporting helped firms to survive.
    Keywords: Exports, firm survival, COVID-19, World Bank Enterprise Surveys, Robit regression
    JEL: D22 F14 L20 L25 L29
    Date: 2023
  4. By: Antonin Bergeaud; Julia Schmidt; Riccardo Zago
    Abstract: When a technology becomes the new standard, the firms that are leaders in producing this technology have a competitive advantage. Matching the semantic content of patents to standards and exploiting the exogenous timing of standardization, we show that firms closer to the new technological frontier increase their market share and sales. In addition, if they operate in a very competitive market, these firms also increase their R&D expenses and investment. Yet, these effects are temporary since standardization creates a common technological basis for everyone, which allows followers to catch up and the economy to grow.
    Keywords: standardization, patents, competition, innovation, text mining
    Date: 2022–10–24
  5. By: Yayi Wei
    Abstract: There is an intense debate regarding the relationship between the firm performance and the degree of geographic diversification. Yet, the results are inconsistent. Learning from the literature of international business, we divide the overall geographic diversification into intra-provincial and inter-provincial diversification to obtain a clearer insight of this relationship. In this research, we manually collected data from listed Chinese real estate firms’ annual reports over 10 years. Using both the property-based and the sold-area-based measurement of geographic diversification level, we find that a more diversified strategy would lead to better firm performance when diversifying within a specific province. Meanwhile, firms would confront a firm value reduction at the first stage and then higher firm performance when diversifying across provinces. These findings add to the extant literature on the impact of geographic diversification on firm performance and shed light on the expanding strategy for real estate firms. The future work of this study is to examine the moderating effect of the geographic distance between firms’ headquarters and properties in each city on this relationship.
    Keywords: Firm Performance; Inter-provincial diversification; Intra-provincial diversification
    JEL: R3
    Date: 2023–01–01
  6. By: Rocco Macchiavello; Ameet Morjaria
    Abstract: Well-functioning markets allocate assets to owners that improve firms' management and performance. We study the effects of ownership changes on coffee mills in Rwanda - an industry in which managing relationships with farmers and seasonal workers is important and that has seen many ownership changes in recent years. We combine administrative data, a survey panel of mills and an original survey of acquirers that allows us to construct acquirer-specific and target-specific control groups. A difference-in-differences design reveals that ownership changes do not improve performance unless the mill is acquired by a foreign firm. Our preferred interpretation - supported by detailed survey evidence that considers alternative hypotheses - is that foreign firms successfully implement management changes in key operational areas. Upon acquisition, both domestic and foreign owned mills attempt to implement similar changes, but domestic firms face resistance from workers and farmers. Domestic owners have relationships with their local communities, which can create opportunities to establish new mills and acquire existing ones. However, these same relationships create pressure to maintain status-quo relational arrangements, which makes it harder to implement managerial changes.
    Keywords: management, performance, market reforms, coffee, Rwanda
    Date: 2022–07–21
  7. By: Bridget Kauma; Giordano Mion
    Abstract: We propose a new data resource that attempts to overcome limitations of standard firm-level datasets for the UK (like the ARD/ABS) by building on administrative data covering the population of UK firms with at least one employee. We also construct a similar dataset for France and use both datasets to: 1) Provide some highlights of the data and an overall picture of the evolution of aggregate UK and French productivity and markups: 2) Analyse the spatial distribution of productivity in both countries at a fine level of detail - 228 Travel to Work Areas (TTWAs) for the UK and 297 Zones da'emploi (ZEs) for France - while focusing on the role of economic density. Our findings suggest that differences in firm productivity across regions are magnified in the aggregate by an increasing productivity return of density along the productivity distribution.
    Keywords: firm-level dataset, merging, BSD, FAME, VAT, FICUS, FARE, productivity, markups, UK, France, regional disparities, density
    Date: 2023–11–01
  8. By: Collischon, Matthias (Institute for Employment Research (IAB), Nuremberg, Germany); Zimmermann, Florian (Institute for Employment Research (IAB), Nuremberg, Germany)
    Abstract: "Gender wage inequality is an important topic in political debates. Especially in recent years, the discussion has increasingly focused on the role of firms. We show that introducing policies to increase gender equality is associated with narrowing within-firm gender pay gaps." (Author's abstract, IAB-Doku) ((en))
    Keywords: Bundesrepublik Deutschland ; IAB-Open-Access-Publikation ; Auswirkungen ; Beruf und Familie ; Betrieb ; Betriebsrat ; erwerbstätige Frauen ; erwerbstätige Männer ; Frauenförderung ; geschlechtsspezifische Faktoren ; Gleichstellungspolitik ; IAB-Linked-Employer-Employee-Datensatz ; IAB-Linked-Employer-Employee-Datensatz ; Tarifbindung ; Lohnunterschied ; Personalpolitik ; regionaler Vergleich ; 2004-2016
    Date: 2023–08–22
  9. By: Elhanan Helpman
    Abstract: Empirical studies have found that enhanced foreign competition can encourage or discourage innovation. To address this relationship, I examine a market structure in which a small number of large multi-product oligopolists compete with a large number of small single-product firms in the same industry. The single-product firms are short-lived while the multi-product firms live forever, and the large firms invest in innovation in order to enlarge their product spans. All firms export. I show that an increase in the competitiveness of foreign firms can increase or reduce innovation efforts of a large multi-product firm. Moreover, changes in the incentives to innovate can be different for more-productive and less-productive oligopolists. As a result, aggregate sectoral innovation may rise or decline, depending on the productivity distribution of the oligopolists. I also show that changes in short-term operating profits may not be aligned with changes in the incentives to invest in innovation.
    JEL: D43 F1 L1
    Date: 2023–11

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