nep-bec New Economics Papers
on Business Economics
Issue of 2024‒01‒22
eight papers chosen by
Vasileios Bougioukos, London South Bank University

  1. The Impact of Accounting Frauds on Labor Markets: Evidence from Bankruptcies and M&As By Jung Ho Choi; Brandon Gipper; Fiona Sequeira
  2. Firms and Worker Health By Alexander Ahammer; Analisa Packham; Jonathan Smith
  3. To commercialize inside or outside of the firm : Behavioral considerations in patent exploitation by family firms By Addis Gedefaw Birhanu; Alfonso Gambardella
  4. AI Unboxed and Jobs: A Novel Measure and Firm-Level Evidence from Three Countries By Engberg, Erik; Görg, Holger; Lodefalk, Magnus; Javed, Farrukh; Längkvist, Martin; Monteiro, Natália; Kyvik Nordås, Hildegunn; Pulito, Giuseppe; Schroeder, Sarah; Tang, Aili
  5. When quality management helps agri-food firms to export By Charlotte Emlinger; Karine Latouche
  6. Mapping the Dynamics of Management Styles— Evidence from German Survey Data By Florian Englmaier; Michael Hofmann; Stefanie Wolter
  7. Business Forms and Business Performance in UK Manufacturing 1871-81 By Hannah, Leslie; Foreman-Peck, James S.
  8. Nash equilibria for dividend distribution with competition By Tiziano De Angelis; Fabien Gensbittel; St\'ephane Villeneuve

  1. By: Jung Ho Choi; Brandon Gipper; Fiona Sequeira
    Abstract: This technical note investigates the organizational changes of accounting-fraud firms to understand and improve the quality of internal firm identifiers in the Business Register Bridge (BRB) of the Census data. Accurate internal firm identifiers are important because firm-level employment statistics aggregate establishment-level employment information based on internal firm identifiers in the Census data. This technical note uses researcher-provided data from the SEC Accounting and Auditing Enforcement Releases (AAERs) to identify accounting-fraud firms, the UCLA-LoPucki Bankruptcy Research Database (BRD) to identify fraud firm bankruptcies, Thomson ONE to identify fraud firm M&As, and Compustat to provide firm characteristics. After linking these external data sets to the Census data including the LBD and LEHD and performing various match rate analyses, this note makes three main contributions: (1) The note documents the overall match rates between external and Census data for firms in our sample, showing that accounting-fraud firms have higher match rates, with potential reasons such as firm size delineated. (2) The note documents the overall match rates, as well as pre and post-2000 rates, between external and Census data for bankruptcy-fraud firms, exploring specific cases of inconsistency in both the LBD and the merged LBD-LEHD data. (3) This note provides descriptive statistics about the number and rate of accounting-fraud firms that experience M&A activities in the three-year post-fraud period.
    Date: 2023–12
  2. By: Alexander Ahammer; Analisa Packham; Jonathan Smith
    Abstract: We estimate the role of firms in worker health care utilization. Using linked administrative data on Austrian workers from 1998-2018, we exploit mobility between firms to estimate how much a firm contributes to worker-level differences in utilization in a setting with non-employer provided universal health care. We find that firms are responsible for nearly 30 percent of the variation in across-worker health care expenditures. Effects are not driven by changes in geography or industry. We then estimate a measure of relative firm-specific utilization and explore existing correlates to help explain these effects.
    JEL: H51 I1
    Date: 2023–12
  3. By: Addis Gedefaw Birhanu (EM - emlyon business school); Alfonso Gambardella (Bocconi University [Milan, Italy])
    Abstract: Research Summary This article examines the relationship between family ownership and patent use strategy using primary data from a patent survey, as well as patent and firm-level data from secondary sources. The findings reveal that family firms are less likely than non-family firms to license their patents and more likely to internally commercialize them. We show that the decision of family firms to license less does not depend on lower patent quality or inefficient patent use. Instead, it arises from their preference for patent uses that allow them to exert greater control over the value they can derive from their innovations. We also show that family firms commercialize more patents because they leverage their managerial discretion to explore and seize emerging internal patent commercialization opportunities. Managerial Summary Whether the desire of families in family firms to maintain control over the company and strategic resources negatively impacts their economic performance has important governance implications. Within the context of patent commercialization, in line with this desire for control, our study highlights the preference of family firms to prioritize internal commercialization over licensing. To offset their underlicensing tendency, family firms internally commercialize more patents by being nimble to identify and capitalize on emerging commercialization opportunities. This enables them to align their control ambitions with patent commercialization efficiency, akin to nonfamily firms.
    Keywords: family firms, family ownership, innovation, patent commercialization, patent licensing
    Date: 2023–12–07
  4. By: Engberg, Erik (The Ratio Institute); Görg, Holger (Kiel Institute); Lodefalk, Magnus (The Ratio Institute); Javed, Farrukh (Lund University); Längkvist, Martin (Örebro University); Monteiro, Natália (The Ratio Institute); Kyvik Nordås, Hildegunn; Pulito, Giuseppe (Berlin School of Economics); Schroeder, Sarah (Aarhus University); Tang, Aili (None)
    Abstract: We unbox developments in artificial intelligence (AI) to estimate how exposure to these developments affect firm-level labour demand, using detailed register data from Denmark, Portugal and Sweden over two decades. Based on data on AI capabilities and occupational work content, We develop and validate a time-variant measure for occupational exposure to AI across subdomains of AI, including language modelling. According to our model, white collar occupations are most exposed to AI, and espe- cially white collar work that entails relatively little social interaction. We illustrate its usefulness by applying it to near-universal data on firms and individuals from Swe- den, Denmark, and Portugal, and estimating firm labour demand regressions. We find a positive (negative) association between AI exposure and labour demand for high- skilled white (blue) collar work. Overall, there is an up-skilling effect, with the share of white-collar to blue collar workers increasing with AI exposure. Exposure to AI within the subdomains of image and language are positively (negatively) linked to demand for high-skilled white collar (blue collar) work, whereas other AI-areas are heterogeneously linked to groups of workers.
    Keywords: Artificial intelligence; Labour demand; Multi-country firm-level evidence
    JEL: E24 J23 J24 N34 O33
    Date: 2023–12–27
  5. By: Charlotte Emlinger (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Karine Latouche (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement)
    Abstract: This article deals with the effects of firms' quality policies on export performance. We rely on the presence of quality management personnel to assess the level of commitment of firms on issues related to reliability and safety of products, using French administrative employee-firm-level data. We merge these data with French customs data providing the value and quantity of exports, for each firm, by product and destination. We show that firms with quality management employees have a better markets penetration and export higher volumes, especially on markets with high standards requirement (higher number of sanitary and phytosanitary or technical measures). Overall, our paper highlights the role of "quality investment" of agri-food firms in export performance, underlining that product quality is not limited to product differentiation perceived by final consumers. Product traceability and reliability is an essential factor in firms' competitiveness, especially in the perspective of the global value chains.
    Keywords: Non-tariff-Measures, Quality management, Export competitiveness
    Date: 2023–12–14
  6. By: Florian Englmaier (LMU Munich); Michael Hofmann (LMU München); Stefanie Wolter (IAB Nürnberg)
    Abstract: We study how firms adjust the bundles of management practices they adopt over time, using repeated survey data collected in Germany from 2012 to 2018. By employing unsupervised machine learning, we leverage high-dimensional data on human resource policies to describe clusters of management practices (management styles). Our results suggest that two management styles exist, one of which employs many and highly structured practices, while the other lacks these practices but retains training measures. We document sizeable differences in styles across German firms, which can (only) partially be explained by firm characteristics. Further, we show that management is highly persistent over time, in part because newly adopted practices are discontinued after a short time. We suggest miscalculations of cots-benefit trade-offs and non-fitting corporate culture as potential hindrances of adopting structured management. In light of previous findings that structured management increases firm performance, our findings have important policy implications since they show that firms which are managed in an unstructured way fail to catch up and will continue to underperform.
    Keywords: management practices; personnel management; panel data analysis; machine learning;
    JEL: M12 D22 C38
    Date: 2023–12–14
  7. By: Hannah, Leslie; Foreman-Peck, James S.
    Abstract: We analyse a new dataset of 483 manufacturing firms in 1881 either that employed at least 1000 or had done so a decade earlier. Among these firms the majority were partnerships, but public corporations attained higher capital/ labour ratios and stronger employment growth than other business forms. The divorce of ownership from control was most effective where it was most thoroughly practised, as by public, in contrast to private, corporations. Engineers were frequently encountered in all business forms and associated with expanding employment. But the large public manufacturing corporations employed almost twice the proportion of engineers and professionals in top management as other enterprises. We find that family firms, proxied by heirs, were present in management of three quarters of partnerships but in only one third of public corporations, and did indeed reduce the employment growth of the firm, whereas engineers boosted it by more. Lords, mayors and landed wealth in management were also associated with faster employment growth of enterprises. These results suggest some stereotypes in the literature need to be more precisely defined or seriously questioned.
    Keywords: Business performance, corporations, partnerships, manufacturing, engineers, Victorian economy
    JEL: N0 N8 O1
    Date: 2023
  8. By: Tiziano De Angelis; Fabien Gensbittel; St\'ephane Villeneuve
    Abstract: We construct a Nash equilibrium in feedback form for a class of two-person stochastic games with absorption arising from corporate finance. More precisely, the paper focusses on a strategic dynamic game in which two financially-constrained firms operate in the same market. The firms distribute dividends and are faced with default risk. The strategic interaction arises from the fact that if one firm defaults, the other one becomes a monopolist and increases its profitability. To determine a Nash equilibrium in feedback form, we develop two different concepts depending on the initial endowment of each firm. If one firm is richer than the other one, then we use a notion of control vs.\ strategy equilibrium. If the two firms have the same initial endowment (hence they are symmetric in our setup) then we need mixed strategies in order to construct a symmetric equilibrium.
    Date: 2023–12

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