nep-bec New Economics Papers
on Business Economics
Issue of 2024‒02‒12
eight papers chosen by
Vasileios Bougioukos, London South Bank University

  1. Firms and Worker Health By Ahammer, Alexander; Packham, Analisa; Smith, Jonathan
  2. Value and Integrative Dynamic Capabilities: an Empirical Confirmation By Jacques Bughin; Julien Gosse; Charles Hoffreumon; Nicolas van Zeebroeck
  3. Is the Nexus Between Capital Structure and Firm Performance Asymmetric? An Emerging Market Perspective By M N, Nikhil; S Shenoy, Sandeep; Chakraborty, Suman; B M, Lithin
  4. Occupational Job Ladders within and between Firms By Forsythe, Eliza
  5. Urban-biased structural change By Chen, Natalie; Novy, Dennis; Perroni, Carlo; Wong, Horng Chern
  6. Market power and innovation in the intangible economy By De Ridder, Maarten
  7. The role of firm-to-firm relationships in exporter dynamics By Rigo, Davide
  8. Firm Effect and the Israeli Gender Wage Gap By Shira Buzaglo-Baris

  1. By: Ahammer, Alexander (University of Linz); Packham, Analisa (Vanderbilt University); Smith, Jonathan (Georgia State University)
    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.
    Keywords: firms, health care utilization, sick leave
    JEL: H51 I1 J2
    Date: 2024–01
  2. By: Jacques Bughin; Julien Gosse; Charles Hoffreumon; Nicolas van Zeebroeck
    Abstract: Digitalization has changed the way certain firms create and capture value. One channel for this change is through the emergence of business ecosystems. Taking part in these ecosystems requires a certain set of dynamic capabilities, called integrative capabilities. In this article, we use data from a large-scale, cross-industries and cross-continents survey to empirically test whether the presence of such capabilities are associated with faster revenue growth. We conclude that it is the case, providing empirical confirmation to the theory that participation in a business ecosystem helps with the value creation or capture of a firm.
    Keywords: Dynamic Capability, Firm Performance, Ecosystems, Strategic Management, Quantitative Research Method
    Date: 2024–01
  3. By: M N, Nikhil; S Shenoy, Sandeep; Chakraborty, Suman; B M, Lithin
    Abstract: The nature of the relationship between leverage and firm performance has been a subject of investigation in extant literature. We re-examine the nature of the association by using a sample of 78 non-financial firms listed in the Nifty 100 index during the 2013-2023 period by applying the quantile regression technique and comparing the result with the linear regression approach (system GMM technique). Our empirical analysis demonstrates that leverage negatively impacts the performance of firms. Further, results show that the association is non-homogeneous among firms of different quantiles: leverage withers the performance of highly profitable firms (upper quantile) than low profitable firms (lower quantile). The identified concave relationship highlights the prominence of optimal capital structure and the role of finance managers in designing a sound financial policy that matches firm characteristics and borrowing requirements. The findings of our study draw insightful implications for managers and policymakers while contributing to the ongoing leverage and firm performance debate reported in previous studies.
    Keywords: leverage, profitability, non-homogeneous, nonlinear relation, quantile regression, GMM, India
    JEL: C23 C26 C33 G30 G32
    Date: 2023–09–02
  4. By: Forsythe, Eliza (University of Illinois at Urbana-Champaign)
    Abstract: I present four facts about occupational mobility: (1) most movements occur within firms, (2) downward moves are frequent, (3) wage growth reflects the direction and distance of mobility, and (4) relative occupational wages before mobility predict the direction of mobility, except for non-displaced movers between firms. I show these facts are consistent with models of vertical sorting. I show that non-displaced movements between firms obscure the positive selection of upward occupational movers, likely reflecting moves up a firm-wage job ladder. Displaced workers show similar predisplacement selection to internal movers, with pre-displacement occupational wage rank predicting the direction of occupational mobility.
    Keywords: job mobility, job ladders, displaced workers
    JEL: J31 J62 J63 M51
    Date: 2023–12
  5. By: Chen, Natalie; Novy, Dennis; Perroni, Carlo; Wong, Horng Chern
    Abstract: Using firm-level data from France, we document that the shift of economic activity from manufacturing to services over the last few decades has been urban-biased: structural change has been more pronounced in areas with higher population density. This bias can be accounted for by the location choices of large services firms that sort into big cities and large manufacturing firms that increasingly locate in suburban and rural areas. Motivated by these findings, we estimate a structural model of city formation with heterogeneous firms and international trade. We find that agglomeration economies have strengthened for services but weakened for manufacturing. This divergence is a key driver of the urban bias, but it dampens aggregate structural change. Rising manufacturing productivity and falling international trade costs further contribute to the growth of large services firms in the densest urban areas, boosting services productivity and services exports, but also land prices.
    Keywords: agglomeration; cities; firm sorting; manufacturing; productivity; services; trade costs; ESRC grant ES/S007121/1; ERC TRADENET grant (714597)
    JEL: F15 F00 R12 R14
    Date: 2023–11–28
  6. By: De Ridder, Maarten
    Abstract: This paper offers a unified explanation for the slowdown of productivity growth, the decline in business dynamism, and the rise of market power. Using a quantitative framework, I show that the rise of intangible inputs, such as software, can explain these trends. Intangibles reduce marginal costs and raise fixed costs, which gives firms with high-intangible adoption a competitive advantage, in turn deterring other firms from entering. I structurally estimate the model on French and US micro data. After initially boosting productivity, the rise of intangibles causes a decline in productivity growth, consistent with the empirical trends observed since the mid-1990s.
    Keywords: productivity; growth; business dynamism; intangible inputs; market power; Centre for Macroeconomics; “Investissements d’Avenir” program (reference: ANR-10-EQPX-1; CASD
    JEL: D20 D24 E23 L11 O31 O47
    Date: 2024–01–01
  7. By: Rigo, Davide
    Abstract: This paper investigates the role of firm-to-firm relationships in export market dynamics, documenting the following stylized facts for French exporters. First, exporters grow in a foreign market by expanding their customer base; the average French exporter doubles its number of buyers after 8 years. Second, sales to existing customers remain the predominant source of growth in a foreign market, with long-lasting relationships contributing to most export values. Third, as a mechanism driving firms' growth in a relationship, prices fall as a relationship ages. Fourth, I exploit the Brexit referendum as a quasi-natural experiment to examine how firm-to-firm relationships adjust in response to changes in market access. I find that French exporters with long-lasting relationships in the UK are less affected by the referendum shock and exhibit higher exchange rate pass-through. Overall, these findings indicate that long-lasting relationships represent a crucial margin for export market growth and in shielding exporters from changing market conditions.
    Keywords: Wiley deal
    JEL: J1
    Date: 2024–01–09
  8. By: Shira Buzaglo-Baris (Bank of Israel)
    Abstract: This paper provides an additional perspective on the well documented gender gap in Israel. Applying methods of firm and worker effects estimation resulted in an overall 29% contribution of firm premium to the gender gap. Sorting of women into lower wage-premium firms (also within the same industry) explains a significant part of the gap, while negligible part is due to within firm inequality, in particular at the bottom 50% of the wage distribution. Heterogeneity in the firm premium gap was found across industries and parental status, where non-parents workers face much lower gap, in line with findings on "motherhood penalty". Based on these estimates, I suggest that policy should focus on ensuring equal opportunities rather than regulating equal pay within a firm.
    Date: 2023–12

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