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on Business Economics |
| By: | Miklós Koren; Álmos Telegdy |
| Abstract: | Using a novel Hungarian dataset on firms and their Chief Executive Officers (CEOs), we estimate the impact of hiring expatriate CEOs. By examining foreign acquisitions where the new owner replaces the incumbent CEO with an expatriate or a local CEO, we address the selection into both acquisition and CEO hiring. Firms led by expatriate CEOs show 13 percent total factor productivity growth, 95 percent sales growth, and increase both exports and domestic sales. Hiring expatriate CEOs enhances firm performance in both international and domestic markets. Our findings suggest that expatriates have superior general management skills. |
| Keywords: | expatriate CEO, foreign acquisition, firm performance, Hungary |
| JEL: | F23 F61 L25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11164 |
| By: | Robert Stehrer; Bernhard Dachs; Maria Yoveska |
| Abstract: | In view of the importance of the export economy for Austria this study examines the role and characteristics of Austrian exporting firms compared with non-exporting firms. Specifically, it assesses how the share of exporting firms has developed in recent years, whether exports have become more important for firms over time and to what extent exporters have an advantage over other firms (export premium). The results show that about two third of the Austrian manufacturing firms are engaged in exporting activities and indicate that – in line with existing literature - exporting firms are larger, more productive, generate higher surpluses, invest more, and spend more on environmental protection than non-exporters. Further, the results highlight that only a small number of firms account for a large share of Austrian manufacturing exports. Finally, the results point towards a mutual positive relationship between export behaviour, productivity, and R&D expenditures. |
| Keywords: | Export premium, Firm-level analysis, productivity and exporting |
| JEL: | F14 D22 |
| Date: | 2022–07 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:ecbook:y:2022:m:07:i:viii-002 |
| By: | BARRIOS Salvador (European Commission - JRC); DELIS Fotis (European Commission - JRC); LANDABASO ALVAREZ Mikel (European Commission - JRC) |
| Abstract: | We provide evidence on the differences in the effective tax rate by firm size, highlighting that effective tax rates tend to follow a bump-shaped curve, increasing from micro to small firms and then decreasing for medium to large firms. Our analysis, based on microdata from several EU countries, shows that both corporate and labour taxation follow this pattern. Econometric analysis reveals that a 1% increase in effective corporate taxation results in a 2.6% decrease in firm turnover growth, with new firms and micro firms being particularly affected. The negative impact of corporate taxation on firm growth is much larger for new firms compared to older firms, and this is especially pronounced in Spain, where a 1% tax hike leads to a turnover growth decrease of 8%. Examining the 2015 Spanish corporate tax reduction for new firms, we find that the reform's overall positive impact was insignificant for micro firms, suggesting the need for more targeted policies considering firm size, age, and ownership. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:taxref:202407 |
| By: | Emmanuel Dhyne (Economics and Research Department, National Bank of Belgium); Pablo Muylle (Ghent University) |
| Abstract: | While past decades were characterized by economic liberalization and deregulation, there re-mains an enduring presence of political influence over the private economy. Such influence can either benefit (e.g. government support addressed at survival and growth prospects) or harm (e.g. reduced efficiency and innovation) firms. This study investigates the impact of government ownership among suppliers on the behavior and performance of privately-held firms. We argue that this channel of government influence on the private economy plays a prominent role, in addition to that of political connections (i.e. the direct presence of politicians on the boards of firms), a more established channel of political influence. Leveraging Belgian firm-level trans-action data, the research reveals that purchasing inputs from state suppliers is associated with lower firm profitability and productivity, along with higher leverage and employment. Notably, the relationship between state suppliers and performance persists even when controlling for the direct presence of politicians on the boards of firms. These findings underscore the influence of government support on firms’ behavior and financial performance and highlight the importance of considering both state suppliers and political connections when assessing the comprehensive impact of government influence on private enterprises |
| Keywords: | Governmental Influence, SOE Suppliers, Political Connections, Economic Liberalization, Firm Performance. |
| JEL: | D22 D72 G38 H11 H32 L33 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202407-451 |
| By: | Jaedo Choi; Andrei A. Levchenko; Dimitrije Ruzic; Younghun Shim |
| Abstract: | We quantify the contribution of the largest firms to South Korea's economic performance over the period 1972-2011. Using firm-level historical data, we document a novel fact: firm concentration rose substantially during the growth miracle period. To understand whether rising concentration contributed positively or negatively to South Korean real income, we build a quantitative heterogeneous firm small open economy model. Our framework accommodates a variety of potential causes and consequences of changing firm concentration: productivity, distortions, selection into exporting, scale economies, and oligopolistic and oligopsonistic market power in domestic goods and labor markets. The model is implemented directly on the firm-level data and inverted to recover the drivers of concentration. We find that most of the differential performance of the top firms is attributable to higher productivity growth rather than differential distortions. Exceptional performance of the top 3 firms within each sector relative to the average firms contributed 15% to the 2011 real GDP and 4% to the net present value of welfare over the period 1972-2011. Thus, the largest Korean firms were superstars rather than supervillains. |
| JEL: | F12 F16 L11 N15 O40 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32648 |
| By: | Jaime Arellano-Bover; Shmuel San |
| Abstract: | We study how job mobility, firms, and firm-ladder climbing can shape immigrants’ labor market success. Our context is the mass migration of former Soviet Union Jews to Israel during the 1990s. Once in Israel, these immigrants faced none of the legal barriers that are typically posed by migration regulations around the world, offering a unique backdrop to study undistorted immigrants’ job mobility and resulting unconstrained assimilation. Rich administrative data allows us to follow immigrants for up to three decades after arrival. Differential sorting across firms and differential pay-setting within firms both explain important shares of the initial immigrant-native wage gap and subsequent convergence dynamics. Moreover, immigrants are more mobile than natives and faster at climbing the firm ladder, even in the long term. As such, firm-to-firm mobility is a key driver of these immigrants’ long-run prosperity. Lastly, we quantify a previously undocumented job utility gap when accounting for non-wage amenities, which exacerbates immigrant-native disparities based on pay alone. |
| Keywords: | immigration, firms, job mobility, labor market assimilation |
| JEL: | J31 J61 F22 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11177 |
| By: | Heng-fu Zou (The World Bank) |
| Date: | 2023–04 |
| URL: | https://d.repec.org/n?u=RePEc:cuf:wpaper:636 |