|
on Business Economics |
| By: | Le Xu; Yang Yu; Francesco Zanetti |
| Abstract: | We assemble a novel firm-level dataset to study the adoption and termination of suppliers over business cycles. We document that the aggregate number and rate of adoption of suppliers are procyclical. The rate of termination is acyclical at the aggregate level, and the cyclicality of termination encompasses large differences across producers. To account for these new facts, we develop a model with optimizing producers that incur separate costs for management, adoption, and termination of suppliers. These costs alter the incentives to scale up production and to replace existing with new suppliers. Both forces are critical to replicating the observed cyclicality in the adoption and termination rates at the producer and aggregate levels. Sufficiently high convexity in management relative to adjustment costs is required to replicate the observed decrease in the procyclicality of termination of suppliers with the size of producers. The optimal policy entails subsidies to management and adjustment costs. |
| Keywords: | management and adjustment costs, adoption and termination of suppliers, business cycles |
| JEL: | E32 L14 L24 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2024-33&r= |
| By: | Ackah, Charles; Alemayehu Geda Fole; Görg, Holger; Merchan, Federico |
| Abstract: | Foreign investments bring in not only new employment but also novel technology, managerial skill and know-how, that may also dissipate into the local economy. It is not clear whether this effect differs by the nationality of source countries, in particular between Chinese and non-Chinese firms. Based on a firm level survey on Ethiopia and Ghana, we found that all types of firms are engaged in limited R&D and innovation activity and their transfer to host countries in both countries. There is little difference between Chinese and non-Chinese foreign firms in such technology and managerial skill transfer once controlling for firm size and industry characteristics in the majority of metrices (R&D activities, horizontal & vertical spillover, directly adopting techniques). However, we found for Ghana that Chinese firms have more suppliers but are less likely to transfer technology to them. Chinese firms are more likely to transfer managerial skills than non-Chinese firms in Ghana though not in Ethiopia. Also, there is little evidence that foreign firms transfer technology via horizontal or backward spillovers in either countries. Finally, Chinese firms are much more likely to receive host country policy support than other foreign firms in Ghana but not in Ethiopia. |
| Keywords: | Foreign direct investment, China, Africa, technological transfer, Ethiopia, Ghana |
| JEL: | F2 O1 O3 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkwp:295225&r= |
| By: | Pubali Chakraborty (Bates College, USA); Kanika Mahajan (Ashoka University) |
| Abstract: | Using firm and household-level data from India, we establish a positive association between relative female employment and firm size. We find that the proportion of female workers is higher in firms with a larger number of total workers (elasticity of 0.47) and greater output (elasticity of 0.1). We show that higher benefits and amenities offered by larger firms, like maternity benefits and paid leave, which are likely to be valued more by female workers, with no accompanying increase in the gender wage gap, is a plausible mechanism behind our findings. We then exploit a natural experiment in the amendment of labor laws across the Indian states, which increased the firm size thresholds for the applicability of regulatory compliances. Using a difference-in-difference estimation that accounts for the staggered amendments, we find an increase in the proportion of female workers by 13% in treated states vs. control states. One of the channels behind this increase is the accompanying increase in firm size by around 5% and welfare expenses per employee by 13%. At the same time, there is no change in the gender wage gap. Theoretically, we propose a task-based explanation that leads to greater relative demand for women in bigger firms and, consequently, higher investment by them in amenities valued by women leading to ambiguous effects on the gender wage gap. Our results show that policies that increase firm growth, which in turn increase the provision of amenities valued by women (without employer backlash), are likely to increase female employment. |
| Keywords: | Employment; Firm Size; Gender; labor laws |
| Date: | 2023–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:ash:wpaper:103&r= |
| By: | Hanqiao Zhang |
| Abstract: | Neighborhood characteristics have been broadly studied with different firm behaviors, e.g. birth, entry, expansion, and survival, except for firm exit. Using a novel dataset of foreign-invested enterprises operating in Shenzhen's electronics manufacturing industry from 2017 to 2021, I investigate the spillover effects of firm exits on other firms in the vicinity, from both the industry group and the industry class level. Significant neighborhood effects are identified for the industry group level, but not the industry class level. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.18009&r= |
| By: | Gupta, Apoorva; Stiebale, Joel |
| Abstract: | We study the effect of stronger patent protection on innovation activities of firms and firm-product level markups. Relying on cross-industry differences in the use of patents, we exploit firm-level variation in exposure to India's patent reform. For firms more exposed to stronger patent protection, we find an increase in patenting and R&D expenditure post-reform. Additionally, we estimate an increase in firm-product level markups after the reform, driven primarily by lower marginal costs rather than higher prices. Our results indicate that process innovations and output expansion contributed to these cost-savings, and incomplete pass-through accounts for a substantial part of rising markups. |
| Keywords: | Intellectual property rights, patent protection, innovation, R&D, markups, patents |
| JEL: | L10 O30 O31 O00 D22 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:295746&r= |
| By: | Jeronimo Carballo; Richard K. Mansfield; Charles Adam Pfander |
| Abstract: | Multi-establishment firms account for around 60% of U.S. workers' primary employers, providing ample opportunity for workers to change their work location without changing their employer. Using U.S. matched employer-employee data, this paper analyzes workers' access to and use of such between-establishment job transitions, and estimates the effect on workers' earnings growth of greater access, as measured by proximity of employment at other within-firm establishments. While establishment transitions are not perfectly observed, we estimate that within-firm establishment transitions account for 7.8% percent of all job transitions and 18.2% of transitions originating from the largest firms. Using variation in worker's establishment locations within their firms' establishment network, we show that having a greater share of the firm's jobs in nearby establishments generates meaningful increases in workers' earnings: a worker at the 90th percentile of earnings gains from more proximate within-firm job opportunities can expect to enjoy 2% higher average earnings over the following five years than a worker at the 10th percentile with the same baseline earnings. |
| JEL: | E24 J62 M51 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32420&r= |
| By: | Cowgill, Bo (Columbia Business School); Davis, Jonathan (University of Chicago); Montagnes, B. Pablo (Emory University); Perkowski, Patryk (Yeshiva University) |
| Abstract: | A principal often needs to match agents to perform coordinated tasks, but agents can quit or slack off if they dislike their match. We study two prevalent approaches for matching within organizations: Centralized assignment by firm leaders and self-organization through market-like mechanisms. We provide a formal model of the strengths and weaknesses of both methods under different settings, incentives, and production technologies. The model highlights tradeoffs between match-specific productivity and job satisfaction. We then measure these tradeoffs with data from a large organization's internal talent market. Firm-dictated matches are 33% more valuable than randomly assigned matches within job categories (using the firm's preferred metric of quality). By contrast, preference-based matches (using deferred acceptance) are only 5% better than random but are ranked (on average) about 38 percentiles higher by the workforce. The self-organized match is positively assortative and helps workers grow new skills; the firm's preferred match is negatively assortative and harvests existing expertise. |
| Keywords: | internal labor markets, assortative matching, assignment mechanisms, team formation, matching |
| JEL: | M5 D47 J4 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16986&r= |