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on Economics of Strategic Management |
| By: | KWON Seokbeom; MOTOHASHI Kazuyuki |
| Abstract: | The Japanese national innovation system (JP NIS) and that of the United States (U.S. NIS) differ. One of the differences is that firms in the JP NIS are likely to collaborate with historical partners for the purpose of innovation or rely on in-house research and development (R&D), approaches that form a "relationship-driven innovation system." In the U.S. NIS, however, firms have a relatively weak reliance on prior partnerships or internal R&D and are likely to seek entities that know about the necessary technology. Thus, U.S. players acquire technologies through market transactions such as mergers and acquisitions (M&A). This paper primarily discusses how this institutional difference affects country-specific industrial sector specialization. Then, by using a multiagent model of the NIS and conducting simulation, we examine what strategy would help Japanese firms in industries dominated by radical innovation. The results show that the JP NIS provides an institutional advantage in industries with fast-changing consumer demand that require incremental innovation. However, the U.S. NIS benefits industries that require frequent radical innovation. Our analysis reveals that extending the partnership network while keeping internal R&D capability would be a beneficial strategy for Japanese firms in industries driven by radical innovation. Therefore, the present research suggests that policymakers need to differentiate policy that emphasizes business relationship and market mechanism importance according to industrial characteristics in order to improve overall national industrial competitiveness. At the same time, Japanese firms need to strengthen their R&D capability while trying to extend their pool of technology partners in order to improve the flexibility of their responses to radical changes in an industry. |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15065&r=cse |
| By: | MURATA Takashi; FURUNISHI Makoto; KITAOKA Michiyo |
| Abstract: | Innovation is indispensable for keeping our social and economic activities not only internationally competitive but sustainable. It is, therefore, one of the most important national policies to create the social and economic fundamentals which may create innovation. We call them “innovative fundamentals.” The recent expansion of social networks supported by ICT (information & communications technology) is characterized by the enormous spread of information and creation of a wide range of networks in our society. These significantly affect the way we interact with existing ideas and create new ideas. Responding to such changes, ideas and knowledge attained by research & development (R&D) activities must be flexibly utilized further for the creation of new innovation. However, we rarely expect innovation by using only one type of idea and/or knowledge. Innovation happens only after the use of new ideas stemming from the interaction of various ideas and knowledge. Different types of intellectual property in the common domain must have the force necessary to interact with one another and create the strong fundamentals needed for future innovation. In this paper, we indicate the importance of strengthening intellectual property in the common domain to advance innovation. In addition, we discuss several policy measures based on the idea of the Commons for the creation of such environment that can cause innovation continuously. |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:esj:esridp:316&r=cse |
| By: | Da Rin, M. (Tilburg University, Center For Economic Research); Penas, M.F. (Tilburg University, Center For Economic Research) |
| Abstract: | Venture capital is a specialized form of financial intermediation that often provides funding for costly technological innovation. Venture capital firms need to exit portfolio companies within about five years from the investment to generate returns for institutional investors. This paper is the first to examine the association of venture capital funding with a company’s choice of innovation strategies. We employ a unique dataset of over 10,000 innovative Dutch companies, some of which received venture financing. The data include detailed information on patent applications, innovation activities, financing sources, and other company characteristics. We find that companies backed by venture capital focus on the buildup of absorptive capacity, by engaging in in-house R&D, while at the same time acquiring external knowledge. We interpret this finding as a consequence of the time horizon of venture capital firms. Our results suggest that the correlation between venture capital funding and the build-up of absorptive capacity is not only due to a selection effect. We derive implications of these findings for corporate strategy and public policy. |
| Keywords: | Venture Capital; Entrepreneurship; Innovation Strategy; Research & Development; Public Policy |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiucen:b1fa60be-4744-45a8-8b43-86a74d757ef1&r=cse |
| By: | Becker, Lasse; Bizer, Kilian |
| Abstract: | Private innovative activities receive public innovation support from different political levels. Few studies have empirically evaluated the influence of political systems on the reception of public innovation support and no other studies have evaluated innovation support across Europe with CIS data. This paper analyses the differences between federal, semi-federal and centralist political systems with CIS data from sixteen European countries. The results show that regional programmes in federal and semi-federal countries reach firms with barriers to innovate, such as small and medium-sized enterprises, while other programmes only claim to reach them. Federal and semi-federal countries therefore support a broader variety of firms compared with centralist countries. European support reaches SMEs better in centralist countries compared with federal and semi-federal countries. Regular and higher expenditure on innovative activities shows a positive influence on the reception of support in all countries, while indicators such as market focus vary between countries and political levels. Regional programmes focus more strongly on companies with a regional market focus, which can be seen as another barrier to innovation. As a policy implication, the paper implies that barriers to innovation can be reduced by a decentralized innovation framework with stronger regional programmes. |
| Keywords: | innovation,innovation support,SME,Europe,federalism,decentralization |
| JEL: | O31 O38 H77 H71 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:245&r=cse |
| By: | Taalbi, Josef |
| Abstract: | The notion of development blocks suggests the co-evolution of technologies and industries through complementarities and the overcoming of imbalances. This paper studies groups of closely related industries and their co-evolution in the network of Swedish product innovations, by combining statistical methods and qualitative data from a newly constructed innovation output database, SWINNO. The study finds ten sets of closely related industries in which innovation activity has been prompted by the emergence of technological imbalances or by the exploitation of new technological opportunities. |
| Keywords: | Development Blocks; Community Detection; Network Analysis; Technological Imbalances |
| JEL: | N1 N7 O3 |
| Date: | 2015–05–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64549&r=cse |
| By: | Sunil Kanwar; Bronwyn H. Hall |
| Abstract: | We revisit the relationship between market value and innovation in the context of manufacturing firms in a developing country, using Indian data from 2001 through 2010. Surprisingly, we find that financial markets value the R&D investment of Indian firms the same or higher than such investment is valued in developed economies like the US. Using a proxy for the option value of R&D, we find that this accounts for a very small part of the R&D valuation (5% at most). We also find that the market value-R&D relationship does not vary significantly across industry groups, although these results are imprecise. |
| JEL: | G12 O16 O30 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21196&r=cse |
| By: | HUO Dong; MOTOHASHI Kazuyuki |
| Abstract: | This study investigates the relationship between the technological value of collaborative research and development (R&D) outcomes and technological diversity in inter-firm R&D alliances. We differentiate technological diversity into two types—relational technological diversity (RTD) and distributional technological diversity (DTD)—and relate them to distinct mechanisms. By empirically analyzing 18,575 granted U.S. patent applications from 1993 to 2002, we find that RTD and DTD is negatively associated and positively associated, respectively, with the technological value of R&D outcomes. In addition, we consider two hypothesized moderators—team size and exploratory degree—in order to examine the moderation effects. The results show that the negative effect of RTD becomes stronger when team size is larger, and the positive effect of DTD becomes greater when an alliance attempts to invent in a less familiar technological field where the exploratory degree is higher. Moreover, we find that RTD and DTD interact in their influences on outcomes. |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15064&r=cse |
| By: | Francesco Di Comite (European Commission – JRC - IPTS); D'Artis Kancs (European Commission – JRC - IPTS) |
| Abstract: | This report compares the modelling of R&D in four macroeconomic models used by the European Commission for ex-ante policy impact assessment: QUEST, RHOMOLO, GEM-E3 and NEMESIS. Whereas the former three are general equilibrium models, the latter is a reduced form macro-econometric model. QUEST and RHOMOLO are in-house models developed and used within the European Commission, whereas GEM-E3 and NEMESIS are external models of University of Athens and University of Paris, respectively. The report highlights particularly those parts of the models that are relevant to R&D transmission mechanisms and interfaces for implementing policy shocks. |
| Keywords: | QUEST, RHOMOLO, GEM-E3, NEMESIS, Macro-Economic Models, R&D Policies |
| JEL: | C68 D24 D58 H50 O31 O32 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc94323&r=cse |
| By: | Fassio, Claudio (Lund University); Montobbio, Fabio (University of Turin); Venturini, Alessandra (University of Turin) |
| Abstract: | This paper uses the French and the UK Labour Force Surveys and the German Microcensus to estimate the effects of different components of the labour force on innovation at the sectoral level between 1994 and 2005. The authors focus, in particular, on the contribution of migrant workers. We adopt a production function approach in which we control for the usual determinants of innovation, such as R&D investments, stock of patents and openness to trade. To address possible endogeneity of migrants we implement instrumental variable strategies using both two-stage least squares with external instruments and GMM-SYS with internal ones. In addition we also account for the possible endogeneity of native workers and instrument them accordingly. Our results show that highly-educated migrants have a positive effect on innovation even if the effect is smaller relative to the positive effect of educated natives. Moreover, this positive effect seems to be confined to the high-tech sectors and among highly-educated migrants from other European countries. |
| Keywords: | innovation, migration, skills, human capital |
| JEL: | O31 O33 F22 J61 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9062&r=cse |
| By: | Lise Arena (University of Nice Sophia Antipolis, France; GREDEG CNRS); Rani Dang (University of Nice Sophia Antipolis, France; GREDEG CNRS; University of Gothenburg, Sweden) |
| Abstract: | As Amabile rightly put it when considering all the organizations she had studied and worked with, "creativity gets killed much more often than it gets supported" (Amabile, 1998). Organizational creativity is even more likely to be killed when an innovative institutional logic seeks to emerge without a corresponding institution, namely within a conservative institution based on strong vested interests. Embedded in a desire for institutional change, 'change agents' (Weik, 2011), beyond being individually creative have to orchestrate organizational creativity in order to turn their new idea into an institutionalised innovation. Based on this organizational paradox, the aim of this paper is twofold. First, it contributes to the existing literature dealing with entrepreneurial innovation and organizational creativity. In particular, it seeks to outline which kind of managerial practices foster creativity in a particularly conservative and inert environment. Second, it sheds light on an original comparative case study - the role of organizational creativity in the emergence and institutionalisation of Oxford and Cambridge business schools – that has been underexplored before and that relies on primary data. Based on a historical perspective of everyday organizational life and practices, this research emphasises the role of academic entrepreneurs in organizational changes through the legitimatization of organizational creativity. |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2015-22&r=cse |
| By: | XU Peng |
| Abstract: | Using firm data from 2002-2012, we examine the relationship between capital structure and risk taking, and between risk taking and firm performance of small and medium-sized enterprises and large private firms. Domestically-owned entrepreneurial private firms are more risk averse than domestically-owned affiliated private firms. Foreign-owned affiliated private firms are much more risk taking than domestically-owned private firms. However, leverage is not strongly associated with less corporate risk taking, but it adversely influences corporate investment significantly. Risk taking has statistically and economically significant effects on corporate growth and corporate earnings. Furthermore, during the credit crisis, risk taking was positively related to corporate earnings, and thus higher risk-taking firms had smaller cash flow shortfalls. |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15061&r=cse |
| By: | V.V.S.Rama Krishna |
| Abstract: | Information Technology has been one of the most important factors for the development of mankind. Information and communication technology (ICT) is the major advent in the field of technology which is used for access, process, storage and dissemination of information electronically. In recent times, Indian banking industry has been consistently working towards the development of technological changes and its usage in banking operation for improvement of their efficiency and customer’s satisfaction in today’s world. Banking industry is fast growing with the use of technology in the form of ATMs, on-line banking, Telephone banking, Mobile banking etc. Therefore, taking an advantage of information technologies (IT) is an increasing challenge for developing countries like India. Hence, the present research paper has made an attempt to study the role of Information and communication Technology (ICT) and its importance in the development of Indian banking sector. Key words: Information Technology (IT), Banking Industry, Customer Satisfaction, Network |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:vor:issues:2015-03-15&r=cse |
| By: | Maithili R.P. Singh |
| Abstract: | Gone are the days when banking industry used to operate in a protected environment. Liberalisation, Privatisation and Globalisation have opened floodgates of competition. Opening of modern banks has also given banking industry new taste in competition. Bankers can no more bank on walk-in-business and relax in cozy offices. Information technology has not only enhanced customer’s awareness level but has made them demanding. Their expectation level is galloping. Demands and priorities are changing every day. The influence of the Internet upon the choice and delivery of products and services has made the situation acerbic. Customers no more want age-old banking products; they cannot be fooled and taken for a ride by changing the wrapper of the product. Never in the history of banking has the power so firmly been in the hands of customers as it is today. The struggle for survival in the cut throat competitive market is the biggest challenge of the time. For facing competition there has to be determination and skill of innovation. This has led to the embracing innovative business practices by various banks in India. The present paper highlights the historical backdrop, evolution of banking industry and recent innovative practices in this sector in India. Key words: Banking, Innovative Practices, New Product & Services, CRM |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:vor:issues:2014-03-16&r=cse |
| By: | Elena Lucia Harpa; Liviu Marian; Sorina Moica; Iulia Elena Apavaloaie |
| Abstract: | The present research aims to highlight the main factors influencing the development of entrepreneurial innovation in a rural environment and to perform an empirical study with the purpose of assessing the main problems in rural development. The research performed is mostly of a quantitative nature, being based on the use of the questionnaire as research tool, although some of the questions were raised in order to collect respondents impressions and opinions which would form the object fo qualitative research. The research outlines the fact that in the rural entrepreneurship innovation is performed with minimal investment in new technologies and depends on the entrepreneur's involvement in Innovation Systems Network. It was also noted that most of the entrepreneurs in rural environment are non-innovators. The research question started to assess the key elements which identify the role of innovation among entrepreneurs in rural areas. Based on these facts, we determined the variables that make entrepreneurial innovation in rural areas, followed by the analysis of the most significant variable rural entrepreneurs in the Mures county. This result can support the creation of the future model of innovation in rural entrepreneurship. There are relatively few studies addressing the problem of research regarding innovation in rural areas. The emphasis is on national and regional studies, without differentiating between the rural and urban areas. Thus, the purpose of the analysis is to add a descriptive background related to the innovation at a micro-economic level in the rural areas |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1505.05639&r=cse |
| By: | Aristei, David; Sterlacchini, Alessandro; Venturini, Francesco |
| Abstract: | Using homogenous firm-level data for the largest Member States of the EU over the period 2007-2009, we test whether manufacturing firms receiving R&D public supports (subsidies and/or tax incentives) spent more on R&D. The analysis is performed by means of both non-parametric (Propensity Score Matching) and parametric estimations (OLS and mixed-model system, with the latter accounting for the possible endogeneity of public supports). The hypothesis of full crowding-out of private with public funds (i.e. public support reduced privately-funded R&D expenses) is rejected for all countries, with the partial exception of Spain. However, we do not find evidence for the hypothesis of additionality of R&D subsidies (i.e. direct funding did not raise private R&D). These findings contrast with earlier works and might be due to the period under assessment, which covers the financial turmoil and the subsequent economic downturn. A focused analysis on France suggests that R&D tax credits exerted a positive impact on R&D. Overall, our findings indicate that, albeit they were not expansive, public supports avoided the reduction of firm R&D at the outset of financial crisis. |
| Keywords: | R&D; subsidies; tax incentives; policy evaluation; EU manufacturing firms |
| JEL: | C21 D04 O32 O38 |
| Date: | 2015–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64611&r=cse |
| By: | Joanna Kuczewska (Faculty of Economics, University of Gdansk); Joanna Stefaniak-Kopoboru (Faculty of Economics, University of Gdansk) |
| Abstract: | Current economic problems, the institutional transformation of the European Union (EU), the successive enlargements, counteracting the effects of the economic crisis and the euro zone crisis contributed to the reduction of the activity of the European Community in the implementation of an effective internal market as well as creating favorable business environment and thereby promoting industrial competitiveness. The single market has become the least popular among businesses and consumers since its implementation. Currently a strong real economy and a competitive business sector with key position in the global supply chain are of paramount importance for the economic recovery The EU's future economic growth depends on an innovative industrial base. The aim of the article is to present results of the analysis of the European industrial policy objectives in light of the challenges of the modern economy. The key issue is to answer the question whether the current activities and tasks of the EU industrial policy might be effective in the context of challenges of the single European market and the globalization of the economy, which are affected by the negative effects of the financial and economic crisis of recent years. |
| Keywords: | European industrial policy, industrial competitiveness, crisis |
| JEL: | O25 O52 L52 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:gda:wpaper:1501&r=cse |
| By: | Valeria Bernardo (Faculty of Economics, University of Barcelona); Joan-Ramon Borrell (Faculty of Economics, University of Barcelona); Jordi Perdiguero (Faculty of Economics, Universitat Autònoma de Barcelona) |
| Abstract: | This paper uses a game of strategic interaction to simulate entry and location of fast charging stations for electric vehicles. It evaluates the equilibria obtained in terms of social welfare and firm spatial differentiation. Using Barcelona mobility survey, demographic data and the street graph we find that only at an electric vehicle penetration rate above 3% does a dense network of stations appear as the equilibrium outcome of a market with no fiscal transfers. We also find that price competition drives location differentiation measured not only in Euclidean distances but also in consumer travel distances. |
| Keywords: | Regional Planning; Electric Vehicle; Fast Charging; Games of Strategic Interaction; Entry Models JEL classification: Q48, Q58, L13, L43, R53 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201513&r=cse |
| By: | Zuzana Brixiová (African Development Bank, IZA and Research Affi liate, SALDRU, University of Cape Town); Mthuli Ncube (University of Oxford) |
| Abstract: | Policymakers in developing countries have recognized that productive entrepreneurship can help eliminate extreme poverty. This paper develops a search model of costly entrepreneurial start-ups under a constraining business environment and skill gaps, where one of the equilibrium outcomes is a low-productivity trap. The model reflects stylized facts from the urban labor markets in low income countries such as Ethiopia where low rates of productive entrepreneurship coexist with high output growth in some sectors. Creating an enabling business environment could help move the economy into the high-productivity equilibrium if the regulatory improvements are substantial and other bottlenecks such as skill gaps addressed. We test the role of the business environment in entrepreneurial sales on data from a recent World Bank survey of enterprises in Addis Ababa. |
| Keywords: | Model of start-ups, productivity, multiple equilibria, low income countries, Africa |
| JEL: | L26 J24 J48 O17 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ldr:wpaper:146&r=cse |
| By: | Alina R. Kadyrova (National Research University Higher School of Economics) |
| Abstract: | The paper presents an analysis of advanced technology classifications development. Despite the variety of technology types – advanced, emerging, disruptive, enabling, best available – the focus of the study is made on the first type considering their precedent character, crucial role for manufacturing and overall economic development. Various approaches to define the term ‘advanced technology’ as well as gradual evolution of the definitions and classifications are demonstrated in the paper. It is argued that the initial understanding of advanced technologies was formed in early 1990s and characterized increase in efficiency, hardware and software usage, robotics, etc. Further rapid progress of science and technology in 1990-2010s led to the expansion of the concept by the means of technologies based on fast computing, primarily used for design, control and track of manufacturing activities as well as micro- and nanotechnologies. Moreover, indicators used for measurement of their development and use are compared |
| Keywords: | advanced technology, technological development, technology classification |
| JEL: | O14 O31 O33 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:38sti2015&r=cse |
| By: | Brahmana, Rayenda Khresna; Setiawan, Doddy; Hooy, Chee Wooi |
| Abstract: | There is a hot debate on whether internationally diversified and or industrially diversified strategy gains premium or discount on firm value. Most of the empirical studies on this topic were conducted in developed markets. However, Indonesia, as an emerging market, offers its unique characteristic in terms of ownership structure. For instance, Indonesia is dominated by family firms, but its SOEs perform better compared to family firms. This research aims to investigate the role of ownership concentration on the value of international and industrial diversification in Indonesia. We investigate how that relationship works in respect of different firm’s identity, such as different ownership level, or different owners (family, government, and foreign). We investigate the value of diversification and ownership structure of Indonesian listed firms over a panel of 2006-2010. We use robust panel regression where we report the probability values based on white robust standard errors that control for heteroscedasticity errors, as well as firm clustering, year clustering, period effect, and industry effect, which induce a within firm serial correlation error structure. To support the results, we also provide graphical evidence of the link between ownership structure, diversification strategy, and firm value. We find that ownership concentration has a prevalent and significant effect on the value of diversification. Further, we also find value discount in the industrial diversification of family firms, and value discount in the international diversification of foreign firms. Overall, our results are consistent with the conjecture that the value of diversification is adversely affected by the agency problem, suggesting that ownership concentration and firm identity play an important role in respect of the value of diversification. |
| Keywords: | diversification, ownership, firm value, family firms |
| JEL: | G15 G3 G32 |
| Date: | 2014–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64607&r=cse |
| By: | Uri Dadush |
| Abstract: | Manufacturing is declining as a share of GDP not only in advanced countries, but in developing countries as well. This new trend, a result of complex forces, should be seen on balance as a reason for development-optimism, not pessimism. In the 21st century economy, manufacturing remains important, but poor countries can attract investment, grow rapidly and diversify away from agriculture on the basis of many possible sources of comparative advantage, without artificially promoting manufacturing. At the heart of the modern development process is learning: by adopting techniques and practices from countries at the technology frontier poor countries can boost productivity across all sectors of the economy. This policy paper takes an eclectic look at the role of manufacturing in today’s development process. It draws from the recent econometric literature, reviews the trends in world trade, and examines the comparative advantage of countries that have been successful in transforming their economies in recent years. Among these countries it examines briefly the case of Morocco, an interesting case of a country that has exhibited quite rapid growth and diversification in a troubled region. The paper draws some implications for policy, underscoring the importance of the four Cs: connectivity, capacity, cost and confidence. |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:rpaper:pp-15/07&r=cse |
| By: | T.D. Stanley; Chris Doucouliagos; Piers Steel |
| Abstract: | In this paper, we apply meta-regression analysis to 58 studies that explore the impact of ICT on economic growth. We find evidence of econometric specification bias and publication selection bias in favor of positive growth effects. After correcting these biases, we show that ICT has contributed positively to economic growth, on average. We find that both developed and developing countries benefit equally from landline and cell technologies, with cell’s contribution to growth being double that of landline. However, developed countries gain significantly more from computing than do developing countries. In contrast, the Internet has had little effect on growth. |
| Keywords: | ICT, economic growth, meta-regression analysis |
| JEL: | O3 O4 |
| Date: | 2015–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:dkn:econwp:eco_2015_9&r=cse |
| By: | Antonio Baez-Morales (Department of Econometrics. University of Barcelona) |
| Abstract: | Informality has been given adverse associations as a result of its economic and social consequences in developed and developing countries. The latter group of countries has been the most affected in terms of low productivity, unprotected workers and the erosion of institutional credibility. Although the determinants of informality have been studied before, the research conducted on micro firms in a developing country has been less notable. In this paper, Mexico is taken as case study due to its high level of micro firm informality and the heterogeneity among Mexican states. The aim of this paper is to analyse the determinants of micro firm informality by state, using different public sources, such as the Encuesta Nacional de Micronegocios (ENAMIN, or the National Micro Firm Survey), the Instituto Nacional de Estadisica (INEGI, or the National Institute for Statistics) and the Secretaría de Economía (SE, or the Secretariat for Economics). Econometric panel data models were estimated for a sample of 32 states over the 2008-2012 period. Furthermore, this paper uses different definitions of informality to check the robustness of the results. The empirical evidence obtained allows us to conclude that, although economic factors are the main causes of informality, variables such as corruption and education have an important role to play. |
| Keywords: | Business surveys; microenterprises, informal economy, entrepreneurship, developing countries, institutions. JEL classification: E26, O17, L26 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:201509&r=cse |
| By: | Timo Hiller; Timo Hiller |
| Abstract: | This paper presents a simple model of strategic network formation with local complementarities in effort levels and positive local externalities for a general class of payoff functions. Results are obtained for one-sided and two-sided link creation. In both cases (pairwise) Nash equilibrium networks are nested split graphs, which are a strict subset of core-periphery networks. The relevance of the convexity of the value function (gross payoffs as a function of neighbours' effort levels when best responding) in obtaining nested split graphs is highlighted. Under additional assumptions on payoffs, we show that the only efficient networks are the complete and the empty network. Furthermore, there exists a range of linking cost such that any (pairwise) Nash equilibrium is inefficient and for a strict subset of this range any (pairwise) Nash equilibrium network structure is different from the efficient network. These findings are relevant for a wide range of social and economic phenomena, such as educational attainment, criminal activity, labor market participation, and R&D expenditures of firms. |
| Keywords: | Strategic network formation, peer effects, strategic complements, positive externalities. |
| JEL: | D62 D85 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:stitep:564&r=cse |
| By: | De Giorgi, Giacomo (Federal Reserve Bank of New York); Ploenzke, Matthew (Federal Reserve Bank of New York); Rahman, Aminur (World Bank Group) |
| Abstract: | Firm informality is pervasive throughout the developing world, and Bangladesh is no exception. The informal status of many firms substantially reduces the tax basis and therefore affects the provision of public goods. The literature on encouraging formalization has focused predominantly on reducing the direct costs of formalization and has found negligible effects from such policies. In this paper, we focus on a stick intervention, which, to the best of our knowledge, is the first in a developing-country setting to deal with the most direct and dominant form of informality: the lack of registration with the tax authority and direct link to the country’s potential revenue base and thus public goods provision. We implement an experiment in which firms are visited by representatives who deliver an official letter from the Bangladesh National Tax Authority stating that the firm is not registered and threatening punishment if it fails to register. We find that the intervention increases the rate of registration among treated firms, while firms located in the same market but not treated do not seem to respond significantly. We also find that only larger-revenue firms at the baseline respond to the threat and register. Our findings have at least two important policy implications: 1) the enforcement angle, which could be an important tool to encourage formalization; and 2) targeting of government resources for formalization to the high-end informal firms. The effects are generally small in level, leaving open the question of why many firms still do not register. |
| Keywords: | firms; informality; development |
| JEL: | O10 |
| Date: | 2015–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:728&r=cse |
| By: | Xavier Cirera (Economics Research World Bank Group); Daniel Lederman (Economics Research World Bank Group); Juan A. Mañez (University of Valencia and ERICES); María E. Rochina (University of Valencia and ERICES; University of Valencia and ERICES) |
| Abstract: | This paper explores the link between exports and total factor productivity (TFP) for Brazilian manufacturing firms over the period 2000-2008, both under the assumption of an exogenous or an endogenous law of motion for productivity. We first obtain TFP estimates under each alternative assumption following Wooldridge (2009) GMM procedure. Second, using stochastic dominance techniques we analyse whether the ex-ante most productive firms are those that start exporting (self-selection hypothesis). Finally, we test whether exporting boosts firms TFP growth (learning-by-exporting hypothesis) using matching techniques, to control for the possibility that selection into exports may not be a random process. Our results confirm the self-selection hypothesis and show that starting to export yields firms an extra TFP growth that emerges since the first year exporting but lasts only from this year to the next. Further, this extra TFP growth is much higher under the assumption of an endogenous law of motion for productivity, which reinforces the importance of accounting for firm export status to study the evolution of productivity. |
| Keywords: | TFP, export status, exogenous vs. endogenous Markov, semi-parametric approach, self-selection, stochastic dominance, learning-by exporting, matching techniques. |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1505&r=cse |
| By: | Pastore, Francesco (University of Naples II); Roccisano, Federica (Catholic University Milan) |
| Abstract: | This letter provides new evidence on the extent of the inheritance of educational inequality in the eight developing countries (Azerbaijan, China, Egypt, Iran, Kosovo, Mongolia, Nepal, Syria) where the ILO carried out the first wave of School-to-Work Transition survey. We observe different patterns of correlation between the level of intergenerational mobility, the educational upgrade and the role of parents' in sons' and daughters' education. |
| Keywords: | intergenerational mobility, educational persistence, developing economies |
| JEL: | D63 H52 I24 P46 P52 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9065&r=cse |
| By: | Francesco Aiello; Graziella Bonanno (Dipartimento di Economia, Statistica e Finanza, Università della Calabria) |
| Abstract: | Banking is increasingly a-spatial. However, the environment matters for small banks. Indeed, they are embedded in narrowed markets and hence benefit from proximity to their member-customers. By referring to multilevel approach, this article aims at measuring how much the performance of Italian mutual-cooperative banks is determined by both geographical (provincial level) and individual characteristics (small bank level). The effect of local markets explains 28.27% of bank heterogeneity in the empty multilevel model and 33% in the most extended model. Moreover, it is found that bank efficiency increases with market concentration and demand density and decreases with branching in local markets. |
| Keywords: | Multilevel model, mutual-cooperative banks, local markets, cost efficiency |
| JEL: | G21 C13 D00 R19 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201503&r=cse |
| By: | Morais, Bernardo (Board of Governors of the Federal Reserve System (U.S.)) |
| Abstract: | I document that the average productivity of firms tends to increase, and its variance to decrease, as they age. These two facts combined suggest that managers learn to reduce their mistakes as they operate. I develop a quantitative framework mimicking these dynamics and find that young firms have substantially higher financing costs due to lower and riskier returns. In this scenario, a reduction in the financial development of an economy raises disproportionately the cost of credit of young-productive firms increasing the input misallocation within this subgroup. To test the validity of the theory, I find that the data confirms some novel predictions on a series of firm-level moments. Finally, I show that introducing these two facts allows the model to better explain the relation between financial and economic development. |
| Keywords: | productivity; misallocation; financial frictions; learning |
| JEL: | O11 O40 |
| Date: | 2015–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:1134&r=cse |
| By: | Yukiko Sawada (Graduate School of Economics, Osaka University) |
| Abstract: | This study presents a simple two-country model in which rms in the manufacturing sector can choose a technology level (high or low). We show how trade costs and productivity levels affect technology choices by the rms in each country, where the fixed cost of adopting high technology differs. This depends on the productivity level of the high technology. In particular, if productivity is medium and trade costs are not too low, then a technology gap between the countries arises. In this case, improving the productivity of the high-technology country reduces the welfare level of consumers in the country in which low technology is adopted. To compensate for the welfare loss of the country from the technological improvement, trade costs should be reduced. |
| Keywords: | Specialization, Technology Choice, Technology Gap |
| JEL: | F10 F12 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1510&r=cse |
| By: | Kelly D.T.Trinh (School of Economics, The University of Queensland); Valentin Zelenyuk (School of Economics, The University of Queensland) |
| Abstract: | Traditional data envelopment analysis (DEA) views a production technology process as a ‘black box’, while network DEA allows a researcher to look into the ‘black box’, to evaluate the overall performance and the performance of each sub-process of the system. The technical efficiency scores calculated from these approaches can be slightly, or sometimes vastly different. Our aim is to develop two bootstrap-based algorithms to test whether any observed difference between the results from the two approaches is statistically significant, or whether it is due to sampling and estimation noise. We focus on testing the equality of the first moment (i.e., the mean) and of the entire distribution of the technical efficiency scores. The bootstrap-based procedures can also be used for pairwise comparison between two network DEA models to perform sensitivity analysis of the resulting estimates across various network structures. In our empirical illustration of non-life insurance companies in Taiwan, both algorithms provide fairly robust results. We find statistical evidence suggesting that the first moment and the entire distribution of the overall technical efficiencies are significantly different between the DEA and network DEA models. However, the differences are not statistically significant for the two sub-processes across these models. |
| Keywords: | DEA,Network DEA,Subsampling Bootstrap |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqcepa:103&r=cse |
| By: | Joanna Tyrowicz (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland); Barbara Liberda (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland); Magdalena Smyk (Faculty of Economic Sciences, University of Warsaw) |
| Abstract: | What is necessary to make entrepreneurship sector successful? It seems like two key factors in this matter are quantity of financial capital and quality of human capital. So far, studies on innovative firms were rather focused on spending on resources, and not on qualification of people who are entering entrepreneurship sector. Using concept of so-called talent workers (Hsieh et al. 2013) we check who is entering self-employment in Poland. Our question is whether people who enter self-employment are more likely to create successful businesses. The analysis is based on the labor force survey panel data for Poland for over a decade between 2001 and 2013. We found that talent workers were more likely to become self-employed in this period. Results are robust on two possibly confounding effects – within sector mobility and productivity of workers before entering self-employment. |
| Keywords: | self-employment, talent, labor force mobility, wage employment |
| JEL: | J62 J24 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2015-18&r=cse |
| By: | Sangita Deota |
| Abstract: | For the past years the conversation about women and leadership has revolved around challenges of Work-Life-Balance which most of the time actually means “Work-Family-Balance”. Woman hardly make it to the top of the companies not because of their personal choice but because of the fact that lots of ambitious women make them off the path of leadership. Women are also gently but firmly avoided while deciding about future leaders, this is mainly because their work and family invariably clash. By this the Government as well as the corporate is not using the talent deck upto it’s full potential. This research paper tries to address the varied dimentions which needs deep insight into the reasons of absenteesm of women leader & suggestions for their work life balance for the purpose of cultural, structural & organisational growth. Key words: Women in leadership, Work life balance, ambitious, talent deck |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:vor:issues:2014-06-12&r=cse |
| By: | David Atkin; Benjamin Faber; Marco Gonzalez-Navarro |
| Abstract: | The arrival of global retail chains in developing countries is causing a radical transformation in the way that households source their consumption. This paper draws on a new collection of Mexican microdata to estimate the effect of foreign supermarket entry on household welfare. The richness of the microdata allows us to estimate a general expression for the gains from retail FDI, and to decompose these gains into several distinct channels. We find that foreign retail entry causes large and significant welfare gains for the average household that are mainly driven by a reduction in the cost of living. About one quarter of this price index effect is due to pro-competitive effects on the prices charged by domestic stores, with the remaining three quarters due to the direct consumer gains from shopping at the new foreign stores. We find little evidence of significant changes in average municipality-level incomes or employment. We do, however, find evidence of store exit, adverse effects on domestic store profits and reductions in the incomes of traditional retail sector workers. Finally, we show that the gains from retail FDI are on average positive for all income groups but regressive, and quantify the opposing forces that underlie this finding. |
| Keywords: | Supermarket revolution, foreign direct investment, gains from trade |
| JEL: | F15 F23 O24 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1351&r=cse |