|
on Economics of Strategic Management |
|
Issue of 2016‒01‒03
twenty-six papers chosen by João José de Matos Ferreira Universidade da Beira Interior |
| By: | R. Brancati; E. Marrocu; M. Romagnoli; S. Usai |
| Abstract: | Are there any factors driving firms’ internationalization process other than productivity? By means of a firm-level dataset on manufacturing and production services sectors collected by MET, this paper investigates the export performance of enterprises in Italy in the aftermath of the recent economic crisis. Our results suggest that productivity is not the only (and most important) determinant in this matter. Innovation activity and learning processes are indeed pivotal in boosting enterprises to sell their products abroad and, to a certain extent, in backing their success on foreign markets. In particular, by estimating dynamic probability models as well as Tobit II-Heckman and two-part models, we provide evidence that firm’s ability to learn from its past export experiences lowers international trade informal barriers, while its ability to learn thanks to regional and local industry spillovers is important in terms of both extensive and intensive performances on foreign markets. |
| Keywords: | international trade, inter-regional trade, innovation, regional/industrial spillovers, dynamic binary models, Tobit II models, two-part models |
| JEL: | C23 C25 F14 O3 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201516&r=cse |
| By: | Guimón , José (Department of Development Economics, Universidad Autónoma de Madrid); Chaminade , Cristina (CIRCLE, Lund University); Maggi , Claudio (Gerencia de Desarrollo Competitivo, CORFO, Santiago, Chile) |
| Abstract: | Over the last decade we have witnessed an unprecedented growth in the number of cross-border R&D investments towards developing countries. Large emerging economies like China or India have become the first destination of R&D-related investments in the world. Latin America, however, has played a rather marginal role as recipient of R&D-related FDI – barely 3.7% of the world total between 2003 and 2013. In an effort to revert this trend, several countries in the region have launched new policy programs and incentives to enhance their attractiveness for R&D-related FDI. However, it remains uncertain whether public incentives can compensate for other locational disadvantages that characterize Latin American innovation systems. The case of Chile provides an interesting empirical setting to explore these issues, because since the early 2000s its government is actively promoting R&D-related FDI through a new policy mix. This policy mix encompasses various grants and tax incentives, targeting not only multinational corporations but also foreign start-ups, universities and public research institutes. Rather than limiting the scope of our analysis to individual policy instruments, we also consider the complementarities and synergies among them. We emphasize that for national innovation systems to benefit from R&D-related FDI it is important to ensure that appropriate linkages are established with local actors that hold absorptive capacities. Equally important for a small emerging economy like Chile is to prioritize R&D-related FDI in strategic technology areas where the country can realistically attain critical mass to compete globally. |
| Keywords: | FDI; technology; R&D; innovation policy; development; globalization |
| JEL: | E61 F21 O38 |
| Date: | 2015–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_048&r=cse |
| By: | Filippo Belloc; Eleonora laurenza; Maria Alessandra Rossi |
| Abstract: | The paper explores the question whether the relationship between corporate governance and innovation is affected by the extent to which the firm is exposed to agency problems and asset specificity issues. In particular, we argue that different combinations of asset specificity and agency costs are associated to firm age and sector of activity and predict heterogenous effects of ownership concentration on innovation across different types of firms. We use a unique dataset on about 35.000 Italian manufacturing corporations over the 2002-2007 period and run a hurdle model, distinguishing four sub-groups of firms on the basis of their age (greater or lower than 15 years) and of whether they belong to a high technology or low technology sector. We find that the effects of ownership concentration on innovation are coherent with the predictions of so-called "shareholder theory" when agency cost effects dominate over asset specificity effects and that they are coherent with the predictions of so-called "stakeholder theory" when asset specificity effects dominate over agency cost effects. These findings are robust to a number of identification issues, including the possible endogeneity of corporate ownership structures. Our results may allow to make sense of the contradictory findings of the literature on corporate governance and innovation, especially as regards the role played by ownership concentration, and may help policy-makers to define more effective type-specific initiatives to stimulate firm innovation. |
| Keywords: | corporate governance, innovation, Italian manufacturing sectors, hurdle models |
| JEL: | C30 G30 L60 O30 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:718&r=cse |
| By: | Villafuerte , James (Asian Development Bank); Yap, Josef T. (University of the Philippines) |
| Abstract: | Global capital flows into emerging markets, including those in Asia, continue to be volatile. These capital flows generate both benefits and costs. The latter are associated with episodes of currency and banking crises like the 1997 Asian financial crisis and the 2008 global financial and economic crisis. Policy responses can be implemented to minimize the costs. At the same time, policy responses should vary depending on whether “pull” factors or “push” factors dominate the capital flows. Data show that the main impact of capital flows on economies of East Asia is reflected in real effective exchange rates, equity prices, and accumulation of foreign exchange reserves. If “pull” factors are dominant, policy makers should allow real exchange rates to appreciate in the long-term. Three broad categories of macroeconomic measures are available to countries facing surges of capital inflows, if they are not willing to allow the nominal exchange rate to appreciate: (i) sterilized intervention, (ii) greater exchange rate flexibility, and (iii) fiscal tightening (preferably through expenditure cuts). However, all of them have major drawbacks. Instead, capital controls or, more generally, macroprudential policy can be considered. Other policy recommendations include measures to encourage foreign direct investment, as this type of capital flow is more stable and beneficial; exchange rate coordination to reduce the adverse impacts of currency appreciation on the global competitiveness of domestic firms; and regional financial cooperation, particularly in the development of local bond markets. Recent data show the adverse impact of Quantitative Easing tapering on Asian economies. This is verified by econometric results showing the strong linkages between the United States bond markets and those in Asia. These findings enhance the role of macroprudential policy, which can be implemented in the context of regional cooperation in order to reduce negative spillovers across economies in Asia. |
| Keywords: | capital flows; exchange rates; regional cooperation; volatility |
| JEL: | F31 F32 F36 |
| Date: | 2015–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0464&r=cse |
| By: | Link, Albert (University of North Carolina at Greensboro, Department of Economics); Swann, Christopher (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | It is well documented that knowledge based capital (KBC) is a driver of economic growth and development and that knowledge acquired through scientific research and development (R&D) is one important component of KBC. In this paper we examine the importance of R&D to a firm for exploring new business opportunities using information from the AEGIS database. We find that, among other things, human capital measured in terms of the educational background of the firm’s founders is a positive and statistically significant covariate with the importance of R&D. We conclude the paper with public policy recommendations for enhancing the educational component of the human capital resource base of firms. |
| Keywords: | entrepreneurship; R&D; knowledge based capital; human capital; technology; innovation; AEGIS |
| JEL: | L25 L26 O31 O33 |
| Date: | 2015–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2015_008&r=cse |
| By: | Zhou, Wen (School of Computer Engineering and Science); Koptyug, Nikita (Research Institute of Industrial Economics (IFN)); Ye, Shutao (School of Computer Engineering and Science); Jia, Yifan (School of Computer Engineering and Science); Lu, Xiaolong (School of Computer Engineering and Science) |
| Abstract: | As computer science and complex network theory develop, non-cooperative games and their formation and application on complex networks have been important research topics. In the inter-firm innovation network, it is a typical game behavior for firms to invest in their alliance partners. Accounting for the possibility that firms can be resource constrained, this paper analyzes a coordination game using the Nash bargaining solution as allocation rules between firms in an inter-firm innovation network. We build an extended inter-firm n-player game based on nonidealized conditions, describe four investment strategies and simulate the strategies on an inter-firm innovation network in order to compare their performance. By analyzing the results of our experiments, we find that our proposed greedy strategy is the best-performing in most situations. We hope this study provides a theoretical insight into how firms make investment decisions. |
| Keywords: | Complex Networks; Game Theory; Innovation; Innovation Network; Nash Equilibrium |
| JEL: | C72 C81 C82 D81 L14 |
| Date: | 2015–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1097&r=cse |
| By: | Trippl , Michaela (CIRCLE, Lund University); Grillitsch , Markus (CIRCLE, Lund University); Isaksen , Arne (Department of Working Life and Innovation, University of Agder, Norway); Sinozic , Tanja (Institute for Multi-Level Governance and Development, Vienna University of Economics and Business, Austria) |
| Abstract: | The past few years have seen an increasing popularity of cluster life cycle approaches. These models, however, suggest a rather deterministic view, are indifferent with respect to context and suffer from biological connotations. This chapter intends to go beyond the cluster life cycle models. We review the literature on industrial districts, innovative milieu and regional innovation systems and investigate how these alternative approaches contribute to the development of a more context-sensitive approach to cluster change. We argue that future research may benefit from developing theoretically relevant categorizations of different cluster types and from carrying out comparative empirical studies. |
| Keywords: | cluster evolution; cluster life cycle; regional industrial change; regional innovation systems |
| JEL: | O10 O30 R10 R50 |
| Date: | 2015–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_046&r=cse |
| By: | Reinhilde Veugelers |
| Abstract: | Highlights The European Union has prioritised the pursuit of innovation based growth and targeting of resources to promote research and development, but performance on innovation remains weak. With the lack of results comes fatigue, waning interest and mounting criticism about policy. Should the EU abandon its ambition to become the most innovative region in the world? We examine EU member state research and innovation policies. We assess whether the deployment of innovation policy instruments in EU countries matches their innovation capacity performance relative to other EU countries. We find a relative homogeneity of policy mixes in EU countries, despite the fairly wide and stable differences in their innovation capacities. Our analysis therefore provides a rationale for a more comprehensive review of innovation policy mixes to assess their adequacy in addressing country specific innovation challenges. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:bre:wpaper:11543&r=cse |
| By: | Martin Aarøe Christensen (European Commission – JRC - IPTS) |
| Abstract: | The report provides a quantitative analysis of the economic impacts of national public support to ICT R&D in the European Union, considering a number of policy scenarios covering different amounts of public spending, policy instruments and sources of financing. For this purpose we use a macroeconomic model with ICT and R&D driven endogenous growth. The model accommodates a range of policy instruments that may be used to stimulate R&D activity (ICT or non-ICT) in the economy, and it captures multiple channels through which R&D activity affects the economy. The policy scenarios are simulated with the model. The simulation exercise provides some preliminary evidence that an increase in public expenditure to support ICT R&D might have a significantly positive impact on ICT sector BERD as well as on economic growth and employment in the EU. It also shows that the strength and in some cases the sign of this impact can be influenced by policy instruments and financing source. Additional work is needed to gain further insights on the sensitivity of these results to the assumptions and parameter settings used in the model. |
| Keywords: | Economic Modelling, R&D, ICT, Endogenous Growth |
| JEL: | C68 O30 O52 H20 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc97907&r=cse |
| By: | Rinaldo Evangelista (University of Camerino); Valentina Meliciani (University of LLUIS Carli); Antonio Vezzani (European Commission – JRC - IPTS) |
| Abstract: | In the context of the Europe 2020 objective of establishing in the EU a smart, sustainable and inclusive economy, European regions have been called to design and implement national and regional 'Research and Innovation Strategies for Smart Specialisation' (RIS3). The rationale behind the concept of smart specialisation is that, in a context of global competition for talent and resources, most regions can only acquire a real competitive edge by finding niches or by mainstreaming new technologies into traditional industries and exploiting their ‘smart’ regional potential. Although the most promising way for a region to promote its knowledge-based growth is to diversify into technologies, products and services that are closely related to existing dominant technologies and the regional skills base, the European Commission puts special emphasis on a set of technologies labelled as 'Key Enabling Technologies' (KETs). Despite the great emphasis on KETs, there is only very limited evidence on the capability of EU regions to specialise in these fields and there are no studies directly investigating the actual impact of these technologies on regional innovation and economic growth. This report aims at filling these gaps by: i) looking at the relationship between KETs and 'Fast Growing Technologies' (FGTs); ii) providing empirical evidence on the EU regional specialisation in KETs and FGTs; iii) relating technological specialisation to regional innovation and economic growth. In particular, the report aims at answering these questions: 1) Which technologies have emerged as the fastest growing ones in the recent decades? 2) Is there a relationship between fast growing technologies and KETs? 3) Which regions are specialised in FGTs and KETs? 4) Are there convergence and polarization phenomena observable in the evolution of EU regions’ innovative activities in fast growing technologies and KETs? 5) Do EU regions specialized in fastest growing technological fields and key enabling technologies exhibit higher innovation and economic performances? The main results of the report can be summarised as follows. First, only a small share of KETs are also fast growing technologies, although the degree of overlapping between KETs and FGTs varies substantially across different KETs fields. Second, while KETs are concentrated in Central Europe, FGTs prevail in Scandinavian countries and the UK. Third, while there is evidence of some regional convergence in KETs and, to a less extent, in FGTs, spatial correlation increases over time, showing that diffusion often occurs across contiguous regions. Finally, the results of the estimations of the effects of FGTs and KETs on innovation (patents) and economic (GDP per capita) growth show that only specialisation in KETs directly affects economic growth, while specialisation in FGTs has an impact on growth only indirectly, that is through its impact on regions’ innovation performances. Overall, these results confirm the pervasive and enabling role of KETs pointing to the importance for European regions to target these technologies as part of their RIS3 strategies. |
| Keywords: | region, gorwht, innovation |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc98111&r=cse |
| By: | Hooghiemstra, Reggy (Faculty of Economics and Business); Hermes, Niels (Faculty of Economics and Business); Oxelheim, Lars (Research Institute of Industrial Economics (IFN)); Randøy, Trond (School of Law and Business) |
| Abstract: | Prior literature shows that choices regarding board composition are associated with earnings management. We add to this literature by examining the effects of the presence of a foreign board member on earnings management. Using a sample of 3,249 firm-year observations representing 586 non-financial listed Nordic firms during 2001–2008, we find that the presence of a non-Nordic, foreign director is associated with significantly higher levels of earnings management. Moreover, we provide preliminary evidence that differences in accounting knowledge drive this effect. Our results suggest that it may not necessarily be beneficial to appoint a foreign director to the board. |
| Keywords: | Earnings management; Board composition; Internationalization; Foreign board member; Accounting knowledge |
| JEL: | G34 M16 M41 M52 |
| Date: | 2015–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1096&r=cse |
| By: | Huijie Yan (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université) |
| Abstract: | The goal of sustainable development is far from being achieved in China. In this context, this paper aims to provide an overview of China’s energy, environment and health policies over the past 30 years and discuss whether the previous policies have fully integrated the energy, environment and health issues in its sustainable development agenda. From the overview, we observe that the energy policies accelerating energy industrial upgrading, stimulating development of new energy sources, deregulating energy pricing mechanism, promoting energy saving and seizing the opportunity of green growth are conducive to an improvement of environmental conditions and public health in China. However, the environmental policies are not effectively implemented and subsequently they could not succeed in reducing environmental risks on public health and putting pressure on enterprises to efficiently use energy. The health policies have not taken real actions to focus with any specificity on energy-induced or pollution-induced health problems. |
| Keywords: | energy,environment,health,China |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01247183&r=cse |
| By: | Guiso, Luigi; Pistaferri, Luigi; Schivardi, Fabiano |
| Abstract: | We document that individuals who grew up in areas with high density of firms are more likely, as adults, to become entrepreneurs, controlling for the density of firms in their current location. Conditional on becoming entrepreneurs, the same individuals are also more likely to be successful entrepreneurs, as measured by business income or firm productivity. Strikingly, firm density at entrepreneur’s young age is more important than current firm density for business performance. These results are not driven by better access to external finance or intergenerational occupation choices. They are instead consistent with entrepreneurial capabilities being at least partly learnable through social contacts. In keeping with this interpretation, we find that entrepreneurs who at the age of 18 lived in areas with a higher firm density tend to adopt better managerial practices (enhancing productivity) later in life. |
| Keywords: | entrepreneurship; learning; spillovers |
| JEL: | J24 M13 R11 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10997&r=cse |
| By: | Freshwater, David; Wojan, Timothy J. |
| Abstract: | Innovation is widely recognized as a key driver of economic growth, but innovation is now mainly measured by patent statistics and seen as reflecting earlier investments in formal innovation systems that produce new products an new technologies. A consequence of this approach to describing the innovation process is that there is little role for entrepreneurs and in particular little chance of innovation taking place in rural regions. Yet prior to the 20th century most innovation came from individual entrepreneurs and many innovations originated in rural regions. In particular one form of innovation - user-innovation, where individuals or single firms when confronted with a significant problem that has no acceptable existing solution create their own innovation, is particularly relevant to rural regions. While most rural innovations serve local or niche markets there are examples of major rural innovations that have had disruptive national or global impacts. Preliminary results from the new USDA Rural Establishment Innovation Survey confirm that user innovation is an important aspect of many rural entrepreneurs and an important aspect of firm competiveness. |
| Keywords: | rural innovation, rural development, entrepreneurship, innovation models, regional growth, Community/Rural/Urban Development, O31, R58, D21, N10, |
| Date: | 2014–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ukysps:229301&r=cse |
| By: | Trippl , Michaela (CIRCLE, Lund University); Grillitsch , Markus (CIRCLE, Lund University); Isaksen , Arne (Department of Working Life and Innovation, University of Agder, Norway) |
| Abstract: | The role of exogenous sources of new path development has been underplayed in the literature on regional industrial change so far. The aim of this paper is to explore in a conceptual way under which conditions and in what ways non-local knowledge can lead to new path development in different regional innovation systems (RIS). We distinguish between organizationally thick and diversified, thick and specialized and thin RIS and argue that these types vary markedly in their needs for exogenous sources as well as in their capacities to attract and absorb knowledge generated elsewhere. Organisationally thick and diversified RIS have a lower need for exogenous sources but they exhibit strong capacities to attract and absorb non-local knowledge. In contrast, organisationally thick and specialised RIS and organisationally thin RIS have a higher need for exogenous sources but show a lower capacity to attract and absorb knowledge from elsewhere. However, a closer look reveals that these RIS types can increase their attractiveness for non-local knowledge and may benefit from its inflow if they strengthen their absorption capacity. We conclude that new regional industrial path development is less endogenous in nature than commonly thought, and that the attraction and absorption of non-local knowledge should be more included in conceptualisations of new path development. |
| Keywords: | new path development; regional industrial change; non-local knowledge; regional innovation systems; degree of organizational thickness; specialization; diversity |
| JEL: | O10 O19 O30 R10 |
| Date: | 2015–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2015_047&r=cse |
| By: | Lackner, Mario (University of Linz); Stracke, Rudi (University of Munich); Sunde, Uwe (University of Munich); Winter-Ebmer, Rudolf (University of Linz) |
| Abstract: | This paper investigates empirically whether decision makers are forward looking in dynamic strategic interactions. In particular, we test whether decision makers in multi-stage tournaments take heterogeneity induced changes of continuation values and the ability of their immediate opponent into account when choosing effort. Using data from professional and semi-professional basketball tournaments, we find that effort is negatively affected by the ability of the current opponent, consistent with the theoretical prediction and previous evidence. More importantly, the results indicate that the expected relative strength in future interactions does affect behavior in earlier stages, which provides support for the 'standard' view that decision makers are forward looking in dynamic strategic interactions. |
| Keywords: | promotion tournament, multi-stage contest, elimination, heterogeneity, forward-looking behavior |
| JEL: | D84 D90 M51 J33 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9564&r=cse |
| By: | KIM YoungGak; KWON Hyeog Ug |
| Abstract: | Using firm level panel data taken from the Basic Survey of Japanese Business Structure and Activities between 2005 and 2010, we examine the effects of reforming board meetings on firm productivity. We find that the probability of reforming board meetings is higher in subsidiary firms and large firms. We also document that the existence of outside directors is positively correlated with firms' productivity growth, whereas the total factor productivity (TFP) post- board meeting reform does not improve significantly in the case of controlling for endogeneity. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:15060&r=cse |
| By: | Peters, Bettina; Roberts, Mark J.; Vuong, Van Anh |
| Abstract: | This article investigates how a firm's financial strength affcts its dynamic decision to invest in R&D. We estimate a dynamic model of R&D choice using data for German firms in high-tech manufacturing industries. The model incorporates a measure of the firm's financial strength, derived from its credit rating, which is shown to lead to substantial differences in estimates of the costs and expected long-run benefits from R&D investment. Financially strong firms have a higher probability of generating innovations from their R&D investment, and the innovations have a larger impact on productivity and profits. Averaging across all firms, the long run benefit of investing in R&D equals 6.6 percent of firm value. It ranges from 11.6 percent for firms in a strong financial position to 2.3 percent for firms in a weaker financial position. |
| Keywords: | R&D choice,Financial strength,Innovation,Productivity,Dynamic structural model |
| JEL: | O31 O32 G30 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:15083&r=cse |
| By: | Fredriksen, Lars (Aarhus university); Wennberg, Karl (Institute for Analytical Sociology (IAS) & Department of Management and Engineering Linköping University, Sweden and Ratio Institute); Balachandran, Chanchal (Linköping unievrsity) |
| Abstract: | Knowledge-based theories of entrepreneurship infer transfer of knowledge from the effect of labor mobility on entrepreneurial entry. Yet, simple selection or situational mechanisms that do not imply knowledge transfer may influence entrepreneurial entry in similar ways. We argue that the extent to which such alternative mechanisms operate, labor mobility predicts entry but not subsequent performance for entrepreneurs. Analyses of matched employee-employer data from Sweden suggest that high rates of geographical and industry mobility increase individuals’ likelihood of entrepreneurial entry but have no effects on their entrepreneurial performance, indicating that the relationship between labor mobility and entrepreneurial entry not necessarily implies knowledge transfer. |
| Keywords: | Entrepreneurship; Mobility; Knowledge |
| JEL: | J61 M13 O18 |
| Date: | 2015–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0266&r=cse |
| By: | Sinha, Pankaj; Sharma, Sakshi; Ghosh, Sayan |
| Abstract: | Competition has been regarded as a positive phenomenon for banks; it is perceived that competition makes banks more efficient, stimulates financial innovation and open up new markets For empirical assessment of the nature of competitive conditions amongst scheduled Indian commercial banks over a period of 15 years, we use the ‘Panzar-Rosser educed form revenue model’ to compute the so-called H statistic by estimating the factor price elasticities. In this study alternative estimation techniques have been used for comparing the dynamic H-statistic with static H-statistic. The static H-statistic was found to have a downward bias. However, dynamic as well as static H-statistic, both pointed to the presence of monopolistic competition. The hypotheses of perfect collusion as well as of perfect competition can be rejected using dynamic as well as fixed panel-econometric model estimations using micro data of banks’ balance sheets and profit & loss accounts for the years 2000-2014. The division of the entire period into two sub-samples, i.e. before and after 2007 revealed a decrease in competition levels across the two periods. Although, empirical analysis supported the assertion that the nature of competition among the Indian Banks is monopolistic.But it showed a decrease in the level of competitionmay be due to consolidation exercises of top few large banks with smaller banks and also because of the shift from traditional financial business to off-balance sheet activities, which might have lead to the convergence of competitive levels in the second sub-sample period, i.e. after 2007.The second sub-period also corresponds to the global financial crisis of 2008, a possible reason for the lower H-statistic values. The low persistence of profit values (in the sub-periods) should be associated with higher competition, It is also found that the values of competitive conduct (H-statistic), does not coincide with the classical concentration approach (CR5, CR10), for the Indian Banking Industry. The unit cost of funds, capital, and labour were found to be positive and statistically significant. The unit cost of funds was the highest contributor to the overall H statistic. The control variables, such as size and risk were found to be positively affecting the revenue. The findings arrived in this study; highlight the possible links between Indian banking sector competitiveness, profitability, intermediation and regulatory scenario. |
| Keywords: | Competition, Competitive Structure, Dynamic Model, Indian Banking Sector, Monopolistic Competition, Panzar-Rosse H-statistic, Profitability |
| JEL: | D4 D40 D41 D42 D5 D50 G2 G21 |
| Date: | 2015–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68556&r=cse |
| By: | Ernesto Reuben; Paola Sapienza; Luigi Zingales |
| Abstract: | Using an incentivized measure of test for competition, this paper investigates whether this taste explains subsequent gender differences in earnings and industry choice in a sample of high-ability MBA graduates. We find that “competitive” individuals earn 9% more than their less competitive counterparts do. Moreover, gender differences in taste for competition explain around 10% of the overall gender gap. We also find that competitive individuals are more likely to work in high-paying industries nine years later, which suggests that the relation between taste for competition and earnings persists in the long run. Lastly, we find that the effect of taste for competition emerges over time when MBAs and firms interact with each other. |
| JEL: | C93 D81 D84 I21 J16 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21695&r=cse |
| By: | Caliendo, Lorenzo; Mion, Giordano; Opromolla, Luca David; Rossi-Hansberg, Esteban |
| Abstract: | The productivity of firms is, at least partly, determined by a firm’s actions and decisions. One of these decisions involves the organization of production in terms of the number of layers of management the firm decides to employ. Using detailed employer-employee matched data and firm production quantity and input data for Portuguese firms, we study the endogenous response of revenue-based and quantity-based productivity to a change in layers: a firm reorganization. We show that as a result of an exogenous demand or productivity shock that makes the firm reorganize and add a management layer, quantity-based productivity increases by about 4%, while revenue-based productivity drops by more than 4%. Such a reorganization makes the firm more productive, but also increases the quantity produced to an extent that lowers the price charged by the firm and, as a result, its revenue-based productivity. |
| Keywords: | firm size; layers; managers; organization; productivity; TFP; wages |
| JEL: | D22 D24 F16 J24 J31 L23 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10993&r=cse |
| By: | Engel, Dirk; Rothgang, Michael; Eckl, Verena |
| Abstract: | The paper analyses how context and time dependent factors determine the impulse of R&D subsidies on firm behavior with respect to private R&D expenditures. Based on data from the German R&D survey, we combine propensity-score matching with a difference-in-difference-estimator in order to measure the causal influence of public direct R&D project funding on firm behavior. Our results indicate that (i) repeated participation in R&D projects on average leads to a higher increase in R&D expenditures than one-time funding; (ii) the aggregate effect of R&D funding on R&D expenditures of business firms is somewhat higher for business and business collaboration projects than for science and business collaboration projects; (iii) R&D expenditures of business firms that cooperate with science show a higher share of external R&D spending. Results of one particular cluster programme indicate that at least the short-term development of R&D does not so much depend on which programme direct R&D project funding is applied to. |
| Keywords: | R&D,public subsidies,collaboration,policy evaluation |
| JEL: | C14 C25 H50 O38 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:587&r=cse |
| By: | Nagar, Neerav; Radhakrishnan, Suresh |
| Abstract: | We examine real-activity based earnings management, i.e., cuts in discretionary innovation/marketing spending and overproduction for meeting the earnings benchmark of avoiding losses across firms’ life cycle. We use the cash flow components to classify a firm’s life cycle. We hypothesize and find that firms in the growth and mature stages exhibit real-activity based earnings management to meet earnings target of avoiding losses; but firms in the introductory stage do not. We also hypothesize and find that such real-activity based earnings management to meet the earnings benchmark of avoiding losses is associated with future performance for mature firms, but not so for growth firms. Collectively, our evidence shows the importance of considering firm’s life cycle when examining real-activity based earnings management. |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:13767&r=cse |
| By: | Naoto Jinji; Yoshihiro Mizoguchi |
| Abstract: | Using a simple three-country model of international duopoly, this study analyses the optimal choice of rules of origin (ROO) in a free trade area/agreement (FTA) when firms from outside the FTA must undertake foreign direct investment (FDI) in FTA countries and conduct part of their production process within the FTA to comply with the ROO. FDI causes spillovers of the superior production technology from a non-FTA firm to its competitor within the FTA, depending on how much of the production process is shifted to the FTA area. In this situation, we show that as the degree of multilateral trade liberalisation before formation of the FTA is higher, the optimal ROO tends to be less stringent. |
| Keywords: | rules of origin; free trade area/agreement; foreign direct investment; technology spillovers; oligopoly; |
| JEL: | F12 F15 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:e-15-012&r=cse |
| By: | NAGAOKA Sadao |
| Abstract: | Abstract in English is not available. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:15025&r=cse |