nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2013‒06‒09
twelve papers chosen by
Frederic S. Lee
University of Missouri-Kansas City

  1. Are Worker-Managed Firms Really More Likely to Fail? By Burdín, Gabriel
  2. The Measurement of Labour Content: A General Approach By Naoki Yoshihara; Roberto Veneziani
  3. When the first interaction matters: Recruitment in the French retailing By Géraldine Rieucau; Marie Salognon
  4. What Do We Learn From Schumpeterian Growth Theory? By Philippe Aghion; Ufuk Akcigit; Peter Brown
  5. Wage Bargaining Institutions – from crisis to crisis By Jelle Visser
  6. Foreign Investors as Change Agents: The Swedish Firm Experience By Fogel, Kathy S.; Lee, Kevin K.; Lee, Wayne Y.; Palmberg, Johanna
  7. Born to be alive? The survival of innovative and non-innovative French micro start-ups By Tristan Boyer; Regis Blazy
  8. Why firms avoid cutting wages: survey evidence from European firms By Philip Du Caju; Theodora Kosma; Martina Lawless; Tairi Rõõm
  9. Do Preferences for Job Attributes Provide Evidence of 'Hierarchy of Needs' By Cem BaÅŸlevent; Hasan KirmanoÄŸlu
  10. The Impact of Wage Subsidies on Jobseekers' Outcomes and Firm Employment By Sarah Crichton; Maré, David C
  11. Behavioral Law and Economics: Empirical Methods By Christoph Engel
  12. Impact of Liner Shipping Trade and Competition Regulations on The Market Structure, Maritime Transport Costs and Seaborne Trade Flows: Regulations on The Market Structure, Maritime Transport Costs and Seaborne Trade Flows. Les réglementations commerciales et concurrentielles dans le secteur du transport maritime de ligne: Impact sur la structure du marché, les coûts de transport et les flux de commerce maritime. By Bertho, Fabien

  1. By: Burdín, Gabriel (IECON, Universidad de la República)
    Abstract: Different theoretical explanations suggest that worker-managed firms (WMFs) are prone to failure in competitive environments. Using a long panel of Uruguayan firms, the author presents new evidence on firm survival comparing WMFs and conventional firms. Excluding microenterprises and controlling for differences in the effective tax burden faced by the two types of firms, the hazard of dissolution is 29% lower for WMFs than for conventional firms. This result is robust to alternative estimation strategies based on semi-parametric and parametric frailty duration models that impose different distributional assumptions about the shape of the baseline hazard and allow to consider firm-level unobserved heterogeneity. The greater survivability of WMFs seems to associated with the greater employment stability achieved in this type of firms. The evidence suggests that the marginal presence of WMFs in actual market economies can hardly be explained by the fact that these organizations exhibit lower survival chances than conventional firms.
    Keywords: labor-managed firms, capitalist firms, survival analysis
    JEL: P13 P51 C41
    Date: 2013–05
  2. By: Naoki Yoshihara (Hitotsubashi University, Tokyo); Roberto Veneziani (Queen Mary, University of London)
    Abstract: This paper analyses the theoretical issues related to the measurement of labour content in the context of general technologies with heterogeneous labour. A novel axiomatic framework is used in order to formulate the key properties of the notion of labour content and analyse its theoretical foundations. Then, a simple measure of labour content is uniquely characterised, which is consistent with common practice in input-output analysis and with a number of recent approaches in value theory.
    Keywords: Labour content, Labour productivity, Technical change, Axiomatic analysis
    JEL: D57 J24 O33 D46
    Date: 2013–06
  3. By: Géraldine Rieucau (CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé, LED - Laboratoire d'Economie Dionysien - Université Paris VIII - Vincennes Saint-Denis : EA3391); Marie Salognon (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: In France, one of ten recently-hired workers works in retailing. The literature provides evidence about the screening criteria used to fill low-wage vacancies in stores. However, neither the stage when criteria matter nor the forefront role of information channels (direct applications, word-of-mouth, employment agency and job ads) has been well explored. Drawing on 35 interviews conducted in 2010-2011, with actors involved in recruitment activities and with recently-hired workers in large stores in Greater Paris, this article explores the initial interaction between job seekers and recruiters. It is argued that the screening criteria vary according to the way employers received information about applicants and first interact with them (by mail, phone or face-to-face). This contribution highlights the importance of walk-in applications, which prioritize selection based on residence, appearances and availability. Changes in the first interaction impact the whole selection process and may change the profile of the workers hired.
    Keywords: Economy of conventions, French retailing, information channels, low-wage jobs, recruitment, screening criteria
    Date: 2012
  4. By: Philippe Aghion (Department of Economics, Harvard University); Ufuk Akcigit; Peter Brown (Department of Economics, Brown University)
    Abstract: Schumpeterian growth theory has .operationalized. Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process that could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; and (iv) the emergence and impact of long-term technological waves. In each case Schumpeterian growth theory delivers predictions that distinguish it from other growth models and which can be tested using micro data.
    Keywords: Creative destruction, entry, exit, competition, .rm dynamics, reallocation, R&D, industrial policy, technological frontier, Schumpeterian wave, general purpose technology
    JEL: O10 O11 O12 O30 O31 O33 O40 O43 O47
    Date: 2013–06–03
  5. By: Jelle Visser
    Abstract: This essay reviews half a century of developments in bargaining coverage, the structure of bargaining, and bargaining coordination respectively in thirty countries, with an emphasis on the last twenty years. Under coverage or the extent of collective bargaining and pay setting, the connection with union density, employer organization, and administrative extension is analysed. In the section on bargaining structure the main issues are decentralisation, multi- or single-employer bargaining, the level at which most bargaining takes place, the organization or articulation of multi-level bargaining, and the existence and use of opening clauses. The discussion of coordination includes an attempt to identify different mechanisms through which wage leadership may be established, varying from state controls to social pacts, and from associational controls to trend- or pattern setting behaviour.
    JEL: D30 J50
    Date: 2013–04
  6. By: Fogel, Kathy S. (University of Arkansas); Lee, Kevin K. (California State University); Lee, Wayne Y. (University of Arkansas); Palmberg, Johanna (Entrepreneurship Forum, CESIS, KTH)
    Abstract: Institutional theory suggests that informal institutions effectively constrain human behavior. Culturally embedded norms and values align corporate governance with socially acceptable outcomes. We argue that active foreign investors can act as agents of change in corporate governance. Investigating changes in ownership and control of Swedish firms, we find that active foreign investors’ participation in conjunction with a reduction of control by the largest domestic shareholder, improves firm performance through more efficient capital utilization and labor productivity. Firms move away from a Swedish stakeholder orientation toward an Anglo-American shareholder wealth maximization focus.
    Keywords: Foreign Direct Investors; Informal Institution; Business Culture
    JEL: E02 G32 G34 G38 M14
    Date: 2013–05–24
  7. By: Tristan Boyer; Regis Blazy
    Abstract: Based on French data describing the characteristics of the entrepreneurs and their project, this paper studies the differences between the determinants of survival for innovative and non-innovative micro-enterprises. We show that the survival of innovative and non-innovative enterprises is linked to personal criteria such as age, gender, minority, professional experience and financing sources. Our results also highlight the positive effect of not being alone in the start-up design phase, whereas being involved in a business network after the start-up period has no significant influence. The survival time of innovative enterprises, which is significantly lower than that of the non-innovative ones, seems adversely influenced by the entrepreneur’s previous management experience. Finally, when considering both innovative and non-innovative start-ups, there appears to be a type of “pecking order” as bank financing has a much more positive effect on survival than a personal one, albeit when focusing solely on innovative ones this difference does not exist.
    Keywords: entrepreneur, innovation, micro-enterprise, survival, pecking order.
    JEL: L26
    Date: 2013–05
  8. By: Philip Du Caju; Theodora Kosma; Martina Lawless; Tairi Rõõm
    Abstract: The rarity with which firms reduce nominal wages has been frequently observed, even in the face of considerable negative economic shocks. This paper uses a unique survey of fourteen European countries to ask firms directly about the incidence of wage cuts and to assess the relevance of a range of potential reasons for why they avoid cutting wages. Concerns about the retention of productive staff and a lowering of morale and effort were reported as key reasons for downward wage rigidity across all countries and firm types. Restrictions created by collective bargaining were found to be an important consideration for firms in euro area countries but were one of the lowest ranked obstacles in non-euro area countries. The paper examines how firm characteristics and collective bargaining institutions affect the relevance of each of the common explanations put forward for the infrequency of wage cut
    Keywords: labour costs, wage rigidity, firm survey, wage cuts, European Union
    JEL: J30 J32 J33 J51 C81 P5
    Date: 2013–05–24
  9. By: Cem BaÅŸlevent (Department of Economics, Istanbul Bilgi University); Hasan KirmanoÄŸlu (Department of Economics, Istanbul Bilgi University)
    Abstract: We examine whether employees’ preferences for various job attributes are associated with their individual characteristics in ways that are in line with ‘hierarchy of needs’ theories. Using data from the fifth round of the European Social Survey, we observe the influence of socio-demographic and dispositional characteristics as well as socialization experiences on opinions regarding the importance of five different desirable job attributes. An item-by-item examination of the attributes (including ‘security’ and ‘offering a high income’) reveals that dispositional factors (measured using the battery of items in Schwartz’s theory of basic personal values) influence job attitudes in expected ways, but employees also tend to place more importance on attributes that concern them more directly. For example, while female employees care more about being able to combine work and family responsibilities, younger workers value training opportunities more highly than older ones. Regarding socialization experiences, we find that job security is more important for those who have been unemployed in the past. We interpret our findings to mean that hierarchy of needs theories are valid in the context of job attitudes in the sense that the ranking of preferred job attributes is quite predictable once individual characteristics are accounted for.
    Keywords: preferred job attributes, hierarchy of needs, basic personal values, European Social Survey
    JEL: C25 J28
    Date: 2012–01
  10. By: Sarah Crichton (Labour and Immigration Research Centre, Ministry of Business, Innovation and Employment); Maré, David C (Motu Economic and Public Policy Research)
    Abstract: The study examines the impact of wage subsidies on assisted jobseekers and on the firms that employ them, using propensity matching methods. Overall we find that starting a subsidised job leads to significant employment and earning benefits for assisted jobseekers over several years. Subsidised workers are disproportionately hired into expanding firms, though we cannot determine whether the expansion would have occurred in the absence of the subsidy.
    Keywords: wage subsidy, active labour market policies, propensity matching
    JEL: J08 J38 J64
    Date: 2013–05
  11. By: Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: Originally, behavioral law and economics was an exercise in exploring the implications of key findings from behavioral economics (and psychology) for the analysis and reform of legal institutions. Yet as the new discipline matures, it increasingly replaces foreign evidence by fresh evidence, directly targeted to the legal research question. This chapter surveys the key methods: field evidence, survey data, vignette and lab experiment, discusses their pros and cons, illustrates them with key publications, and concludes with methodological paths for fu-ture development. It quantifies statements with descriptive statistics about the 77 behavioral papers that have been published in the Journal of Empirical Legal Studies since its foundation until the end of 2012.
    Keywords: behavioral law and economics, law and psychology, criminology, field data, survey data, vignette, lab experiment
    JEL: K00 D02 C91 D03 C01 C83
    Date: 2013–01
  12. By: Bertho, Fabien
    Abstract: This dissertation aims at assessing the impact of liner shipping trade and competition regulations on the market structure, prices, and seaborne trade flows. To quantify the overall level of trade restrictions in the liner shipping sector, I construct an original Service Trade Restrictiveness Index (STRI). The original STRI is included in a two-stage econometric analysis. Since barriers to trade are likely to influence seaborne trade through maritime transport costs (MTCs), in a first stage, I assess the impact of trade restrictions on MTCs. And, in a second stage I assess the impact of MTCs on seaborne trade flows. I show that barriers to trade affect positively MTCs and that MTCs affect negatively seaborne trade flows. Thus, barriers to trade have an indirect and negative impact on seaborne trade flows. Furthermore, I show that distance affects positively MTCs. The results also suggest that besides affecting negatively seaborne trade through MTCs, distance affect directly and positively seaborne trade. I assess the impact of regulatory barriers to entry on the market structure and MTCs. In a first stage, I assess the impact of regulations on the market structure. In a second stage, I assess the impact of the market structure on MTCs. I show that the presence of maritime conferences does not affect the number of carriers on routes while the presence of discussion agreements does. Moreover, when they reach a critical level, barriers to trade limit the number of carriers. Furthermore, I show barriers to trade affect MTCs through the market structure and marginal costs. Finally, I show that shipping exercise a market power even though this effect is small.
    Abstract: J’évalue l’impact des réglementations commerciales et concurrentielles dans transport maritime de ligne sur la structure du marché, les coûts de transport et le commerce maritime. D’abord, je quantifie le niveau global des Barrières Commerciales (BC) dans le secteur du transport maritime de ligne en construisant un Indice de Restriction du Commerce des Services (IRCS). Cet indicateur est inclus dans une analyse économétrique en deux étapes. Les BC sont susceptibles d’influencer le commerce maritime à travers les Coûts de Transport Maritime (CTM). Ainsi, j’évalue l'impact des BC sur les CTM, puis l'impact des CTM sur le commerce maritime. Je montre que les BC ont un impact positif sur les CTM et que les CTM ont un impact négatif sur le commerce maritime. Ainsi, les BC ont un impact indirect négatif sur le commerce maritime. Je montre aussi qu’en plus d’affecter négativement le commerce maritime à travers les CTM, la distance a un impact positif direct sur le commerce maritime. Ensuite, j’évalue l'impact des barrières réglementaires à l'entrée sur la structure du marché et les CTM. D’abord, j’évalue l'impact de la réglementation sur la structure du marché. Puis, j’évalue l'impact de la structure du marché sur les CTM. Je montre que la présence de conférences maritimes n’a pas d’impact sur le nombre de compagnies sur les routes alors que la présence d'accords de discussion a un impact positif. De plus, lorsqu’elles atteignent un seuil, les BC ont un impact négatif sur le nombre de compagnies. En outre, je montre les BC affectent les CTM à travers la structure du marché et les coûts marginaux. Enfin, je montre que les compagnies maritimes de ligne exercent un pouvoir de march
    Keywords: Transport maritime, service, Coûts de transport, indicateur, commerce, réglementations, concurrence;
    Date: 2012–06

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