nep-knm New Economics Papers
on Knowledge Management and Knowledge Economy
Issue of 2021‒12‒13
three papers chosen by
Laura Ştefănescu
Centrul European de Studii Manageriale în Administrarea Afacerilor

  1. Greenfield or Brownfield? FDI Entry Mode and Intangible Capital By Haruka Takayama
  2. Codetermination for the sustainable company By Kluge, Norbert; Vitols, Sigurt
  3. Who Benefits from Online Gig Economy Platforms? By Christopher T. Stanton; Catherine Thomas

  1. By: Haruka Takayama (Economics Faculty, University at Albany, SUNY, U.S.A., Junior Research Fellow, Research Institute for Economics and Business Administration, Kobe University, JAPAN)
    Abstract: When a multinational firm invests abroad, it can either establish a new facility (greenfield investment, GF) or purchase a local firm (cross-border merger and acquisition, M&A). Using a novel US firm-level dataset, I provide the first evidence that multinationals with higher levels of intangible capital systematically invest through GF rather than through M&A. Motivated by this empirical result, I develop and quantify a general equilibrium search model of a multinational firm's choice between M&A and GF. The model implies that equilibrium FDI patterns can be suboptimal from the host country's perspective. In particular, since the gap between the productivities of multinationals and local firms is larger in less developed countries, policymakers there can increase welfare by incentivizing FDI through M&A. By allowing highly productive multinationals to use local intangible capital, this policy increases aggregate productivity more than the laissez-faire outcome.
    Keywords: FDI; Cross-border M&A; Greenfield FDI; Intangible capital
    JEL: F14 F21 F23
    Date: 2021–12
  2. By: Kluge, Norbert; Vitols, Sigurt
    Abstract: The 'Green Deal' will be a civic achievement only when workers are able to participate in it actively. Codetermination as a guiding principle for sustainable companies sets the course for decent work, incomes, production locations and, at the same time, for competitiveness and a healthy environment. Research has provided strong evidence of the efficiency and functionality of codetermination. However, there must be political will and support for it. It is the democratic design principle of the social market economy.
    Keywords: Codetermination, green deal
    Date: 2020
  3. By: Christopher T. Stanton; Catherine Thomas
    Abstract: This paper estimates the magnitude and distribution of surplus from the knowledge worker gig economy using data from an online labor market. Labor demand elasticities determine workers’ wages, and buyers’ past market experience shapes both their job posting frequency and hiring rates. We find that workers on the supply side capture around 40% of the surplus from filled jobs. Under counterfactual policies that resemble traditional employment regulation, buyers post fewer online jobs and fill posted jobs less often, reducing expected surplus for all market participants. We find negligible substitution on the demand side between online and offline jobs by assessing how changes in local offline minimum wages affect online hiring. The results suggest that neither online or offline knowledge workers will benefit from applying traditional employment regulation to the online gig economy.
    JEL: F66 J23 J8 L24 L51 M5
    Date: 2021–11

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