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on Business Economics |
| By: | Mathilde Aubry (EM Normandie, Métis Research Department, France); Jean Bonnet (University of Caen Basse-Normandie - CREM UMR CNRS 6211, France); Patricia Renou-Maissant (University of Caen Basse-Normandie - CREM UMR CNRS 6211, France) |
| Abstract: | We study the influences of new firms startups on growth in regional and macroeconomic dimensions in France using a quarterly data basis over the 1993-2011 period. We find that fluctuations in GDP are an early indicator of new firm startups. Nevertheless the most important relationships are found between unemployment rate and new firms startups. Entrepreneurship is mainly driven by necessity motives that have consequences upon potential of growth of new firms startups in most of the French regions. |
| Keywords: | New firm formation, Business cycle, Schumpeter effect, «refugee» effect, panel data |
| JEL: | L26 E32 R11 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:201304&r=bec |
| By: | Nadav Ben Zeev (European University Institute); Hashmat U. Khan (Department of Economics, Carleton University) |
| Abstract: | This paper provides robust evidence that news shocks about future investment-specific technology (IST) constitute a signicant force behind U.S. business cycles. Extending a recent empirical approach to identifying news shocks, we find that positive IST news shocks induce comovement, i.e., raise output, consumption, investment,and hours. These shocks account for 70% of the business cycle variation in output, hours, and consumption, and 60% of the variation in investment, and have played an important role in 9 of the last 10 U.S recessions. IST news shocks also dominate unanticipated IST shocks in accounting for the forecast variance of aggregate variables. The findings have two important implications for research on news driven business cycles. First, they provide strong support for shifting focus to IST news shocks when investigating the role of news (or foresight) in driving business cycles. Second, an important avenue for further research is to consider structural mechanisms that can enhance the role of IST news shocks in estimated dynamic general equilibrium models. |
| Keywords: | Investment-specific technology, News shocks, Business cycles |
| JEL: | E32 |
| Date: | 2012–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:12-05&r=bec |
| By: | Bénabou, Roland; Tirole, Jean |
| Abstract: | This paper analyzes the impact of labor market competition and skill-biased technical change on the structure of compensation. The model combines multitasking and screening, embedded into a Hotelling-like framework. Competition for the most talented workers leads to an escalating reliance on performance pay and other high-powered incentives, thereby shifting effort away from less easily contractible tasks such as long-term investments, risk management and within-firm cooperation. Under perfect competition, the resulting efficiency loss can be much larger than that imposed by a single firm or principal, who distorts incentives downward in order to extract rents. More generally, as declining market frictions lead employers to compete more aggressively, the monopsonistic underincentivization of low-skill agents first decreases, then gives way to a growing overincentivization of high-skill ones. Aggregate welfare is thus hill-shaped with respect to the competitiveness of the labor market, while inequality tends to rise monotonically. Bonus caps and income taxes can help restore balance in agents' incentives and behavior, but may generate their own set of distortions. |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:26667&r=bec |
| By: | Chia-Lin Chang (Department of Applied Economics, Department of Finance, National Chung Hsing University Taichung, Taiwan); Hui-Kuang Hsu (Department of Finance and Banking National Pingtung Institute of Commerce, Taiwan); Michael McAleer (Econometric Institute, Erasmus School of Economics, Erasmus University Rotterdam and Tinbergen Institute, The Netherlands, Department of Quantitative Economics, Complutense University of Madrid, and Institute of Economic Research, Kyoto University.) |
| Abstract: | This paper examines the size effects of volatility spillovers for firm performance and exchange rates with asymmetry in the Taiwan tourism industry. The analysis is based on two conditional multivariate models, BEKK-AGARCH and VARMA-AGARCH, in the volatility specification. Daily data from 1 July 2008 to 29 June 2012 for 999 firms are used, which covers the Global Financial Crisis. The empirical findings indicate that there are size effects on volatility spillovers from the exchange rate to firm performance. Specifically, the risk for firm size has different effects from the three leading tourism sources to Taiwan, namely USA, Japan, and China. Furthermore, all the return series reveal quite high volatility spillovers (at over sixty percent) with a one-period lag. The empirical results show a negative correlation between exchange rate returns and stock returns. However, the asymmetric effect of the shock is ambiguous, owing to conflicts in the significance and signs of the asymmetry effect in the two estimated multivariate GARCH models. The empirical findings provide financial managers with a better understanding of how firm size is related to financial performance, risk and portfolio management strategies that can be used in practice. |
| Keywords: | Tourism, Size effects, Small-firm effects, Financial performance, Spillover effects, MGARCH, VARMA, BEKK. |
| JEL: | C22 G32 L83 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doicae:1301&r=bec |
| By: | Becker, Sascha O. (CAGE @ Warwick University ; CEPR ; CESifo ; Ifo and IZA); Hvide, Hans K. (University of Bergen ; CEPR and University of Aberdeen) |
| Abstract: | In the large literature on firm performance, economists have given little attention to entrepreneurs. We use deaths of more than 500 entrepreneurs as a source of exogenous variation, and ask whether this variation can explain shifts in firm performance. Using longitudinal data, we find large and sustained effects of en- trepreneurs at all levels of the performance distribution. Entrepreneurs strongly affect firm growth patterns of both very young firms and for firms that have begun to mature. We do not find signficant differences between small and larger firms, family and non-family firms, nor between firms located in urban and rural areas, but we do find stronger effects for founders with high human capital. Overall, the results suggest that an often overlooked factor – individual entrepreneurs – plays a large role in affecting firm performance. Key words: entrepreneurship ; firm performance ; human capital. JEL classification: D21 ; D24 ; J23 ; L11 ; L25 ; G39 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1002&r=bec |
| By: | Petra Gibcus; Erik Stam |
| Abstract: | The early growth of firms is a dynamic process that is difficult to manage and to analyse. Accordingly methodological difficulties have been identified in many studies. This paper uses systematic cohort and longitudinal methodologies to analyse the relationship between dynamic capabilities and new firm growth. Using a panel study of 647 firms, we examine how new firm growth is related to dynamic capabilities. We found no evidence of any effect of dynamic capabilities on the growth of new firms. A longitudinal analysis of the data reveals that especially firm investments over time drive subsequent firm growth, next to growth intentions. |
| Date: | 2012–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:eim:papers:h201219&r=bec |
| By: | Iossa, Elisabetta (DEF, University of Rome Tor Vergata, CEPR, CMPO and EIEF); Rey, Patrick (TSE,IDEI) |
| Abstract: | We study how career concerns affect the dynamics of incentives in a multi-period contract, when the agent’s productivity can evolve exogenously (random shocks) or improve endogenously through investment. We show that incentives are stronger and performance is higher when the contract approaches its expiry date. Contrary to common wisdom, long-term contracts may strengthen reputational effects whereas short-term contracting may be optimal when investment has persistent, long-term effects. |
| Keywords: | Career concerns, contract duration,contract renewal, reputation and dynamic incentives. |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:26677&r=bec |
| By: | Monika Lewandowska – Kalina (Warsaw School of Economics) |
| Abstract: | Differences in GDP per capita across countries are large and to a large extent accounted by differences in total factor productivity. We analyze role the misallocation of resources plays in helping us understand productivity differences. In theory, the extent of misallocation is worse when there is a greater productivity dispersion between firms in the same industry. We find significant differences in productivity dispersions within Polish industries but also compared to the same two-digit German industries. It provides evidence that misallocation of resources is important source of low level of total factor productivity. |
| JEL: | O47 O52 |
| Date: | 2013–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:wse:wpaper:66&r=bec |
| By: | Alexandros Maziotis (Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Centre on Climate Change (CMCC)); David S. Saal (Aston University); Emmanuel Thanassoulis (Aston University) |
| Abstract: | The purpose of this paper is to assess the impact of regulation in the financial performance of the Water and Sewerage companies (WaSCs) in England and Wales. We apply a panel index approach across WaSCs over time to decompose unit-specific (temporal) index number based profitability growth as a function of the profitability, productivity and price performance growth achieved by benchmark firms, and the catch-up to the benchmark firm achieved by less productive firms. The results indicated that the steady decline in average price performance, gains in productivity and relatively stable economic profitability after 2000, suggest that Ofwat is now more focused on passing productivity benefits to consumers, and maintaining stable profitability than it was in earlier regulatory periods. This technique is of great interest for regulators to evaluate the effectiveness of regulation and companies to identify the determinants of profit change and improve future performance, even if sample sizes are limited. |
| Keywords: | Profit Decomposition, Productivity, Price Performance, Panel Index Numbers, Regulation, Water and Sewerage Industry |
| JEL: | Q5 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.84&r=bec |
| By: | Joern Kleinert (Karl-Franzens University of Graz); Nico Zorell (European Central Bank, Frankfurt am Main) |
| Abstract: | In this paper we propose a novel mechanism that helps explain the surge in world trade over the last two decades: the export-magnification effect of offshoring. We show analytically in a general equilibrium model with heterogeneous firms that a fall in variable offshoring costs boosts trade in differentiated final goods through an intra-industry reallocation of resources towards the more productive firms. More specifically, lower barriers to offshoring reduce the average costs of inputs for offshoring firms and allow more firms to source cheap foreign intermediates, which improves firm-level price competitiveness. This, in turn, translates into higher export quantities of incumbent exporters (intensive margin) and the entry of new exporters (extensive margin). The increase in final goods trade comes on top of the boost to trade in intermediates. Hence the mechanism proposed in this paper is consistent with the fact that the share of intermediate goods in international trade has remained broadly stable. |
| Keywords: | offshoring, international trade, multinational firms |
| JEL: | F12 F15 F23 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2012-09&r=bec |