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on Business Economics |
| By: | Godart, Olivier (Kiel Institute for the World Economy); Görg, Holger (Kiel Institute for the World Economy); Hanley, Aoife (Kiel Institute for the World Economy) |
| Abstract: | We explore whether the introduction of trust based working hours is related to the subsequent innovation performance of firms. Employing a panel data set of over 5,000 German establishments, we implement a propensity score matching approach where we only consider firms that did not use trust based work contracts initially. Our results show that firms which adopt such contracts tend to be between 11 to 14 percent more likely to improve products. These results hold when we control for another form of flexible time work arrangements, namely working time accounts. Thus, the positive relationship between the adoption of trust based working hours and innovation seems to be driven by the degree of control and self-management over working days, rather than by merely allowing time flexibility. |
| Keywords: | trust based work time, innovation, firm performance |
| JEL: | M54 M12 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8097&r=bec |
| By: | Roig, Guillem |
| Abstract: | Product design and advertisement strategy have been theoretically studied as separate firms decisions. In the present paper, we look at the link between advertisement and product design and we analyze how firms' advertising decisions influence the market effect of product design. We consider a model of informative advertisement where two firms produce a bundle of complementary products which are partially compatible. A product design with more compatible components is associated with a larger intensity of advertisement. Higher compatibility reduces competition between firms, which incentivizes them to give factual information about their bundle. Like Matutes and Regibeau (1988), industry profit and total welfare is maximized with full product compatibility. However, contrary to them, we obtain that consumer surplus is not monotone with the level of product compatibility and its maximum is attained with partial compatibility. Moreover, because consumer surplus not only depends on the equilibrium prices but also on the intensity of advertisement, we find that for intermediate equilibrium levels of advertising, consumers prefer fully compatible components rather than full incompatibility. As a result, a more compatible product design benefits all the agents in the economy. |
| Keywords: | Informative advertisement; product design; partial compatibility; welfare. |
| JEL: | D21 D43 L13 L15 |
| Date: | 2014–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:28044&r=bec |
| By: | Lubik, Thomas A. (Federal Reserve Bank of Richmond); Sarte, Pierre-Daniel G. (Federal Reserve Bank of Richmond); Schwartzman, Felipe (Federal Reserve Bank of Richmond) |
| Abstract: | Beginning in the mid-1980s, the nature of U.S. business cycles changed in important ways, as made evident by distinctive shifts in the comovement and relative volatilities of key economic aggregates. These include labor productivity, hours, output, and inventories. Unlike the widely documented change in absolute volatility over that period, known as the Great Moderation, these shifts in comovement and relative volatilities persist into the Great Recession. To understand these changes, we exploit the fact that inventory data are informative about sources of business cycles. Specifically, they provide additional information relative to aggregate investment regarding firms' intertemporal decisions. In this paper, we show that the "investment wedge" estimated with inventories, unlike previous measures, correlates well with established independent measures of credit market frictions. Furthermore, contrary to previous findings, our generalized investment wedge informed by inventory behavior plays a key role in explaining the shifts in U.S. business cycles observed after the mid-1980s. |
| Keywords: | Business Cycles; Inventories; Investment Wedge; Financial Frictions |
| JEL: | E32 E44 |
| Date: | 2014–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:14-06&r=bec |
| By: | Mulder, Machiel; Huizingh, Eelko (Groningen University) |
| Abstract: | Economic regulators use a number of instruments to change the behavior of economic agents, but only limited evidence exists on the effectiveness of such regulatory interventions. We conduct a randomized field experiment to determine the effects of two interventions aimed at e-commerce firms by a regulatory authority in order to let these firms meet legal obligations regarding information disclosure to protect consumer interests. We measure the compliance behavior of e-commerce firms in both a treatment group and a control group before and after two interventions. The first regulatory intervention concerns sending personalized letters to firms (firm-specific guidance), whereas the second intervention includes a number of dedicated publications and presentations by the regulatory authority (industry guidance). We find that both of these interventions have hardly any effect, neither in the short term nor in the long term. We conclude that regulatory interventions in the form of providing only guidance on the legal rules to firms are not effective strategies to influence their behavior. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:rugsom:14011-eef&r=bec |
| By: | Nick, Sebastian (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Wetzel , Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln) |
| Abstract: | In this study, we address a major problem in the measurement of firm performance and the regulation of natural monopolies, namely the intertemporal character of long-term investment decisions. In specific, we focus on the impact of adjustment costs of investments on estimates of firms' technical and cost inefficiency. We apply nonparametric dynamic data envelopment analysis to investigate the dynamic inefficiency of electricity distribution and transmission companies in the US during the years 2004 to 2011 and compare our results with their static counterparts. Our empirical findings reveal that ignoring long-term investments and their corresponding adjustment costs does significantly distort both firm-specific and industrial inefficiency estimates and may thus create misleading incentives for the regulated firms to cut investments. |
| Keywords: | Dynamic Inefficiency; Dynamic Directional Distance Function; Dynamic Data Envelopment Analysis; Electricity Transmission and Distribution |
| JEL: | D22 D24 D61 D92 L51 |
| Date: | 2014–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2014_003&r=bec |
| By: | Antoine Berthou (Banque de France - -); Lionel Fontagné (Banque de France - -, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | We use data on individual French exporters to document how a change in trade costs following the introduction of the euro affected firms' export margins in relation to export decisions, the number of products exported and average sales per product. Our results confirm two effects predicted by the theory: firms increase the range of products they export as well as their intensive margin. This effect is most evident in markets with moderate monetary policy coordination before 1999. General equilibrium competition effects reduce the initial positive impact on each of these margins. We find no evidence of firms' increased export participation |
| Keywords: | International trade, firm heterogeneity, multi-product exporters |
| Date: | 2013–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00975562&r=bec |
| By: | Grund, Christian (RWTH Aachen University) |
| Abstract: | Making use of panel data from a survey of highly educated professionals, gender pay gaps are explored with regard to total compensation as well as to individual compensation components. The results indicate meaningful male-female wage differentials for this quite homogeneous group of people working in one specific industry: in particular for more experienced employees in higher positions of firm hierarchies with children. Gender pay gaps are much more pronounced for bonus payments than they are for fixed salaries. |
| Keywords: | bonus payments, fixed salaries, gender wage gap, management compensation |
| JEL: | M52 J31 J33 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8112&r=bec |
| By: | Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | We use the historical self-employment rate as an indicator of a regional culture of entrepreneurship and link this measure to economic growth in recent periods. The results indicate that German regions with a high level of entrepreneurship in the mid- 1920s have higher start-up rates about 80 years later. Furthermore, we find that the effect of current start-up activity on regional employment is significantly higher in regions with a pronounced entrepreneurial culture. We conclude that a regional culture of entrepreneurship is an important resource for regional growth. |
| Keywords: | Entrepreneurship, economic development, self-employment, new business formation, entrepreneurship culture, institutions |
| JEL: | L26 R11 O11 |
| Date: | 2014–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2014-014&r=bec |
| By: | Yothin Jinjarak (Asian Development Bank Institute (ADBI)); Paulo Jose Mutuc; Ganeshan Wignaraja |
| Abstract: | This paper studies factors associated with firm participation in export markets, focusing primarily on firm size and access to credit, based on a survey sample comprising observations of 8,080 small and medium enterprises (SMEs) (with fewer than 100 employees) and non-SME firms in developing East Asian countries across sectors. The main findings suggest the interdependent relationships between export participation, firm size, and access to credit. SMEs participating in export markets tend to gain more access to credit, while potential scale economies (firm sizes) of SMEs are positively associated with participation in export markets. The estimation results also point to the supportive influences of foreign ownership, worker education, and production certification on export participation, and the positive effects of financial certification, managerial experience, and collateral/loan value on access to credit for SMEs. |
| Keywords: | SMEs, East Asian firms, export markets, export participation, firm size, access to credit |
| JEL: | D22 E44 F14 L16 O14 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:eab:microe:24047&r=bec |
| By: | Alicia Garcia-Herrero; Enestor dos Santos; Pablo Urbiola; Marcos dal Bianco; Fernando Soto; Mauricio Hernandez; Arnulfo RodrÃguez; Rosario Sanchez |
| Abstract: | After analysing the evolution of exports from the large Latin American countries over the last decade, and examining on a case by case basis the determinants for each country’s performance, this study concludes that competitiveness in the manufacturing sectors of most countries in the region went down from 2007 to 2012, after relatively favourable progress in the previous five-year period between 2002 and 2007. This recent deterioration, which has been more noticeable in countries such as Brazil and Colombia, is related to the real exchange rate appreciation, high labour costs and insufficient progress in labour productivity. The main exception to these regional trends is Mexico, where gains in the manufacturing sector’s competitiveness continued beyond 2007, partly because the exchange rate stayed relatively depreciated and labour costs, as well as work productivity, performed better than in the South American countries. However, from 2011 onwards, the reversal of these trends has been making it difficult for the Mexican manufacturing sector to gain competitiveness. Case studies of each of the region’s main countries show that in general the exchange rate, labour costs and work productivity were the main determinants in the evolution of manufacturing competitiveness in the last decade. In fact, the countries and periods where these variables performed poorly coincide with losses of market share in international trade and deteriorating competitiveness. Nevertheless, the impact of the remaining variables affecting the manufacturing sector’s competitiveness is not insignificant either. In fact, gains in competitiveness have been greater (and losses in competitiveness smaller) in Chile and Peru, where the institutional framework has improved and logistics and energy costs reduced or kept under control. |
| Keywords: | competitiveness, Latin America, manufacturing, exports |
| JEL: | F10 L60 O14 O54 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:bbv:wpaper:1411&r=bec |
| By: | Chan, Rosanna |
| Abstract: | Under financial constraints, exporting may have less to do with productivity and more to do with financial resources. The established relationship between exporting and productivity would differ when examined through the lens of the working capital needs of the firm. The hypothesis that working capital matters in the firm's exporting decision is explored in two ways: first, by articulating a dynamic working capital model of the firm that incorporates the firm's export decision. Secondly, by testing the hypothesis empirically using a unique firm level dataset from Bangladesh, where issues of financial constraints are particularly acute. The model shows that productivity determines export status of the firm as long as it is not under financial constraints. However, under financial constraints, export status is less dependent on productivity and more dependent on the availability of working capital. Empirical results support the model's prediction. The relationship between exporting time and the need for greater liquidity is also borne out empirically as shown by a positive and significant correlation between the amount of working capital and the distance of export destination. An important policy implication from the analysis is that short term liquidity is critical in allowing productive firms to export and that access to finance may prevent the benefits of trade liberalization within a country to be fully realized. |
| Keywords: | Economic Theory&Research,Banks&Banking Reform,Access to Finance,Debt Markets,Labor Policies |
| Date: | 2014–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6839&r=bec |