|
on Business Economics |
| By: | Mayer, Thierry; Melitz, Marc J.; Ottaviano, Gianmarco I. P. |
| Abstract: | We build a theoretical model of multi-product firms that highlights how competition across market destinations affects both a firm's exported product range and product mix. We show how tougher competition in an export market induces a firm to skew its export sales toward its best performing products. We find very strong confirmation of this competitive effect for French exporters across export market destinations. Theoretically, this within-firm change in product mix driven by the trading environment has important repercussions on firm productivity. A calibrated fit to our theoretical model reveals that these productivity effects are potentially quite large. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:faseco:12330897&r=bec |
| By: | Ana P. Fernandes (University of Exeter); Priscila Ferreira (NIMA, Universidade do Minho); L. Alan Winters (University of Sussex, CEPR, CEP and IZA) |
| Abstract: | This paper studies the effect of competition on executive compensation. We estimate the effect of increased product market competition on the performance-pay sensitivity of CEOs, and contrast it with the effect for department managers and other workers in the corporation. We use a recent reform that simplied firm entry regulation in Portugal as a quasi-natural experiment. The empirical strategy exploits the staggered implementation of the reform across municipalities. Using linked employer-employee data for the universe of workers and firms, we show that increased product market competition, following the deregulation, decreased the sensitivity of pay to performance of CEOs and other managers, with no significant effects found for other workers. These findings are consistent with existing theoretical results in a principal-agent framework that a fall in entry costs leads to weaker managerial incentives. |
| Keywords: | Entry, Deregulation, Product Market Competition, Executive Compensation, Performance-related Pay |
| JEL: | J31 J33 M52 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:nim:nimawp:57/2014&r=bec |
| By: | Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This note uses a new tailor-made data set to investigate the link between firm age and the extensive and intensive margins of exports empirically for the first time for Germany. Results turn out to be fully in line with the theoretical considerations. Older firms are more often exporters, export more and more different goods to more different destination countries, and export to more distant destination markets. |
| Keywords: | Exports, firm age, export margins, Germany |
| JEL: | F14 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:303&r=bec |
| By: | Gopinath, Gita; Neiman, Brent |
| Abstract: | We empirically characterize the mechanics of trade adjustment during the Argentine crisis. Though imports collapsed by 70 percent from 2000-2002, the entry and exit of firms or products at the country level played a small role. The within-firm churning of imported inputs, however, played a sizeable role. We build a model of trade in intermediate inputs with heterogeneous firms, fixed import costs, and roundabout production. Import demand is non-homothetic and the implications of an import price shock depend on the full distribution of firm-level adjustments. An import price shock generates a significant decline in productivity. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:faseco:12330899&r=bec |
| By: | B. MERLEVEDE; BERNHARD MICHEL (-) |
| Abstract: | tba |
| JEL: | F2 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:rug:rugwps:14/880&r=bec |
| By: | Joachim Wagner (Leuphana University Lueneburg, Germany) |
| Abstract: | This note uses a tailor-made new data set to investigate for the first time the link between the quality of a firm’s exports and the distance to destination countries for Germany. To anticipate the most important result, it is shown that the quality of exported goods and the distance to destination countries are not statistically positively correlated. |
| Keywords: | Exports, export quality, distance, Germany |
| JEL: | F14 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:302&r=bec |
| By: | Thorsten Beck; Hans Degryse; Ralph de Haas; Neeltje van Horen |
| Abstract: | Using a novel way to identify relationship and transaction banks, we study how banks' lending techniques affect funding to SMEs over the business cycle. For 21 countries we link the lending techniques that banks use in the direct vicinity of firms to these firms' credit constraints at two contrasting points of the business cycle. We show that relationship lending alleviates credit constraints during a cyclical downturn but not during a boom period. The positive impact of relationship lending in an economic downturn is strongest for smaller and more opaque firms and in regions where the downturn is more severe. |
| Keywords: | Relationship banking; credit constraints; business cycle |
| JEL: | F36 G21 L26 O12 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:431&r=bec |
| By: | Luca Marotta; Salvatore Miccich\`e; Yoshi Fujiwara; Hiroshi Iyetomi; Hideaki Aoyama; Mauro Gallegati; Rosario N. Mantegna |
| Abstract: | We present an analysis of the credit market of Japan. The analysis is performed by investigating the bipartite network of banks and firms which is obtained by setting a link between a bank and a firm when a credit relationship is present in a given time window. In our investigation we focus on a community detection algorithm which is identifying communities composed by both banks and firms. We show that the clusters obtained by directly working on the bipartite network carry information about the networked nature of the Japanese credit market. Our analysis is performed for each calendar year during the time period from 1980 to 2011. Specifically, we obtain communities of banks and networks for each of the 32 investigated years, and we introduce a method to track the time evolution of these communities on a statistical basis. We then characterize communities by detecting the simultaneous over-expression of attributes of firms and banks. Specifically, we consider as attributes the economic sector and the geographical location of firms and the type of banks. In our 32 year long analysis we detect a persistence of the over-expression of attributes of clusters of banks and firms together with a slow dynamics of changes from some specific attributes to new ones. Our empirical observations show that the credit market in Japan is a networked market where the type of banks, geographical location of firms and banks and economic sector of the firm play a role in shaping the credit relationships between banks and firms. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1407.5429&r=bec |
| By: | MATSUDA Naoko; MATSUO Yutaka |
| Abstract: | Using comprehensive data of Japanese firms, including small-sized and unlisted firms, this paper empirically analyzes the relationship of initial public offerings (IPOs) and the governing boards. The results show that board size, interlocks with other firms, and interlocks with other listed firms are all positively related to the probability of an IPO. These results imply that a firm's intention to conduct an IPO can be estimated by the size and interlocks of the firm's board, and that knowledge diffusion of an IPO occurs among firms. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:14040&r=bec |
| By: | Nicholas Trachter (Federal Reserve Bank of Richmond); Andrea Pozzi (Einaudi Institute for Economics and Fina); Luigi Paciello (Einaudi Institute (EIEF)) |
| Abstract: | We study a model where customers face frictions when changing their supplier, generating sluggishness in the firm's customer base. Firms care about expanding their customer base and this affects their pricing strategy. We characterize optimal pricing in this model and estimate it using data on the evolution of the customer base of a large US retailer. The introduction of customer markets reduces average markups, more markedly for less productive firms. We use the model to perform a counterfactual exercise and investigate the cyclical behaviour of markups in response to both aggregate supply and demand shocks. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:39&r=bec |
| By: | Igor A. Bykadorov (National Research University Higher School of Economics); Alexey A. Gorn (Bocconi University); Sergey G. Kokovin (National Research University Higher School of Economics); Evgeny V. Zhelobodko |
| Abstract: | Studying the standard monopolistic competition model with unspecified utility/cost functions, we find necessary and sufficient conditions on the function elasticities, when an expanding market or trade incur welfare losses. Two numerical examples explain why: either excessive or insufficient entry of firms is aggravated by market growth. The variable marginal cost enforces the harmful effect. Still harm looks practically improbable. |
| Keywords: | Market distortions, Trade gains, Variable markups, Demand elasticity. |
| JEL: | F12 L13 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:61/ec/2014&r=bec |
| By: | René Böheim; Thomas Leoni |
| Abstract: | In many countries, social security insures firms against their workers' sickness absences. The insurance may create a moral hazard for firms, leading to inefficient monitoring of absences or to an underinvestment in the prevention of absences. We exploit an administrative threshold in the Austrian social security that defined whether a firm had to pay a deductible for its blue-collar workers sicknesses or not. The quasi-experimental situation around the threshold provides causal evidence on the extent of moral hazard induced by the deductible. We apply a regression discontinuity design to estimate the differences in the incidences and durations of sicknesses for firms that faced the deductible and those who did not. We find that the deductible did not lead to different sickness outcomes and conclude that relatively low deductibles have little impact on forms' management of sicknesses. |
| JEL: | H51 I18 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20305&r=bec |
| By: | William Hawkins (Yeshiva University) |
| Abstract: | Online appendix for the Review of Economic Dynamics article |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:append:12-114&r=bec |
| By: | Domadenik, Polona (University of Ljubljana); Prašnikar, Janez (University of Ljubljana); Svejnar, Jan (Columbia University) |
| Abstract: | In this paper we present and test a theory of how political corruption, found in many transition and emerging market economies, affects corporate governance and productive efficiency of firms. Our model predicts that underdeveloped democratic institutions that do not punish political corruption result in political connectedness of firms that in turn has a negative effect on performance. We test this prediction on an almost complete population of Slovenian joint stock companies with 100 or more employees. Using the supervisory board structure, together with balance sheet and income statement data for 2000-2010, we show that a higher share of politically connected supervisory board members leads to lower productivity. |
| Keywords: | corruption, corporate governance, productivity, politicians, state owned enterprises |
| JEL: | D2 D21 D73 G34 L32 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8321&r=bec |