|
on Business Economics |
| By: | Nathan, Max (London School of Economics) |
| Abstract: | A growing number of studies find linkages between workforce diversity and business performance, but key aspects of this relationship remain unclear. First, within the firm, the role of 'top team' demography on firm outcomes is surprisingly little understood. Second, urban location may amplify firm-level processes, but almost no studies test these firm-area interactions. I deploy English cross-sectional data to explore these issues, using latent class analysis to tackle firm-level heterogeneity. I find evidence of positive links in some firm classes, both linear and non-linear, and suggestive evidence that ethnic top team diversity is amplified in the London city-region. |
| Keywords: | firm-level analysis, business performance, diversity, ethnicity, gender, cities |
| JEL: | J15 L21 R23 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8462&r=bec |
| By: | Lorenz Kueng; Mu-Jeung Yang; Bryan Hong |
| Abstract: | What determines firm growth over the life-cycle? Exploiting unique firm panel data on internal organization, balance sheets and innovation, representative of the entire Canadian economy, we study recent theories that examine life-cycle patterns for firm growth. These theories include organizational capital accumulation and management practices, financial frictions, learning about demand, and recent endogenous growth models with incumbent innovation. We emphasize the importance of differentiating between pure age effects of these theories and effects on size conditional on age. Our stylized facts highlight both empirical successes and shortcomings of current theory. First, models of organizational capital and innovation are broadly consistent with firm size correlations conditional on age but have difficulties matching the life-cycle dynamics of firm organization and innovation. Second, among theories we analyze, organizational capital and management practices are the most important determinants to explain intensive margin firm growth over the life-cycle. Third, although less important to explain intensive margin firm growth, financial frictions are an important determinant of firm exit, conditional on firm age. |
| JEL: | D2 D22 D23 D24 D9 D92 E20 E24 E32 F23 G3 G32 M1 M5 O3 O4 O47 O51 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20621&r=bec |
| By: | Beatrice D'Ippolito (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Marcela Miozzo (MBS - Manchester Business School - University of Manchester); Consoli Davide (INGENIO (CSIC-UPV) - INGENIO) |
| Abstract: | The paper explores two pathways that are crucial for making knowledge economically useful - knowledge systematisation and knowledge reconfiguration - and analyses how their interplay enables the emergence of a new business function or activity. Knowledge systematisation is the abstraction and diffusion of operative principles to the effect of expanding to broader remits practices that had been initially conceived for a narrow purpose. Knowledge reconfiguration involves the conversion and formalisation of these novel practices within existing firm and industry organisation. Using the design activity as a lens, and drawing on primary and secondary interviews and archival data on the home furnishing sectors in Italy, our case study articulates the processes that facilitate the abstraction of general rules from novel practices and the changes that are necessary, both within firm and industry organisation, to foster their diffusion. |
| Keywords: | Knowledge systematisation; knowledge reconfiguration; design; firm organisation; industry organisation; routines; capabilities; home furnishing |
| Date: | 2014–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00962391&r=bec |
| By: | Trinh, Long; Sonobe, Tetsushi |
| Abstract: | There has been an increasing interest among economists in the impact of management practices on firm’s productivity. This paper explores how business practices affect firm productivity by using Vietnam’s bi-annual surveys of small firms conducted from 2006 to 2011. We constructed a simple weighted business practice index from 8 indicators. This index is simple but rather suitable for small and medium firms in developing countries. To examine the role of business practices in determining firm performance, production function and determinants of business practice adoption are estimated using the GMM-system method, which allows us to control for the endogeneity of production input, business practices index, and other factors. The results indicate that business practice index has a positive and statistically significant impact on firm productivity, employment and sales growth. As business practice index increases by 1 standard deviation (e.g. by 0.194 points over 1 and 0.173 points), the firm's value added increases by 19.1% to 24.0%. There is no evidence that the education level of the business owners/managers, percentage of employees with college degree on firm productivity. The results suggest that education may have indirect effects on productivity through business practice index. The effect of business practice on firm performance is found to vary across different sub-samples.. Both direct and indirect effects of competition lose their significance when we separately estimate production functions for each group of firms. We also find that for whole sample and for sole proprietorship businesses, the adoption of business practice in last period have a positive and statistically significant effects on the adoption of business practice in this period. However, total factor productivity (estimated from production function without business practice index) in the previous period does not have a strong impact on a firm’s adoption of business practice in this period while previous revenue and value added have a statistically significant impact. |
| Keywords: | business practice, dynamic panel data, productivity growth, small medium enterprises, microenterprise, Vietnam, Industrial Organization, Production Economics, Productivity Analysis, |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169792&r=bec |
| By: | Tobias Hahn (Kedge Business School - Kedge Business School, France); Jonatan Pinkse (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)) |
| Abstract: | We analyze the suitability of cross-sector partnerships as an effective mechanism for private environmental governance. By focusing on the interaction between firms within cross-sector partnerships, we analyze how competition between firms affects partnership effectiveness. Marrying insights from the private governance literature with institutional theory and the resource-based view, we identify under which conditions firm-level competition for legitimacy and capabilities, respectively, undermines or enhances effectiveness of cross-sector partnerships to address environmental issues. In doing so, our argument develops the various factors that moderate the relationship between competition and effectiveness for different types of partnerships. We contend that the effectiveness of cross-sector partnerships for governing global environmental issues depends considerably on whether competitive forces at the firm level are aligned with the collective benefits of partnerships. We discuss the consequences for designing effective cross-sector partnerships as well as the implications of a firm perspective on private governance. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00961234&r=bec |
| By: | Chong, Hooi Ying; Chan, Tze-Haw |
| Abstract: | This study assesses the market structure and competitiveness of Malaysian pharmaceutical industry. A panel analysis of 41 pharmaceutical manufacturing firms over 2004-2012 is conducted founded on the modified Structure-Conduct-Performance (SCP) framework. Our study reveals that the Malaysian pharmaceutical industry is highly concentrated (oligopoly) and the major findings are threefold. First, anti-competitive practices subsist among the pharmaceutical firms. Major players may have greater control over the markets and potentially colluded to gain better profits. Second, selling intensity is evident to raise the firms’ business performance, suggesting that advertisement, marketing campaigns, product differentiations and distribution efforts could be effective in building competencies over the rivals. Third, the study has tackled the endogeneity problem of traditional SCP with dual causal effects found between business conduct and business performance. Firms and authorities should consider the interactive mutual influences of structure-conduct-performance when formulating their respective management decisions and regulatory rules. |
| Keywords: | Modified Structure-Conduct-Performance, Pharmaceutical Industry, Competition, Panel Regression, Panel Causality |
| JEL: | D2 I15 L1 |
| Date: | 2014–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59537&r=bec |
| By: | Bannier, Christina E.; Feess, Eberhard; Packham, Natalie |
| Abstract: | This paper examines the effect of imperfect labor market competition on the efficiency of compensation schemes in a setting with moral hazard, private information and risk-averse agents. Two vertically differentiated firms compete for agents by offering contracts with fixed and variable payments. Vertical differentiation between firms leads to endogenous, type-dependent exit options for agents. In contrast to screening models with perfect competition, we find that existence of equilibria does not depend on whether the least-cost separating allocation is interim efficient. Rather, vertical differentiation allows the inferior firm to offer (cross-)subsidizing fixed payments even above the interim efficient level. We further show that the efficiency of variable pay depends on the degree of competition for agents: For small degrees of competition, low-ability agents are under-incentivized and exert too little effort. For large degrees of competition, high-ability agents are over-incentivized and bear too much risk. For intermediate degrees of competition, however, contracts are second-best despite private information. |
| Keywords: | Incentive compensation,screening,imperfect labor market competition,vertical differentiation,cross-subsidy |
| JEL: | D82 D86 J31 J33 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:475&r=bec |
| By: | Angelo Secchi (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Federico Tamagni (Scuola Superiore Sant'Anna - Institute of Economics); Chiara Tomasi (Università di Trento - Dipartimento di Economia e Management) |
| Abstract: | Exploiting data on product-destination level transactions of a large panel of Italian firms, we provide new evidence on the effect of financial constraints on price variation across exporters. Controlling for firm characteristics and endogeneity, constrained exporters charge higher prices than unconstrained firms exporting in the same product-destination market. The positive price difference increases with horizontal differentiation of products, while it reduces in vertically differentiated products, where there is more scope for quality adjustments. The results are consistent with constrained firms exploiting demand rigidities to keep prices up in the attempt to sustain revenues and escape the constraints. |
| Keywords: | Financial constraints; export prices; horizontal and vertical differentiation; quality adjustment |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00848159&r=bec |
| By: | Hentschel, Sandra (University of Bielefeld); Muehlheusser, Gerd (University of Hamburg); Sliwka, Dirk (University of Cologne) |
| Abstract: | We study the impact of managers on the success of professional soccer teams using data from the German "Bundesliga". We evaluate the performance impact of individual managers by estimating regression models that include both team and manager fixed effects, where we are exploiting the high turnover of managers between teams to disentangle the managers' contributions. We find that teams employing a manager at the 75% ability percentile gain on average 0:25 points per game more than those employing a manager at the 25% ability percentile, which corresponds to a sizeable difference of 18% of the average number of points awarded per game. Moreover, estimated abilities have significant predictive power for future performance. |
| Keywords: | managerial skills, human capital, empirical, fixed effects, professional sports |
| JEL: | J24 J44 J63 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8560&r=bec |
| By: | Timothy De Stefano; Richard Kneller; Jonathan Timmis |
| Abstract: | This paper applies a fuzzy regression discontinuity design to study the effects of ADSL broadband internet on the performance of firms. We exploit a geographical discontinuity in the availability of ADSL broadband, firms located one side of the divide had access to broadband services that those on the other side did not. The discontinuity stems from an historical accident, whereby the telecommunications in one area of the North East of England is delivered by a separate company to the national monopoly provider. We study the discontinuity at the boundary between these two telecommunications providers, which rolled out broadband infrastructure at different times. Our analysis strongly suggests that broadband use has no statistically significant effect on the performance of firms. |
| Keywords: | broadband; firms; fuzzy regression discontinuity JEL Numbers: J23; J24; J31 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:not:notecp:14/06&r=bec |