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on Business Economics |
| By: | Joachim Wagner (Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre) |
| Abstract: | This paper uses firm level data from the World Bank Enterprise surveys conducted in 2019 and from the COVID-19 follow-up surveys conducted in 2020 in ten European countries to investigate the link between the gender of the firm’s owner and firm survival until 2020.The estimated effect of female ownership is positive ceteris paribus after controlling for various firm characteristics that are known to be related to survival. Furthermore, the size of this estimated effect can be considered to be large on average. Having a female owner helped firms to survive. |
| Keywords: | Gender, female owned firms, firm survival, COVID-19, World Bank Enterprise Surveys |
| JEL: | D22 L20 L25 L29 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:409&r= |
| By: | Julian di Giovanni; Manuel García-Santana; Priit Jeenas; Enrique Moral-Benito; Josep Pijoan-Mas |
| Abstract: | We provide a framework to study how different allocation systems of public procurement contracts affect firm dynamics and long-run macroeconomic outcomes. We start by using a newly created panel data set of administrative data that merges Spanish credit register loan data, quasi-census firm-level data, and public procurement projects to study firm selection into procurement and the effects of procurement on credit growth and firm growth. We show evidence consistent with the hypotheses that there is selection of large firms into procurement, that procurement contracts provide useful collateral for firms more so than sales to the private sector and that procurement contracts facilitate firm growth beyond the contract duration. We next build a model of firm dynamics with both asset-based and earnings-based borrowing constraints and a government that buys goods and services from private sector firms. We use the calibrated model to quantify the long-run macroeconomic consequences of alternative procurement allocation systems. We find that granting procurement contracts to small firms, either by directly targeting them or by slicing large contracts into smaller ones, helps these firms grow and overcome financial constraints in the long run. However, we also find that reducing the average size of contracts or making it less likely for large firms to access them removes saving incentives for large firms, whose negative effects on capital accumulation can overcome the expansionary consequences for small firms and hence generate a drop in aggregate output. |
| Keywords: | government procurement; financial frictions; capital accumulation; aggregate productivity |
| JEL: | E22 E23 E62 G32 |
| Date: | 2022–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:93773&r= |
| By: | Özgür, Arslan-Ayaydin; Thewissen, James (Université catholique de Louvain, LIDAM/LFIN, Belgium); Torsin, Wouter |
| Abstract: | This paper examines whether CEO risk aversion – proxied by their political affiliation – explains the method used to manage earnings. We argue that, even though real earnings management can have severe long-term consequences for firm performance, Republican managers are likely to prefer real over accruals-based earnings management because the former incurs significantly lower litigation risk costs than the latter and is relatively more difficult to detect. Based on a sample of more than 20,000 firm-year observations, we find that firms led by Republican (i.e. more risk averse) CEOs tend to manage their earnings through real activities manipulation, while those led by Democratic (i.e. more risk taking) CEOs tend to favor accruals-based earnings management. We also show that the positive (negative) relation between Republican-leaning managers and real (accruals-based) is more positive (less negative) for CEOs whose compensation is more oriented towards risk-taking. |
| Keywords: | Accruals earnings management ; CEO Risk Aversion ; Political affiliation ; Political donations ; Real activities manipulation |
| JEL: | M41 |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ajf:louvlf:2021017&r= |
| By: | Xiao Ma (Peking University); Alejandro Nakab (Universidad Torcuato Di Tella); Daniela Vidart (University of Connecticut) |
| Abstract: | How do the sources of worker learning change over the lifecycle, and how do these changes a˙ect on-the-job human capital accumulation? We use detailed worker quali-fication data from Germany and the US to document that internal learning (learning through colleagues) decreases with worker experience, while external learning (on-the-job training) has an inverted U-shape in worker experience. To shed light on these findings, we build an analytical model where the incentives to engage in each type of skill acquisition evolve throughout the lifecycle due to shifts in the relative position of the worker in the human capital distribution. We embed this two-source learning mechanism in a quantitative Burdett and Mortensen search framework where firms and workers jointly fund learning investments. The model equilibrium replicates our em-pirical lifecycle results, as well as several key findings in the literature on the e˙ects of firm matching and coworker quality in the formation of human capital. Counterfactual analyses imply that aggregate human capital decreases by approximately 30% in the absence of either learning source, and that the two sources are highly complementary in the aggregate. We conduct a policy analysis that highlights key ineÿciencies to learning investments stemming from firms’ role in learning, and shows that subsidizing learning can generate sizeable increases to human capital and aggregate output. |
| Keywords: | On-the-Job Training, Human Capital Accumulation, Lifecycle Wage Growth |
| JEL: | J24 E24 M53 O15 J62 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2022-11&r= |
| By: | Henry, Elaine; Thewissen, James (Université catholique de Louvain, LIDAM/LFIN, Belgium); Torsin, Wouter |
| Abstract: | This paper examines two attributes of earnings press releases issued by firms cross-listed on U.S. stock exchanges: the tone and frequency of forward-looking statements. A more conservative tone and a greater proportion of forward-looking statements are often viewed as contributing to more credible disclosures. Our analysis indicates that culturally and institutionally more distant firms are generally less positive in their disclosures and include more forward-looking statements than U.S. firms. Further, we find that the tone and frequency of forward-looking statements of crosslisted firms’ earnings announcements are more informative than those of U.S. firms in predicting future firm performance, and this informativeness generally increases with the cultural and institutional distance of the home country from the U.S. In explaining market reaction to earnings announcements, tone informativeness in particular increases with the cultural distance of the home country from the U.S. Overall, in the context of home bias theory, we interpret our findings as suggesting that a cautious disclosure tone and more forward-looking information serve to mitigate potential home bias-related credibility and asymmetric information concerns arising from cultural and institutional distance. |
| Keywords: | Disclosure ; tone ; forward-looking ; credibility ; home bias ; cross-listed firms |
| Date: | 2021–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ajf:louvlf:2021016&r= |
| By: | Loren Brandt; Ruochen Dai; Gueorgui Kambourov; Kjetil Storesletten; Xiaobo Zhang |
| Abstract: | This paper studies entrepreneurship and the creation of new firms in China through the lens of serial entrepreneurs, i.e. entrepreneurs who establish more than one firm, and their differences with non-serial entrepreneurs. Drawing on data on the universe of all firms in China, we document key facts about serial entrepreneurship in China since the early 1990s and develop a theoretical framework to rationalize the role of endowments, ability, and capital market frictions in their behavior. We also examine the key determinants of the sectoral choice for serial entrepreneurs' second firms. Quantitatively, serial entrepreneurs are more productive, raise more capital, and operate larger firms than non-serial entrepreneurs. Moreover, serial entrepreneurs with greater liquidity and whose firms have relatively similar productivity are more likely to operate these firms concurrently rather than sequentially. We also find that less productive serial entrepreneurs are more likely to switch sectors when establishing new firms, with the choice of sector influenced by considerations of risk diversification, upstream and downstream linkages, and sectoral complementarities. |
| Keywords: | Serial Entrepreneurship; Entrepreneurship; Capital Distortions; Sector Choice |
| JEL: | D22 D24 E22 E44 L25 L26 O11 O14 O16 O40 O53 P25 R12 D21 |
| Date: | 2022–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-721&r= |
| By: | MORIKAWA Masayuki |
| Abstract: | This paper presents an overview of the adoption, intensity, and productivity of working-from-home (WFH) during the COVID-19 pandemic using panel data from original firm surveys. According to the results, first, both the ratio of WFH-adopting firms and the intensity of WFH decreased substantially compared to when the first State of Emergency was declared in 2020. Second, although mean WFH productivity improved by a few percentage points, it is still about 20% lower than productivity at the workplaces. The firms' evaluation of WFH productivity is quite similar to the result obtained from a survey of workers. Third, as the COVID-19 pandemic has continued, increasing numbers of firms introduced cost subsidies for WFH employees and reduced office space. Fourth, about half of firms are planning to discontinue the WFH practice and to revert to the conventional workstyle after the end of COVID-19, indicating that there is a large gap between corporate interests and the preferences of WFH workers. |
| Date: | 2021–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:22005&r= |