A critique and review of the study by Suarez et al. (2013). The paper examines product-focused firms that expand their offerings of services with the goal of increasing profits. Data sets regarding revenue and cost channels are generated and examined, derived from public records of software product firms. An implication is made that the inflection point where services offerings become profitable for product firms can provide additional opportunities within, not just mature markets, but companies with growth goals. Surarez et al (2013) takes a radical humanist outlook on the topic, which is in line with the theories described by Burrell and Morgan (1979). It is indicated that consistent qualitative support in addition to the consistent data set provided would substantiate the authors’ arguments further.
Suarez et al.(2013)对该研究的评论和回顾。本文考察了以增加利润为目标而扩大服务范围的以产品为中心的公司。有关收入和成本渠道的数据集生成和检查，源自软件产品公司的公开记录。这意味着，服务产品变得有利可图的拐点不仅可以为成熟市场提供额外的机会，还可以为有增长目标的公司提供额外的机会。Surarez et al(2013)对该主题采取了激进的人文主义观点，这与Burrell和Morgan(1979)所描述的理论是一致的。作者指出，除了提供一致的数据集外，一致的定性支持将进一步证实作者的论点。
{"title":"Critical Analysis of ‘Services and the Business Models of Product Firms: An Empirical Analysis of the Software Industry’ by Suarez Et Al. (2013)","authors":"M. Groh","doi":"10.2139/ssrn.2887921","DOIUrl":"https://doi.org/10.2139/ssrn.2887921","url":null,"abstract":"A critique and review of the study by Suarez et al. (2013). The paper examines product-focused firms that expand their offerings of services with the goal of increasing profits. Data sets regarding revenue and cost channels are generated and examined, derived from public records of software product firms. An implication is made that the inflection point where services offerings become profitable for product firms can provide additional opportunities within, not just mature markets, but companies with growth goals. Surarez et al (2013) takes a radical humanist outlook on the topic, which is in line with the theories described by Burrell and Morgan (1979). It is indicated that consistent qualitative support in addition to the consistent data set provided would substantiate the authors’ arguments further.","PeriodicalId":11837,"journal":{"name":"ERN: Other IO: Empirical Studies of Firms & Markets (Topic)","volume":"13 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-12-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76563989","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-11-07DOI: 10.1016/J.JCLEPRO.2016.10.129
Vera Ferrón‐Vílchez, Nicole Darnall, J. Aragón-Correa
{"title":"Stakeholder Influences on the Design of Firms’ Environmental Practices","authors":"Vera Ferrón‐Vílchez, Nicole Darnall, J. Aragón-Correa","doi":"10.1016/J.JCLEPRO.2016.10.129","DOIUrl":"https://doi.org/10.1016/J.JCLEPRO.2016.10.129","url":null,"abstract":"","PeriodicalId":11837,"journal":{"name":"ERN: Other IO: Empirical Studies of Firms & Markets (Topic)","volume":"31 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-11-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81246820","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A. Bernard, J. Jensen, S. Redding, Peter K. Schott
Research in international trade has changed dramatically over the last twenty years, as attention has shifted from countries and industries towards the firms actually engaged in international trade. The now-standard heterogeneous firm model posits measure-zero firms that compete under monopolistic competition and decide whether to export to foreign markets. However, much of international trade is dominated by a few “global firms,” which participate in the international economy along multiple margins and account for substantial shares of aggregate trade. We develop a new theoretical framework that allows firms to have large market shares and decide simultaneously on the set of production locations, export markets, input sources, products to export, and inputs to import. Using US firm and trade transactions data, we provide strong evidence in support of this framework's main predictions of interdependencies and complementarities between these margins of firm international participation. Global firms participate more intensively along each margin, magnifying the impact of underlying differences in firm characteristics and increasing their shares of aggregate trade. (JEL D22, F14, F23, L60, R32)
{"title":"Global Firms","authors":"A. Bernard, J. Jensen, S. Redding, Peter K. Schott","doi":"10.1257/jel.20160792","DOIUrl":"https://doi.org/10.1257/jel.20160792","url":null,"abstract":"Research in international trade has changed dramatically over the last twenty years, as attention has shifted from countries and industries towards the firms actually engaged in international trade. The now-standard heterogeneous firm model posits measure-zero firms that compete under monopolistic competition and decide whether to export to foreign markets. However, much of international trade is dominated by a few “global firms,” which participate in the international economy along multiple margins and account for substantial shares of aggregate trade. We develop a new theoretical framework that allows firms to have large market shares and decide simultaneously on the set of production locations, export markets, input sources, products to export, and inputs to import. Using US firm and trade transactions data, we provide strong evidence in support of this framework's main predictions of interdependencies and complementarities between these margins of firm international participation. Global firms participate more intensively along each margin, magnifying the impact of underlying differences in firm characteristics and increasing their shares of aggregate trade. (JEL D22, F14, F23, L60, R32)","PeriodicalId":11837,"journal":{"name":"ERN: Other IO: Empirical Studies of Firms & Markets (Topic)","volume":"124 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91298089","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Government investment in infrastructure may crowd out private investment that would have otherwise occurred. But, the threat of government intervention may also induce private firms to invest preemptively in infrastructure, in order to maintain their market position. This leaves the net effect of public competition on private investment unclear. This paper investigates the tension between these competing effects by providing evidence from the setting of internet service provision. Using household survey data and a novel data set of internet plan characteristics, I provide nationwide estimates of demand for internet technologies. I then use these results to estimate a dynamic oligopoly model of private and public internet service providers’ entry and technology adoption decisions, where private firms are driven by profits and municipalities by some (as yet) unknown combination of profits and consumer welfare. Finally, I simulate firms’ actions under a ban on public provision and find evidence that public competition partially, but not completely, crowds out private investment. Ultimately, I find that a ban on municipal provision in 30 states would result in a loss in consumer welfare of $1.11 billion over 20 years.
{"title":"Does Public Competition Crowd Out Private Investment? Evidence from Municipal Provision of Internet Access","authors":"Kyle Wilson","doi":"10.2139/ssrn.2848569","DOIUrl":"https://doi.org/10.2139/ssrn.2848569","url":null,"abstract":"Government investment in infrastructure may crowd out private investment that would have otherwise occurred. But, the threat of government intervention may also induce private firms to invest preemptively in infrastructure, in order to maintain their market position. This leaves the net effect of public competition on private investment unclear. This paper investigates the tension between these competing effects by providing evidence from the setting of internet service provision. Using household survey data and a novel data set of internet plan characteristics, I provide nationwide estimates of demand for internet technologies. I then use these results to estimate a dynamic oligopoly model of private and public internet service providers’ entry and technology adoption decisions, where private firms are driven by profits and municipalities by some (as yet) unknown combination of profits and consumer welfare. Finally, I simulate firms’ actions under a ban on public provision and find evidence that public competition partially, but not completely, crowds out private investment. Ultimately, I find that a ban on municipal provision in 30 states would result in a loss in consumer welfare of $1.11 billion over 20 years.","PeriodicalId":11837,"journal":{"name":"ERN: Other IO: Empirical Studies of Firms & Markets (Topic)","volume":"3 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91252814","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We provide robust empirical evidence of conditional convergence in corporate investments among US firms. Small firms have significantly higher investment rates than large firms even after controlling for standard empirical proxies of firm investment opportunities and financial status, such as Tobin's Q and cash flow measures. The inclusion of a firm's initial size in a traditional Tobin's Q investment regression is at least as economically and statistically important as the inclusion of cash flow measures in explaining corporate investment dynamics. This finding is robust to measurement errors, sample selection, nonlinear specifications of the investment regression, different estimation horizons, and different proxies of investment opportunities and financial status. We also document convergence in corporate investments in other countries around the world. Accounting for the size dependence in standard empirical investment specifications substantially improves the explanatory power of corporate investments dynamics. Moreover, the empirical evidence suggests that firm size improves the measurement of firms' true investment opportunity set rather than reflecting differences in firms' financial constraints.
{"title":"Firm Size and Corporate Investment","authors":"V. Gala, Brandon Julio","doi":"10.2139/ssrn.1787350","DOIUrl":"https://doi.org/10.2139/ssrn.1787350","url":null,"abstract":"We provide robust empirical evidence of conditional convergence in corporate investments among US firms. Small firms have significantly higher investment rates than large firms even after controlling for standard empirical proxies of firm investment opportunities and financial status, such as Tobin's Q and cash flow measures. The inclusion of a firm's initial size in a traditional Tobin's Q investment regression is at least as economically and statistically important as the inclusion of cash flow measures in explaining corporate investment dynamics. This finding is robust to measurement errors, sample selection, nonlinear specifications of the investment regression, different estimation horizons, and different proxies of investment opportunities and financial status. We also document convergence in corporate investments in other countries around the world. Accounting for the size dependence in standard empirical investment specifications substantially improves the explanatory power of corporate investments dynamics. Moreover, the empirical evidence suggests that firm size improves the measurement of firms' true investment opportunity set rather than reflecting differences in firms' financial constraints.","PeriodicalId":11837,"journal":{"name":"ERN: Other IO: Empirical Studies of Firms & Markets (Topic)","volume":"80 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83840334","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using economic deregulation as a quasi-natural experiment for increasing product market competition, we find increases in earnings manipulation and accounting frauds following deregulation. This “dark-side” of product market competition is particularly evident for deregulated firms in high market-to-book industries, where we find evidence of short-termism in the capital market. We further find that firms in these industries, if actively manage earnings, tend to make more acquisitions and have higher survival rates. Overall, our results are largely consistent with Shleifer (2004), who predicts an important interplay between product market competition and capital market valuation feedback that could induce misbehaving incentives among firms in competitive industries.
{"title":"Competition, Capital Market Feedback, and Earnings Management: Evidence from Economic Deregulation","authors":"Jongsub Lee, Xiaoding Liu","doi":"10.2139/ssrn.2348294","DOIUrl":"https://doi.org/10.2139/ssrn.2348294","url":null,"abstract":"Using economic deregulation as a quasi-natural experiment for increasing product market competition, we find increases in earnings manipulation and accounting frauds following deregulation. This “dark-side” of product market competition is particularly evident for deregulated firms in high market-to-book industries, where we find evidence of short-termism in the capital market. We further find that firms in these industries, if actively manage earnings, tend to make more acquisitions and have higher survival rates. Overall, our results are largely consistent with Shleifer (2004), who predicts an important interplay between product market competition and capital market valuation feedback that could induce misbehaving incentives among firms in competitive industries.","PeriodicalId":11837,"journal":{"name":"ERN: Other IO: Empirical Studies of Firms & Markets (Topic)","volume":"31 6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-08-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72847004","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-07-31DOI: 10.1016/J.LRP.2016.07.003
C. Carnes, F. Chirico, M. Hitt, Dongsuk Huh, Vincenzo Pisano
{"title":"Resource Orchestration for Innovation: Structuring and Bundling Resources in Growth- and Maturity-Stage Firms","authors":"C. Carnes, F. Chirico, M. Hitt, Dongsuk Huh, Vincenzo Pisano","doi":"10.1016/J.LRP.2016.07.003","DOIUrl":"https://doi.org/10.1016/J.LRP.2016.07.003","url":null,"abstract":"","PeriodicalId":11837,"journal":{"name":"ERN: Other IO: Empirical Studies of Firms & Markets (Topic)","volume":"74 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84474451","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper estimates the wage effects of foreign direct investment (FDI) with firm-level and linked employer-employee panel data containing a large number of foreign acquisitions over a long period of rapid development in Hungary. Matching on pre-acquisition data, the paper finds that much of the raw foreign wage premium represents selection bias but that foreign acquisition nevertheless raises average wages 15-29% when controlling for fixed effects for firms and highly detailed worker groups, and 6% with firm-worker match effects. Acquired firms that are later divested to domestic owners experience a substantial reversal of the acquisition effect. No type of worker – defined by education, experience, gender, incumbency, and occupational group – experiences wage decline, but the patterns suggest skill bias in the gains from acquisition. The evidence implies a strong cross-firm correlation of FDI wage and productivity differentials, and an inverse relationship between FDI effects and level of economic development.
{"title":"Foreign Ownership and Wages: Evidence from Hungary, 1986-2008","authors":"John S. Earle, Á. Telegdy, G. Antal","doi":"10.2139/ssrn.2183305","DOIUrl":"https://doi.org/10.2139/ssrn.2183305","url":null,"abstract":"This paper estimates the wage effects of foreign direct investment (FDI) with firm-level and linked employer-employee panel data containing a large number of foreign acquisitions over a long period of rapid development in Hungary. Matching on pre-acquisition data, the paper finds that much of the raw foreign wage premium represents selection bias but that foreign acquisition nevertheless raises average wages 15-29% when controlling for fixed effects for firms and highly detailed worker groups, and 6% with firm-worker match effects. Acquired firms that are later divested to domestic owners experience a substantial reversal of the acquisition effect. No type of worker – defined by education, experience, gender, incumbency, and occupational group – experiences wage decline, but the patterns suggest skill bias in the gains from acquisition. The evidence implies a strong cross-firm correlation of FDI wage and productivity differentials, and an inverse relationship between FDI effects and level of economic development.","PeriodicalId":11837,"journal":{"name":"ERN: Other IO: Empirical Studies of Firms & Markets (Topic)","volume":"4 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-07-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82393804","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study optimal non-linear contracts offered by two firms competing for the exclusive services of workers, who are privately informed about their ability and motivation. Firms differ in their organizational form, and motivated workers are keen to be hired by the non-profit firm because they adhere to its mission. If the for-profit firm has a competitive advantage over the non-profit firm, the latter attracts fewer high-ability workers with respect to the former. Moreover, workers exert more effort at the for-profit than at the non-profit firm despite the latter distorts effort levels upwards. Finally, a wage penalty emerges for non-profit workers which is partly due to compensating effects (labor donations by motivated workers) and partly due to the negative selection of ability into the non-profit firm. The opposite results hold when it is the non-profit firm that has a competitive advantage.
{"title":"Competition between For-Profit and Non-Profit Firms: Incentives, Workers’ Self-Selection, and Wage Differentials","authors":"F. Barigozzi, Nadia Burani","doi":"10.2139/ssrn.2811114","DOIUrl":"https://doi.org/10.2139/ssrn.2811114","url":null,"abstract":"We study optimal non-linear contracts offered by two firms competing for the exclusive services of workers, who are privately informed about their ability and motivation. Firms differ in their organizational form, and motivated workers are keen to be hired by the non-profit firm because they adhere to its mission. If the for-profit firm has a competitive advantage over the non-profit firm, the latter attracts fewer high-ability workers with respect to the former. Moreover, workers exert more effort at the for-profit than at the non-profit firm despite the latter distorts effort levels upwards. Finally, a wage penalty emerges for non-profit workers which is partly due to compensating effects (labor donations by motivated workers) and partly due to the negative selection of ability into the non-profit firm. The opposite results hold when it is the non-profit firm that has a competitive advantage.","PeriodicalId":11837,"journal":{"name":"ERN: Other IO: Empirical Studies of Firms & Markets (Topic)","volume":"11 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81072619","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies a number of features of transaction networks, firm sales growth, and buyer-supplier comovements of sales using a large scale dataset on the Japanese interfirm transaction network. Larger firms have higher sales growth rates and smaller growth dispersion. Well-connected firms also exhibit higher growth rates, but there is no systematic relationship between the number of partners (degree) and sales growth dispersion. Using a statistical test for spatial interdependence, it is confirmed that there exists a significant network interdependence of sales growth. By employing spatial autoregressive models, various propagation factors are estimated. In the baseline specification, the elasticity of average sales growth of suppliers is estimated to be 0.153 while that of customers is 0.257 for 2012. In all years, the upstream propagation factor is larger than the downstream factor, implying difficulty in replacing an existing customer or adjusting to a demand shock. The manufacturing sector is characterized by a large degree of propagation. For both downstream and upstream propagations, manufacturing and wholesale sectors exhibit higher propagations factors while retail and service sectors exhibit lower ones. The interdependence of intermediate physical inputs produced by other firms may generate an additional margin for the buyer-supplier comovements. It was also found that larger firms have higher propagation factors. Larger firms have more partners, and their degree of propagation is also higher. This result stresses an even larger impact of big firms for aggregate fluctuations in a granular production network.
{"title":"Shock Propagations in Granular Networks","authors":"D. Fujii","doi":"10.2139/ssrn.2808094","DOIUrl":"https://doi.org/10.2139/ssrn.2808094","url":null,"abstract":"This paper studies a number of features of transaction networks, firm sales growth, and buyer-supplier comovements of sales using a large scale dataset on the Japanese interfirm transaction network. Larger firms have higher sales growth rates and smaller growth dispersion. Well-connected firms also exhibit higher growth rates, but there is no systematic relationship between the number of partners (degree) and sales growth dispersion. Using a statistical test for spatial interdependence, it is confirmed that there exists a significant network interdependence of sales growth. By employing spatial autoregressive models, various propagation factors are estimated. In the baseline specification, the elasticity of average sales growth of suppliers is estimated to be 0.153 while that of customers is 0.257 for 2012. In all years, the upstream propagation factor is larger than the downstream factor, implying difficulty in replacing an existing customer or adjusting to a demand shock. The manufacturing sector is characterized by a large degree of propagation. For both downstream and upstream propagations, manufacturing and wholesale sectors exhibit higher propagations factors while retail and service sectors exhibit lower ones. The interdependence of intermediate physical inputs produced by other firms may generate an additional margin for the buyer-supplier comovements. It was also found that larger firms have higher propagation factors. Larger firms have more partners, and their degree of propagation is also higher. This result stresses an even larger impact of big firms for aggregate fluctuations in a granular production network.","PeriodicalId":11837,"journal":{"name":"ERN: Other IO: Empirical Studies of Firms & Markets (Topic)","volume":"70 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2016-07-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83082863","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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