World trade contracted sharply in late 2008 and early 2009 following the deepening of the financial crisis in September 2008. This paper discusses the main mechanisms behind the global downturn in trade and its impact on euro area exports and competitiveness. It finds that the euro area was hit particularly hard by the contraction in global demand. Moreover, the collapse in the demand for euro area products during the downturn was exacerbated to some degree by unfavourable developments in price competitiveness, resulting in further losses in competitiveness compared to our main trading partners, in line with pre-crisis trends. This view is also confi rmed by evidence from broad-based competitiveness measures, which show that euro area countries recorded losses in productivity during this period. Going forward, the recovery in world trade will depend mainly on a resurgence in global demand and its expenditure composition. With regard to the euro area, as the global economy recovers at varying speeds and given the current growth momentum in emerging economies, the performance of the external sector may be hindered by the geographical orientation of its export markets, which are mainly focused on advanced economies and other EU member states. Furthermore, the strength and sustainability of the recovery in exports will also depend on the structuring process undertaken by European fi rms in response to globalisation-related challenges. Governments within the European Union should therefore focus on policies to strengthen competition and increase market integration, in order to benefit fully from the globalisation process going forward. In contrast, a resurgence in global protectionist policies could dampen the prospects for world and euro area trade and should be strongly resisted. JEL Classification: C32, O11
{"title":"The Global Downturn and its Impact on Euro Area Exports and Competitiveness","authors":"Filippo di Mauro, Katrin Forster, Ana Lima","doi":"10.2139/ssrn.1683325","DOIUrl":"https://doi.org/10.2139/ssrn.1683325","url":null,"abstract":"World trade contracted sharply in late 2008 and early 2009 following the deepening of the financial crisis in September 2008. This paper discusses the main mechanisms behind the global downturn in trade and its impact on euro area exports and competitiveness. It finds that the euro area was hit particularly hard by the contraction in global demand. Moreover, the collapse in the demand for euro area products during the downturn was exacerbated to some degree by unfavourable developments in price competitiveness, resulting in further losses in competitiveness compared to our main trading partners, in line with pre-crisis trends. This view is also confi rmed by evidence from broad-based competitiveness measures, which show that euro area countries recorded losses in productivity during this period. Going forward, the recovery in world trade will depend mainly on a resurgence in global demand and its expenditure composition. With regard to the euro area, as the global economy recovers at varying speeds and given the current growth momentum in emerging economies, the performance of the external sector may be hindered by the geographical orientation of its export markets, which are mainly focused on advanced economies and other EU member states. Furthermore, the strength and sustainability of the recovery in exports will also depend on the structuring process undertaken by European fi rms in response to globalisation-related challenges. Governments within the European Union should therefore focus on policies to strengthen competition and increase market integration, in order to benefit fully from the globalisation process going forward. In contrast, a resurgence in global protectionist policies could dampen the prospects for world and euro area trade and should be strongly resisted. JEL Classification: C32, O11","PeriodicalId":294049,"journal":{"name":"ERN: Other European Economics: Microeconomics & Industrial Organization (Topic)","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-09-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129228443","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}
The aim of this paper is to make a comparison between survey and time series-based estimates of capacity utilization for the Italian manufacturing sector. The comparison is focused on the actual economic crisis. Two kinds of empirical evaluation are implemented: the ability of the series to correctly track cyclical turning points and their contribution in explaining CPI inflation. The ISAE survey measures results to be lagging, especially at troughs, and moreover time series-based measures generally outperform the survey in explaining inflation.
{"title":"Measuring Capacity Utilization in the Italian Manufacturing Sector: A Comparison Between Time Series and Survey Models in Light of the Actual Economic Crisis","authors":"M. Malgarini, A. Paradiso","doi":"10.2139/SSRN.1696222","DOIUrl":"https://doi.org/10.2139/SSRN.1696222","url":null,"abstract":"The aim of this paper is to make a comparison between survey and time series-based estimates of capacity utilization for the Italian manufacturing sector. The comparison is focused on the actual economic crisis. Two kinds of empirical evaluation are implemented: the ability of the series to correctly track cyclical turning points and their contribution in explaining CPI inflation. The ISAE survey measures results to be lagging, especially at troughs, and moreover time series-based measures generally outperform the survey in explaining inflation.","PeriodicalId":294049,"journal":{"name":"ERN: Other European Economics: Microeconomics & Industrial Organization (Topic)","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-09-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122233206","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 was authored with a Japanese audience in mind to explain recent developments in universal service policy and State aid rules for Next Generation Networks in the European Union. Universal service policy is intended to ensure that all members of society should be able to obtain a minimum level access to communications networks at fair and reasonable prices without regard to their where they live, their income level, or other disadvantages. Countries typically pursue universal service policies for communications networks because their benefit in terms stimulating broader economic growth outweighs the possible economic inefficiencies these policies can introduce.The on-going migration of communication networks to multi-service NGNs holds challenges for universal service policy. Heretofore, these universal service policies have been applied to traditional voice telecommunications networks. Given the decreasing importance of traditional voice telecommunications networks and growing adoption NGNs, industrialized nations are considering whether and how to apply universal service policies to broadband networks. Within the European Union, efforts are under way to address these questions such as the necessary and appropriate role for governments in funding universal service for NGNs. The rules governing State aid prohibits any form of aid which distorts or threatens to distort competition by favoring certain firms or certain goods. State aid includes, under certain circumstances, the public ownership of firms. The European Union recognizes that State aid can advance common interests and can remedy market failures. However, this approach also limits the way in which State aid can be used so as to not crowd out private investment. In September 2009, the European Commission published guidelines which established distinction between what it calls white, black and grey NGA areas to guide the granting of State aid for NGA deployment. In so-called ‘white NGA’ areas, aid supporting broadband network is generally permissible. In so-called ‘NGA grey’ and ‘NGA black’ areas, State aid is permissible only where the deployment where unsatisfactory or if there is market failure.These efforts may hold valuable lessons for regulators in other countries, particularly those where the incumbent carrier is partly publicly owned. The European Union approach is intended to present the least intrusive means, and as such it embodies the principle that desired outcome should be achieved with the least amount of effort possible and at the least possible economic cost.
{"title":"Universal Service and State Aid in the European Union in the Era of NGN","authors":"Kenneth R. Carter","doi":"10.2139/SSRN.1659940","DOIUrl":"https://doi.org/10.2139/SSRN.1659940","url":null,"abstract":"This paper was authored with a Japanese audience in mind to explain recent developments in universal service policy and State aid rules for Next Generation Networks in the European Union. Universal service policy is intended to ensure that all members of society should be able to obtain a minimum level access to communications networks at fair and reasonable prices without regard to their where they live, their income level, or other disadvantages. Countries typically pursue universal service policies for communications networks because their benefit in terms stimulating broader economic growth outweighs the possible economic inefficiencies these policies can introduce.The on-going migration of communication networks to multi-service NGNs holds challenges for universal service policy. Heretofore, these universal service policies have been applied to traditional voice telecommunications networks. Given the decreasing importance of traditional voice telecommunications networks and growing adoption NGNs, industrialized nations are considering whether and how to apply universal service policies to broadband networks. Within the European Union, efforts are under way to address these questions such as the necessary and appropriate role for governments in funding universal service for NGNs. The rules governing State aid prohibits any form of aid which distorts or threatens to distort competition by favoring certain firms or certain goods. State aid includes, under certain circumstances, the public ownership of firms. The European Union recognizes that State aid can advance common interests and can remedy market failures. However, this approach also limits the way in which State aid can be used so as to not crowd out private investment. In September 2009, the European Commission published guidelines which established distinction between what it calls white, black and grey NGA areas to guide the granting of State aid for NGA deployment. In so-called ‘white NGA’ areas, aid supporting broadband network is generally permissible. In so-called ‘NGA grey’ and ‘NGA black’ areas, State aid is permissible only where the deployment where unsatisfactory or if there is market failure.These efforts may hold valuable lessons for regulators in other countries, particularly those where the incumbent carrier is partly publicly owned. The European Union approach is intended to present the least intrusive means, and as such it embodies the principle that desired outcome should be achieved with the least amount of effort possible and at the least possible economic cost.","PeriodicalId":294049,"journal":{"name":"ERN: Other European Economics: Microeconomics & Industrial Organization (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123037275","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}
Hugo Alberto Rivera Rodríguez, A. Avila, Diana López, F. García, Deisy F. Garzón, Diana Flores
To cope with turbulence and achieve improvements in performance, companies must develop a process of addressing aimed at generating strategic dynamic capabilities, and to carry out relevant organizational changes. Only those organizations able to adapt to new environmental conditions and develop and maintain competitive advantages sustainable can be sustained over time.The pharmaceutical sector is no stranger to this situation, there has been uncertainty has been reflected in the difficulty of predicting environment behavior, difficulty in predicting the outcome of the actions of those involved, companies have been forced to work hard to find the best response to market changes. The dynamism of the sector has been reflected in that the knowledge necessary for the operation of the company often change, no change in taste by consumer modes of production and service change frequently, there is competition in pricing and promotions, and any action is matched by competitors quickly. In complexity of the sector, a large number of actors and components in the environment, the existing factors (technological, economic, political, social, cultural) are heterogeneous, new products have been developed as a result of technological advances.This paper intends to contribute to group work. This will perform a strategic analysis of the pharmaceutical sector in period between 2000 and 2008.
{"title":"Analysis of the Pharmaceutical Sector in the Period 2000-2008 (In Spanish)","authors":"Hugo Alberto Rivera Rodríguez, A. Avila, Diana López, F. García, Deisy F. Garzón, Diana Flores","doi":"10.2139/SSRN.1698895","DOIUrl":"https://doi.org/10.2139/SSRN.1698895","url":null,"abstract":"To cope with turbulence and achieve improvements in performance, companies must develop a process of addressing aimed at generating strategic dynamic capabilities, and to carry out relevant organizational changes. Only those organizations able to adapt to new environmental conditions and develop and maintain competitive advantages sustainable can be sustained over time.The pharmaceutical sector is no stranger to this situation, there has been uncertainty has been reflected in the difficulty of predicting environment behavior, difficulty in predicting the outcome of the actions of those involved, companies have been forced to work hard to find the best response to market changes. The dynamism of the sector has been reflected in that the knowledge necessary for the operation of the company often change, no change in taste by consumer modes of production and service change frequently, there is competition in pricing and promotions, and any action is matched by competitors quickly. In complexity of the sector, a large number of actors and components in the environment, the existing factors (technological, economic, political, social, cultural) are heterogeneous, new products have been developed as a result of technological advances.This paper intends to contribute to group work. This will perform a strategic analysis of the pharmaceutical sector in period between 2000 and 2008.","PeriodicalId":294049,"journal":{"name":"ERN: Other European Economics: Microeconomics & Industrial Organization (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133791273","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 several unique data sets on wage agreements at both industry and firm levels in France, we document stylized facts on wage stickiness and the impact of wage-setting institutions on wage rigidity. First, the average duration of wages is a little less than one year and around 10 percent of wages are modified each month by a wage agreement. Data patterns are consistent with predictions of a mixture of Calvo and Taylor models. The frequency of wage change agreements is rather staggered over the year but the frequency of effective wage changes is seasonal. The national minimum wage has a significant impact on the probability of a wage agreement and on the seasonality of wage changes. Negotiated wage increases are correlated with inflation, the national minimum wage increases and the firm profitability.
{"title":"Wage Rigidity, Collective Bargaining and the Minimum Wage: Evidence from French Agreement Data","authors":"S. Avouyi-Dovi, D. Fougère, E. Gautier","doi":"10.2139/SSRN.1653890","DOIUrl":"https://doi.org/10.2139/SSRN.1653890","url":null,"abstract":"Using several unique data sets on wage agreements at both industry and firm levels in France, we document stylized facts on wage stickiness and the impact of wage-setting institutions on wage rigidity. First, the average duration of wages is a little less than one year and around 10 percent of wages are modified each month by a wage agreement. Data patterns are consistent with predictions of a mixture of Calvo and Taylor models. The frequency of wage change agreements is rather staggered over the year but the frequency of effective wage changes is seasonal. The national minimum wage has a significant impact on the probability of a wage agreement and on the seasonality of wage changes. Negotiated wage increases are correlated with inflation, the national minimum wage increases and the firm profitability.","PeriodicalId":294049,"journal":{"name":"ERN: Other European Economics: Microeconomics & Industrial Organization (Topic)","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133184737","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 investigates whether the existence of knowledge spillovers, differences in the capacity of f rms to assimilate them and disparities in some human resource management practices are related with the decision to innovate of Spanish f rms. In order to do this, we employ data from the “Central de Balances” database, which covers both manufacturing and services f rms during the period 2003-2007, and use an estimator proposed by Wooldridge (2005) for dynamic random effects discrete choice models. The empirical exercise provides evidence on the positive link between spillovers and the innovative behaviour of companies, not just for the knowledge generated in the same industry, but also for that generated in the same region or by the public sector. Moreover, this link is stronger for those f rms with a higher capacity to absorb those spillovers. This ability not only works through f rms’ R&D capabilities, but also through such factors as the quality of the labour force, the share of temporary employment and the amount of resources spent in training. In addition to these factors, we f nd that innovation performance exhibits a high degree of inertia. Further, some other observed f rm characteristics, such as size, sales growth, export behaviour, sector capital intensity or f nancial structure variables, are also found to be relevant determinants of the likelihood of innovation.
{"title":"Understanding the Spanish Business Innovation Gap: The Role of Spillovers and Firms’ Absorptive Capacity","authors":"José Manuel Montero, Paloma López-García","doi":"10.2139/ssrn.1631705","DOIUrl":"https://doi.org/10.2139/ssrn.1631705","url":null,"abstract":"This paper investigates whether the existence of knowledge spillovers, differences in the capacity of f rms to assimilate them and disparities in some human resource management practices are related with the decision to innovate of Spanish f rms. In order to do this, we employ data from the “Central de Balances” database, which covers both manufacturing and services f rms during the period 2003-2007, and use an estimator proposed by Wooldridge (2005) for dynamic random effects discrete choice models. The empirical exercise provides evidence on the positive link between spillovers and the innovative behaviour of companies, not just for the knowledge generated in the same industry, but also for that generated in the same region or by the public sector. Moreover, this link is stronger for those f rms with a higher capacity to absorb those spillovers. This ability not only works through f rms’ R&D capabilities, but also through such factors as the quality of the labour force, the share of temporary employment and the amount of resources spent in training. In addition to these factors, we f nd that innovation performance exhibits a high degree of inertia. Further, some other observed f rm characteristics, such as size, sales growth, export behaviour, sector capital intensity or f nancial structure variables, are also found to be relevant determinants of the likelihood of innovation.","PeriodicalId":294049,"journal":{"name":"ERN: Other European Economics: Microeconomics & Industrial Organization (Topic)","volume":"83 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124950694","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 firm-level balance-sheet data comparable across EU countries, we consider firms active in generation, distribution and transmission of electricity and their ownership structure to empirically investigate the interaction of public versus private ownership and the quality of institutions as determinants of productivity. While earlier literature has traditionally focused on ownership as an internal governance mechanism, and has suggested that public ownership is associated with lower productivity than under private ownership, here we focus on the role of institutions as an external governance mechanism. After controlling for size, wages, countries and sectors, we confirm that government-owned tend to be less productive than their private counterparts (a result robust to different productivity measures), but we also discover two new facts. First, when the control of the firm by government is indirect, i. e. when government ownership is at the top of the control chain, the negative productive effect is weaker. Second, this effect is smaller in countries with high-quality institutions and public enterprises are more efficient than in countries with a poor institutional environment
{"title":"Ownership, Institutions and Productivity of European Electricity Firms","authors":"M. Florio, Elisabetta Borghi, C. D. Del Bo","doi":"10.2139/ssrn.2723455","DOIUrl":"https://doi.org/10.2139/ssrn.2723455","url":null,"abstract":"Using firm-level balance-sheet data comparable across EU countries, we consider firms active in generation, distribution and transmission of electricity and their ownership structure to empirically investigate the interaction of public versus private ownership and the quality of institutions as determinants of productivity. While earlier literature has traditionally focused on ownership as an internal governance mechanism, and has suggested that public ownership is associated with lower productivity than under private ownership, here we focus on the role of institutions as an external governance mechanism. After controlling for size, wages, countries and sectors, we confirm that government-owned tend to be less productive than their private counterparts (a result robust to different productivity measures), but we also discover two new facts. First, when the control of the firm by government is indirect, i. e. when government ownership is at the top of the control chain, the negative productive effect is weaker. Second, this effect is smaller in countries with high-quality institutions and public enterprises are more efficient than in countries with a poor institutional environment","PeriodicalId":294049,"journal":{"name":"ERN: Other European Economics: Microeconomics & Industrial Organization (Topic)","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-06-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130386522","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}
In this paper we study price competition, equilibrium market configurations and entry decisions when firms compete in vertically-differentiated markets producing complementary goods. We show that allowing firms to sell complementary goods may be welfare-enhancing and pro-competitive. In fact, such strategy favors the entry of new firms producing lower-quality components. Moreover, this strategy increases consumer surplus, even when firms sell the two complements as a bundle. Interestingly, notwithstanding the increase in competition, it is always optimal for firms to enter a complementary good market. By discouraging such practices, antitrust authorities may harm both consumers and low-quality firms, at the same time undermining market stability.
{"title":"Bundling and Compatibility: Selling the Whole Package May Be Pro-Competitive","authors":"M. Alvisi, Emanuela Carbonara","doi":"10.2139/ssrn.1625844","DOIUrl":"https://doi.org/10.2139/ssrn.1625844","url":null,"abstract":"In this paper we study price competition, equilibrium market configurations and entry decisions when firms compete in vertically-differentiated markets producing complementary goods. We show that allowing firms to sell complementary goods may be welfare-enhancing and pro-competitive. In fact, such strategy favors the entry of new firms producing lower-quality components. Moreover, this strategy increases consumer surplus, even when firms sell the two complements as a bundle. Interestingly, notwithstanding the increase in competition, it is always optimal for firms to enter a complementary good market. By discouraging such practices, antitrust authorities may harm both consumers and low-quality firms, at the same time undermining market stability.","PeriodicalId":294049,"journal":{"name":"ERN: Other European Economics: Microeconomics & Industrial Organization (Topic)","volume":"60 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-06-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122723677","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 article builds upon the empirical results concerning localised knowledge spillovers in order to highlight some policy implications within the European regions. The analysis emphasises the role of the regional innovationpolicies as supporting the institutions which generate knowledge and learning. However, it appears that the search for universal policy tools is unrealistic. The empirical literature stresses indeed a variety of regional features. In this perspective, we argue that original strategies have to be built in order to cope with the various dilemmas faced by regional innovationpolicies, concerning in particular the best way to enhance and exploit public/private, intra/inter-firms, intra/inter-industries and local/global knowledge flows. Such specific strategies require having an accurate knowledge on the local features and on the comparative positioning of the concerned region compared to others. Improving data and indicators to diagnose and monitor regional innovation is therefore presented as a key issue for the policy makers.
{"title":"Knowledge Diffusion and Innovation Policies within the European Regions: Challenges Based on Recent Empirical Evidence","authors":"C. Autant-Bernard, M. Fadairo, N. Massard","doi":"10.2139/ssrn.1625246","DOIUrl":"https://doi.org/10.2139/ssrn.1625246","url":null,"abstract":"This article builds upon the empirical results concerning localised knowledge spillovers in order to highlight some policy implications within the European regions. The analysis emphasises the role of the regional innovationpolicies as supporting the institutions which generate knowledge and learning. However, it appears that the search for universal policy tools is unrealistic. The empirical literature stresses indeed a variety of regional features. In this perspective, we argue that original strategies have to be built in order to cope with the various dilemmas faced by regional innovationpolicies, concerning in particular the best way to enhance and exploit public/private, intra/inter-firms, intra/inter-industries and local/global knowledge flows. Such specific strategies require having an accurate knowledge on the local features and on the comparative positioning of the concerned region compared to others. Improving data and indicators to diagnose and monitor regional innovation is therefore presented as a key issue for the policy makers.","PeriodicalId":294049,"journal":{"name":"ERN: Other European Economics: Microeconomics & Industrial Organization (Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114265191","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 study analyzes the circumstances under which firms choose to have a relationship lender and under which firms switch their relationship lender. Relationship lending is measured by the largest lender’s share of debt. Our study is based on a unique dataset for Germany with more than 13,000 observations. We find that young firms and well capitalized firms are more likely to concentrate their borrowing on one bank. These two groups of firms are also more likely to switch their relationship lender. Moreover, firms concentrate their borrowing more heavily on banks with a high share of core deposits. Small firms are also more likely to stay with relationship lenders with a high share of core deposits. Finally, the proportion of debt borrowed from the relationship lender is reduced if the relationship between the lender and the borrower has been close for several years. Our findings suggest that both the decision in favor of relationship lending and the decision to switch the relationship lender are made in such a way as to balance the potential benefits and costs of a relationship lender’s access to private information.
{"title":"Marrying and Breaking Up: Firms and their Relationship Lenders","authors":"Ingrid Stein, Christoph Memmel, C. Schmieder","doi":"10.2139/ssrn.1568204","DOIUrl":"https://doi.org/10.2139/ssrn.1568204","url":null,"abstract":"This study analyzes the circumstances under which firms choose to have a relationship lender and under which firms switch their relationship lender. Relationship lending is measured by the largest lender’s share of debt. Our study is based on a unique dataset for Germany with more than 13,000 observations. We find that young firms and well capitalized firms are more likely to concentrate their borrowing on one bank. These two groups of firms are also more likely to switch their relationship lender. Moreover, firms concentrate their borrowing more heavily on banks with a high share of core deposits. Small firms are also more likely to stay with relationship lenders with a high share of core deposits. Finally, the proportion of debt borrowed from the relationship lender is reduced if the relationship between the lender and the borrower has been close for several years. Our findings suggest that both the decision in favor of relationship lending and the decision to switch the relationship lender are made in such a way as to balance the potential benefits and costs of a relationship lender’s access to private information.","PeriodicalId":294049,"journal":{"name":"ERN: Other European Economics: Microeconomics & Industrial Organization (Topic)","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-03-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126072251","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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