1,720,971 research outputs found
The export performance of emerging economy firms: The influence of firm capabilities and institutional environments
No full textWe advance a two-stage theoretical model which contends that the export performance of emerging economy firms (EEFs) will depend both upon their firm-specific capabilities and their home institutional environments. Specifically, we argue that EEFs will be more likely to export when facing more uncertainty at home from greater political instability, substantial informal competition, and high corruption. Furthermore, we hypothesize that firms’ export intensities will be contingent upon specialized internal capabilities such as a skilled workforce, top managerial experience, and access to external technologies. We test these hypotheses using a dataset of more than 16,000 firms from the four BRIC economies (i.e., Brazil, Russia, China and India). Our results confirm that political instability and informal competition have robust effects on the export propensity of EEFs, whilst export intensity is contingent upon the availability of skilled workers and access to external technologies via licensing
(Not) Keeping up with the Joneses: income inequality, social cohesion and crimes against businesses
No full textRising inequality is one of the grand societal challenges of our time. Yet, its effects on firms – including multinational enterprises (MNEs) – and their operations have not been widely examined by IB scholars. In this study we posit that income inequality within a country is positively associated with the incidence and severity of crime experienced by businesses. Further, we propose that this relationship will be negatively moderated by social cohesion (in the form of greater societal trust and lower ethno-linguistic fractionalization) in these countries, such that social cohesion helps to offset the negative impacts of inequality on crime against businesses. We test these hypotheses using a comprehensive data set of 114,000 firms from 122 countries and find consistent support for our theses. Our findings, which are robust to different alternative variables, model specifications, instrumentation, and estimation techniques, advance our understanding of the intricate ways through which inequality affects societies worldwide, specifically via business organizations, and the challenges this may pose to MNEs and other businesses. They also offer important managerial and policy insights regarding the consequences of inequality and potential mitigation mechanisms
Income inequality, social cohesion, and crime against businesses: evidence from a global sample of firms
No full textRising inequality is one of the grand societal challenges of our time. Yet, its effects on firms – including multinational enterprises (MNEs) – and their operations have not been widely examined by IB scholars. In this study, we posit that income inequality within a country is positively associated with the incidence and severity of crime experienced by businesses. Further, we propose that this relationship will be negatively moderated by social cohesion (in the form of greater societal trust and lower ethno-linguistic fractionalization) in these countries, such that social cohesion helps to offset the negative impacts of inequality on crime against businesses. We test these hypotheses using a comprehensive data set of 114,000 firms from 122 countries and find consistent support for our theses. Our findings, which are robust to different alternative variables, model specifications, instrumentation, and estimation techniques, unpack the intricate ways through which inequality affects businesses worldwide and the associated challenges to MNEs. They also offer important managerial and policy insights regarding the consequences of inequality and potential mitigation mechanisms
Does Access to Finance Lower Firms’ Cost of Capital? Empirical Evidence from International Manufacturing Data
Get PDFLack of access to finance is argued to be one of the most binding constraints for firm growth. There is, however, limited empirical evidence on the relationship between access to finance and the cost of capital. This paper uses international manufacturing data to analyze the effect of access to finance on firms’ cost of capital. Using a unique dataset that covers tens of thousands firms in more than 80 countries, I examine the effect of credit access on firms’ cost of capital. I address the endogeneity of credit access by instrumenting it with indicators of the strength of firms’ political connections. The results show that credit access has significant negative effect on the cost of capital. Taking advantage of the large country coverage of the dataset, I also relate firms’ cost of capital to country-level measures of financial development and find that financial development reduces cost of capital.
Does Access to Finance Lower Firms’ Cost of Capital? Empirical Evidence from International Manufacturing Data
Get PDFLack of access to finance is argued to be one of the most binding constraints for firm growth. There is, however, limited empirical evidence on the relationship between access to finance and the cost of capital. This paper uses international manufacturing data to analyze the effect of access to finance on firms’ cost of capital. Using a unique dataset that covers tens of thousands firms in more than 80 countries, I examine the effect of credit access on firms’ cost of capital. I address the endogeneity of credit access by instrumenting it with indicators of the strength of firms’ political connections. The results show that credit access has significant negative effect on the cost of capital. Taking advantage of the large country coverage of the dataset, I also relate firms’ cost of capital to country-level measures of financial development and find that financial development reduces cost of capital
Employment Protection and Misallocation of Resources across Plants:International Evidence
Get PDFEmployment protection affects aggregate productivity via several channels in potentially contradicting ways, which makes it difficult to establish the relationship between the two. This study focuses on the misallocation of production factors across plants, which has been shown in past studies to substantially reduce aggregate productivity. The study provides new evidence on the effect of employment protection on resource misallocation using a large dataset of manufacturing plants covering more than 90 countries. For measuring misallocation, I use the within‐industry dispersion of the marginal product of labor and total factor productivity. The results show that higher cost of dismissing redundant workers is positively associated with misallocation. The effect of dismissal cost is especially larger in industries that have greater demand for adjusting labor. More specifically, the effect is larger in industries that intrinsically have higher layoff rate, and in industries that have large positive or negative sales growth rates
Employment Protection and Misallocation of Resources across Plants:International Evidence
Get PDFEmployment protection affects aggregate productivity via several channels in potentially contradicting ways, which makes it difficult to establish the relationship between the two. This study focuses on the misallocation of production factors across plants, which has been shown in past studies to substantially reduce aggregate productivity. The study provides new evidence on the effect of employment protection on resource misallocation using a large dataset of manufacturing plants covering more than 90 countries. For measuring misallocation, I use the within‐industry dispersion of the marginal product of labor and total factor productivity. The results show that higher cost of dismissing redundant workers is positively associated with misallocation. The effect of dismissal cost is especially larger in industries that have greater demand for adjusting labor. More specifically, the effect is larger in industries that intrinsically have higher layoff rate, and in industries that have large positive or negative sales growth rates
Does Access to Finance Lower Firms’ Cost of Capital? Empirical Evidence from International Manufacturing Data
Get PDFLack of access to finance is argued to be one of the most binding constraints for firm growth. There is, however, limited empirical evidence on the relationship between access to finance and the cost of capital. This paper uses international manufacturing data to analyze the effect of access to finance on firms’ cost of capital. Using a unique dataset that covers tens of thousands firms in more than 80 countries, I examine the effect of credit access on firms’ cost of capital. I address the endogeneity of credit access by instrumenting it with indicators of the strength of firms’ political connections. The results show that credit access has significant negative effect on the cost of capital. Taking advantage of the large country coverage of the dataset, I also relate firms’ cost of capital to country-level measures of financial development and find that financial development reduces cost of capital
Employment Protection and Misallocation of Resources across Plants:International Evidence
Get PDFEmployment protection affects aggregate productivity via several channels in potentially contradicting ways, which makes it difficult to establish the relationship between the two. This study focuses on the misallocation of production factors across plants, which has been shown in past studies to substantially reduce aggregate productivity. The study provides new evidence on the effect of employment protection on resource misallocation using a large dataset of manufacturing plants covering more than 90 countries. For measuring misallocation, I use the within‐industry dispersion of the marginal product of labor and total factor productivity. The results show that higher cost of dismissing redundant workers is positively associated with misallocation. The effect of dismissal cost is especially larger in industries that have greater demand for adjusting labor. More specifically, the effect is larger in industries that intrinsically have higher layoff rate, and in industries that have large positive or negative sales growth rates
Employment Protection and Misallocation of Resources across Plants: International Evidence
Get PDFEmployment protection affects aggregate productivity via several channels in potentially contradicting ways, which makes it difficult to establish the relationship between the two. This study focuses on the misallocation of production factors across plants, which has been shown in past studies to substantially reduce aggregate productivity. The study provides new evidence on the effect of employment protection on resource misallocation using a large dataset of manufacturing plants covering more than 90 countries. For measuring misallocation, I use the within‐industry dispersion of the marginal product of labor and total factor productivity. The results show that higher cost of dismissing redundant workers is positively associated with misallocation. The effect of dismissal cost is especially larger in industries that have greater demand for adjusting labor. More specifically, the effect is larger in industries that intrinsically have higher layoff rate, and in industries that have large positive or negative sales growth rates
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