73 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
sj-pdf-1-etp-10.1177_10422587221077222 – Supplemental Material for Gender Differences in Enterprise Performance During the COVID-19 Crisis: Do Public Policy Responses Matter?
No full textSupplemental Material, sj-pdf-1-etp-10.1177_10422587221077222 for Gender Differences in Enterprise Performance During the COVID-19 Crisis: Do Public Policy Responses Matter? by Addis G. Birhanu, Yamlaksira S. Getachew, and Addisu A. Lashitew in Entrepreneurship Theory and Practice</p
(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
No full textLack 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.
Competition between food and biofuel production in Ethiopia: a partial equilibrium analysis
No full textResource misallocation and aggregate productivity
No full textInternationale inkomensverschillen worden grotendeels veroorzaakt door verschillen in productiviteit. In dit proefschrift wordt de potentiële bijdrage bestudeerd die misallocatie van productiefactoren kan leveren aan de verklaring van zulke verschillen in geaggregeerde productiviteit. Er wordt een analyse gedaan door recent verbeterde methodieken toe te passen op twee unieke datasets voor de (formele) industriële sector. De resultaten laten zien dat misallocatie van arbeid en kapitaal tussen heterogene bedrijven kan leiden tot een substantiële verlaging van de geaggregeerde productiviteit, hoewel dit effect niet merkbaar sterker lijkt te zijn in armere landen. Het onderzoek concentreert zich op een aantal institutionele factoren die misallocatie versterken, zoals ontslagbescherming, financiële ontwikkeling en politieke connecties. Strengere ontslagbescherming en een laag niveau van financiële ontwikkeling blijken verband te houden met een hogere mate van misallocatie. Potentieel verstorende politieke connecties bevorderen de toegang tot financiële middelen, al speelt dit een minder grote rol in landen met een goed functionerend financieel systeem. De resultaten van dit proefschrift tonen aan dat het oplossen van institutionele knelpunten kan leiden tot efficiëntere allocatie van productiefactoren, en zo kan bijdragen tot productiviteitsgroei.Cross-country income differences are to a great extent driven by productivity. This thesis looks into the potential contribution of resource misallocation in explaining these large gaps in aggregate productivity. Analysis is conducted by applying recent methodological advances on two unique datasets for the formal manufacturing sector. The results show that misallocation of labor and capital among heterogeneous plants can depress aggregate productivity substantially, although this does not appear to be particularly higher in poorer countries. The thesis takes a closer look into a number of institutional factors that induce misallocation, focusing on employment protection, financial development, and political connections. Stringent employment protection and low level of financial development are associated with greater misallocation. Potentially distorting political connections increase firms’ financial access, although their role is lower in countries where financial markets are well developed. The results of this thesis indicate that loosening institutional bottlenecks can induce more efficient resource allocation, contributing to productivity growth
Does Access to Finance Lower Firms’ Cost of Capital? Empirical Evidence from International Manufacturing Data
No full textLack 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
No full textEmployment 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
No full textEmployment 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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