The outcome of different bargaining models: the effects on wages, employment and the employment mix

The paper analyses data on wages, employment and labour composition in the Uruguayan manufacturing sector during 1985-1999 in order to get some evidence on the effects of union action on these variables. The whole period is first studied using a model in which no assumptions on the underlying bargaining model are made. The results support the hypothesis of two different bargaining frameworks in the 80s and 90s. Therefore, a right-tomanage bargaining model is specified for the 80s and a recursive contracts model for the 90s. Union effects are such that while in the 80s the effect of trade unions were to increase wages and hence decrease employment, in the nineties they moderated wage demands in exchange of more job stability. They not only managed to have a positive direct effect on employment but also to buffer the negative effects of increased openness and demand fluctuations on employment. The existence of unions also had an impact on labour composition, favouring a higher share of non-production workers in total employment. The result can be linked to the fact that firms moved to more capital intensive – or at least more skilled labour intensivetechnologies to avoid union costs. A final finding is related to the fact that the change in the Uruguayan bargaining regime at the beginning of the 90s – by which the mandatory extension of contracts vanished – favoured a more decentralised negotiation scheme and thus ended with the homogenous impact found in the 80s, since coordination in bargaining was lost.

Of markets, products and prices- the effects of the euro on European firms

In this Blueprint, Lionel Fontagné, Thierry Mayer and Gianmarco Ottaviano, show that trade flows have not increased meaningfully since the introduction of the euro. However, trade volume can be a misleading yardstick. Other obstacles Â? be it differences in regulation, legal framework, taxes or language Â? are significant enough to continue to act as binding constraints on internationalisation. In terms of prices, the authors find that the euro has resulted in less volatile and lower prices, especially within the euro area, and this is a clear plus for consumers.

International Trade and Productivity: Firm-Level Evidence from Ukraine

The paper empirically assesses microeconomic exporting-productivity nexus using the data for Ukrainian manufacturing firms for the years 2000-2005. The results of the estimation show that firms with higher total factor productivity (TFP) levels in the period prior to entry are much more likely to enter export markets. Also age, size and intangible assets of the firm have significant positive influence on the probability of exporting. In testing learning-by-exporting effect I employ propensity score matching to address issues of endogeneity and sample selection. When the estimation is done for the whole universe of firms in the dataset, the results go in line with common trends and suggest significant positive post-entry productivity effect for the firms that enter export markets for the first time (in the t, t+1 and t+2 periods). At the industry level the results confirm the presence of learning-by-exporting effect in some industries. However the effect is not universal and varies between different types of exporting firms.exports, TFP, control function, matching, sample selection, endogeneity

A multivariate framework to explore firms' internationalization patterns: the role of individual heterogeneity

In this paper, we explore the internationalization pattern of firms and its relationship with firms\u2019 heterogeneity. Besides the more traditional exports and Foreign Direct Investments (FDI), we consider various forms of non-equity internationalization. The use of a Multivariate Probit Model allows us to assess the associations among the choices driving the firms\u2019 internationalization strategy as a whole and, at the same time, to avoid a priori assumptions on the internationalization patterns. From the empirical evidence, two main results emerge. At first, we observe that Italian firms jointly adopt various internalization forms, others than exports and FDI, conditionally to characteristics of the firms. The hypothesis reported in literature of a complementary or subsidiary relationship between exports and FDI is then confirmed also for non-equity internationalization forms. Secondly, we find that the heterogeneity of firms, measured by a large range of variables, has an important role in defining the choice of firms on the patterns of internalization. Thus in this context, we endorse the emerging opinion asserting that various dimensions other than productivity are relevant

Do banking relationships improve credit conditions for Spanish SMEs?

Small and medium-sized companies are extremely important for the Spanish economy. However, they face difficulties when trying to obtain financing (credit rationing). As a result, and given their limited possibilities to obtain finance in the capital market, they turn to the credit market, which is the main provider of funds for such companies. The main aim of this study is to provide an insight into the banking relationships that are developed in this market and their impact on credit rationing. Previous literature has studied this situation by focusing on price rationing and quantity rationing. This study furthers research into banking relationships by examining the effects that these relationships may have on compensation demanded for debt and the relationship with long-term credit rationing. After studying 386 SMEs listed in the Spanish Guide of Exporting Companies, the main conclusions drawn were as follows: i) SMEs working with larger numbers of financial entities and with longer relationships with these entities enjoy better access to credit; ii) SMEs that develop banking relationships by contracting financial products manage to reduce their credit costs; iii) SMEs that have longer banking relationships with banking entities benefit from better long-term credit conditions; and iv) the maintenance of banking relationships through the rendering of services reduces bank requirements in terms of guarantees in credit applications

The international entrepreneurial firms' social networks

ABSTRACT This paper investigates theoretically the importance and impact of the international entrepreneurial firms? (IEFs) social networks on selected firms? strategies. We focus specifically on some core attributes of IEFs and the impact of social networks on such strategies as the choice of the foreign markets to operate and the foreign entry modes. The social networks are a major driver of the internationalization from inception and help in overcoming a variety of physical and social resource limitations as well as transactional hazards. We conclude that it is likely that both some fundamental characteristics of the IEFs and those of the foreign markets entered account for these firms reliance on their social networks.entrepreneurship, international entrepreneurial firms, social networks, internationalization

Essays into Firms, Innovation and Productivity

This empirical research aims to understand firm-level innovation and productivity in the context of firm’s innovative activities or international activities such as offshoring and exporting. The PhD dissertation consists of three chapters that use the Survey of Business Activities annually provided by the Statistics Korea to gain insights into the link between such activities and firm performances such as markup or productivity. Chapter 1 investigates the link between R&D and firm-level markups. A detailed data on R&D expenditures is used to examine whether a firm’s innovation activities have any impact on its markups rather than productivity, whose relationship is already well-established in the literature. R&D is likely to help to differentiate a firm’s products from those of other competitors, thus boosting its demand. However, this demand-enhancing aspect of R&D has not been thoroughly examined in the literature. With the consistent estimation of firm-level markups using a dataset of the Korean manufacturing firms, it is found that R&D increases firm-level markups, despite its size being small. To account for the fact that R&D is simply a measure of the innovation input, patent counts have been used as an alternative measure of innovation, but no evidence of positive effect was found. This may indicate that demand-enhancing innovations are not necessarily all patented, which may be due to various reasons. Chapter 2 investigates the learning-by-exporting hypothesis. This has been widely researched in the current literature. However, this chapter places more focus on the estimation of productivity, which has been given little attention. In the learning-by-exporting hypothesis, it is theoretically suggested that productivity increases as a result of increase in efficiency. However, the conventional total factor productivity (TFP) measure contains information not only on efficiency but also on measurement errors and temporary shocks, the latter of which is hardly related to the theoretical link between exports and productivity. In this chapter, a real total factor productivity that is derived as part of the semi-parametric estimation (denoted RTFP) is suggested as an alternative measure in which the latter elements above can be minimised. The findings show that, when RTFP is employed, the-learning-by-exporting effect is not only positive but also significant and long-lasting. However, this effect becomes short-lived and insignificant when the TFP is used. This does not necessarily suggest that the learning-by-exporting effect is better captured with the RTFP, but a certain measure, despite being not so relevant for productivity, can end up providing a misleading result. Moreover, the markups measure obtained from the first chapter are used to reconcile the fact that the productivity measure is measured by revenue data rather than quantity. Chapter 3 examines the firm-level productivity, with much focus on offshoring. This chapter suggests modification to the Levinsohn-Petrin (LP) method to ensure alignment with the context of offshoring. This chapter suggests that value-added be used in place of gross sales when estimating a production function using the LP method to avoid inconsistent estimation in the second stage. The results show that offshoring has a positive impact on productivity, but the effect is not long-lasting. This suggests that offshoring can enhance productivity in the short-term by a composition effect in which resources are reallocated towards more productive activities or departments, whilst offshoring less productive ones to foreign vendors. The results also show that the modifications generate a significant difference in the estimators, suggesting the possibility of misleading results if no modification is made. RTFP, introduced in the second chapter, is also employed as a dependent variable and the results again display a highly significant effect of offshoring on productivity. As will be explained in the second chapter, RTFP is more fitting in measuring the trend of productivity, as it is designed to be less influenced by transitory shocks or measurement errors. Thus, the change in results indicates that the productivity-enhancing effect is clearer when using RTFP, however becomes less so when the conventional measure is employed. Moreover, the same estimates of markups from the first chapter are employed again to mitigate any bias arising from the demand-side

International Capital Flows, Technology Spillovers and Local Credit Markets.

No abstract availableInvestments, Foreign; Investments, Foreign -- Mathematical models; Capital investments;

A Richer Understanding of Australia’s Productivity Performance in the 1990s: Improved estimates based upon firm-level panel data

Australia’s productivity performance is characterized by important differences across continuing firms, frequent entry of new firms, and substantial exit of firms which, for one reason or another, decide to cease production. These basic facts call into question the appropriateness of measuring productivity using an aggregate production function that is based upon a representative firm. This study relaxes the standard assumptions that industries are comprised of a set of homogeneous firms, the set of which are constant over time. Instead, we apply a semi-parametric production to continue production. The model controls for the relationship between productivity shocks and input choices and the inter-relationship between these and the decision to continue production. Using the Business Longitudinal Survey we estimate an improved set of production functions for twenty-five two-digit industries in Australia. We use these results to examine aggregate industry-level productivity performance. We use a new aggregation method in calculating these changes which allows us to separate productivity changes and output composition changes which sheds new light on industry-level productivity performance in Australia.Firm-level production function estimation, multi-factor productivity, semiparametric estimation, Australian economic performance

The Gulf Cooperation Council countries – economic structures, recent developments and role in the global economy

In the wake of high and rising oil prices since 2003, the member states of the Gulf Cooperation Council (GCC) have seen dynamic economic development, enhancing their role in the global economy as investors and trade partners. Real GDP growth has been buoyant, with non-oil activity expanding faster than oil GDP. Macroeconomic developments have also been characterised by large fiscal and current account surpluses as a result of rising oil revenues, notwithstanding fiscal expansion and rapid import growth. The most significant macroeconomic challenge faced by GCC countries is rising inflation in an environment in which the contribution of monetary policy to containing inflationary pressure is constrained by the exchange rate regimes. The overall favourable macroeconomic backdrop of recent years has provided GCC countries with an opportunity to tackle long-standing structural challenges, such as the diversification of oil-centred economies and reform of the labour markets. In a global context, apart from developing into a pole of global economic growth, GCC countries – together with other oil-exporting countries – have become a major net supplier of capital in global markets, second only to East Asia. As a result, they have become part of the international policy debate on global imbalances. Furthermore, GCC countries are home to some of the world’s largest sovereign wealth funds, which raises several financial stability issues. Their role as trade partners has also increased, with the European Union being the only major region in the world maintaining a significant surplus in bilateral trade with the GCC. GCC countries are also key players in global energy markets in terms of production, exports and the availability of spare capacity. Their role is likely to become even more pivotal in the future as they command vast oil and gas reserves and benefit from relatively low costs in exploiting oil reserves. JEL Classification: F40, F30, F14, E60, N15, O53, Q40.Gulf Cooperation Council, global imbalances, sovereign wealth funds, financial stability, oil markets.