Productive Cluster Hire

Discovering a group of experts to complete a set of tasks that require various skills is known as Cluster Hire Problem. Each expert has a set of skills which he/she can offer and charges a monetary cost to offer their expertise. We are given a set of projects that need to be completed and on completion of each project, the organization gets a Profit. For performing a subset of given projects, we are given a predetermined budget. This budget is spent on hiring experts. We extend this problem by introducing the productivity and capacity of experts. We want to hire experts that are more productive, and this factor is determined on the basis of their past experience. We also want to make sure that no expert is overworked as it is not possible for a single expert to provide his/her expertise for unlimited times. Our goal is to hire as many experts as possible in which the sum of their hiring costs (i.e., salary) is under the given budget as we are interested to maximize the profit and also maximize the productivity of the group of experts, our problem is a bi-objective optimization problem. To achieve this, we propose two different approaches that maximize our Profit and Productivity

Informality and Productivity in Bolivia: A Gender Differentiated Empirical Analysis

The urban labor market in Bolivia can be divided into 4 main sectors: 1) the public sector, 2) the formal private sector, 3) self-employed informals, and 4) informal workers. Although incomes are generally higher in the public sector and in the formal private sector, there is a strong preference in Bolivia for being informally self-employed. Two thirds of both men and women in urban areas respond that they would prefer to be self-employed rather than a salaried employee, and few see any advantage of becoming formal under the current institutional set-up. Currently, half of all economically active women in urban areas are informally self-employed, while this is the case for only one third of men. This implies that women are actually closer to the desired state than men, according to their own preferences. The real problem for women is not that they are informally self-employed, but rather that the profitability of their informal enterprises is low. On average, monthly profits of female micro-entrepreneurs is about 40% lower than those of male micro-entrepreneurs. This report uses quantitative information from about 600 micro and small enterprises to break down and understand this gender gap in profitability, and the results show that almost the whole gap is due to the fact that women operate their businesses on a much smaller scale (with less productive capital and fewer employees) than men. Why do female entrepreneurs operate on a smaller scale? One partial explanation is that they do not want to grow, because the business then would loose some of the features that make a micro-business particularly attractive for women (not to depend on others, to be able to care for children simultaneously, flexible working hours, and daily revenues). More important, however, is the lack of access to capital. Micro and small businesses operated by women have only a third of the operating capital of male operated businesses. There are two main reasons for this. First, women generally have fewer opportunities to accumulate capital, both because their household and reproductive work takes time away from paid work, and because they tend to earn less than men when they do work for money. Second, they do not have access to credit on reasonable terms. Access by itself is not the problem, as there is a very active micro-credit industry in Bolivia, but the terms are so unattractive that women try to avoid it if at all possible. The interest rates are high (20-40% per year); the group-lending practices increases the risk for the borrower, as they may end up paying other group members’ debt also; and they are typically required to assist at compulsory training courses twice a month, which is demanding for busy women running both a business and a household. Banks offer loans at more reasonable terms, but the requirements are difficult for micro-entrepreneurs to comply with (especially proof of a monthly pay check) and the risk is large as an entire house is often put up as collateral for even a small loan. Capital and credit is not a binding constraint in all sectors, however. On average, returns to additional capital investments are estimated to be relatively high (internal rates of return of over 20%) in the food sales sector, the textile clothing sector, and the camelid clothing sector. In contrast, they are estimated to be negative for grocery stores and the transport sector, which have experienced overinvestment to the extent that the returns to both capital and labor in these two sectors have been severely depressed. Even in the sectors where returns to capital are relatively high, a doubling of productive capital would not lead to a doubling of monthly profits. In fact, estimation results show strongly diminishing returns to scale, which means that micro-enterprises have little incentive to grow. Under the current institutional setup in Bolivia, it makes more economic sense to have several identical micro-enterprises in the family rather than one larger enterprise, and this is indeed often observed in practice. This is partly due to the characteristics of the sectors (for example, several small stores can capture a larger market due to the geographical dispersion), but it is mostly due to the tax-system, which becomes very demanding, both in terms of bureaucratic procedures and in terms of tax burden, as soon as an enterprise grows past a certain threshold. Under the current institutional set up, micro-entrepreneurs perceive no benefits from becoming formal, and indeed estimation results confirm that formality would lower the monthly profits of micro-enterprises (less than 3 workers and less than $1000 in operating capital) by 30-40%. Slightly bigger firms (3-5 workers), however, may benefit from getting a NIT and thus be able to offer facturas to the clients.Informality, Productivity, Gender, Bolivia

Is Inter-Firm Labor Mobility a Channel of Knowledge spillovers? Evidence from a Linked Employer-Employee Panel

An employer-employee panel is used to study whether the movement of workers across firms is a channel of unintended diffusion of R&D-generated knowledge. Somewhat surprisingly, hiring workers from others' R&D labs to one's own does not seem to be a significant spillover channel. Hiring workers previously in R&D to one's non-R&D activities, however, boosts both productivity and profitability. This is interpreted as evidence that these workers transmit knowledge that can be readily copied and implemented without much additional R&D effort.Labor Mobility, R&D Spillovers, Profitability, Linked Employer-Employee Data

East Midlands food & drink sector strategy

The food & drink sector is one of four priority sectors identified in the regional economic strategy, A Flourishing Region. This document sets out a strategy for maximising the contribution of the food & drink sector to the economic development of the East Midlands

Do Foreign Experts Increase the Productivity of Domestic Firms?

While most countries welcome (and some even subsidise) high-skilled immigrants, there is very limited evidence of their importance for domestic firms. To guide our empirical analysis, we first set up a simple theoretical model to show how foreign experts may impact on the productivity and wages of domestic firms. Using matched worker-firm data from Denmark and a difference-indifferences matching approach, we then find that firms that hire foreign experts – defined as employees eligible for reduced taxation under the Danish "Tax scheme for foreign researchers and key employees" – both become more productive (pay higher wages) and increase their exports of goods and services.foreign experts, export, immigrants, productivity, difference-in-differences matching

Migropolis: migration networks and formation of ethnic clusters in cities

In this paper we extend previous models of migration networks and ethnic cluster formation by considering migration as an ethnic-community wide phenomena where established migrants strategically provide support to newcomers. The incentive to provide support is associated with positive externalities which new waves of migrants might have on migrants already settled in the host location. Culturally-based tastes for particular goods and services generate an ethnic consumer demand and only individuals from the same ethnic community have the skills or the “insider’s information” required to provide these goods (protected market). If the ethnic population is large enough, an ethnic sector will emerge and eventually grow as the ethnic population expands further. According to the degree of preferences toward ethnic consumption, the mobility costs of the source locality population and congestion costs (hostility externalities) in the host location, alternative scenarios may arise. These scenarios provide a possible explanation of why different groups of migrants show different migration dynamics. Keywords: Consumption externalities, immigration, ethnic cluster, ethnic goods. JEL classification: F22, J15, J61.

Does Agglomeration Account for Process Innovation in Vietnamese Small and Medium Enterprises?

Although small and medium enterprises (SMEs) play a crucial role in the Vietnamese economy, this sector’s growth is hindered by low level of technology and innovation. This paper uses firm-level panel data to examine whether process innovation activities in SMEs are influenced by their industrial environments. It measures the effects that agglomeration, the geographic concentration of firms within the same locality, has on firms’ total outputs and their propensity to introduce new technology. Using a logistic model with firm fixed-effects, I find that agglomeration decreases outputs of informal firms and the likelihood of new technology introduction in all firms. However, there are evidence of positive lagged effects of agglomeration on innovation and heterogeneous effects across industries

Labor Pooling, Labor Poaching and Spatial Clustering

When firms cluster in the same local labor market, they face a trade-off between the benefits of labor pooling (i.e., access to workers whose knowledge help reduce costs) and the costs of labor poaching (i.e., loss of some key workers to competition and the indirect effect of a higher wage bill to retain the others). We explore this trade-off in a duopoly game. Depending on market size and on the degree of horizontal differentiation between products, we characterize the strategic choices of firms regarding locations, wages, poaching and prices. Our results show that co-location, although it is always efficient, is not in general the equilibrium outcome.Labor pooling, labor poaching, firm clustering, agglomeration

Strategies of Italian firms in Romania. Evidence from selected case studies

The aim of this paper is to analyze the internationalization of Italian firms in Romania, operating in the sectors of footwear, furniture and industrial refrigeration. After describing and quantifying the internationalization process between Veneto and Romania, we discuss for each of the sectors, the changes that occurred in the organisation of the production processes within the firms, and particularly how such processes have been fragmented. This article draws on numerous case studies, posits different models of value chain governance, and discusses their implications for regional development and sustainabilityInternationalization, Romania, Italy, Organization of Production