Putting the Parts Together: Trade, Vertical Linkages, and Business Cycle Comovement

A well established empirical result is that countries that trade more with each other exhibit higher business cycle correlation. This paper examines the mechanisms underlying this relationship using a large cross-country industry-level panel dataset of manufacturing production and trade. We show that higher bilateral trade in an individual sector increases both the co-movement within the sector between trading countries, as well as the comovement between that sector and the rest of the economy of the trading partner. We also demonstrate that vertical linkages in production are an important force behind the overall impact of trade on business cycle synchronization. The elasticity of comovement with respect to bilateral trade is significantly higher in industry pairs that use each other as intermediate inputs in production. Our estimates imply that vertical production linkages account for some 30% of the total impact of bilateral trade on business cycle correlation for our full country sample. Finally, the positive impact of trade on industry-level comovement is far more pronounced in the North-North country pairs compared to either the South-South or North-South country pairs. However, the relative contribution of vertical linkages to aggregate comovement is roughly three times greater for North-South trade than North-North trade.trade, institutional change

Strategic Renewal and its Effect on Small Firm Performance

In this paper, we investigate the relationship between strategic renewal and the performance of smaller firms (less than 100 employees). We use a panel of micro data on about 1000 Dutch firms. The dataset contains information on aspects of strategic renewal, including process innovation and knowledge management. In our regression analyses we explain the variation in firm performance and we explicitly control for reversed causality, business cycle effects, sector effects, and firm age. We find that market research, an active external network for knowledge acquisition and strategic efforts into the improvement of internal processes are positively related to turnover growth. Furthermore, codification of knowledge, cooperation with partner firms and the provision of training to employees directly relates to employment growth. The results emphasize the importance of both knowledge absorption and knowledge creation to the success of innovative efforts in small firms. We find that the impact of the various measures varies with firm size. One further notable finding is that the ownership of patents negatively impacts small firm performance, particularly for the smallest firms in our sample.

Testing the ‘residential rootedness’ hypothesis of self-employment for Germany and the UK

The work on this paper was funded by a Marie Curie grant from the European Commission within the 7th Framework Program (ID 252752).Based on the notion that entrepreneurship is a ‘local event’, the literature argues that entrepreneurs are ‘rooted’ in place. This paper tests the ‘residential rootedness’‒hypothesis of self-employment by examining for Germany and the UK whether the self-employed are less likely to move over long distances (internal migration) than workers in paid employment. Using longitudinal data from the German Socio-economic Panel Study (SOEP) and the British Household Panel Survey (BHPS) and accounting for transitions in employment status we found little evidence that the self-employed in Germany and the UK are more rooted in place than workers in paid employment. Generally speaking, the self-employed were not less likely than workers in paid employment to migrate over longer distance. In contrast to the residential rootedness–hypothesis we found that an entry into self-employment and female self-employment are associated with internal migration, and that the self-employed who work from home (home-based businesses) are fairly geographically mobile. The gendered results suggest that women might use self-employment as a strategy to be spatially mobile with their household, or as a strategy to stay in the workforce after having moved residence until they find a job in the more secure wage and salary sector.PostprintPeer reviewe

Practical Supply Chain Management Knowledge from Industry-Academia Dialogue

Value co-creation, which can be defined as a joint initiative by two or more supply chain members to create value that cannot be created by the sole effort of one member, is a cornerstone concept in Supply Chain Management (SCM). To provide needed clarity about the concept, the invitation-only summit World Class Supply Chain 2017: Value Co-creation , was convened on May 10th, 2017 in Milton, Ontario. The summit brought together accomplished executives, scholars, and students in the SCM field to engage in dialogue directed at uncovering actionable insights about three crucial issues: The business benefits of value co-creation The actions required for successful value co-creation The obstacles to value co-creation and ways to overcome them The deliberations covered an extensive range of content that included concrete real-world examples to reinforce the insights. Those insights can be summarized in the following three major points: Information technology innovations can (a) come from an industry’s established players instead of only from new entrants and (b) significantly improve not only standard operational efficiency metrics in supply chains but also how supply chains parties interact with each other to create value. The suite of key success factors in value co-creation spans three major stages of activities for any organization: (i) preparing for its discussions with potential co-creation partners, (ii) having those discussions with an intent to find common ground on the most important partnership parameters, and (iii) managing the ongoing relationship(s) with selected partners. To be better poised for future success in value co-creation, today’s young, upcoming professionals (e.g., internship and entry-level jobs) must have jobs that are designed with a view to nurturing interpersonal skills in forming and sustaining effective inter-organizational business relationships

Trade intensity and output synchronisation: On the endogeneity properties of the EMU

Using annual bilateral data over the period 1988-2011 for a panel of 24 industrialised and emerging economies, we analyse in a time-varying framework the determinants of output synchronisation in EMU (European Monetary Union) distinguishing between core and peripheral member states. The results support the specialisation paradigm rather than the endogeneity hypothesis. Evidence is found in the euro period of diverging patterns between the core and the peripheral EMU countries raising questions about the future stability of EMU

People Matters: Accounting for Culture in Mergers and Acquisitions

People_matters.pdf: 664 downloads, before Oct. 1, 2020

Exploring the trend of Czech FDIs and their effect to institutional environment

This paper is the result of Metropolitan University Prague research project no. 68-02“Territorial Studies, Economics, International Relations” (2019) based on a grant from the Institutional Fund for the Long-term Strategic Development of Research Organisations. The authors would like to thank for useful comments and suggestions professors and participants of the 7th edition of the Conference IFRS Global Rules and Local Use - Beyond the Numbers in Prague 2019 and participants at conference ICABE 2019 in Thessaloniki Greece.Purpose: The goal of this paper is to explore the trend of FDIs in the Czech Republic and its changes in recent years using the gravity model. Apart from traditional variables used in FDI models we also introduce IFRS in national accounting rules. Design/Methodology/Approach: We use open-source data from the World Bank and FDI data from the Czech national bank, to analyse a panel data of bilateral FDI for 19 EU countries over the period 2008–2017 by PPML specification. Findings: We have observed significant effect of positive impact on broader introduction of IFRS in 2010 in terms of country imports and exports. We observed lower significance of IFRS dummy in the gravity model, where dependent variable is the sum of FDI inflow and FDI outflow it is not significant in the models which dependent variables are FDI inward and FDI outward for FDIs. Practical Implications: In general, FDIs increased productivity in the Czech Republic, especially in 1990s. We assess the effect and possible contribution of traditional variables like size, GDP, border and distance to Czech FDIs. Originality/Value: We find that the positive effect of IFRS exists at 10 percent significance for FDIs. Nevertheless we claim that this effect is mixed with other institutional issues, namely institutional isomorphism. Further tests will be needed after the forthcoming change of the Czech accounting act, which is approaching after 2020.peer-reviewe

Is venture capital a local business? : A test of the proximity and local network hypotheses

Venture capital (VC) investment has long been conceptualized as a local business , in which the VC’s ability to source, syndicate, fund, monitor, and add value to portfolio firms critically depends on their access to knowledge obtained through their ties to the local (i.e., geographically proximate) network. Consistent with the view that local networks matter, existing research confirms that local and geographically distant portfolio firms are sourced, syndicated, funded, and monitored differently. Curiously, emerging research on VC investment practice within the United States finds that distant investments, as measured by “exits” (either initial public offering or merger & acquisition) out-perform local investments. These findings raise important questions about the assumed benefits of local network membership and proximity. To more deeply probe these questions, we contrast the deal structure of cross-border VC investment with domestic VC investment, and contrast the deal structure of cross-border VC investments that include a local partner with those that do not. Evidence from 139,892 rounds of venture capital financing in the period 1980-2009 suggests that cross-border investment practice, in terms of deal sourcing, syndication, and performance indeed change with proximity, but that monitoring practices do not. Further, we find that the inclusion of a local partner in the investment syndicate yields surprisingly few benefits. This evidence, we argue, raises important questions about VC investment practice as well as the ability of firms to capture and lever the presumed benefits of network membership