Can firms grow without credit?: evidence from the Euro Area, 2005-2011: a quantile panel analysis

This paper explores the effects of bank credit on firm growth before and after the recent financial crisis, taking into account different structural characteristics of banking sectors and domestic economies. Panel quantile analysis is used on a sample of 2075 euro area firms in 2005-2011. The post-2008 credit crunch is found to seriously affect only small, slow-growth firms and especially those operating in concentrated and domestic-dominated banking systems, and in riskier and less financially developed economies. Large, high-growth firms seem to be able to find alternative financial sources and, thus, may act as carriers and facilitators of a credit-less recovery

Inventory investment and sectoral characteristics in some OECD countries

This paper discusses the effects of sectoral structure on the long run macroeconomic inventory behaviour of national economies. Data on 15 OECD countries are included in the analysis, which is based on correlation and cluster analysis methodologies. The study is part of a long-term research project exploring factors influencing the inventory behaviour of national economies. First, we introduce some basic characteristics of macroeconomic inventory formation in the 15 OECD countries. We argue that our previous results on the existence of specific characteristic features of macroeconomic inventory investment are justified, hence it makes sense to study the factors influencing these features. We then examine the contribution of various sectors to the production of in the countries involved and the relationship between sectoral structure and inventory intensity (annual inventory change/Gross Value Added). We find that the high share of agriculture and manufacturing increases inventory intensity, that the increasing share of services has a negative effect and that the role of construction and trade is not obvious. The relatively low stability of the statistical results warns us to be cautious with our judgements. Further, case-by-case analysis would be required to obtain more solid results

Do Multinational enterprises push up wages of domestic firms in the Italian Manufacturing sector?

This paper analyzes the effects of foreign direct investment on wages paid by domestic firms in the Italian manufacturing sector over the period 2002–2007. In particular, the authors investigate the im-pact of multinational enterprises on wages paid by local firms which operate in the same industry, known and horizontal wage spillovers, or have linkages with multinational enterprises in both downstream and upstream industries, known as vertical wage spillovers. By using a large panel dataset, consisting of 551,000 observations, the authors find evidence of wage spillovers only at inter-industry level and, more specifically, for those firms who supply their goods to multinational enterprises, described as backward wage spillovers. Moreover, findings suggest that the wage spillover effect is strongly affected by the technological gap between local and foreign firms: only workers employed in domestic firms with a low-medium technological absorptive capacity seem to benefit from the presence of multinational enterprises in terms of higher wages

External asymmetries in the Euro area and the role of foreign direct investment

Soon after the introduction of the common currency, a divide emerged between two groups in the Euro area: one comprised of the North-European countries achieving external surpluses and the other of the South-European countries with large external deficits. This paper shows that different patterns of Foreign Direct Investment (FDI) inflows across the Euro area countries contributed to this divergence. Our theoretical framework shows that if the economy is relatively capital-intensive in the production of traded (non-traded) output, FDI will be channeled in greater proportions to the traded (non-traded) sector, thus improving (deteriorating) the trade balance. Focusing on ten Euro area countries over the period 1980- 2009, we establish a positive (negative) long-run effect of FDI inflows on the trade balance in the North (South). In the North the positive effect stems from the traded-sector FDI inflows that were significantly higher in comparison to the South, both before and after the EMU. In contrast, in the South the increased FDI inflows in the post-EMU era were dominated by investments in the non-traded sector. When industry-level data are employed, a positive (negative) long-run effect of manufacturing (non-manufacturing) FDI inflows on the trade balance in the North (South) is further established

Which firms benefit from foreign direct investment? Empirical evidence from Indonesian manufacturing

Despite growing concern regarding the productivity benefits of foreign direct investment (FDI), very few studies have been conducted on the impact of FDI on firm-level technical efficiency. This study helps fill this gap by empirically examining the spillover effects of FDI on the technical efficiency of Indonesian manufacturing firms. A panel data stochastic production frontier (SPF) method is applied to 3318 firms surveyed over the period 1988–2000. The results reveal evidence of positive FDI spillovers on technical efficiency. Interesting differences emerge however when the samples are divided into two efficiency levels. High-efficiency domestic firms receive negative spillovers, in general, while low-efficiency firms gain positive spillovers. These findings justify the hypothesis of efficiency gaps, that the larger is the efficiency gap between domestic and foreign firms the easier the former extracts spillover benefits from the latter

Risk based uncertainty quantification to improve robustness of manufacturing operations

The cyber-physical systems of Industry 4.0 are expected to generate vast amount of in-process data and revolutionise the way data, knowledge and wisdom is captured and reused in manufacturing industries. The goal is to increase profits by dramatically reducing the occurrence of unexpected process results and waste. ISO9001:2015 defines risk as effect of uncertainty. In the 7Epsilon context, the risk is defined as effect of uncertainty on expected results. The paper proposes a novel algorithm to embed risk based thinking in quantifying uncertainty in manufacturing operations during the tolerance synthesis process. This method uses penalty functions to mathematically represent deviation from expected results and solves the tolerance synthesis problem by proposing a quantile regression tree approach. The latter involves non parametric estimation of conditional quantiles of a response variable from in-process data and allows process engineers to discover and visualise optimal ranges that are associated with quality improvements. In order to quantify uncertainty and predict process robustness, a probabilistic approach, based on the likelihood ratio test with bootstrapping, is proposed which uses smoothed probability estimation of conditional probabilities. The mathematical formulation presented in this paper will allow organisations to extend Six Sigma process improvement principles in the Industry 4.0 context and implement the 7 steps of 7Epsilon in order to satisfy the requirements of clauses 6.1 and 7.1.6 of the ISO9001:2015 and the aerospace AS9100:2016 quality standard

Foreign presence, technical efficiency and firm survival in Greece: a simultaneous equation model with latent variables approach

The aim of the paper is to explain the role that technical efficiency and foreign spillover effects have on firm survival. Panel data from Greek manufacturing industry (3142 firms) in 1997-2003 are used. Technical efficiency is estimated through a CES translog production function. A hazard function is then used (corresponding to the Exponential and Weibull distributions as well as the Cox model) to estimate survival probabilities. While foreign spillovers exercise a positive impact on hazard, foreign firms do not have any distinctive survival advantage compared to their domestic rivals. On the contrary, technical efficiency affects hazard in a negative way, improving survival expectations