Financing constraints and fixed-term employment contracts: evidence from the 2008-09 financial crisis

This paper investigates the effects of financing constraints on employment decisions of firms, when it is possible to choose between permanent and fixed-term workers. We use linked employer-employee data for the universe of private sector firms in Portugal, and the 2008-09 financial crisis as a shock for identification. We find that firms in sectors that intrinsically rely more on external finance increased the share of fixed-term employment and hires after the crisis, while the effect for firms with wider access to buyer-supplier credit is relatively lower. At the worker level, workers in sectors that require significant external financing are more likely to be hired with a fixed-term contract after the crisis, while those in sectors that have wider access to supplier credit are less likely. Our results suggest that the crisis induced financially constrained firms to use the more flexible fixed-term contracts more intensively. Credit from suppliers alleviated this effect by potentially providing an alternative source of funds to credit from financial institutions.European Union FEDER Programme, and Fundação para a Ciência e a Tecnologia. Project EXPL/IIM-ECO/1207/2013

Determinants of vertical integration in export processing: Theory and evidence from China

AbstractThis paper examines the determinants of vertical integration versus outsourcing in export processing, by exploiting the coexistence of two export processing regimes in China, which designate by law who owns and controls the imported components. Based on a variant of the Antràs-Helpman (2004) model, we show theoretically that control over imported components for assembly can affect firm integration decisions. Our empirical results show that when Chinese plants control the use of components, the export share of foreign-owned plants is positively correlated with the intensity of inputs provided by the headquarter (capital, skill, and R&D). These results are consistent with the property-rights theory of intra-firm trade. However, when foreign firms own and control the components, there is no evidence of a positive relationship between the intensity of headquarters' inputs and the prevalence of vertical integration. The results are consistent with our model that considers control over imported components as an alternative to asset ownership to alleviate hold-up by export-processing plants

Learning to export from neighbors

Article“NOTICE: this is the author’s version of a work that was accepted for publication in the Journal of International Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of International Economics, [Vol. 94, Issue 1, (September 2014)] DOI: 10.1016/j.jinteco.2014.06.003 ¨This paper studies how learning from neighboring firms affects new exporters' performance. We develop a statistical decision model in which a firm updates its prior belief about demand in a foreign market based on several factors, including the number of neighbors currently selling there, the level and heterogeneity of their export sales, and the firm's own prior knowledge about the market. A positive signal about demand inferred from neighbors' export performance raises the firm's probability of entry and initial sales in the market but, conditional on survival, lowers its post-entry growth. These learning effects are stronger when there are more neighbors to learn from or when the firm is less familiar with the market. We find supporting evidence for the main predictions of the model from transaction-level data for all Chinese exporters over the 2000-2006 period. Our findings are robust to controlling for firms' supply shocks, countries' demand shocks, and city-country fixed effects

Scale, scope, and trade dynamics of export processing plants

Copyright © 2015 Elsevier. NOTICE: this is the author’s version of a work that was accepted for publication in Economics Letters. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Economics Letters (2015), DOI: 10.1016/j.econlet.2015.04.033NOTE: the working paper version (2012) is in ORE at http://hdl.handle.net/10036/4380We use transaction-level data for the universe of Chinese trading firms over 2000–2006 to document that compared to ordinary exporters, export processing firms are larger but less diversified in products and destinations within the same industry; start exporting larger volumes but grow less over time within a market; are more likely to start selling to more distant markets but less likely to penetrate new ones after the first year. Since EP firms face less uncertainty, these facts can be rationalized in light of the heterogeneous-firm model with uncertainty in export sales, such as Fernandes and Tang (2014)

Determinants of vertical integration in export processing: theory and evidence from China

Open Access articleNOTICE: this is the author’s version of a work that was accepted for publication in Journal of Development Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Development Economics (2012), DOI: 10.1016/j.jdeveco.2012.05.004This paper examines the determinants of vertical integration versus outsourcing in export processing, by exploiting the coexistence of two export processing regimes in China, which designate by law who owns and controls the imported components. Based on a variant of the Antràs-Helpman (2004) model, we show theoretically that control over imported components for assembly can affect firm integration decisions. Our empirical results show that when Chinese plants control the use of components, the export share of foreign-owned plants is positively correlated with the intensity of inputs provided by the headquarter (capital, skill, and R&D). These results are consistent with the property-rights theory of intra-firm trade. However, when foreign firms own and control the components, there is no evidence of a positive relationship between the intensity of headquarters' inputs and the prevalence of vertical integration. The results are consistent with our model that considers control over imported components as an alternative to asset ownership to alleviate hold-up by export-processing plants

Improving offshore wind resource assessments using a data assimilation technique

Wind research and industry partners in collaboration with the EU have created the FP7 NORSEWInD project with the main objective of delivering to the North, Baltic and Irish Sea areas high quality wind atlases for offshore wind resource assessment. The state-of-the-art atmospheric mesoscale model WRF is used to map the wind resource at 90m a.g.l. for the North Sea area. A model domain with a spatial resolution of 20x20 km is used to simulate a winter and a summer month (November 2008 and July 2009). It is coupled with a Newtonian relaxation assimilation technique to ingest surface wind data provided from QuikSCAT (QS) satellite and sea surface temperature (SST) data from GHRSST Level 4 analysis. Wind results from the model are validated against observational data from the anemometric mast FINO1 and the spatial improvement of the average wind field at 90 m a.g.l is calculated. Improvements of more than 5% were obtained from using data assimilation on the overall domain. Each source has shown a distinct impact on the analyzed periods. The QS assimilation had higher impact during the summer period whereas SST assimilation was significant during the winter period. At FINO 1 location, improvements on the vertical wind profile were obtained from the SST assimilation. The MAE and RMSE statistical parameters were slightly improved

Impacte da assimilação de dados de vento provenientes de satélite em ambiente offshore: caso de estudo da Berlenga

Com o acentuado desenvolvimento da capacidade de produção de energia eólica onshore, onde Portugal já excede,actualmente, 3500 MW de capacidade instalada, é de esperar que este número ascenda a patamares muito elevados, tendo em conta os objectivos ambiciosos que a União Europeia planeia para o sector até 2020, prevendo-se que, em 2013, Portugal atinja a meta dos 5100M de capacidade instalada. No entanto, o recurso eólico onshore nacional não é infinito, tendo o LNEG já estimado uma meta nacional para a capacidade eólica sustentável onshore para Portugal Continental de, aproximadamente, 6000MW [1], capacidade só ultrapassável com a libertação de região actualmente protegidas ambientalmente de forma severa, bem como com a introdução de impactos naõ desprezáveis sobre as populações, que seria desejável evitar. Desta forma, e para um horizonte temporal além de 2013, há que fomentar e redireccionar as oportunidades de investimento do sector para outro nicho de mercado que se espera emergente, e que é o aproveitamento da energia eólica offshore que o País dispõe [2]

Optimal procedures for home visits — a case study

In Portugal the population is ageing. Therefore, the provision of health care at patients’ home is becoming an important social and health area; this health service is provided by professional teams (usually composed by nurses) of the Health Centers. Nowadays, the scheduling of the visits is made manually. The proposal of this work is to do the scheduling automatically in order to minimize the overall time spent by the professional teams in the visiting activity. In this work the genetic algorithm was used to solve the optimization problem. Some numerical results are presented.info:eu-repo/semantics/publishedVersio

Entry deregulation, firm organization and wage inequality

This paper identifies a causal link between changes in product market competition, firm reorganization and within-firm wage inequality. We exploit a unique episode of comprehensive firm entry deregulation as a quasi-natural experiment and use exceptionally detailed linked employer-employee data for the universe of private sector firms and workers. We find that following deregulation affected firms flatten their hierarchies: the number of layers is reduced and managers´spans of control increased. Dropping a hierarchy layer is accompanied by a significant reduction in wage inequality within the firm, by 10% for the average pay ratio between the top and the bottom layer, showing that there are real changes arising from firm reorganization. Overall dispersion is also reduced. We discuss mechanisms and interpretations for these changes.Fundação para a Ciência e Tecnologia (FCT

The effect of competition on manager's compensation : evidence from a quasi-natural experiment

This paper studies the effect of competition on executive compensation. We estimate the effect of increased product market competition on the performance-pay sensitivity of CEOs, and contrast it with the effect for department managers and other workers in the corporation. We use a recent reform that simplied firm entry regulation in Portugal as a quasi-natural experiment. The empirical strategy exploits the staggered implementation of the reform across municipalities. Using linked employer-employee data for the universe of workers and firms, we show that increased product market competition, following the deregulation, decreased the sensitivity of pay to performance of CEOs and other managers, with no significant effects found for other workers. These findings are consistent with existing theoretical results in a principal-agent framework that a fall in entry costs leads to weaker managerial incentives.Fundação para a Ciência e a Tecnologia through the Applied Microeconomics Research Unit, award no. PEst-OE/EGE/UI3181/2014. Portuguese Ministry of Labor and Social Solidarity and the O¢ce for National Statistics (INE