Effects of Organizational Change on Firm Productivity

An increasing use of IT facilitates firms to use more efficient organizational forms. Significant reorganizations of business processes around IT capital can thereby boost productivity growth. The aim of this study is to empirically examine how firm productivity growth is affected by organizational changes and investments in IT using a Difference-in-Difference approach on a panel of Swedish firms over the years 1997-2005. The empirical results show a positive and significant effect on total factor productivity growth for firms that invested above median in IT and at the same time undertook organizational changes

Simultaneous Impact of the Presence of Foreign MNEs on Indigenous Firms’ Exports and Domestic Sales

YesIncorporating the global production network approach and competitor analysis, this paper establishes an analytical framework with two hypotheses for the role of foreign multinational enterprises (FMNEs) in indigenous firms’ exports and domestic sales. First, the presence of FMNEs as a whole is likely to have a negative impact on indigenous firms’ domestic sales but a simultaneous positive impact on their exports in an emerging economy like China. Second, the presence of MNEs from Hong Kong, Macau and Taiwan (HMT MNEs) is more likely to generate this pattern of impact than MNEs from other countries (Other FMNEs). The FDI-led export strategy contributed to the dominance of the scenario described by the first hypothesis in China, while a higher degree of market commonality and resource similarity of HMT MNEs with that of indigenous Chinese firms than Other FMNEs leads to the second hypothesis. These novel hypotheses are tested and supported by a very large and recent firm-level panel dataset from Chinese manufacturing

Foreign Acquisition and Employment Effects in Swedish Manufacturing

This paper investigates the employment effects of foreign acquisitions in acquired firms in Swedish manufacturing during the 1990s, a period characterized by a dramatic increase in foreign ownership. To handle likely endogeneity problems, we evaluate the effects of foreign acquisitions on the targeted firms' employment by combining propensity score matching with difference-in-difference estimation. We find some evidence of positive employment effects in firms taken over by foreigners and it seems that the employment of skilled labor increases more than the employment of less-skilled labor. Moreover, we examine whether the employment impact of foreign ownership differs between takeovers of Swedish MNEs and non-MNEs. Our results indicate that the positive employment effects only appear in acquired non-MNEs. Furthermore, we observe shifts in skill intensities toward higher shares of skilled labor in non-MNEs taken over by foreign MNEs but not in acquired Swedish MNE

Service-sector competition, innovation and R&D

The central prediction of the Aghion, Bloom, Blundell and Howitt model is an inverted U-shaped relationship between innovation and competition. The model is built on the assumption of a product market and has not yet been tested on the service sector. Using detailed firm-level data on Swedish service-sector firms, we find evidence of an inverse U-shaped relationship for exporting service-sector firms. A further breakdown of innovation expenditures shows that the inverse U-shaped pattern holds for intramural R&D and training, but not for extramural R&D. Finally, the results indicate that as competition increases, small firms tend to seek strategic alliances with competitors, whereas large firms tend to reduce collaboration with competitors. The behavior of large firms can partly be due to their superior capacity to handle innovation projects internally, which will become more important if increased competition results in higher pay-offs to innovation.R&D, innovation, competition, service sector, CIS data,