Do Foreign Firms Crowd Out Domestic Firms? Evidence from the Czech Republic

I examine how foreign presence affects the growth and survival of domestic firms. Separating a negative crowding out and positive technology spillovers, I analyze whether the crowding out effect is dynamic, that is, domestic firms cut production over time as foreign firms grow, or a static effect realized on foreign entry into the industry. Using 1994-2001 firm-level Czech data, I find evidence of both technology spillovers and crowding out. However, crowding out is only short term; after initial entry shakeout, growing foreign sales increase domestic firm growth and survival, indicating domestic demand creation effect. However, I find no such benefits from domestic competition. (c) 2010 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Replication data for: Do Foreign Firms Crowd Out Domestic Firms? Evidence from the Czech Republic

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1 Agency and Compensation: Evidence from the Hotel Industry

We examine the relationship between employee supervision and compensation by taking advantage of the structure of the hotel industry, in which many chains have both company managed and franchised properties. Given that supervision is less rigorous at company managed establishments, we estimate differences in wages and human resource practices not only across company managed and franchised hotels within chains, but also within individual hotels as they change organizational form. While we cannot rule out the use of efficiency wages, our results suggest that agency problems affect the timing of pay and employers’ propensity to use performance-based incentives. I

Does FDI Facilitate Domestic Entry? Evidence from the Czech Republic

This paper analyzes the impact of FDI on domestic firm entry and firm size distributions in the Czech Republic during 1994-2000. We find that larger foreign presence stimulates the entry of domestic firms within the same industry, indicating the existence of positive horizontal spillovers from FDI. We also find evidence of significant vertical entry spillovers-FDI in downstream (upstream) industries initiates entry in upstream (downstream) sectors. Our results also show that entry spillovers through vertical linkages are stronger than horizontal spillovers and that while service industries benefit from both horizontal and vertical spillovers, manufacturing industries do not experience significant positive entry spillovers of any kind. We also find that country of origin of FDI matters-horizontal spillovers are driven by FDI from the EU countries. The right skewness of the firm size distributions in industries without FDI further emphasizes an important role of FDI presence for overall industry dynamics. Copyright � 2010 Blackwell Publishing Ltd.

The Terrorist Attacks of 9/11 and the Financial Crisis of 2008: The Impact of External Shocks on U.S. Hotel Performance

The U.S. hotel industry faced two major external shocks in the decade of the 2000s, the terrorist attacks of September 11, 2001, and the financial crisis of September 2008, which led to an economic recession. Using data from STR covering nearly 35,000 hotels, this study isolates the specific effects of the two shocks by controlling for other market factors (e.g., inflation, seasonality) and hotel characteristics (e.g., hotel size, segment, or operation type) that affect a hotel’s daily operations. The study shows that hotels were significantly affected by both events, but they started to recover relatively quickly, within four months of each shock. Because of the nature of the shock, the 9/11 terrorist attacks had an abrupt and dramatic impact in reducing hotels’ occupancy, and rates briefly followed occupancy downward. The effects of the financial crisis took longer to develop but were less striking and apparently well handled by most hotel managers. Looking specifically at New York City’s hotels which stand next to ground zero for both shocks, the study found a pattern of occupancy, ADR, and RevPAR similar to that of the nation as a whole. New York’s luxury hotels felt the brunt of the shocks, but they were able to recover. Overall, the study paints a picture of an industry that maintains its ability to address the effects of environmental shocks, and focuses well on revenue management. Far from being in disarray, hotel management addressed the effects of these two shocks, as evidenced by the hotels’ recovery.Enz6_The_Terrorist_Attacks.pdf: 3315 downloads, before Aug. 1, 2020