Do Schumpeterian Waves of Creative Destruction Lead to Higher Productivity? Panel Data Evidence from Poland

We look at the determinants and consequences of job reallocation in the 22 2-digit sectors of the manufacturing industry in Poland over the period 1993-1997. Import competition and competitve market structure (weak concentration) are found to lead to more reallocation. Moreover, more reallocation seems to be associated with more poductive industries in some specifications. This confirms implications from neo-Schumpterian growth models: one channel through which competition might positively affect growth is through the reallocation of scarce resources from declining firms to rising ones.http://deepblue.lib.umich.edu/bitstream/2027.42/39870/3/wp485.pd

Do Schumpeterian Waves of Creative Destruction Lead to Higher Productivity? Panel Data Evidence from Poland

We look at the determinants and consequences of job reallocation in the 22 2-digit sectors of the manufacturing industry in Poland over the period 1993-1997. Import competition and competitve market structure (weak concentration) are found to lead to more reallocation. Moreover, more reallocation seems to be associated with more poductive industries in some specifications. This confirms implications from neo-Schumpterian growth models: one channel through which competition might positively affect growth is through the reallocation of scarce resources from declining firms to rising ones.Schumpeterian growth, job flows, competition, trade

Testing Models of Hierarchy: Span of Control, Compensation and Career Dynamics

In this paper, we test implications from various theories of hierarchies in organizations, in particular the assignment model (Rosen, 1982), the incentives model (Rosen, 1986), the supervision model (Qian, 1994) and the knowledge- based hierarchy model (Garicano, 2000; Garicano and Rossi-Hansberg, 2006). We use a unique dataset providing personnel records from a large European firm in an high tech manufacturing industry from January 1997 to May 2004. An unusually rare feature of this dataset is that relationships within the hierarchy are reported and we can therefore identify the chain of command. Some of our results are in line with the Garicano and Rossi-Hansberg (2006) model of hierarchies when communication costs are decreasing: we observe an increase in the span, an increase in wage inequality between job levels, and the introduction of a new hierarchical level. However, we also find evidence of learning and reallocation of talent within and across job levels, a finding that can not be explained by a static model of knowledge based hierarchy but rather by dynamic models of careers in organizations (e.g. Gibbons and Waldman, 1999). We then propose a new model of hierarchies where individuals accumulate general and managerial human capital on the job, and firms learn gradually about individuals' managerial ability and allocate managers to span according to their expected effective ability. This theory explains our empirical findings and provides a richer theory of careers in hierarchiehierarchy; span of control; wage determination; promotions; careers

A Joint Estimation of Price-Cost Margins and Sunk Capital - Theory and Evidence from the European Electricity Industry

In this paper, we propose a new methodology to jointly estimate market power and the importance of sunk capital extending the work of Hall (1988) and Roeger (1995). We then apply this new technique to the European electricity industry using firm level data for the period 1994-1999, and analyze the impact of the 1996 European directive to liberalize electricity markets. We find that the average price cost margin has declined from 0.29 in 1994 to 0.22 in 1999. Moreover, the magnitude of the decline is linked to firm size: the largest firms have experienced a larger percentage fall. The variable cost parameter has increased from 0.36 in 1994 to 0.56 in 1999. The main reason of the change is the switch of the relationship between real labor productivity and the share of variable capital. Our results therefore document a more competitive electricity market and a more flexible and more efficient use of capital.market power; fixed capital; liberalization; electricity market

Job Creation, Job Destruction and Voting Behavior in Poland

This paper analyzes the effect of job creation and job destruction on the voting patterns of individuals in Poland during the 1997 and 2001 parliamentary elections. First, we link the votes for the left wing party to the unemployment rate and the job creation and destruction rates in the constituency. We show that the job destruction rate and unemployment rate has a positive effect on the votes for the SLD, while the job creation rate has a negative effect. Second, we look at the effect of the change in job creation and job destruction rates on the change in the votes for individual candidates. We find that incumbents from the former right wing coalition received less votes if excess job reallocation had increased in their constituency. Therefore, the paper provides evidence that job flows have a strong impact on voting patterns and that the balance between the positive and negative effects of reforms determine to a large extent the political outcome.Job creation; Job destruction; voting behavior; gradualism

Vertical Integration, Exclusivity and Game Sales Performance in the U.S. Video Game Industry

This paper empirically investigates the relation between vertical integration and video game performance in the U.S. video game industry. For this purpose, we use a widely used data set from NPD on video game montly sales from October 2000 to October 2007. We complement these data with handly collected information on video game developers for all games in the sample and the timing of all mergers and acquisitions during that period. By doing this, we are able to separate vertically integrated games from those that are just exclusive to a platform First, we show that vertically integrated games produce higher revenues, sell more units and sell at higher prices than independent games. Second, we explore the causal effect of vertical integration and find that, for the average integrated game, most of the difference in performance comes from better release period and marketing strategies that soften competition. By default, vertical integration does not seem to have an effect on the quality of video game production. We also find that exclusivity is associated with lower demand.vertical integration, exclusivity, performance, video games

Performance, Career Dynamics, and Span of Control

There is an extensive theoretical literature based on what is called the scale-of-operations effect, i.e., the idea that the return to managerial ability is higher the more resources the manager influences with his or her decisions. This idea leads to various testable predictions including that higher ability managers should supervise more subordinates, or equivalently, have a larger span of control. And although some of this theory’s predictions have been empirically investigated, there has been little systematic investigation of the theory’s predictions concerning span of control. In this paper we first extend the theoretical literature on the scale-of-operations effect to allow firms’ beliefs concerning a manager’s ability to evolve over the manager’s career, where much of our focus is the determinants of span of control. We then empirically investigate testable predictions from this theoretical analysis using a unique single firm dataset that contains detailed information concerning the reporting relationships at the firm. Our investigation provides strong support both for the model’s predictions concerning wages, wage changes, and probability of promotion, and also for the model’s predictions concerning span of control including predictions derived from the learning component of the model. Overall, our investigation supports the notion that the scale-of-operations effect and additionally learning are important determinants of the internal organization of firms including span of control

Learning by Exporting, Importing or Both? Estimating productivity with multi-product firms, pricing heterogeneity and the role of international trade

In this paper, we analyze the relationship between exporting/importing status and firm productivity. We use a rich product-firm-level dataset providing both revenue and quantities of all products for a large panel of Danish manufacturing firms over the period 1998-2005 and link it to another dataset describing firms’ international trade transactions by product. We use our detailed product level information to compute a firm level deflator and avoid the criticism of biased estimates due to the use of industry level deflator. We find that both importing and exporting behaviours are strongly associated with productivity, but firms involved in both importing and exporting are the most productive. We also find evidence of a self-selection into importing and exporting but no learning effect. Finally, we try to distinguish between cost effect and product quality effect by analyzing the importance of the origin of imports and the destination of exports. We find that both imports from countries with abundant and cheap labor like China and from countries with similar level of development matter, although the mechanism through which productivity is affected is likely to be different. In addition, exporting to more distant OECD economies is more strongly associated to productivity than exporting to neighboring or other EU countries, especially when controlling for the price specific effectno; keywords

Price Cost Margins and Exporting Behaviour: Evidence from Firm Level Data

This paper examines whether exporting activity matters for firm's price cost margins. The recent literature on exporting and productivity shows that exporters on average are more efficient than nonexporters. If that is the case we may also expect them to have different mark-ups. We investigate this issue using company level data for UK manufacturing industries. The measurement of mark-ups follows the recent approach presented by Roeger (1995). Our results show that, on average, exporters have higher mark-ups than non-exporters. We also distinguish sectors into homogeneous and differentiated goods producing. This distinction shows that we only find higher mark-ups for exporters in differentiated goods sectors, not in homogeneous sectors.exports, mark-ups, price cost margins, productivity

Vertical Integration, Exclusivity and Game Sales Performance in the U.S. Video Game Industry

This paper empirically investigates the relation between vertical integration and video game performance in the U.S. video game industry. For this purpose, we use a widely used data set from NPD on video game montly sales from October 2000 to October 2007. We complement these data with handly collected information on video game developers for all games in the sample and the timing of all mergers and acquisitions during that period. By doing this, we are able to separate vertically integrated games from those that are just exclusive to a platform First, we show that vertically integrated games produce higher revenues, sell more units and sell at higher prices than independent games. Second, we explore the causal effect of vertical integration and find that, for the average integrated game, most of the difference in performance comes from better release period and marketing strategies that soften competition. By default, vertical integration does not seem to have an effect on the quality of video game production. We also find that exclusivity is associated with lower demand.No; keywords