Government Engagement,Environmental Policy,and Environmental Performance: Evidence from the Most Polluting Chinese Listed Firms

This study empirically examines the implementation of environmental policies and how government engagement impacts on a firm's environmental performance based on a sample of Chinese listed firms in the eight most polluting industries over a 10‐year period. The findings of the study demonstrate that government engagement, measured as ownership structure, is positively correlated with environmental performance, measured by environmental capital expenditure, for state‐owned firms, but no significant relation is found for non‐state‐owned firms. In addition, non‐state‐owned firms are more likely to perform better in terms of environmental investment after the 2006 enactment of a new policy explicitly linking environmental issues with political incentives to regional governments. This study also reports that corporate environmental performance impairs firm value for state‐owned firms but has no impact on firm value for non‐state‐owned firms, suggesting that investors negatively respond to environmental investments made by state‐owned firms as a result of government engagement/political pressure. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.     

Can Institutional Change Impact High-technology Firm Growth?: Evidence from Germany’s Neuer Markt

To facilitate the transformation of the German economy from the traditional manufacturing industries towards emerging new technologies, a new segment of the Frankfurt exchange was introduced in 1997 — the Neuer Markt. To examine whether the Neuer Markt was successful, we compare the relationship between firm size and growth for firms listed on the Neuer Markt and contrast the results with two benchmarks: (1) for German firms prior to the 1990s (to reflect the older traditional manufacturing sector) and (2) for the stylized results for the US. This study provides evidence that not only did many new firms obtain funding from the Neuer Markt; but that for the first time in recent history, Germany succeeded in enabling smaller firms to grow faster than larger firms. This suggests that the new policies were not only successful in promoting a new type of firm that otherwise might not exist, but in transforming the sources of growth and innovation within the German economy.     

Responding to Digital Transformation by External Corporate Venturing: An Enterprising Family Identity and Communication Patterns Perspective

Digital transformation increasingly requires activities located outside firm boundaries, for example via alliances with start‐up companies. Despite this, German Mittelstand firms, primarily owned and managed by enterprising families and seen as role models of innovation, appear reluctant to place strategic emphasis on venturing outside the firm’s boundaries when it comes to digital transformation. Drawing on the concepts of identity and communication patterns, we theorize on the mechanisms behind this behaviour. Applying structural equation modelling to a sample of 254 members of the next generation in enterprising families from Germany, we find that family communication patterns impact the strategic priority for or against external corporate venturing via identity‐related considerations.     

Labor unions and productivity: An empirical analysis using Japanese firm-level data

This paper empirically analyzes the relationship between labor union and firm performance in areas such as productivity and profitability by using data on more than 4000 Japanese firms, ranging from listed large firms to unlisted SMEs, in both the manufacturing and non-manufacturing sector. The presence of labor unions has statistically and economically significant positive effects on firm productivity. Unions' effects on wages are also positive, their magnitude being slightly larger than those on productivity. The decrease in the number of employees is greater at unionized firms than at non-unionized firms. The difference in employment growth is mainly attributable to the change in the number of part-time workers. In order to enhance productivity, close cooperation between management and unions is essential.     

Firms' human capital,R&D and performance: a study on French and Swedish firms

This paper studies the effects of human and technological capital on productivity in a sample of large French and Swedish firms. While the role of technological capital as measured by R&D has been intensively investigated, almost no work has been done on the role of human capital as measured by firm-sponsored training and even less its interaction with technological capital. The level of intangible capital may also have a lasting effect on productivity growth, as emphasised by some endogenous growth models in a macroeconomic setting.The study uses data from two panels of large French and Swedish firms for the same period (1987–1993). It constructs measures of a firm's human capital stock, based on their past and present training expenditures. The results confirm that firm-sponsored training and R&D are significant inputs in the two countries, although to a different extent, and have high returns. However, except for managers and engineers in France, we do not find evidence of positive interactions between these two types of capital. Finally, growth effects at the firm level do not appear.     

Institutional antecedents and performance consequences of employment security and career advancement practices: Evidence from the people's republic of China

In this study, we examine the provision of employment security and career advancement opportunities in firms of diverse institutional ownership and the impact of such practices on employee and firm outcomes. The sample included 478 state‐owned and non‐state‐owned firms (i.e., domestic private firms, Sino‐foreign joint ventures, and wholly‐foreign‐owned firms) in the People's Republic of China. We found that the provision of employment security was greater in state‐owned than in non‐state‐owned firms. The provision of career advancement opportunities in domestic private firms and Sino‐foreign joint ventures was similar to that in wholly foreign‐owned firms, but greater than that in state‐owned firms. The provision of career advancement opportunities was positively related to employee organizational commitment, citizenship behaviors, and firm performance. The provision of employment security was positively related to employee organizational commitment, but not to citizenship behaviors or firm performance. © 2008 Wiley Periodicals, Inc.     

Firm performance and the political economy of corporate governance: survey evidence for Bulgaria,Hungary, Slovakia and Slovenia

Using survey data for 220 traditional manufacturing firms over 7 years of transition and 4 Central Eastern Europe (CEE) countries, we find firms that produced for the EU market under planning consistently outperform those that produced for the CMEA market. Within the previously CMEA market, the best firms were selected to outside privatisation and outperformed insider/state owned firms. Outside privatisation was resisted in EU oriented firms and ownership was found to have no effect on performance. Path dependent demand shocks and political constraints on the sequencing of state firms to private ownership determine the relationship between firm performance and ownership structure during transition.     

Derivatives Usage in Risk Management by US and German Non-Financial Firms: A Comparative Survey

This paper is a comparative study of the responses to the 1995 Wharton School survey of derivative usage among US non-financial firms and a 1997 companion survey on German non-financial firms. It is not a mere comparison of the results of both studies but a comparative study, drawing a comparable subsample of firms from the US study to match the sample of German firms on both size and industry composition. We find that German firms are more likely to use derivatives than US firms, with 78 percent of German firms using derivatives compared to 57 percent of US firms. Aside from this higher overall usage, the general pattern of usage across industry and size groupings is comparable across the two countries. In both countries, foreign currency derivative usage is most common, followed closely by interest rate derivatives, with commodity derivatives a distant third. In contrast to the similarities, firms in the two countries differ notably on issues such as the primary goal of hedging, their choice of instruments, and the influence of their market view when taking derivative positions. These differences appear to be driven by the greater importance of financial accounting statements in Germany than the US and stricter German corporate policies of control over derivative activities within the firm.     

Flexible collective bargaining agreements: Still a moderating effect on works council behaviour?

We analyse the interaction between different labour market institutions in Germany, namely, industry‐level bargaining and firm‐level codetermination by works councils. In particular, we are interested in the moderating effect of flexibility measures on the link between the existence works councils and collective agreements on wages and productivity. In presence of institutional changes, the question is whether works councils in covered plants still generate rather than redistribute rents, given recent decentralisation processes in the German system of industrial relations. We augment a theoretical model to provide hypotheses, which are then tested using empirical analysis of representative German plant level data. We find that the existence of flexibility provisions in collective bargaining agreements does not alter the effect of works council on firms' wages. We find, however, that with flexibility provisions works council presence is associated with higher productivity levels than without such provisions. These findings, however, depend on the level of collective bargaining: they can only be observed in plants covered by industry‐level contracts, but do not hold in plants covered by firm‐level contracts.     

Financial crisis and relative productivity dynamics in Korea: evidence from firm-level data (1992–2003)

We have estimated the relative TFP growth at firm level and analyzed the firm dynamics in view of entry and exit of firms in Korea during 1992–2003, which includes the turbulent financial crisis of 1997–1998. Following Pyo and Ha, Hitotsubashi J Econ 48(1): 67–81, (2007), we have adopted a gross output model rather than a value added model of relative TFP analysis. We have found that the cyclical variation of productivity growth plays a dominant role in the decomposition effects before and after the 1997 financial crisis in Korea. Productivity growth is modest before the crisis and strong after the crisis owing to the recovering market efficiency. There is the likelihood that the productivity growth of stayers during the post-crisis period was significantly higher than new entrants. The net entry effect is found to be more sensitive in small business and export-based firms than in large business and domestic market-based firms. Our findings suggest that Korean firms have recovered a modest level of technical change after its severe financial crisis owing to the improvement of management transparency and the build-up of market efficiency during the IMF-mandated restructuring process. But since the entry effect is estimated to be still negative in Manufacturing and the exit effect is negative in Service sector after the crisis, the Korean economy has not fully recovered its metabolism in the post-crisis period and still lacks a creative destructive process to resume another round of sustainable growth path.     

R&D subsidies and productivity in eastern European countries

This paper shows that R&D subsidy policies at the European Union (EU) and national levels stimulated labor productivity in Central and Eastern European countries (CEEC) in the years after their entry to the EU. However, the average impact of national funding on labor productivity was higher for countries in the Western control group than in the CEEC sample. EU R&D subsidies compensated the CEEC in part for the greater innovation impact of Western economies. Although they crowded out some R&D subsidies by local governments at the country level, the EU subsidies crowded in many national and local subsidies at the firm level. Local/regional state innovation aid to enterprises encouraged no increase in labor productivity in all but one of the sample CEEC countries. These impacts are assessed in a sequential structural econometric model estimated using Eurostat’s collection of Community Innovation Surveys covering the years 2006–2014.     

Bottoms up: Delivering sustainable value in the base of the pyramid

Despite a wealth of expertise involving leading institutions over at least 15 years, a base of the pyramid (BoP) model resulting in scalability has yet to emerge. We posit that institutional gaps between BoP goals of developing human and social capital on one hand and a short‐term profit focus of business on the other contribute to the lack of scalability. We address this gap by proposing a social intermediary to link the BoP with firms involved in the BoP. The social intermediary will coordinate and interpret the informal market requirements of the BoP to the firm in a “bottoms up” approach. We illustrate the bottoms up approach through a case involving Deutsche Gesellschaft fur Internationale Zusammenarbeit, a German government agency, with the garment manufacturing industry in Pakistan. The case study involves implementation of labor standards and productivity in the Pakistan garment industry, resulting in improved productivity and labor standards enabling garment manufacturers to access global supply chains.     

Can Germany save itself from negative rates?

• German inflation looks set to rise in response to diminishing slack in the economy. But this will be a mixed blessing for those in Germany hit by negative policy rates and ECB asset purchases. Higher German inflation may eliminate the need for further ECB policy action, but it is unlikely to trigger imminent rate hikes. As a result, the rise in inflation will merely lower real interest rates for German savers.
• Structural cross‐country differences mean that the ECB is better able to hit its inflation target when the peripheral economies rather than Germany are the region's growth engine. A key reason for this is that the German Phillips curve is flat by Eurozone standards, meaning that policymakers need to work hard to generate sufficient inflation in Germany to offset sustained weakness elsewhere.
• Despite this, there is evidence to suggest that the tightening labour market is beginning to push German wage growth higher. And if productivity growth remains subdued, this will lead to faster unit labour cost growth.
• While firms could respond by lowering their margins, the strength of household spending suggests that firms may be more inclined than in the past to pass on higher costs to consumers.
• In all, we expect German inflation to rise more sharply than elsewhere to around 2% in 2017, meaning that the ECB will not unveil further unconventional policy support. But it would take much sharper rises in German wage growth and inflation than in our baseline forecast to prompt the ECB to bring forward interest rate rises.

     

Corporate governance and pay for performance: evidence from Germany

This paper investigates how two distinctive features of the German corporate governance system—concentrated ownership structure and representation of employees on firm supervisory boards—influence the sensitivity of managerial pay to firm profitability. There is a positive, though very small, link between pay and profitability for widely held firms. The presence of a largest owner seems hardly to affect this link in any economically significant way. However, the link between pay and profitability is smaller and indeed not significantly different from zero in firms whose largest owner is a German financial institution. This suggests that large owners tend to act as a substitute for rather than a complement to performance related pay in Germany. We thank Dennis Leech for allowing us to use his algorithms for computing voting power indices, and Brian Cheffins, Tim Guinnane, Andrew Harvey, Dennis Leech, Hamish Low, Sheilagh Ogilvie, Melvyn Weeks and two anonymous referees for helpful comments. The research reported in this paper was started during a joint visit to CES, University of Munich, and completed during visits of Edwards and Weichenrieder to the University of Konstanz and the ifo Institute for Economic Research in Munich. We thank the three institutions for their hospitality, especially Bernd Genser and Hans-Werner Sinn. A previous version of this paper was circulated under the title “The Measurement of Firm Ownership and its Effect on Managerial Pay”.     

The need for speed: impacts of internet connectivity on firm productivity

Broadband access is widely considered to be a productivity-enhancing factor, but there are few firm-level estimates of its benefits. We use a large micro-survey of firms linked to longitudinal firm financial data to determine the impact that broadband access has on firm productivity. Propensity score matching is used to control for factors, including the firm’s own lagged productivity, that determine a firm’s internet access choice. Instrumental variables estimates are employed as a robustness check. Results indicate that broadband adoption boosts firm productivity by 7–10%; effects are consistent across urban versus rural locations and across high versus low knowledge intensive sectors.     

国有股权参股与家族企业全要素生产率

家族企业在我国经济中占有相当大的比重,如何有效提升家族企业全要素生产率受到了社会各界的广泛关注.本文以2014～2019年沪深A股上市家族企业为研究样本,探究了国有股权参股家族企业对其全要素生产率的影响.研究发现,国有股权参股有利于提升家族企业全要素生产率,且主要通过缓解融资约束、增加创新投入、提高治理水平这三条路径作...     

How well is productivity being priced?

By understanding how productivity shocks affect firm value, an entrepreneur can better compute the risk premium associated with uncertainty in production. This study explores the link between plant-level productivity and firm value for the baking and confectionary sector. From the impulse response analysis, the study finds that there is a lag in the firm’s response to productivity shocks at the plant level. Further, the paper employs Tobin’s Q as a valuation metric that acts as a link between a firm’s manufacturing plant productivity and firm value. Empirical estimations indicate that there is comovement between firm valuation and plant level productivity.     

The Effects of a Separation of Ownership from Control on UK Listed Firms: An Empirical Analysis

There has been a wide‐ranging debate concerning the effects of the separation of management and ownership of large firms. Given recent issues concerning corporate remuneration, this debate is as relevant and possibly more so today as it has ever been. Theoretically, as the ownership of a firm becomes more diverse, the management of the firm will have more discretion and opportunity to act in accordance with their own interests at the expense of those of the shareholders. This paper considers the effect of a separation of ownership from control on 406 UK listed firms. Simultaneous equations are used to test for a relationship between the percentage of shares owned by significant outsiders and insiders and the performance of the firm. A number of authors have suggested that there may be a significant relationship between these variables. The analysis conducted in this study supports the view that there is a relationship between ownership structure and firm performance. Copyright © 2011 John Wiley & Sons, Ltd.     

Liberalising the German model: institutional change,organisational restructuring and workplace effects

Institutional change at supranational, European Union level affects national and firm level institutions in various ways. This article traces effects of liberalisation measures in the airport industry enacted in two airport firms in Germany. The study, based on qualitative empirical research, found that EU liberalisation facilitated company creation of subsidiaries (subsidiarisation) and elevated shareholder interest in corporate governance. These factors affected institutional practices and cultural norms within the German industrial context that in turn influenced significant alterations in employment and workplace relations. Considerable disruption of the German social partnership model of corporate governance and industrial relations was observed. However, in addition to patterns of convergence towards neoliberal practices and outcomes frequently observed in Anglo‐Saxon systems, the study found some elements of effective retention of cultural institutional resources of the German model. Both ‘path departure’ and social embeddedness appear to coexist.     

Pacts for employment and competitiveness in Germany

Pacts for employment and competitiveness (PECs) in Germany reflect a process of organised decentralisation, delegating additional rights and responsibilities for industrial relations agreements to the plant level. PECs are now used by both struggling and prosperous firms. An analysis of the content of recent agreements shows that the economic situation of the firm has a significant impact on changes agreed at the firm level. Changes in working time are associated with the demand for the products and services of a firm while financial concessions by employees are more common in firms with weak profits.