Corruption and firm behavior: Evidence from African ports

This paper investigates how corruption affects firm behavior. Using an original and unusually rich dataset on bribe payments at ports matched to firm-level data, we observe how firms adapt to different types of corruption by adjusting their transport strategies. Our results suggest that firms respond to the price effects of corruption, organizing production in a way that increases or decreases demand for the public service.     

Geographical disadvantage: a Heckscher-Ohlin-von Thünen model of international specialisation

We analyse the trade and production patterns of countries located at varying distances from an economic centre. Exports and imports of final and intermediate goods bear transport costs which increase with distance. We show how production and trade depend on factor endowments and factor intensities, and also on countries’ locations and the transport intensities of different goods. Countries divide into zones with different trade patterns, some export oriented and others import substituting. We study the implications of distance for factor prices and real incomes, the effects of changes in transport costs, and the locational choice of new activities.     

Corruption and industrial dualism in less developed countries

This paper provides an explanation for the observation that developing countries tend to have a higher degree of dualism in the size distribution of firms and a relatively smaller proportion of large firms than do developed countries. This paper builds a model where large 'formal' firms attract rent seeking activities from the government while small firms do not. In the model, there exists a 'competitive fringe' of small firms and a formal market consisting of Cournot competitors. The number of formal firms is made endogenous and is a function of the degree to which the government can extract rents. This ability to extract rents is itself posited as a function of the degree of corruption in a country's government. Thus, it is the high degree of corruption in developing country governments that contributes to the dual nature of their industrial structure. The model predicts that the higher the degree of corruption, the fewer (and larger) are the formal firms, the lower is social welfare and the greater is dead-weight loss, and the higher are government rents. An examination of the size distribution of 16 countries and their degree of corruption shows that the degree of corruption is a good predictor of the percentage of large firms in an economy.     

Gender differences in firm performance: Evidence from new ventures in the United States

Prior studies examining the performance of female- and male-owned firms have generally reported that female-owned firms underperform male-owned firms. However, it is conceivable that the performance measures used by previous studies and/or their inability to control for key demographic differences may have contributed to this finding. For example, few studies use size adjusted performance measures and yet we know that female-owned firms tend to be smaller than their male counterparts. Similarly, risk is typically not considered even though evidence suggests that women tend to be more risk averse than men. We use a longitudinal (five-year) database of more than 4000 new ventures that began operations in the U.S. in 2004 to determine whether potential differences in the performances of female- and male-owned firms disappear when appropriate performance measures are used and important demographic differences are controlled for in the models. The performance measures we examine include: 4-year closure rates; return on assets (ROA); and a risk-adjusted measure (Sharpe ratio). Univariate test results confirm our expectation (based on both liberal and social feminist theory) that there is no difference in the performance of female- and male-owned new ventures provided performance is appropriately measured. Further, these results are supported by our multivariate analyses, which control for demographic differences such as industry, experience and hours worked. Our findings should be of interest to researchers, financiers, advisors and policy makers. Perhaps more importantly, our findings should also ensure that women who are contemplating starting a new venture are not discouraged from doing so by a false belief that new ventures initiated by women are less likely to succeed than those initiated by men.     

Investment Flows,Economic Growth,and Corruption in African Countries: An Analysis

ABSTRACT

The analysis of corruption in international business is a relatively new phenomenon, and for the past two decades, many studies have attempted to capture the economic impact of the corruption in a country. However, most of these studies have concentrated their analysis to the experiences of the developed countries. None or very few of the current works have addressed the corruption issue in the context of foreign direct investment and economic growth in the developing countries. This work examines theoretically, as well as empirically, the incidence of corruption in the context of foreign direct investment in the developing countries, especially several African countries that signed a treaty to reduce the incidence of corruption in their respective countries.     

Corporate governance and firm performance in emerging markets: Evidence from Turkey

This is a study of the relationship between context, internal corporate governance and firm performance, looking at the case of Turkey, an exemplar of family capitalism. We found more concentrated ownership, often in the hands of families, led to firms performing better; concentrated ownership means that controlling families bear more of the risks of poor performance. Less predictably, given that the institutional environment is so well attuned to family ownership, we found that mechanisms that accord room for a greater range of voices and interests within and beyond families – larger boards and foreign ownership stakes – seem to also make for positive performance effects. We also noted that increase in cross ownership did not influence market performance, but was negatively associated with accounting performance. Conversely, we found that a higher proportion of family members on boards had no discernable effect on performance. Our findings provide further insights on the relationship between the type of institutions encountered in many emerging markets, internal corporate governance configurations and firm performance.     

利用国内资源成本法考量贸易利益的探讨——以中澳羊毛贸易为例

贸易利益的考量一直是学界关心的问题。本文从国内资源成本法的思想出发,利用DRC近似量化中澳羊毛贸易利益的大小,考察贸易利益的大小变动与产品比较优势变动情况的相关性,并对利用贸易条件方法对贸易利益的考量问题做出探讨,认为从贸易条件角度对贸易利益的衡量应结合国内资源成本的考量。     

A simple model of firm heterogeneity, international trade, and wages

This paper presents a general equilibrium trade model in which homogeneous firms choose a technology from a set of competing technologies and choose employees from a set of workers of heterogeneous skill. In equilibrium, the interaction between the characteristics of competing technologies, international trade costs, and the availability of workers of heterogeneous skill gives rise to firm heterogeneity. The model generates several of the stylized facts concerning the (apparent) superiority of firms that engage in international trade relative to those that do not and has implications for the effect of international trade on the skill premium and on observed industry-level productivity.     

Competition regimes and air transport costs: The effects of open skies agreements

The relevance of transport costs has increased as liberalization continues to reduce artificial barriers to trade. Is it worthwhile to implement policies designed to increase competition in transport markets? Focusing on air transport, this paper quantifies the effects of liberalization of air cargo markets on transport costs. Between 1990 and 2003, the United States implemented a series of Open Skies Agreements, providing a unique opportunity to assess the effect that a change in the competition regime has on prices. In our sample, Open Skies Agreements reduce air transport costs by 9% and increase by 7% the share of imports arriving by air. Those results hold for developed and upper-middle-income developing countries but for lower-middle-income and low-income developing countries Open Skies Agreements do not reduce air transport costs.     

Development of firm export market oriented behavior: Evidence from an emerging economy

Based on gathered survey data from Chinese apparel exporters, using structural equation modeling technique, a proposed firm's export market oriented (EMO) behavior model was empirically tested. A great set of antecedent factors (i.e., organizational structure, export systems, export coordination, top management factors, and export dependence) and moderating factors (i.e., environmental turbulence, export experience) were examined in the context of China, which extends the EMO literature from mainly Western business setting to non-Western business environment. This study identifies several key antecedents (i.e., export reward and training systems, top management support, and export dependence) facilitating the development of firm's EMO behavior while determining the specific moderating effects of environment and experience, and therein explains a large percentage of variance in EMO behavior (78.3%). Importantly, we uncover some instances where the theory of firm EMO behavior's antecedents does not hold for Chinese apparel exporters.     

The death of firms: exploring the effects of environment and birth cohort on firm survival in Sweden

This paper investigates the death of firms and seizes a long-term perspective. It investigates the life spans of nearly 2,200 firms in seven birth cohorts of Swedish joint-stock companies, founded during seven separate years between 1899 and 1950. Research has traditionally emphasized individual- and micro-oriented factors in explaining post-entry performance, or has often focused on the influence of firm-specific structural factors (firm age and size). A less attended field recognizes environmental forces. This paper focuses on the interaction between the micro and macro levels, and combines structural and environmental factors. Employing a cohort approach, it relates firm survival to firm age and size, as well as to the effect of cohort affiliation and environmental change over time (period effects). During macroeconomic expansion, the risk of death decreases. Cohort effects are also evident. Firms founded during times of economic crisis exhibit lower survival rates. Consequently, cohort affiliation and environmental forces, i.e. period effects, can explain differences in death rates in different firm populations.

The Blinding Effects of Team Identification on Sports Corruption: Cross-Cultural Evidence from Sub-Saharan African Countries

Journal of Business Ethics - Although the world of sports has witnessed numerous corruption scandals, the effects of perceived corruption in sports have not been sufficiently investigated in the...     

Corruption and bank risk-taking: Evidence from emerging economies

This paper addresses the impact of corruption on banks' risk-taking behavior, using bank-level data from more than 1200 banks in 35 emerging economies during the period 2000–2012. We find consistent evidence that higher levels of corruption increase the risk-taking behavior of banks, in favor of the “sand the wheel” view in the corruption-development nexus. In addition, we examine the indirect effects of corruption on bank risks, and find evidence that the impact of monetary policy on banks' risk-taking behavior is more pronounced with the increasing severity of corruption.     

Foreign Ownership and Performance: Evidence from Italian Firms

This paper studies the impact of foreign ownership on a firm’s economic performance. We use a unique panel data set to test the foreign ownership premium by comparing our sample of firms based in Italy and owned by a foreign subject to a sample of purely domestic firms that, in order to have a proper counterfactual, were selected using propensity score matching. Our difference-in-differences results show the existence of a premium for the size, profitability, and financial soundness of the foreign-owned companies. The premium increases with time, is concentrated in the service sector, and disappears if the foreign investor is based in a fiscal haven.     

Franchisor strategy and firm performance: Making the most of strategic resource investments

A key decision for entrepreneurs in many retail and service firms is whether, and how much, to use franchising. If the decision is made to franchise, the actor may assume one of two “identities” or tactics: (1) the “chain builder,” who uses a blend of company and franchised outlets, and (2) the “turnkey,” who sells business opportunities but does not own any outlets. To benefit from their chosen strategy, franchisors must put resources in place to support it. We argue that franchisors use the chain building strategy to strike a balance between standardization and innovation by building resources that foster trust and encourage knowledge sharing with franchisees. In contrast, for turnkeys, a valuable set of operational routines is the critical strategic resource. To better appreciate how franchisors choose between the chain builder and turnkey strategies, we gathered survey information from 263 franchisors. Via this data, and as described herein, we learned that franchisors perform better when they invest in resources that best support their selected strategy.     

Trade liberalization and informality nexus: Evidence from Pakistan

This study investigates the impact of trade openness on informal sector employment during the drastic 1988s trade reforms of Pakistan. It is generally perceived that increased external competition in less developed countries results in as an expansion in informal sector, which has less compliance with labor market regulations. Using micro-level data of Pakistan, we study the adjustments in the employment of informal sector due to trade openness. We find that informality and trade openness are associated. In Pakistan, trade reforms have given rise to employment in the informal sector. Our findings are robust to different trade-related measures. A substantial flexibility in labor market is required to benefit from the gains of liberalization.     

Transport costs and trade: Empirical evidence for Latin American imports from the European union

Abstract

This paper aims to investigate the relationship between trade flows and transport costs. In previous studies the cost of transport was considered as an exogenous variable. However, an expanding volume of trade also reduces the unit cost of transport and, therefore, the causal relationship between trade and transport costs may be operating in both directions. A transport-costs equation is estimated using data on transportation costs from the International Transport Data Base (BTI). The relationship between transport costs and trade is then analysed by applying a gravity model for sectoral imports for five Latin American Countries from the European Union. We investigate the endogeneity of the transport cost and trade variables by estimating simultaneously both equations. Our results show that, while higher distance and poor importer's infrastructure notably increase transport costs, a higher volume of trade has the opposite effect. Moreover, trade is significantly deterred by higher transport costs and fostered by cultural similarities.     

Corruption and cash holdings: Evidence from emerging market economies

We examine the effect of corruption on cash holdings and cash value using a panel data set of 4236 firms from 16 emerging market economies. We find that the cash holdings are positively related to the corruption and by managing their cash holdings upwards, the firms can benefit in the corrupt environment by trading cash. Furthermore, cash holding adds value to the firms. However, it is insignificant when the firms are operating in high corruption environment with low investor protection. Overall, the evidence suggests that corruption play an important role in shaping the cash policies of firms in emerging markets.     

Industry effects and firm effects: No effect is an island

At the heart of business research is the identification and prioritization of the factors that create competitive advantage. Previous studies that decompose observed firm performance into industry and other effects have not considered the higher moments of the performance distribution (i.e., the excess kurtosis), nor estimated the correct null hypothesis level of those effects (i.e., of the industry effect). We address these issues to find that: (1) the industry effect impact on firm performance is likely overstated; and, (2) the interaction between the calculated component firm and industry effects is likely one that includes synergistic effects (i.e., the standard additive model of decomposition is likely mis-specified). We offer a new model, test it, and then discuss the resulting implications.     

内部控制、学历水平与高管腐败:理论框架与实证

本文将内部控制、学历水平与高管腐败纳入到一个统一的分析逻辑和理论框架之中.研究结论显示,企业内部控制和人口统计学意义上的高管学历特征,是影响高管腐败的两个显著因素.其中内部控制作为主变量在抑制高管腐败过程中具有显著效应;而高管学历水平作为调节变量在内部控制抑制企业腐败的过程中具有调节效应.进一步基于要素层次的研究结果表明,内部控制对于高管腐败的防控作用是介由内部环境、信息与沟通、内部监督三个要素的改善而实现的.以上结论形成对于现有文献的有益补充,实现了对反腐败理论的延伸拓展,而且对寻找有效的腐败治理政策也具有实践意义.