Firms’ skills as drivers of radical and incremental innovation

Using firm level data from the Irish Community Innovation Survey 2008–2010 we analyse the importance of eight skill sets for the innovation performance of firms. We distinguish between radical and incremental innovation. Our results suggest that there is substantial heterogeneity in the importance of skills for different types of innovation and that some skills are best sourced from outside the firm while others are best developed in-house.     

Beyond lectures and tutorials: Formal on-the-job training received by young European university graduates

This paper examines the probability of receiving job-related formal training and the returns to on-the-job training in Europe using a sample containing personal, educational, and firm characteristics. The results show that certain occupations, such as managers and professionals, receive more training than others. Furthermore, certain types of workers are more likely to receive training—for example, those graduates in the public sector and those working in larger firms. With respect to the returns to training, estimation results show that the training measure has a significant impact on wages. In estimating the returns to training we have also taken into account the fact that participation in training is endogenous and not random.     

Globalization,Worker Mobility and Wage Inequality

In the present paper, I integrate frictional labor markets with on‐the‐job search into an otherwise standard heterogeneous firm model of intra‐industry trade. Most importantly, I show that the returns to workers' inter‐firm mobility are higher in a trade equilibrium than in autarky. Intuitively, by favoring large and productive firms, international trade amplifies the disparities in profitability between small and large firms. Hence, the returns to labor reallocation across firms rise. In view of the empirically observed higher inter‐firm mobility among high‐skill workers, this suggests a skill‐biased impact of trade liberalization.     

Barriers to innovation in young and mature firms

This paper examines how firm age can affect a firm’s perception of the obstacles (deterring vs. revealed) that hamper and delay innovation. Using a comprehensive panel of Spanish firms for the period 2004–2011, the empirical analysis conducted shows that distinct types of obstacle are perceived differently by firms of different ages. First, a clear-cut negative relationship is identified between firm age and a firm’s assessment of both the internal and external shortages of financial resources. Second, young firms seem to be less sensitive to the lack of qualified personnel when initiating an innovative project than when they are already engaged in such activities. By contrast, the attempts of mature firms to engage in innovation activity are significantly affected by the lack of qualified personnel. Finally, mature incumbents appear to attach greater importance to obstacles related to market structure and demand than is the case of firms with less experience.     

Choosing between Time and State Dependence: Micro Evidence on Firms' Price‐Reviewing Strategies

Because of recent findings based on survey data, it is now well known that firms differ from each other with respect to their price‐reviewing strategies. While some firms review their prices at fixed intervals of time, others prefer to perform price revisions in response to changes in economic conditions. Some theories have been suggested to explain this. However, empirical evidence on the relative importance of the factors that determine the different strategies of firms is virtually non‐existent. In this paper, we help to fill this gap by investigating the factors that explain why firms follow time‐dependent, state‐dependent, or both time‐ and state‐dependent price‐reviewing rules. We find that the strategies of firms vary with firm characteristics that have a bearing on the importance of information costs, with the variability of the optimal price, and with the sensitivity of profits to non‐optimal prices.     

Innovation or imitation? The effect of spillovers and competitive pressure on firms’ R&D strategy choice

In this paper a firm’s R&D strategy is assumed to be endogenous and allowed to depend on both internal firm characteristics and external factors. Firms choose between two strategies, either they engage in R&D or abstain from own R&D and imitate the outcomes of innovators. This yields three types of equilibria, in which either all firms innovate, some firms innovate and others imitate, or no firm innovates. Firms’ equilibrium strategies crucially depend on external factors. We find that the efficiency of intellectual property rights protection positively affects firms’ incentives to engage in R&D, while excessive competitive pressure has a negative effect. In addition, smaller firms are found to be more likely to become imitators when the product is homogeneous and the level of spillovers is high. Regarding social welfare our results indicate that strengthening intellectual property protection can have an ambiguous effect. In markets characterized by a high rate of innovation a reduction of intellectual property rights protection can discourage innovative performance substantially. However, a reduction of patent protection can also increase social welfare because it may induce imitation. This indicates that policy issues such as the optimal length and breadth of patent protection cannot be resolved without taking into account specific market and firm characteristics.     

Does Exporting Increase Productivity? A Microeconometric Analysis of Matched Firms

Exporting involves sunk costs, so some firms export whilst others do not. This proposition derives from a number of models of firm behavior and has been exposed to microeconometric analysis. Evidence from the latter suggests that exporting firms are generally more productive than nonexporters. They self‐select, in that they are more productive before they enter export markets, but the evidence suggests that entry does not make them any more productive. This paper investigates exporting and firm performance for a large panel of UK manufacturing firms, applying matching techniques. The authors find that exporters are more productive and they do self‐select. In contrast to other evidence, however, exporting further increases firm productivity.     

Sorting by search intensity

In this paper, I characterize matching in an on-the-job search model with endogenous search intensity, heterogeneous workers and firms, and match surplus is shared between workers and firms through bargaining. I provide proof of existence and uniqueness of steady state equilibrium. Given equally efficient matched and unmatched search, the worker skill conditional distribution of firm productivity over matches is stochastically increasing (decreasing) in worker skill if the production function is supermodular (submodular). I also show that this strong notion of sorting does not obtain everywhere for the firm productivity conditional match distribution.     

Skills,Tasks and the Scarcity of Talent in a Global Economy

The scarcity of talent is a tremendous challenge for firms in the globalized world. This paper investigates the role of labor market imperfection in open economies for the usage of talent in the production process of firms. For this purpose, I set up a heterogeneous firms model, where production consists of a continuum of tasks that differ in complexity. Firms hire low‐skilled and high‐skilled workers to perform these tasks. How firms assign workers to tasks depends on factor prices for the two skill types and the productivity advantage of high‐skilled workers in the performance of complex tasks. I study the firms’ assignment problem under two labor market regimes, which capture the polar cases of fully flexible wages and a binding minimum wage for low‐skilled workers. Since the minimum wage lowers the skill premium, it increases the range of tasks performed by high‐skilled workers, which enhances the stock of knowledge within firms to solve complex tasks and reduces the mass of active firms. In a setting with fully flexible wages trade does not affect the firm‐internal assignment of workers to tasks. On the contrary, if low‐skilled wages are fixed by a minimum wage, trade renders high‐skilled workers a scarce resource and reduces the range of tasks performed by this skill type with negative consequences for the human capital stock within firms. In this case, trade leads to higher per‐capita income for both skill types and thus to higher welfare in the open than in the closed economy, whereas – somewhat counter‐intuitive – inequality between the two skill types decreases, as more low‐skilled workers find employment in the production process.     

Disorganization and financial collapse

Since the fall of communism, the former Soviet Union experienced a strong output decline and a dramatic increase in arrears and barter. We develop a model which explains how these three phenomena are connected. We introduce liquidity and credit constraints into a model of disorganization and show how these problems can alleviate the hold-up problem. We argue further that barter creates a hostage that allows to deal with disorganization when credit enforcement becomes prohibitively costly. Based on a firm survey in Ukraine in 1997, we test how input shortages, financial shortages and barter affect output growth of firms.     

Who Trades with Whom? Exploring the Links between Firms' International Activities,Skills, and Wages

Using firm‐level data on the Italian manufacturing industry, we examine how trade activities are related to workforce composition and wages. We contribute to empirical research on these issues in three ways. First, we provide new evidence that is consistent with multi‐attribute models on firm heterogeneity and trade. We show that even after controlling for various company characteristics, including size and capital intensity, exporters still pay higher wages and employ more skilled workers than nonexporters. Second, we consider engagement in international transactions, either by means of exports, imports, or a combination of the two. We show that failing to control for importing activities may bias upward export premia. Third, we look at how the wage and the employment structures of trading firms change with the country of destination and origin of trade flows. We find that wage and skill premia are influenced by the characteristics of partner countries.     

Are environmentally responsible firms less vulnerable when investing abroad? The role of reputation

Globalization allows multinational firms to locate strategically the polluting activities in lax countries. This paper revisits the empirical evidence by exploiting heterogeneity in firms’ environmental image. While locating in countries with weak environmental standards is likely to be detrimental for a firm’s image and reputation, investing in corporate environmental responsibility can help firms to convince consumers that they have good environmental practices, even when investing in the “dirty” countries. Exploiting an original database that records an index of environmental responsibility for large European firms, we find that the firms viewed as environment-friendly are more often than others located in countries with weak environmental regulations. We show that our findings are not likely to be driven by omitted variables bias, specific sectors nor particular countries. Interestingly, this relationship is observed only among the firms with a well-established reputation for environmental responsibility.     

Firm productivity and importing: Evidence from Chinese manufacturing firms

This paper investigates various aspects of the relationship between firm productivity and importing for a large sample of Chinese firms between 2002 and 2006 making a distinction between the origin, variety, skill and technology content of imports. Employing a random effects probit model and a propensity score matching with difference‐in‐differences (PSM–DID) approach and treating imports as endogenous in our measure of total factor productivity (TFP) (De Loecker 2007), we test the self‐selection and learning‐by‐doing hypotheses. Our results show evidence of a bi‐directional causal relationship between importing and productivity. Although importing firms tend to be more productive before entering the import market, once they start importing firms experience significant productivity gains for up to two years following entry. We also find evidence of learning effects following the decision to import, which is stronger when import starters source their products from high‐income economies, import a wider variety of products and import products with a higher skill and technology content. A number of robustness checks confirm the learning effects of importing on TFP growth.     

Impact of nontariff measures on firms in Tunisia

This paper analyzes the effect of nontariff measures (NTMs) on firms in Tunisia. It draws a precise picture of NTMs’ effects on firms’ imports. We use firm‐level data to take into account firm heterogeneity. We explore the impact of NTMs on small vs. medium and large firms. We also consider the differentiated impact of NTMs. Some measures have informational content and help reduce information asymmetries. When the endogeneity issue of NTMs is controlled for, results show an overall positive impact of NTMs on imports. They provide evidence that NTMs are more beneficial to the imports of medium and large firms. Moreover, NTMs with informational content have an import enhancing effect. An extended analysis separating importing and exporting firms from those solely importing suggests that both types of firms benefit from the positive effects of NTMs. This result highlights the need to assist small firms facing NTMs. Furthermore, some NTMs with informational content should be addressed carefully and not considered only as barriers to trade to be eliminated. Instead, harmonization efforts between countries can be a better policy.     

Learning about compliance under asymmetric information

Over time, inspection agencies gather information about firms’ pollution levels and this information may allow agencies to differentiate their monitoring strategies in the future. If a firm is less successful than its peers in reducing emissions, it faces the risk of being targeted for increased inspections in the next period. This risk of stricter monitoring might induce high-abatement cost firms to mimic low-abatement cost firms by choosing lower emission levels, while the latter might try to avoid being mimicked. We explain firms’ compliance decisions and the inspection agency's monitoring strategy by means of a signaling game which incorporates dynamic enforcement and learning. Interestingly, we show that the ongoing signaling game between firm types might lead to firms over-complying with the emission standard.     

Cooperative oligopoly equilibrium

Oligopoly cooperation is investigated in an industry with N firms: each firm selects its own output. We show that such oligopoly problems have the same structure as problems of allocating public goods since each firm views its own output as a private good while viewing the outputs of others as public bads. This leads to ‘cooperative oligopoly equilibria’ which are the Lindahl equilibria of the oligopoly model. Agreements are modeled by the selection of a mechanism or ‘game form’ which obeys certain axioms. Under the postulated axioms we show the equivalence of agreed allocations with the set of oligopoly equilibria.It is argued that the principle of ‘Lindahl agreements’ may have wider applications.     

Firm entry deregulation,competition and returns to education and skill

This paper studies the effect of firm entry deregulation on the returns to skill and education. We exploit a comprehensive episode of entry deregulation, unique in the industrialized world, as a quasi-natural experiment. Using matched employer–employee data for the universe of workers and firms in Portugal, we show that increased product market competition, which resulted from deregulation, increased the returns to a university degree and the returns to skill. We verify that our results are not driven by changes in employment composition, and are unlikely to be driven by skill-biased technical change, or by workers who change skill levels after the deregulation.     

Increased sorting and wage inequality in the Czech Republic

This paper makes use of a linked employer–employee dataset to examine the evolution of wage inequality in the Czech Republic during 1998–2006. We find evidence of slightly increasing returns to human capital and diminishing gender inequality and document sharp increases in both within‐firm and between‐firm inequality. We investigate several hypotheses to explain these patterns: increased domestic and international competition, decentralized wage bargaining, skill‐biased technological change and a changing educational composition of the workforce. Domestic competition is found to lower within‐firm inequality whereas we find no evidence that increased international trade at the industry level is associated with higher between‐ or within‐firm wage inequality. The key factors driving the observed increase in wage inequality are increased educational sorting and the inflow of foreign firms to the Czech Republic.     

信息技术、组织变革与生产绩效 --关于企业信息化阶段性互补机制的实证研究

本文利用浙江企业的数据研究了企业信息化与组织变革、生产绩效的相互关联,发现企业信息化互补机制存在阶段性特征,即企业信息化资本和组织行为的互补性随着企业信息化资本和信息化应用程度的变化呈现阶段性变化。另外,我们还发现大企业和中小企业的信息化互补机制也存在显著差异。这些经验发现与现存文献以欧美国家企业信息化为主要对象所得出的结论形成鲜明对比。     

Labor matching behavior and trade adjustment

This paper develops a model of costly trade and team production to examine the matching behavior of skilled workers in an open economy. Trade liberalization changes the supply of skilled production teams available for hire, even when firm production techniques remain fixed. As trade barriers fall, some workers choose to quit small firms in order to accept less skill intensive jobs at large firms that participate in foreign markets. Changes in worker matching behavior can explain several stylized features of firm-level adjustments to trade, with effects that are not limited to firms on the margin of exit or exporting. Trade is shown to rationalize the matching behavior of workers, leading to aggregate gains in productivity and lower prices. Openness benefits workers employed at exporting firms, however the likelihood of gaining from trade is not necessarily increasing in skill. Wages in the open economy are tied to both worker skill and job type.