International trade and firm innovation: patterns and evidence from the Chinese Employer-Employee Survey data

ABSTRACT

How international trade fosters firm innovation is crucial in understanding how economic integration boosts productivity growth. This study uses the Chinese Employer-Employee Survey data set, which contains detailed, firm-level information on exports, imports, and innovation. The study documents several stylized facts characterizing the interaction between international trade and innovation among Chinese firms. The main findings are that exporters and importers are exceptional in production and innovation; exporters are more inclined to import material and machinery inputs; domestic and private firms do not seem to be more innovative than their counterparts.

Abbreviations: CEES: Chinese Employer-Employee Survey; FIE: Foreign investment enterprise; NBS: National Bureau of Statistics of China; SOE: State-owned enterprise     

Effects of regulatory burden and corruption on firm performance: Evidence from Moldova

Firms in Moldova face a high level of regulatory burden, as proxied by the number of inspections by public authorities. At the same time, they face high levels of corruption. We examine the effect of frequent inspections on four measures of firm performance: labour and total factor productivity, and levels of tangible and intangible assets. We also investigate how corruption affects the relationship between inspections and firm performance. We perform panel data analysis using firm-level administrative data and survey data from Moldova in 2005–2015. The results show that inspections and corruption each affect firm productivity negatively, but corruption moderates the negative effect of inspections. We also find that inspections and intangible assets are positively correlated, but this correlation is weaker for higher levels of corruption. Finally we examine whether these results differ by industry, firm size and ownership types. Inspections and corruption affect medium and large firms, and state-owned enterprises differently from micro and small firms and private firms respectively.     

人格特征对于劳动力工资的影响效应——基于中国企业—员工匹配调查(CEES)的实证研究

作为人力资本非认知能力(non-cognitive skills)的重要因素,人格经济学已成为劳动力市场研究的新兴热点。在系统梳理现有研究成果的基础上,本文运用中国企业—员工匹配调查(CEES)数据,就大五人格特征对于劳动力工资的影响效应进行了基于微观一手调查数据的实证检验。基准回归结果表明,开放性、严谨性等积极的人格特征对于劳动力工资具有显著的促进作用,而对于现阶段中国劳动力市场而言,以开放性为代表的创新型人格特征较为稀缺,其对于工资收入的边际贡献更为明显。在此基础上,本文以开放性人格特征为例,选取处理效应的识别策略,就人格特征对于劳动力工资的因果效应进行了稳健性检验。估计结果表明,开放性人格特征对于工资收入的促进效应均在至少5%显著性水平上满足因果推断的统计要求,而以员工冒险精神、风险偏好指数作为开放性人格特征的替代变量,也得到了相似的估计结果。     

Entrepreneurial overconfidence and firm survival: an analysis using the Kauffman firm survey

We used the Kauffman Firm Survey of ventures founded in the year 2004 to identify overconfident (OC) entrepreneurs and found, contrary to the existing literature, that the hazard ratio for these entrepreneurs was lower than the corresponding value for their non-OC peers. We categorized an entrepreneur as OC if he or she believed that his or her firm enjoys a competitive advantage over its industry peers, while simultaneously underperforming relative to the industry in terms of average initial ROA. Specifically, we looked at the average ROA during the years 2004–2007 and compared it to the industry median. In addition to our hazard findings, we discovered that these OC entrepreneurs, while starting with lower initial ROA levels relative to their industry peers, may have enjoyed slightly better movement in ROA over the intervening years. Our results are explained in the context of the psychological literature on optimism.     

Diversification strategies and firm performance in Vietnam

This paper is based upon the assumption that a firm's profitability is determined by its degree of diversification which is, in turn, strongly related to the antecedent decision to carry out diversification activities. This calls for an empirical approach that permits the joint analysis of the three interrelated and consecutive stages of the overall diversification process: diversification decision, degree of diversification and outcome of diversification. We apply parametric and semi‐parametric approaches to control for sample selection and the endogeneity of the diversification decision in both static and dynamic models. For the analysis, we use the census dataset on the whole firm population in Vietnam, as a representative of transition countries. After controlling for industry fixed‐effects, the empirical evidence from the firm‐level data shows that diversification has a curvilinear effect on profitability: it improves firms’ profit up to a point, after which a further increase in diversification is associated with declining performance. This implies that firms should consider optimal levels of product diversification when they expand their product offerings beyond their core business. Other noteworthy findings include the following: (i) the factors that stimulate firms to diversify do not necessarily encourage them to extend their diversification strategy; (ii) firms that are endowed with highly technological resources and innovation investment are likely to successfully exploit diversification as an engine of growth; and (iii) while industry performance does not have a strong influence on the profitability of firms, it impacts their diversification decision as well as the degree of diversification.     

Board independence and operating performance: analysis on (French) company and individual data

This article studies the relationship between board independence and firm operating performance in French listed companies. We take advantage of an original database, with a time-series dimension that can be used to mitigate heterogeneity and dynamic endogeneity issues. In addition, this database can be disaggregated at the individual (director) level. This design enables us to introduce firm fixed effects and individual fixed effects in firm performance equations, thereby controlling for heterogeneity at the firm and individual levels. Our main result is to document a significant negative relationship between independence and accounting performance. This result suggests that, in the French context, the costs of independence (i.e. the informational gap supported by independent directors compared to insiders and affiliated directors) outweigh the benefits of independence (i.e. the reduction in agency costs).     

Swimming upstream throughout the turmoil: Evidence on firm growth during the great recession

Economic downturns significantly impact on industry and firm dynamics. During a slowdown, increased competitive pressure makes less efficient firms more likely to exit (the cleansing hypothesis). However, evidence on Italian manufacturing firms during the Great Recession contrasts with this view. In fact, a not negligible subset of firms grew considerably during the crisis, increasing intra-industry heterogeneity. In this paper, we study these swimming upstream firms (SUFs) and we obtain two results. First, SUFs exhibit a high capability accumulation profile (innovation, intangibles investments and internationalization). Second, the impact of endogenous capability accumulation does not vanish after controlling for exogenous factors.     

How and where to offshore: a productivity comparison at the firm level

Using recent survey data on South Korean firms’ strategies for sourcing intermediate goods from abroad, we investigate whether there exists a productivity premium of offshoring by considering organizational forms (insourcing versus outsourcing) and the income level of offshored countries (North versus South) altogether. Thus, we consider the following four offshoring types: outsourcing from South, insourcing from South, outsourcing from North and insourcing from North. Unlike previous studies, we give particular attention to the comparison between outsourcing from North and insourcing from South and find that firms outsourcing from North are more productive than firms sourcing from their own affiliates in South. We offer three critical conditions to incorporate our empirical findings into the standard firm heterogeneity model: the fixed cost is higher for insourcing than for outsourcing and is higher in North than in South, the headquarters receive a larger share of the final revenue through insourcing than through outsourcing, and sourcing from North guarantees better profitability (or a bigger share) in the market for the headquarters than sourcing from South. Thus, this article contributes to the literature by identifying a new productivity order.     

Nature of technology and location effects on firm performance in the US medical device industry

ABSTRACT

This paper examines the location effects on firm performance (sales, employment and market value) by analyzing geographical and technological proximities in the US medical device industry. The nature of technology is introduced as a new way to scrutinize the impact of various proximities, and the findings indicate that the geographical and technological proximity in itself does not affect performance, whereas the spatially-mediated technological proximity, characterized by the technological proximity within a cluster, positively influences the performance of medical device firms. The paper addresses an important theoretical question. It consequently contributes to the effects of different proximities and nature of technology on firm performance and provides relative managerial implications interlocked with insights obtained from the medical industry.     

The impact of dual network structure on firm performance: the moderating effect of innovation strategy

ABSTRACT

Firm innovation is embedded in a collaboration network among researchers and a knowledge network composed of knowledge elements; the two networks are decoupled. Guided by social network theory, this study puts forward the definition and the classification of firm dual network structure, probes into the influence of dual network structure on firm performance, and explores the alignment between innovation strategy and firm dual network structure. We conduct an empirical study of 183 listed companies in China from 2004 to 2018. It is found that the four types of dual network structure all have positive impacts on firm performance, and the impact of a collaboration network is slightly higher than that of a knowledge network. Besides, innovation strategy plays a positive moderating role in the relationship between dual network structure and firm performance. Our findings provide new ideas for firms to identify and optimise knowledge and collaboration network structures and match them with innovation strategy to improve performance.     

Measuring the influences of supplier selection and supply chain tasks on firm performance among manufacturing firms in India

The primary objective of this research is to empirically probe the various aspects and variables that have been already addressed in the previous literature related to supplier selection criterion, supply effort management and firm performance. Further, this research aims to develop a measurement framework and pragmatically prove the framework through a measurement model. First, a factor structure for various constructs is made and the initial validity is determined from practicing managers and academicians. This research employs survey method and the data is collected from 358 supply chain professionals working in manufacturing firms in India. A measurement model is developed and proved with various tests of reliability and validity. Finally, three major latent constructs were formulated, namely, criterion of supplier selection, supply effort management and firm performance. The factor scores of these latent variables were used for further analysis. A six-stage approach was followed in the analysis of data. Firm performance was regressed against supplier selection criterion and supply effort management. The results indicate that the predictive variable has positive and significant effect on firm performance and they do not have any interaction and multicollinearity effects.     

Beyond absorptive capacity in open innovation process: the relationships between openness,capacities and firm performance

The literature has shown that open innovation (OI) can be a winning strategy in improving firm performance. However, in order to adopt and implement it, managers need to resolve practical problems, such as understanding the role played by OI capacities and openness on firm performance. In response to these needs, this study aims to investigate the hierarchical relationships between openness, OI capacities and performance using a structural equation model approach. This paper also attempts to compare the levels of openness between firms in different industries to discover similarities and differences in OI phenomena. The analysis of data obtained from a survey of Korean firms shows significant interrelations between openness, OI capacities and firm performance. Our results go further in developing understanding of the building blocks on which successful OI is built and particularly suggest that desorptive capacity which underpins the out-bound OI process, is in turn strongly supported by knowledge management capacity. It is hoped that the results of this study can enrich our understanding of the OI mechanism and provide managerial and policy implications.     

Ownership dynamics and firm performance in an emerging economy: a meta-analysis of the Russian literature

This paper provides a meta-analysis of studies on the effect of ownership on the performance of Russian firms over 20 years of rapid institutional and economic changes. We review 29 studies extracted from the EconLit and Web of Science databases with a total of 877 relevant estimates. We find that the government negatively affects company performance regardless of its administrative level. In contrast, private ownership is positively associated with firm performance. However, the effect size and statistical significance are notably varied among different types of private ownership. While the effect of insider (employee and management) ownership is comparable to that of foreign investors, the effect of domestic outsider investors is considerably smaller. Our assessment of publication selection bias reveals that the existing literature does not contain genuine evidence for a series of ownership types and, therefore, some of the findings have certain limitations.     

A naturalistic approach to the theory of the firm: The role of cooperation and cultural evolution

One reason why firms exist, this paper argues, is because they are suitable organizations within which cooperative production systems based on human social predispositions can evolve. In addition, we show how an entrepreneur, given these predispositions, can shape human behavior within a firm. To illustrate these processes, we will present a model that depicts how the biased transmission of cultural contents via social learning processes within the firm influence employees’ behavior and the performance of the firm. These biases can be traced back to evolved social predispositions. Humans lived in tribal scale social systems based on significant amounts of intra- and even intergroup cooperation for tens if not a few hundred thousand years before the first complex societies arose. Firms rest upon the social psychology originally evolved for tribal life. We also relate our conclusions to empirical evidence on the performance and size of different kinds of organizations. Modern organizations have functions rather different from ancient tribes, leading to friction between our social predispositions and organization goals. Firms that manage to reduce this friction will tend to function better.     

Effect of cognitive abilities and non-cognitive abilities on labor wages: empirical evidence from the Chinese Employer-Employee Survey

ABSTRACT

The existing literature suggests that worker’s cognitive and non-cognitive abilities have a significant impact on wages. However, presently there is little research in this area of ??China’s labor force, due to scanty data. To this end, this Paper conducted a CEES-based data research, which found that, the cognitive and non-cognitive abilities of male, skilled workers have a greater impact on their wages, as compared with those of the female, unskilled workers. The OLS regression based on the Mincer Wage Equation found that, the impact of non-cognitive abilities on wages is generally larger than that of the cognitive abilities. All cognitive abilities have a positive impact on wages, wherein English proficiency has the greatest elasticity of wages, which is 12.1%. Of all non-cognitive abilities, Conscientiousness has the highest wage elasticity, which is 13.6%, whereas Agreeableness has a negative wage elasticity of ?6.32%.

Abbreviations: CEES: Chinese Employer-Employee Survey OLS: Ordinary least squares     

The impact of China's millennium labour restructuring program on firm performance and employee earnings1

Around the turn of the century, China experienced perhaps the largest labour restructuring program in the world. This paper uses a new dataset of Chinese industrial enterprises to examine what leads to downsizing, and tries to understand the effects of labour downsizing on firms’ technical efficiency, financial performance and employee wages. We find that downsizing is more prevalent in state‐owned enterprises (SOEs), and is more likely when enterprises are older, larger and have higher excess capacity. For both SOEs and private firms, downsizing is more likely when the prices of their products drop, but private firms respond more dramatically. Moreover, downsizing has serious short‐term costs in terms of total factor productivity (TFP). For mild downsizing, private firms suffer more deterioration in productivity. The distribution of surplus after downsizing is more favourable to labour in SOEs. For severe downsizing, both SOEs and private firms exhibit lower TFP growth with similar magnitudes. Our findings imply that private firms emphasize profit goals, while SOEs place a greater weight on labour protection.