Synchronized job transfer and task-specific human capital

Recent evidence suggests that frequent and broad lateral transfers increase the possibility of promotion. A question is how firms save the costs of these frequent lateral transfers given the existence of job-specific skills. This paper proposes a new theory of the transition across jobs based on the assumption that each job consists of tasks and that each of these tasks requires specific skills. This shows that firms synchronize the promotions and lateral transfers of their employees to reduce the cost of transferring to the employee those task-specific skills required for a new position. We find that this unique prediction is broadly supported by a large personnel data set in Japan.     

Scissors or Horizon: Neoclassical Debates about Returns to Scale,Costs, and Long-Run Supply, 1926-1942

Modern treatment of long-run (U-shaped) cost curves developed from reactions to Sraffa's criticisms of Marshall. He argued that internal (dis)economies were incompatible with partial-equilibrium analysis under perfect competition. Pigou concurred and drew L-shaped cost curves; Viner realized that this made firm size indeterminate and industry output volatile. Using Austin and Joan Robinson's analyses, Stigler justified rising costs/supply, determinacy, and stability by irrational entrepreneurs enduring coordination failure and by factor price changes. We conclude that consistency requires constant costs but firm employment, output, and factor incomes remain theoretically indeterminate. It becomes likely that large firms will undermine perfect competition.     

Employment and wage adjustments at firms under distress in Japan: An analysis based upon a survey

We use the result from a survey of Japanese firms in manufacturing and service to investigate the choice of wage and employment adjustments when they needed to reduce substantially the total labor cost. Our regression analysis indicates that the large size reduction favors the layoffs of the core employees, whereas the base wage cuts are more likely if the firms do not feel immediate pressures from the external labor market or the strong competition in the product market. We also find some evidence that the concerns over adverse selection or demoralizing effects of wage cuts are real. Firms do try to avoid using base wage cuts if they consider these factors more important.     

A Political Economy Model of Health Insurance Policy

This paper aims to explain the divergent path of U.S. health policy from other high-income countries. The paper develops a general framework of interest group politics to study how the organization of industry can shape health insurance coverage and greater public involvement in health insurance. Large firms face a higher degree of unionization and provide more health coverage for employees than small firms. Consequently, large firms favor the adoption of a policy of universal health care coverage as a means of divesting health care costs to the public sector. Public aversion to higher taxation counterbalances this effect.     

Stakeholder Orientations and Cost Management

We examine the effect of stakeholder orientation on firms' cost management as proxied by selling, general, and administrative (SG&A) cost stickiness. Using a sample of 19,783 firm‐years, we find that customer and employee orientation are associated with greater SG&A cost stickiness. Furthermore, the effect of customer orientation on SG&A cost stickiness is more prominent in firms where SG&A costs create high future value, growth firms, and firms with strong corporate governance. In contrast, the effect of employee orientation on SG&A cost stickiness is stronger in firms where SG&A costs create low future value, mature firms, and firms with weak corporate governance. Overall, the association between customer orientation and SG&A cost stickiness is consistent with efficiency considerations (i.e., adjustment costs). In contrast, the association between employee orientation and SG&A cost stickiness is consistent with agency motives such as empire building or “a preference for a quiet life.” In sum, we provide evidence that corporate orientation toward different stakeholders can have different efficiency implications in the context of SG&A resource adjustments and cost management.     

Long-term evolution of the firm value and behavior of business groups: Korean chaebols between weak premium,strong discount,and strong premium

This paper analyzes the long-term evolution of the costs and benefits associated with chaebols or diversified business groups in Korea. Chaebol-affiliated firms in Korea have experienced dramatic changes in their costs and benefits along three time periods (1984–1988, 1990–1995, and 2001–2005). They did not suffer a value loss relative to non-affiliated firms in the 1980s, but did so in the 1990s. In the post-crisis period, however, they began to show value gains.To identify the causes of these changes, we examine if chaebol firms prioritize profit stability over profit maximization, overinvest in low-return businesses, cross-subsidize the low-performing affiliates of their group, and possess greater debt capacity, consequently enjoying lower tax burdens. We discover that in the 1980s, chaebol firms generally enjoyed various perks, such as tax breaks, but shied away from excessive investment activities. In the 1990s, their performance worsened because of substantial over-investment, despite several advantages. However, after massive restructuring and sorting out following the 1997 Asian financial crisis, chaebols emerged as very profitable firms correcting over-investment despite the absence of tax perks and debt-carrying advantages.     

Effects of state-sponsored human capital investment on the selection of training type

Since the 1990s, firms in Japan have reduced their human capital investment in the workplace to minimize costs. Moreover, in response to the increase in the number of non-regular employees and turnover rates, workers need to have greater incentive to make the self-motivated investment in themselves for their self-protection. In this study, we first estimate the effects of workers’ self-motivated investment in themselves on wage rates. Next, we explore who is likely to participate in which training type and accordingly estimate the effects of the self-motivated investment on wage rates by training type. Our estimates controlling for individual-level fixed-effects indicate that the return is significantly positive and particularly high for practical training related to workers’ current jobs, and regular workers tend to self-select these higher-returns programs, while non-regular workers are more likely to enroll in lower-returns programs, such as schooling. This trend in investment in oneself could potentially increase the wage inequality between regular and non-regular workers through the self-selection of training types. Our estimates reveal that receiving the training and education benefit raises the likelihood for workers to participate in a high-return training program regardless of whether they are non-regular or regular workers. This suggests that government benefits on self-investment change workers’ self-selection of training type and serve to promote practical trainings that lead to high returns.     

Sunk Costs Hysteresis in Spanish Manufacturing Exports

We test the sunk costs explanation for hysteresis in exports using a sample of Spanish manufacturing firms for the period 1990–2000, allowing for sunk costs to be different for small and large firms. The data are drawn from the Spanish Encuesta sobre Estrategias Empresariales. To obtain consistent estimates for sunk costs, we control for all other sources of persistence and use a dynamic multivariate probit model that is estimated through pseudo simulated maximum likelihood techniques. Our results support the sunk costs explanation for hysteresis for both size groups and indicate that sunk costs are smaller for large firms. JEL no.  F12, L1, C23, C25     

企业产权、社会责任与权益资本成本

企业社会责任是否是企业为社会利益而牺牲自身利润的行为一直是学术界争论的焦点,文章尝试从资本市场参与者的角度出发,通过考察我国上市公司的社会责任履行情况对权益资本成本的影响来回答这个问题。研究发现：（1）良好的社会责任表现确实能显著降低企业的权益资本成本,其中改善企业对投资者的责任起到的作用最为突出;（2）与非国有企业相比,目前国有企业的社会责任履行情况更好且权益资本成本更低,但是积极的社会责任行为在非国有样本中更能发挥降低权益资本成本的作用。     

Export Activity,Firm Size and Wage Structure: Evidence from Taiwanese Manufacturing Firms*

This study adopts a semiparametric smooth coefficient model to evaluate the export–wage premiums, firm size–wage premiums, and the wage gap between skilled and unskilled labor. Particular focus is placed upon widespread evidence indicating that pay levels in ‘large’ and ‘export‐oriented’ firms are higher than in their ‘small’ and ‘domestic‐oriented’ counterparts. Applying the firm‐level data for Taiwanese manufacturing firms, we find a positive export–wage premium for skilled workers and a negative export–wage premium for unskilled workers. The hypothesis of a constant export premium across firm size is rejected. While most of the export–wage premiums for skilled labor can be attributed to the small and medium firms, the large exporting firms have a significant adverse effect on wages for unskilled labor. Moreover, our results suggest that the firm size–wage premiums for skilled workers are larger than those for unskilled workers. The wage gap between the two skill groups is also sensitive to size categories.     

Where Do the Sick Go? Health Insurance and Employment in Small and Large Firms

Small firms that offer health insurance to their employees may face variable premiums if the firm hires an employee with high-expected health costs. To avoid expensive premium variability, a small firm may attempt to maintain a workforce with low-expected health costs. In addition, workers with high-expected health costs may prefer employment in larger firms with health insurance rather than in smaller firms. This results in employment distortions. We examine the magnitude of these employment distortions in hiring, employment, and separations using the Medical Expenditure Panel Survey from 1996 to 2001. We find that workers with high-expected health costs are less likely to be new hires in insured small firms and are less likely to be employed in insured small firms. We find no evidence that state small group health insurance reforms designed to restrict insurers' ability to deny coverage and restrict premium variability have reduced the extent of these distortions.     

成本、禀赋与中国制造业对外直接投资——基于扩展KK模型的分析

本文通过区分6种企业结构类型,扩展了KK模型的一般均衡框架并进行了数值模拟。研究发现,给定中等贸易成本和相对企业总部成本,在不同的要素禀赋情形中模拟各种类型企业的活动,可以很好地解释中国制造业的对外直接投资动因:中国制造业企业向更落后的发展中国家的投资主要依据技术优势,向经济发展水平相近的新兴经济体的投资主要为了节约贸易成本,向发达国家的投资主要基于中国低劳动成本优势。     

The Role of Commercial Non-profit Organizations in the Provision of Public Services

In this paper we discuss the role of commercial non-profit firmsin the provision of public services, referring to three casestudies to illustrate the main issues. We consider problemsof corporate governance, including the role of the board ofmembers and the scope for performance-related pay. We discussthe performance of such non-profit firms in terms of qualityand costs, the particular finance problems of these firms andthe implications for risk taking. We also suggest various aspectsof non-profit behaviour in public service provision that presentinteresting avenues for future research.     

Is Bigger Still Better? The Decline of the Wage Premium at Large Firms

This study shows that the wage premium paid by large firms fell over the past 20 years and that this decline in the size premium is most pronounced among the least educated workers. Empirical evidence supports several explanations for the shrinking size premium. First, there has been a convergence in the returns to worker characteristics at large and small firms over time. Second, small and large firms are hiring more workers with similar characteristics. Particularly important are the declining share of workers at large manufacturing firms and the rising share of workers at large retail firms. Also, the greater decline of unionism at large firms has contributed significantly to the decline in the size premium.     

Domestic multinationals, foreign affiliates, and labour demand elasticities

Using information on a panel of multinational firms operating in the United Kingdom from 1996 to 2005, we find that labour demand in domestic multinationals is less sensitive to labour cost changes than in foreign multinationals. This difference in the wage elasticity of labour demand persists even when we control for the skill intensity of firms or their level of intangible assets. This is in line with an interpretation that the provision of headquarter services in domestic multinational firms protects against strong fluctuations in labour demand. Overall, our results suggest that the wage elasticity of labour demand is about 40 % lower in domestic than in foreign multinationals.     

Firm Size and Work Compensation in China

Remarkably, recent research on the Chinese labor market has suggested that the situation in China is inconsistent with the stylized fact that large firms pay higher wages and offer more generous benefits. Expanding the empirical basis from 78 to 300 000 industrial firms, I overturn theprevious result andshow that wage determination in the averagefirmfits the international norm. Exploring subsamples of firms I also point to a likely source for the conflictingfindings： firm size is positively correlatedwith the average wage in private firms, but negatively correlated with the average wage in the state-owned sector. These novel results couM guide future studies aiming to understand the sources of the firm size wage premium, and, in particular, studies that target the largest industrial labor market in the world     

Managed workspace. Do tenants stay too long?

The managed workspace format rose to prominence as a tool for local economic development during the 1980s, Its popularity has continued into the 1990s, offering support for new and small firms in their early stages of operation through the provision of suitable premises and a “protected environment”. In this article, evidence is presented to indicate that a significant proportion of tenant firms are, in fact, remaining in managed workspace well beyond the early stages of operation for which it is primarily intended, and we examine the reasons for this. Most significantly, this examination reveals that the added costs associated with the provision of the “protected environment” often appear to produce little in the way of added value for these more mature tenant firms, and on this basis we conclude with a call for a reappraisal of the role for managed workspace in local economic development policies.     

Corporate hierarchy, promotion, and firm growth: Japanese internal labor market in transition

This paper investigates the incentive systems and the hierarchical design of the Japanese firms as integral parts of employment structure. Using the survey cross-section data on job ranks and wages, we analyze the promotion policy and compensations system as the key incentive mechanism in these firms with highly developed internal labor markets. We find that the incentive as well as hierarchical structures of the large Japanese firms are highly sensitive to the longrun growth rates of these firms. This finding is supported by a prediction of a model of internal promotions developed in the paper. We also find that the span of control, incentive effects of promotion, and wage-age profile at each job rank are all increasing in the longrun growth rates of these firms. These findings are jointly consistent with and in support of the hypothesis that the expected gains from the promotion is the key incentive in inducing efforts of the employees.     

Who bears the burden of employer compliance with social security contributions? Evidence from Chinese firm level data

This article utilizes firm level audited data from Shanghai in 2002 and 2003 to examine the extent to which employers shift the burden of compliance with social security obligations back to employees in the form of lower wages. Results from a fixed effects panel model using data on a subset of the firms audited in both years found that 18.9% of the compliance cost was shifted back to employees in the form of lower wages. Separate two-stage least squares estimates with controls for firm size, ownership and industry type for 2002 and 2003 found that the incidence of social insurance contributions on employees increased across the two years. In 2002 the incidence of social insurance contributions on employees was 9.1% and in 2003 this increased to 33.8%. An explanation for the increase in the incidence on employees over the two years is that employer compliance improved in 2003 compared with 2002.     

Managerial perspectives of the shorter workweek in Georgia manufacturing firms

Conclusions At present, great opposition exists among Georgia's 50 largest manufacturing firms toward the adoption of the shorter workweek. More than twice as many (61 percent) of the managers opposed it as favored it (26.7 percent), with a representative number (12.3 percent) indifferent to the idea. This opposition appears to be based upon anticipated problems in the areas of scheduling, communication difficulties, costs, and employee considerations. Employee acceptance of the shorter workweek (as perceived by the managers surveyed) already exists in approximately two-thirds of the firms surveyed. This perceived acceptance is reflected in the potential shorter workweek advantages as reported by the same surveyed managers, namely decreased absenteeism and turnover and the ease of recruiting employees. While the probability of the modified workweek gaining wide acceptance in Georgia seems at best small, the shorter workweek movement cannot be ingnored. Its advocates promise to provide the key to greater productivity, increased efficiency and improved employee relations. This study has served to determine the attitudes of Georgia's largest manufacturing firms toward what may be the accepted work schedule of the future.