The Use and Abuse of Export Subsidies: Evidence from Colombia

(12033) Christian Helmers and Natalia Trofimenko We evaluate the impact of firm‐specific export subsidies on exports in Colombia. Using a two‐step selection model, we predict firm‐specific subsidy amounts that can be explained by the characteristics that determine firms’ eligibility for government support and its amount. Drawing on the accounts of the discretionary allocation of subsidies in developing countries, we interpret the discrepancy between the predicted and the observed subsidy amounts as a proxy for a firm's ties to government officials. Controlling for observable and unobservable firm characteristics as well as persistence in exporting, we find that although, in general, subsidies exhibit a positive impact on export volumes, this impact is diminishing in subsidy size and in the degree of a firm's connectedness.     

Influence of Affective Traits on Entrepreneur's Goals and Satisfaction

Emotions are important to an individual's behavior. However, affective elements have rarely been included in the analysis of entrepreneurs' behavior. Using a sample of 335 entrepreneurs from multiple industries of the Spanish region of Castile and León, we analyze the role of emotions in entrepreneurs' statement of goals and in their satisfaction with business performance. The results show that positive affective traits influence an entrepreneur to state broad and ambitious goals, and personal negative affective traits influence an entrepreneur to state a narrow set of goals. We also find that positive (negative) affective traits are positively (negatively) related to entrepreneur satisfaction.     

Client–consultant interaction: Capturing social practices of professional service production

Based on the investigation of seven consultancy projects within an international technical consulting firm, we identify three major practices that characterize client–consultant interaction – shaping impressions, problem-solving, and negotiating expectations – and discuss their respective characteristics, activities, and contingencies. Our discussion of these practices provides not only a more differentiated picture of client–consultant interaction but also uncovers the critical role that clients play in these practices.     

What hinders innovation performance of services and manufacturing firms in Mexico?

Barriers to innovation are heterogeneous, of financial and non-financial nature. The importance of barriers to innovation and their actual influence on innovation depend on firms’ characteristics such as sectoral affiliation, technological behavior and their response to perceived obstacles to innovation. Firms either continue to engage in innovation, or they avoid the activity altogether. This paper explored the nature and perceived importance of the obstacles to innovation that firms confront, in a developing-country context; we build on survey data about firms in Mexico. Our findings suggest that two kinds of policy interventions should help offset a firm’s perception of barriers to innovation. On the one hand, policies should enhance the innovation capacity of firms interested in innovation; on the other hand, policies need to tackle factors that reduce the interest of firms in innovation. Policies that boost demand for locally generated innovations would assist in achieving both these goals.     

Choosing to Cofinance: Analysis of Project-Specific Alliances in the Movie Industry

We use a movie industry project-by-project dataset to analyzethe choice of financing a project internally versus financingit through outside alliances. The results indicate that projectrisk is positively correlated with alliance formation. Moviestudios produce a variety of films and tend to develop theirsafest projects internally. Our findings are consistent withinternal capital market explanations. We find mixed evidenceregarding resource pooling, i.e., sharing the cost of largeprojects. Finally, the evidence shows that projects developedinternally perform similarly to projects developed through outsidealliances.     

Improving Food Safety at the Dairy Farm Level: Farmers' and Experts' Perceptions

This study examines farmers' and experts' perceptions of important action points for improving food safety on the dairy farm. Adaptive conjoint analysis is used to elicit these perceptions. A comparison on the basis of professional background (farmers versus experts) shows no major differences in the perceptions regarding chemical and microbiological hazards. Two-stage cluster analysis of individual perceptions regarding chemical and microbiological hazards results in four and three distinct groups, respectively. Although results indicate a rather good level of farmers' knowledge of most important action points, the findings can be used to modify current education programs aimed at improving farm-level food safety.     

Endogenous capacities and price competition: The role of demand uncertainty

We analyze the role of demand uncertainty in markets of fixed size, in which firms take long-run capacity decisions prior to competing in prices. We characterize the set of subgame perfect Nash equilibria under various assumptions regarding the nature and timing of demand uncertainty. In order to prove equilibrium existence, we identify a sufficient condition for the capacity choice game to be submodular. This condition resembles the standard downward-sloping marginal revenue condition used in Cournot games. A robust conclusion of the analysis is that equilibrium capacity choices are asymmetric, even when firms are ex-ante identical. Concerning the equivalence between the capacity-price game and the Cournot game, we find that with inelastic demands, the equilibria of the former belong to the equilibrium set of the latter. However, as compared to the Cournot game, the capacity-price game leads to lower prices and generates price dispersion.     

Governmental Financial Reporting of Heritage Assets From a User Needs Perspective

The implementation of IPSASs in European Union countries and the harmonization of governmental financial reporting are intended to respond to the needs of citizens. An important characteristic of reforms to governmental accounting and financial reporting is the incorporation within the accounting systems of all public authority assets, which include the case of ‘heritage assets’. This paper investigates to what extent IPSAS 17 responds to user needs of governmental financial reporting about heritage assets by conducting a survey of mayors and councillors in the Italian local government.