Firm-Level Data

This article analyzes the relationship between the usage of Internet-based technologies, different types of innovation, and performance at the firm level. Data for the empirical investigation originates from a sample of 7,302 European enterprises. The empirical results show that Internet-based technologies were an important enabler of innovation in the year 2003. It was found that all studied types of innovation, including Internet-enabled and non-Internet-enabled product or process innovations, are positively associated with turnover and employment growth.

What determines a country's ability to compete in international markets? What fosters the global competitiveness of its firms? And in the European context, have key elements of the EU strategy such as EMU and enlargement helped or hindered domestic firms' competitiveness in local and global markets? We address these questions by calibrating and simulating a conceptual framework that, based on Melitz and Ottaviano (2005), predicts that tougher and more transparent international competition drives less productive firms out the market, thereby increasing average productivity as well as reducing average prices and mark-ups. The model also predicts a parallel reduction of price dispersion within sectors. Our conceptual framework allows us to disentangle the effects of technology and freeness of entry from those of accessibility (i.e. the ease for local firms to reach local and foreign consumers). On the one hand, by controlling for the impact of trade frictions, we are able to co...

Under perfect competition and constant returns to scale, firms producing homogeneous products set their prices at their marginal costs which also equal their average costs. However, the departure from these standard assumptions has important implications with respects to the derived theoretical results and the validity of the related empirical analysis. In particular, monopolistic firms will charge a markup over their marginal costs. We show that firms' markups tend to be directly associated with the employed production technology, more specifically with their returns to scale. Accordingly, we analyze the implications for the markup ratios from the incidence of non-constant returns to scale. We present quantitative results illustrating the effect of the returns to scale index on the firms' price markups, as well as the relationship between the two indicators, on the basis of firm-level data for Bulgarian and Hungarian manufacturing firms. JEL classification numbers: C23, D21, D24

The paper investigates the diversified patterns of outsourcing in the Lombardy region and relates them to the probability of introducing product and process innovation. Based on a large firm-level survey, we show that outsourcing processes are strongly regionally embedded and that offshoring is still a limited phenomenon. Outsourcing strategies are shown to have a positive impact on firms’ innovation. In particular, the outsourcing of service activities contributes the most to innovation, thus suggesting that firms successfully pursue core strengthening strategies. Our econometric estimates show that both geographical and organizational proximity matter. Indeed, the positive association of services with innovation is strongly related to their regional dimension, which points toward the importance of local user-producer relationships. When outsourcing crosses national borders, keeping the outsourced activities at least loosely connected to the firm appears critical, as offshoring to ...

The Small Business Innovation Research Program (SBIR) partners with small and medium enterprises (SME) in high-risk R&D enabling technologies with strong potential for economic benefits to Taiwan. This paper provides evidence that SBIR policy can help SME innovation. It delivered the evidence by studying the effects of government funding on the R&D behavior of SMEs in Taiwan. By adapting the methodology recently proposed by Wallsten (2000) to firm-level data, this research shows that government funding subsidy helps SMEs.

Cloud computing is a new development of grid, parallel, and distributed computing with visualization techniques. It is changing the IT industry in a prominent way. Cloud computing has grown due to its advantages like storage capacity, resources pooling and multi-tenancy. On the other hand, the cloud is an open environment and since all the services are offered over the Internet, there is a great deal of uncertainty about security and privacy at various levels. This paper aims to address security and privacy issues threatening the cloud computing adoption by end users. Cloud providers are mindful of cloud security and privacy issues and are working hardly to address them. Few of these threats have been addressed, but many more threats still unsolved. This paper focused on cloud computing security and privacy threats, challenges, and issues. Furthermore, some of the countermeasures to these threats will be discussed and synthesized. Finally, possible solutions for each type of threats will be introduced before we end with conclusions and future work.

Using both firm-level and city-level data from the Chinese National Bureau of Statistics and unique information on investment promotion agencies (IPA) in China, the present paper evaluates whether IPA affect foreign direct investment (FDI) from the perspective of both intensive and extensive margins; that is, re-investment by incumbent foreign-owned firms and total new FDI inflows into the city, respectively. After controlling for potential determinants of FDI and correcting for biases due to endogeneity, we find that, in general, IPA do not necessarily increase FDI in either case. However, IPA are found to promote re-investment by large foreign-owned firms. The results imply difficulty in the dissemination of information about the business environment to foreign investors.

On the basis of abundant facility and firm-level data for German manufacturing, originating from a recent OECD-survey, this paper empirically investigates the relevance of a variety of incentives for environmentally innovative behavior of facilities, the respective influence of pressure groups, and the impact of both regulatory and market-based policy instruments, such as eco-taxes. Since the early 1990s, Environmental Management Systems (EMS), specifically, have become a vital voluntary complement to mandatory environmental policies based on regulation and legislation. EMS may be perceived as an organizational environmental innovation that may lead to improved environmental performance. While the paper provides a descriptive analysis of the determinants for EMS-adoption and incentives that may trigger environmental innovation activities within German facilities, the major questions that will be addressed in this paper are: (1) How can public authorities support the introduction of ...

Two logit models are estimated to explain merger and acquisition (M&A) activities in US food manufacturing using firm level data for public firms: a "target model" predicting the likelihood of a firm being targeted for M&A and a "takeover model" predicting the likelihood of a targeted firm being taken over. Target model results suggest the importance of firm liquidity, debt/leverage, profitability, growth in sales, stock earnings capacity, percentage of common stocks traded in the stock market, and market-to-book ratio. Activity or turnover ratio, firm size, and price-earnings ratio were not statistically significant. Takeover model results suggest the importance of degree of officer control, attitude surrounding the transaction, number of prior bids, existence of litigation during negotiations, and involvement of the bidder and/or target in other takeovers during negotiations. With predictive accuracy of 74.5 and 62.9%, respectively, these models suggest the systematic nature of M&A activities.

Shareholder value orientation has commonly been considered a hallmark of corporate financialization. Today, firms increasingly share their profits with shareholders in the form of cash dividends and share buybacks. Yet how the shareholder payouts are distributed by firms from various sectors, sizes and countries remains unexplored. To complement existing accumulation- and asset-centered approaches that focus, respectively, on how resources enter the firm and change its structure, we present a payouts-centered approach to corporate financialization that focuses on how resources leave the firm. This paper analyses firm-level trends in shareholder payouts in OECD member countries for the period 2000-2019, differentiating between types of distributed payouts. We show that shareholder payouts are high across various sectors and geographical locations, and not limited to a small subset of large, US-American financial corporations, but includes ‘big pharma’ and ‘big tech’ as well as Latin American and Israeli firms. The paper sheds light on the nature of the contemporary corporations and contributes to discussions on the increasing financialization of non-financial firms and their rising shareholder value orientation. 
Keywords: corporate financialization; corporate sectors; non-financial corporations; shareholder payouts; shareholder value

The objective of this paper is twofold. On one hand, we undertake an analysis of the recent evolution of capital markets and their effect on the availability of external financing in Mexico in the last two decades. On the other hand, based on a newly assembled firm-level data set on corporate governance and firm performance, we show that better firm-level corporate governance practices are linked to higher valuations, better performance and more dividends disbursed to investors. These results hold after controlling for endogeneity. Overall, the evidence shows that the Mexican legal environment poses serious problems for access to capital.

Turkey’s pace of income convergence has globally been one of the most remarkable of the past fifteen years. Sustaining growth and improvements in living standards in Turkey will require higher productivity in the economy. The Turkey Productivity Report (2019) provides an in-depth analysis of firm productivity in Turkey and how this adds up to economic growth in the country. The report has six parts. The first two provide macro and micro diagnosis of productivity in the economy – what are the productivity trends, how have these affected economic growth, what firms in what industry are the most productive, and are they absorbing an increasing or decreasing share of resources? From here the report analyzes specific policy areas that might explain firm productivity dynamics in Turkey – namely firms’ integration in the global economy, access to innovation support, the quality of human capital, and the business environment including competition. The report finds that economic integration and innovation have boosted firm-level productivity, though reforms could further accelerate these positive impacts. Productivity gains could accelerate the demand for more educated and skilled workers. The growth of more productive firms could in turn also be accelerated through reforms that increase competition and reduce regulatory burden.

This paper discusses the channels between openness and productivity and trade hampering factors. The stylized facts from the heterogeneous firms literature suggests that firms face market entry costs for each new product they export and to each new export market. Transport costs, border costs and retail and wholesale distribution costs might add up to 170% of the export value, but formal import tariffs and duties are relatively unimportant. The results by the Observatory of European SMEs survey, which has firm-level data for the whole European Union confirm this result. Lack of knowledge on export markets and regulations in other countries are important trade barriers for European firms. From these outcomes it could be derived that EU trade policies should be directed to deep integration with other countries, preferably by implementing internal market policies for goods and services trade and foreign direct investment. These policies can deal with reducing regulations heterogeneity,...

The present paper aims to test the impact of incoming Foreign Direct Investment (FDI) on local wages in the Italian manufacturing sector by using firm level data from 2002 to 2007. Results initially show the lack of wage spillovers at both horizontal and vertical level, meaning that the effects of foreign investment are completely internalized within each firm. However, when the technology gap is taken into account, we find some evidence of a non-linear relationship between gap size and wage spillover. In particular, if the technological gap between local firms and foreign companies is too large, Multinational Enterprises (MNEs) face some difficulty in interacting with domestic suppliers and customers, with the consequence that they act like monads within the host country. We therefore believe that policies favouring the attraction of inward investments, should not be of the 'one for all' or 'one for always' type, but must be strongly directed towards the sectoral and local characteristics of the host country.

Empirical studies on total factor productivity growth (TFPG) in developing countries highlight trade open-ness, research and development and market structure as being the most important determinants of TFPG. The role of institutions remains overlooked in the literature on the determinants of TFPG. In this paper, we look into the role of institutional quality as captured by effective state-business relationships (SBRs) in influencing TFPG, using Indian manufacturing as a case-study. By SBRs we mean a set of highly institutionalised, responsive and public interactions between the state and the business sector. To compute TFPG, we use firm level data for both the formal and informal manufacturing sector. We correct for the simultaneity bias associated with the production function approach for TFPG estimation by employing a method developed by Levinsohn and Petrin. We propose measures of effective SBRs for 15 Indian States over the period 1994-2005, and then use them in TFP growth equations to estimate the effect of SBR on TFPG. The results indicate that SBR has positively affected the TFP growth of Indian industry. The effect however is primarily for the formal sector.

This paper relies on rich firm-level data on transition economies to examine the role of informality as an important channel through which regulatory and other policy constraints affect firm growth. We find that firms reduce their formal operations with greater tax and regulatory burdens, but increase them with better enforcement quality. In terms of firm growth, we find a differential impact of regulatory burden and enforcement quality on formal and informal firm growth. In particular, we find that growth in formal firms is negatively affected by both tax and financing constraints, whereas these constraints are insignificant for growth in informal firms. Moreover, formal firm growth improves with better enforcement, while informal firm growth is constrained by organized crime, pointing to informal firms' inability to take full advantage of the legal and judicial systems. Finally, we find that an interaction term between a countrywide measure of the rule of law and formality is positive, suggesting that better rule of law improves formal firm growth. [JEL L25, O17, O43, P26, P37] IMF Staff Papers (2008) 55, 50-82.

The internal resource barriers that firms experience influence their capability to export. This in turn influences the export performance of the country and the extent to which exports contribute to economic growth. The aim of this paper is to analyse the impact of resource barriers, more specifically firm size, productivity, firm-specific capital and labour market constraints, on South African firms' decision to internationalise. The literature on South African exporting firms presents some interesting glimpses of the exporting behaviour of firms in South Africa. However, these were cross-sectional studies focusing on earlier NES data and the 2003 ICA data. This paper tries to provide another dimension in terms of data, by taking the 2007 ICA data into account and by constructing a unique panel from the World Bank Enterprise Survey data for 2003 and 2007. Using panel data allows for better understanding of South African firms in that it enables one to consider the dynamic nature of firms over time. Also, the earlier South African contributions examined the export behaviour of South African firms, but did not control for unobserved heterogeneity. This paper takes the analysis a step further by estimating a panel data two-step Heckman selection model of the predictors of firms’ export propensities and intensities. From the overall results of the model, it is clear that the unobserved factors that make export more likely tend to be associated with lower levels of exports. The main findings are that firm size, productivity and finance matter for exports. Also, barriers to doing business, such as electricity, customs delays and transportation and the use of imported inputs influence exporting firms’ supply-side capabilities.

By using firm-level data provided by the last round of the (Italian) Community Innovation Survey (CIS4) this paper explores (in a manufacturing-services comparative framework) the relationship between technological and non-technological innovations and their impact on firms' performances. The empirical evidence presented shows that including the organizational dimension of innovation provides a much more comprehensive picture of the variegated universe of innovation in both macro-sectors. Four distinct innovation modes have been identified on the basis of the ways firms combine technological and non-technological innovations. These different modes of innovation are present and relevant in both manufacturing and service sectors and have been found to have a differentiated impact on firms' performances. Strategies characterized by the joint introduction of product, process and organizational innovations have been found to give to both manufacturing and service firms a clear competitive advantage vis à vis both non-innovating firms and firms with a narrow approach to innovation. A few significant differences between services and manufacturing firms in the relevance and economic impact of different types of innovation strategies have also been found.

While the earlier literature examined the impact of intellectual property protection on the volume of foreign direct investment (FDI), little is known about its effect on the composition of FDI inflows. This paper addresses this question empirically using a unique firm-level data set from Eastern Europe and the former Soviet Union. It finds that weak protection deters foreign investors in technologyintensive sectors that rely heavily on intellectual property rights. Moreover, the results indicate that a weak intellectual property regime encourages investors to undertake projects focusing on distribution rather than local production. The latter effect is present in all sectors, not just those relying heavily on intellectual property protection.

Downloadable! While tariff and quota barriers in agricultural, food and manufactured products have been declining due to the proliferation of multilateral trade agreements, there is increasing debate regarding the impact of product and process standards and technical regulations ...

This paper fits translog stochastic frontiers with inefficiency effects to a panel of Hungarian firm level data for 117 agricultural enterprises and 43 firms in the light manufacturing sector for the period from 1985 to 1991. Throughout this period, labor and materials make important contributions to output while energy and capital do not. Constant returns to scale and low elasticities of substitution are the norm. Technological regression dominates, giving negative productivity change, but the cross section estimates show that relative efficiency improved sufficiently in both agriculture and industry that in the later years the average production function is preferred to the stochastic frontier, except when manufacturing efficiency collapsed in 1991. The inefficiencies are explained by over capitalization, subsidies and excessive management costs, while firms that had established export markets were more efficient.

and Singh (1995, Corporate Financial Patterns in Industrializing Economies: A Comparative International Study) has suggested that large firms in a number of developing countries, including India, use much more external finance in general, and equity finance in particular, than those in developed countries. However, the contrast is in part a product of methodological differences, and India is much less different from countries such as France and Italy. The Singh results are not due merely to bias arising from the focus on the largest companies, since the rest of the Indian corporate sector also issues large amounts of equity, via informal networks rather than organized stock exchanges. The importance of such issues suggests the need for further research before policy conclusions can be drawn. 0 1998 Elsevier Science Ltd. All rights reserved

This paper contributes to the examination of factors that affect the decision to export of firms. Using a panel of firm-level data in Vietnam's manufacturing sector, we test for the role of sunk cost and heterogeneous characteristics of firms in determining firms' probability of exporting. Under a framework that controls for unobserved heterogeneity among firms, we find that the sunk entry costs are a significant factor that makes export status highly persistent in Vietnam. Firm size, firm age and foreign ownership are positively related to export probability of firms, while total factor productivity has no statistically significant effect. Besides, firms with labor-intensive technology, more skilled labors or competitive labor service are more likely to export.

How do trade activities affect firms' employment and wages structures? Using firm level data on Italian manufacturing firms, this paper adds to the existing literature, by assessing how thedegree of involvement in international trade impacts on workforce composition, earning levels and wage inequality. We differentiate firms that only export from firms that only import and from those involved in both trading activities -namely two-way traders. We show that two-way traders have a higher propensity to employ non-production workers, exhibit significant wage gaps, but also pay higher wages for both production and non production workers, relative to non internationalized firms and to firms which are involved only in either export or import. The paper also looks at how the wages and the skill structure of the trading firms change with the country of destination and origin.

This paper analyses collective bargaining using Spanish firm-level data. Central to the analysis are the joint determination of wage and strike outcomes in a dynamic framework and the possibility of separate wage equation for strike and non-strike outcomes. Conditional to strikes taking place, we confirm a negative relationship between strike duration and wage changes in a dynamic context. In this sense, the joint effect of the strike variables is positive for short strikes and negative for long ones (above 20 days). Furthermore, we find selection in wage equations induced by the strike outcome. In this sense, the possibility of wage determination processes being different in strike and non-strike samples is not rejected by the data. In particular, wage dynamics are of opposite sign in both strike and non-strike equations. Finally, we find evidence of a 0.33 percentage points wage change strike premium.

By using firm level data provided by the last round of the (Italian) Community Innovation Survey (CIS4) this paper explores (in a manufacturing-services comparative framework) the relationship between technological and non-technological innovation and their impact on firms' performances. The empirical evidence presented shows that including the organizational dimension of innovation provides a much more comprehensive picture of the variegated universe

In many economies today, the principal barriers to the rule of market forces lie in services rather than in manufacturing industries. Given that services are used as an essential input into a wide range of activities, liberalization of services sectors may lead to noticeable gains in downstream industries. Combining firm-level data from the Czech Republic for the period 1998-2003 with information on inter-industry sourcing linkages and various measures of services liberalization, we find that services liberalization induces changes in services firms and has a significant and positive impact on the productivity of downstream manufacturing firms. The latter finding is robust to several econometric specifications, including controlling for unobservable firm heterogeneity and other aspects of openness. Moreover, we find that opening services sectors to foreign providers is a key channel through which services liberalization contributes to improved performance of downstream manufacturing firms. This finding is robust to instrumenting for the extent of foreign presence in services industries. As most barriers to foreign investment today are not in goods but in services sectors, our findings may strengthen the argument for reform in this area.

This paper extensively reviews empirical studies that analyze the various impacts of the globalization phenomenon on corporate activities by using micro data. First, we set up a flow chart describing how globalization leads to national productivity enhancement. Secondly, we summarize the hypotheses and the methods explored in 13 lines of literature on globalization, which this flow chart maps. Thirdly, we discuss further possible avenues for micro data analysis. Finally, we provide some suggestions on statistics-related policies.

Vallés, an anonymous referee and participants in the BIS meeting and in the seminar held at the Banco de España for helpful comments and the Central Balance Sheet Data Office of the Banco de España for providing the data. The views expressed are those of the authors and should not be attributed to the Banco de España.

During the 1990s, the performance of several emerging economies was linked to their access to foreign capital. Colombia was no exception, experiencing a boom and bust cycle associated with an initial period of real exchange rate appreciation followed by a sharp depreciation. Although several studies have discussed the recent underperformance of the Colombian economy, few attempts have been made at analyzing firm-level data. We rely on information for a large sample of firms during 1995-2001 and examine the determinants of foreign indebtedness and the effects on firm performance of holding dollar debt amid real depreciations (i.e. the so-called 'balance sheet effect'). In our data set, matching does seem to take place to the extent that firms in more open sectors and exporting firms have higher shares of dollar debt. Our estimations also reveal a negative balance sheet effect on firms' profitability, while the effect on investment is generally not significant. ᮊ

Standard models of the Bank Lending Channel are unable to yield predictions on the differential impact of monetary policy shocks over heterogeneous borrowers. This inability has made researchers doubt about the role played by bank credit as a transmission mechanism of monetary policy. Moreover, it has made them reject those models in favor of the Balance Sheet Channel as a transmission mechanism. In this paper we show that an “augmented” version of the Bank Lending Channel that allows for firm heterogeneity (but without any role for firms’ balance sheets) reproduces well the dynamics of firm-level data. Our contribution is to show that it is not clear that the Bank Lending Channel should be rejected in favor of alternative theories on the basis of its inability to reproduce firm-level data. Thus, there is additional room for econometric tests that can provide support to the Bank Lending Channel.

The binomial logit model is applied to data of the Technology Development Foundation and of the State Institute of Statistics in order to identify determinants of the decision of Turkish manufacturing firms to innovate or not. Our findings are: (i) Determinants of innovation identified in ...

The paper analyses whether, and to what extent, firm's ability to innovate is induced by firm's own R&D activity and to what extent by factors external to firm. It first estimates the impact of firms' internal R&D capital and external R&D spillovers on firms' innovation activity within an integrated dynamic model. In the second step, we then estimate the impact of firms' innovations on firms' productivity growth. Using the firm level data on innovation activity combined with firms' financial data for a large sample of Slovenian firms in the period 1996-2002, the paper produces three main findings. First, firm's own R&D expenditures as well as external knowledge spillovers, such as national and international public R&D subsidies, foreign ownership and intrasector innovation spillovers do enhance firm's ability to innovate. Second, innovations as a result of firm's R&D do contribute substantially to firm's total factor productivity growth. And third, foreign ownership has a double impact on firm's TFP growth -it first enhances firm's ability to innovate and then it additionally contributes to firm's TFP growth via superior organization techniques and other channels of knowledge diffusion.

In this paper, we empirically examine the impact of foreign direct investment (FDI) on the export decision of domestic firms using large-scale panel data from Hungary. In comparison with the conventional model that expresses the export propensity of multinational enterprises (MNEs) with a single variable, the concentric-circle model, considering the nested structure of industrial classification, more precisely specifies the source, extent, and direction of information spillovers from MNEs to indigenous firms. We also confirmed the close relationship between the information spillover effect and the heterogeneity of FDI and domestic firms.

Organisation de Coopération et de Développement Économiques Organisation for Economic Cooperation and Development 17-Jun-2010 ___________________________________________________________________________________________ _____________ English-Or. English ECONOMICS DEPARTMENT MEASURING COMPETITION IN SLOVENIAN INDUSTRIES-ESTIMATION OF MARKUPS ECONOMICS DEPARTMENT WORKING PAPER No. 787

We discuss how standard computable equilibrium models of trade policy can be enriched with selection effects without missing other important channels of adjustment. This is achieved by estimating and simulating a partial equilibrium model that accounts for a number of real world effects of trade liberalisation: richer availability of product varieties; tougher competition and weaker market power of firms; better exploitation of economies of scale; and, of course, efficiency gains via the selection of the most efficient firms. The model is estimated on E.U. data and simulated in counterfactual scenarios that capture several dimensions of European integration. Simulations suggest that the gains from trade are much larger in the presence of selection effects. Even in a relatively integrated economy as the E.U., dismantling residual trade barriers would deliver relevant welfare gains stemming from lower production costs, smaller markups, lower prices, larger firm scale and richer product variety. We believe our analysis provides enough ground to support the inclusion of firm heterogeneity and selection effects in the standard toolkit of trade policy evaluation.

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper presents empirical evidence on the impact of competition on firm productivity. Using firm-level observations from the World Bank Enterprise Survey database, we find a positive and robust causal relationship between our proxies for competition and our measures of productivity. We also find that countries that implemented product-market reforms had a more pronounced increase in competition, and correspondingly, in productivity: the contribution to productivity growth due to competition spurred by product-market reforms is around 12-15 percent. JEL Classification Numbers: O11, O17, O40, O43, O47

Using ¢rm level data from the Bangladesh food manufacturing sector, this paper examines the impact of economic reform on productive capacity realisation in the eighties. The results suggest that although improvement occurred in the realisation of productive capacities after the implementation of economic reforms, there is, however, room for signi¢cant further improvement in increasing output by realising the unrealised capacity.