New business formation and employment growth: some evidence for the Spanish manufacturing industry

This paper explores the effects of new business formation on employment growth in Spanish manufacturing industries. New firms are believed to make an important contribution to economic growth but the extent of this contribution is unclear. We consider time lags of new firm formation as explanatory variables of employment change and identify how long the effect of new firm entries on employment lasts. Our main results show that the effects of new business formation are positive in the short term, negative in the medium term and positive in the long term, thus confirming the existence of indirect supply-side effects found in similar studies for other countries. Key words: regional growth, firm entry, time lags and Spanish economy. JEL classifications: L00, L60, R11, R12

Entrepreneurial intention, cognitive social capital and culture: empirical anaylisis for Spain and Taiwan

The main purpose of this paper is building a research model to integrate the socioeconomic concept of social capital within intentional models of new firm creation. Nevertheless, some researchers have found cultural differences between countries and regions to have an effect on economic development. Therefore, a second objective of this study is exploring whether those cultural differences affect entrepreneurial cognitions. Research design and methodology: Two samples of last year university students from Spain and Taiwan are studied through an Entrepreneurial Intention Questionnaire (EIQ). Structural equation models (Partial Least Squares) are used to test the hypotheses. The possible existence of differences between both sub-samples is also empirically explored through a multigroup analysis. Main outcomes and results: The proposed model explains 54.5% of the variance in entrepreneurial intention. Besides, there are some significant differences between both subsamples that could be attributed to cultural diversity. Conclusions: This paper has shown the relevance of cognitive social capital in shaping individuals’ entrepreneurial intentions across different countries. Furthermore, it suggests that national culture could be shaping entrepreneurial perceptions, but not cognitive social capital. Therefore, both cognitive social capital and culture (made up essentially of values and beliefs), may act together to reinforce the entrepreneurial intention.

Desarrollo del nuevo karat Starter Kit

El proyecto se desarrolla en el marco de un convenio entre la UAB y la empresa UNIT4 en las oficinas de UNIT4 Ibérica en Barberà del Vallès. El objetivo del proyecto es crear una nueva herramienta, denominada karat Starter Kit Reloaded, que sirva de autoformación y demostración de la plataforma de desarrollo propia utilizada en la empresa (karat) reforzando los puntos débiles de la anterior y manteniendo los puntos fuertes de los que ya disponía.

Young innovative firms and R&D strategies: is the Spanish case different?

This paper analyzes the profile of Spanish young innovative companies (YICs) and the determinants of innovation and imitation strategies. The results for an extensive sample of 2,221 Spanish firms studied during the period 2004–2010 show that YICs are found in all sectors, although they are more concentrated in high-tech sectors and, in particular, in knowledge-intensive services (KIS). Three of every four YICs are involved in KIS. Our results highlight that financial and knowledge barriers have much impact on the capacity of young, small firms to innovate and to become YICs, whereas market barriers are not obstacles to becoming a YIC. Public funding, in particular from the European Union, makes it easier for a new firm to become a YIC. In addition, YICs are more likely to innovate than mature firms, although they are more susceptible to sectoral and territorial factors. YICs make more dynamic use of innovation and imitation strategies when they operate in high-tech industries and are based in science parks located close to universities. Keywords: innovation strategies, public innovation policies, barriers to innovation, multinomial probit model. JEL Codes: D01, D22 , L60, L80, O31

Ex post bargaining, labor coordination and wage formation at the firm level

We lay out a model of wage bargaining with two leading features:bargaining is ex post to relevant investments and there isindividual bargaining in firms without a Union. We compareindividual ex post bargaining to coordinated ex post bargainingand we analyze the effects on wage formation. As opposed to exante bargaining models, the costs of destroying the employmentrelationship play a crucial role in determining wages. Highfiring costs in particular yield a rent for employees. Ourtheory points to a employer size-wage effect that is independentof the production function and market power. We derive a simpleleast squares specification from the theoretical model thatallow us to estimate components of the wage premium fromcoordination. We reject the hypothesis that labor coordinationdoes not alter the extensive form of the bargaining game. Laborcoordination substantially increases bargaining power butdecreases labor's ability to pose costly threats to the firm.

Viscous fingering as a paradigm of interfacial pattern formation: Recent results and new challenges

We review recent results on dynamical aspects of viscous fingering. The Saffman¿Taylor instability is studied beyond linear stability analysis by means of a weakly nonlinear analysis and the exact determination of the subcritical branch. A series of contributions pursuing the idea of a dynamical solvability scenario associated to surface tension in analogy with the traditional selection theory is put in perspective and discussed in the light of the asymptotic theory of Tanveer and co-workers. The inherently dynamical singular effects of surface tension are clarified. The dynamical role of viscosity contrast is explored numerically. We find that the basin of attraction of the Saffman¿Taylor finger depends on viscosity contrast, and that the sensitivity to this parameter is maximal in the usual limit of high viscosity contrast. The competing attractors are identified as closed bubble solutions. We briefly report on recent results and work in progress concerning rotating Hele-Shaw flows, topological singularities and wetting effects, and also discuss future directions in the context of viscous fingering

Audit firm tenure and qualified opinions: New evidence from Spain

The 2010 Green Paper on Audit Policy by the European Commission has explicitly questioned the sufficiency of audit rotation rules established by European Union Members to guarantee auditor independence. In addition, the Paper clearly states that more research is needed regarding the effects of long audit tenures on independence. In this article, we have replicated the research by Ruiz-Barbadillo, Gómez-Aguilar, and Biedma (2005) about the effects of audit firm tenure on independence with more updated data. However, unlike them, we have performed panel data estimations instead of pooled regression. Our approach allows for a better control of individual unobserved heterogeneity, thus reducing potential problems caused by omitted variable bias. While Ruiz-Barbadillo et al. reported an unexpected positive effect of tenure on the likelihood of audit qualifications, we do not show any significant effect of tenure on the opinion of the audit report. Our results are robust to various sensitivity analyses.

A territorial approach to firm entry: The effect of city size

This paper concerns the effects of territorial factors on the processes involved in the creation of manufacturing firms in Spanish cities. Most contributions have focused on regional factors rather than urban ones. Here we assume that it is possible to identify certain urban factors that attract new firms. We use data for the entry of firms in Spanish manufacturing industries between 1994 and 2002. This paper contributes to the existing literature on market entry. Key words: cities, regions, firm entry and Spanish economy. JEL: R0, R12, L60

Immigration and Firm Growth: Evidence from Spanish cities

This article analyses the effect of immigration flows on the growth and efficiency of manufacturing firms in Spanish cities. To date, most studies have tended to focus on the effect immigrants have on labour markets at an aggregate level. Here, however, we undertake an exhaustive analysis at the firm level and report conclusive empirical findings. Ten years ago, Spain began to register massive immigration flows, concentrated above all on its most dynamic and advanced regions. Here, therefore, rather than focusing on the impact this has had on Spain’s labour market (changes to the skill structure of the workforce, increase in labour supply, the displacement of native workers, etc.), we examine the arrival of immigrants in terms of the changes this has meant to the structure of the country’s cities and their amenities. Thus, we argue that the impact of immigration on firm performance should not only be considered in terms of the labour market, but also in terms of how a city’s amenities can affect the performance of firms. Employing a panel data methodology, we show that the increasing pressure brought to bear by immigrants has a positive effect on the evolution of labour productivity and wages and a negative effect on the job evolution of these manufacturing firms. In addition, both small and new firms are more sensitive to the pressures of such immigrant inflows, while foreign market oriented firms report higher productivity levels and a less marked impact of immigration than their counterparts. In this paper, we also present a set of instruments to correct the endogeneity bias, which confirms the effect of local immigration flows on the performance of manufacturing firms.

Tax differentials and agglomeration economies in intraregional firm location

This paper analyses empirically how differences in local taxes affect the intraregional location of new manufacturing plants. These effects are examined within the random profit maximization framework while accounting for the presence of different types of agglomeration economies (localization/ urbanization/ Jacobs’ economies) at the municipal level. We look at the location decision of more than 10,000 establishments locating between 1996 and 2003 across more than 400 municipalities in Catalonia, a Spanish region. It is necessary to restrict the choice set to the local labor market and, above all, to control for agglomeration economies so as to identify the effects of taxes on the location of new establishments.

Firm dynamics support the importance of the embodied question

This paper contributes to the literature on both embodied technical progress and firm dynamics, by formulating an endogenous growth model where selection and imitation play a fundamental role in helping capital good producers to learn about the productivity of technologies embodied in new plants. By calibrating the model to some key aggregates particularly relevant for the embodied capital literature, among them the growth rate of the relative investment price, the model quantitatively replicates the main facts associated to firm dynamics, such as the entry rate and the tail index of the establishment size distribution. In line with the previous literature, it also predicts a contribution to productivity growth of embodied technical progress and selection of around 60%

Agency cost of government ownership: a study of voluntary audit comitte formation in China

In this paper, we investigate the agency costs of government ownership and their impact on corporate governance and firm value. China is used as a laboratory because of the prevalent state shareholdings in exchange-listed firms. In this context, we specifically consider the trade-offs involved in the voluntary formation of an audit committee when the controlling shareholder is the state. The decision to improve corporate governance (in this case, introduce an audit committee) is shown to be value relevant and a function of existing agency relationships and non-trivial implementation costs. Our findings are robust to the level of pyramid groups, the ownership-control wedge, and financial leverage. The research adds to the debate regarding the effect of government shareholdings on corporate culture and performance - a topic that hastaken on renewed importance in recent times.

Trade, firm selection, and innovation: the competition channel

The availability of rich firm-level data sets has recently led researchers to uncover new evidence on the effects of trade liberalization. First, trade openness forces the least productive firms to exit the market. Secondly, it induces surviving firms to increase their innovation efforts and thirdly, it increases the degree of product market competition. In this paper we propose a model aimed at providing a coherent interpretation of these findings. We introducing firm heterogeneity into an innovation-driven growth model, where incumbent firms operating in oligopolistic industries perform cost-reducing innovations. In this framework, trade liberalization leads to higher product market competition, lower markups and higher quantity produced. These changes in markups and quantities, in turn, promote innovation and productivity growth through a direct competition effect, based on the increase in the size of the market, and a selection effect, produced by the reallocation of resources towards more productive firms. Calibrated to match US aggregate and firm-level statistics, the model predicts that a 10 percent reduction in variable trade costs reduces markups by 1:15 percent, firm surviving probabilities by 1 percent, and induces an increase in productivity growth of about 13 percent. More than 90 percent of the trade-induced growth increase can be attributed to the selection effect.

On the effect of the geographical scope of agglomeration economies on firm location

This article analyses how agglomeration economies shaped the location decisions of new manufacturing start-ups in Catalan municipalities in 2001-2005. We estimate whether the locations of new firms are spatially autocorrelated and whether this phenomenon is industry-specific. Our aim is to estimate the geographical scope of agglomeration economies on firm entries. The data set comes from a compulsory register of manufacturing establishments (REIC: Catalan Manufacturing Establishments Register). JEL classification: R1, R3 Keywords: firm location; spatial autocorrelation

Industrial Location and Space: New Insights

This paper tries to resolve some of the main shortcomings in the empirical literature of location decisions for new plants, i.e. spatial effects and overdispersion. Spatial effects are omnipresent, being a source of overdispersion in the data as well as a factor shaping the functional relationship between the variables that explain a firm’s location decisions. Using Count Data models, empirical researchers have dealt with overdispersion and excess zeros by developments of the Poisson regression model. This study aims to take this a step further, by adopting Bayesian methods and models in order to tackle the excess of zeros, spatial and non-spatial overdispersion and spatial dependence simultaneously. Data for Catalonia is used and location determinants are analysed to that end. The results show that spatial effects are determinant. Additionally, overdispersion is descomposed into an unstructured iid effect and a spatially structured effect. Keywords: Bayesian Analysis, Spatial Models, Firm Location. JEL Classification: C11, C21, R30.