Essays on Firm Heterogeneity with Empirical Applications in Economic History and Agricultural Economics

This thesis uses models of firm-heterogeneity to complete empirical analyses in economic history and agricultural economics. In Chapter 2, a theoretical model of firm heterogeneity is used to derive a statistic that summarizes the welfare gains from the introduction of a new technology. The empirical application considers the use of mechanical steam power in the Canadian manufacturing sector during the late nineteenth century. I exploit exogenous variation in geography to estimate several parameters of the model. My results indicate that the use of steam power resulted in a 15.1 percent increase in firm-level productivity and a 3.0-5.2 percent increase in aggregate welfare. Chapter 3 considers various policy alternatives to price ceiling legislation in the market for production quotas in the dairy farming sector in Quebec. I develop a dynamic model of the demand for quotas with farmers that are heterogeneous in their marginal cost of milk production. The econometric analysis uses farm-level data and estimates a parameter of the theoretical model that is required for the counterfactual experiments. The results indicate that the price of quotas could be reduced to the ceiling price through a 4.16 percent expansion of the aggregate supply of quotas, or through moderate trade liberalization of Canadian dairy products. In Chapter 4, I study the relationship between farm-level productivity and participation in the Commercial Export Milk (CEM) program. I use a difference-in-difference research design with inverse propensity weights to test for causality between participation in the CEM program and total factor productivity (TFP). I find a positive correlation between participation in the CEM program and TFP, however I find no statistically significant evidence that the CEM program affected TFP.

Assessment of Socio-Economic and Climate Change Effects on Water Resources and Agriculture in Southern and Eastern Mediterranean countries. MEDPRO Technical Paper No. 28/March 2013

This study aims at assessing the socio-economic and environmental effects of different societal and human development scenarios and climate change in the water-scarce southern and eastern Mediterranean. The study develops a two-stage modelling methodology that includes an econometric analysis for the southern and eastern Mediterranean region as a whole and a detailed, integrated socioecological assessment focusing on Jordan, Syria and Morocco. The results show that water resources will be under increasing stress in future years. In spite of country differences, a future path of sustainable development is possible in the region. Water withdrawals could decrease, preserving renewable water resources and reversing the negative effects on agricultural production and rural society. This, however, requires a combination across the region of technical, managerial, economic, social and institutional changes that together foster a substantive structural change. A balanced implementation of water supply-enhancing and demand-management measures along with improved governance are key to attaining a cost-effective sustainable future in which economic growth, a population increase and trade expansion are compatible with the conservation of water resources.

Manufactured Exports and FDI in Southern Mediterranean Countries: Evolution, determinants and prospects. MEDPRO Technical Report No. 14/April 2012

This paper investigates the evolution and determinants of manufactured exports and foreign direct investment (FDI) in 11 southern Mediterranean countries over the period 1985–2009, as well as their prospects under different scenarios pertaining to the development of the determinants. The econometric analysis confirms the role of exchange rate depreciation, the openness of the economy and the quality of institutions and infrastructure in fostering manufactured exports and FDI inflows in the region. The assessment of the prospects suggests that a scenario of deeper integration with the EU entails superior performance for manufactured exports and FDI compared with either the status quo or less integration with the EU but greater integration within the region.

Continuous Off-the-Job Training in East Germany After Unification: Preliminary Results of an Evaluation of the Effects for Individual Workers, CES Germany & Europe Working Papers, No. 05.9, 19 July, 1995

Retraining the labor force to match the demands of a modem economy is seen as an important task during the transition process from a centrally-planned to a market economy. This need was particularly pressing in East Germany, because the transition process has proceeded much faster than in the rest of Eastern Europe. Therefore, substantial resources have been devoted to this purpose. This paper analyzes the impact of continuous off-the-job training in East Germany from the point of view of individuals who were part of the labor force before German unification in 1990. It tries to answer questions about the average gains from participating in a specific type of training. Typical outcomes considered to measure those gains are income, employment status, job security, and expected future changes in job position. The methodology used for the evaluation is the potential outcome approach to causality. This approach has received considerable attention in the statistical literature over the last fifteen years and it has recently been rediscovered by the econometric literature as well. It is adapted to allow for important permanent and transitory shocks, such as unemployment, which influence the decision to participate in the training as well as future labor market outcomes. The empirical part is based on the first four waves of the Socio-Economic Panel (GSOEP)-East (1990-1993). This panel data set has the advantage that the fourth wave contains a special survey on continuous training and that it allows keeping track of individual behavior on a monthly, respectively yearly, basis. The econometric analysis focuses on off-the-job training courses that began after unification and were completed not later than in early 1993. Although it is obviously too early to evaluate the long-term implications, the results suggest that there are no positive effects in the short run.

The European Pharmaceutical Industry in a Global Economy: what drives EU exports of pharmaceuticals?. Bruges European Economic Research Papers (BEER) 31/2015.

The pharmaceutical industry is one of the most competitive sectors in the European Union. With its substantial investments in research and development, this industry represents a key asset for the European economy and a major source of growth and employment. However, despite the importance of the pharmaceutical sector for the European Union, few researchers have attempted to assess the determinants of the EU exports of pharmaceuticals. This paper aims at filling the aforementioned gap by examining what drives EU exports of pharmaceuticals. In order to tackle this question, this paper has derived hypotheses from the Gravity Model of Trade and the relevant academic literature on pharmaceuticals. Based on an econometric analysis, the research sheds light on the complex interaction of factors influencing the EU exports of pharmaceuticals. The paper finds that the protection of intellectual property in the receiving countries, their economic size, the importance of their health sector, and the quality of infrastructures constitute major drivers to the EU exports of pharmaceuticals. On the contrary, the research shows that transports costs as well as tariff barriers and non-tariff barriers tend to hinder the EU exports of pharmaceuticals.

ANÁLISE DAS MUDANÇAS DOS FATORES DETERMINANTES DA ESTRUTURA DE CAPITAL EM FUNÇÃO DO CICLO DE VIDA DAS EMPRESAS BRASILEIRAS SÃO BERNARDO DO CAMPO

As várias teorias acerca da estrutura de capital despertam interesse motivando diversos estudos sobre o assunto sem, no entanto, ter um consenso. Outro tema aparentemente pouco explorado refere-se ao ciclo de vida das empresas e como ele pode influenciar a estrutura de capital. Este estudo teve como objetivo verificar quais determinantes possuem maior relevância no endividamento das empresas e se estes determinantes alteram-se dependendo do ciclo de vida da empresa apoiada pelas teorias Trade Off, Pecking Order e Teoria da Agência. Para alcançar o objetivo deste trabalho foi utilizado análise em painel de efeito fixo sendo a amostra composta por empresas brasileiras de capital aberto, com dados secundários disponíveis na Economática® no período de 2005 a 2013, utilizando-se os setores da BM&FBOVESPA. Como resultado principal destaca-se o mesmo comportamento entre a amostra geral, alto e baixo crescimento pelo endividamento contábil para o determinante Lucratividade apresentando uma relação negativa, e para os determinantes Oportunidade de Crescimento e Tamanho, estes com uma relação positiva. Para os grupos de alto e baixo crescimento alguns determinantes apresentaram resultados diferentes, como a singularidade que resultou significância nestes dois grupos, sendo positiva no baixo crescimento e negativa no alto crescimento, para o valor colateral dos ativos e benefício fiscal não dívida apresentaram significância apenas no grupo de baixo crescimento. Para o endividamento a valor de mercado foi observado significância para o Benefício fiscal não dívida e Singularidade. Este resultado reforça o argumento de que o ciclo de vida influência a estrutura de capital

Benchmarking the knowledge competitiveness of the globe's high performing regions:a review of the World Knowledge Competitiveness Index

Purpose – The purpose of this paper is to analyze the way in which the knowledge competitiveness of regions is measured and further introduces the World Knowledge Competitiveness Index (WKCI) benchmarking tool. Design/methodology/approach – The methodology consists of an econometric analysis of key indicators relating to the concept of knowledge competitiveness for 125 regions from across the globe consisting of 55 representatives from North America, 45 from Europe and 25 from Asia and Oceania. Findings – The key to winning the super competitive race in the knowledge-based economy is investment in the future: research and development, and education and training. It is found that the majority of the high-performing regional economies in the USA have a knowledge competitive edge over their counterparts in Europe and Asia. Research limitations/implications – To an extent, the research is limited by the availability of comparable indicators and metrics at the regional level that extend across the globe. Whilst comparative data are often accessible at the national level, regional data sources remain underdeveloped. Practical implications – The WKCI has become internationally recognized as an important instrument for economic development policymakers and regional investment promotion agents as they create and refine their strategies and targets. In particular, it has provided a benchmark that allows regions to compare their knowledge competitiveness with other regions for around the world and not only their own nation or continent. Originality/value – The WKCI is the first composite and relative measure of the knowledge competitiveness of the globe's best performing regions.

Trade unions and productivity:the impact of union presence on labour productivity in Korean manufacturing

This thesis examines the theoretical and empirical relationship between trade unions and productivity in the Korean auto and cement manufacturing industries, during the 1980s. It challenges the tenets of the existing debate by stressing the contingent nature of this relationship. In particular this thesis pinpoints inadequacies of econometric analysis as the only method of judging this association between union presence and productivity, because this ignores national and historical industrial relations contexts. Moreover, the polarity between positive and negative views of trade union influences on productivity is seen as needlessly limited, failing as it does to consider the full context of labour-management dynamics within the employment relationship. Empirically, this thesis focuses on the unionism and productivity during two contrasting political periods: the first a time of constraint on union action and the second a period of relative freedom. It examines these periods using a full range of quantitative and qualitative analysis. Of particular significant is the inclusion of attitude surveys of the relationship between the presence of unions and productivity conducted amongst workers, managers and trade union officials. The broad conclusion of the thesis is a rejection of the validity of continuing to examine the relationship between trade unions and productivity without locating this within national and historical industrial relations contexts.

Measuring economies of horizontal and vertical integration in the US electric power industry:how costly is unbundling?

This research employs econometric analysis on a cross section of American electricity companies in order to study the cost implications associated with unbundling the operations of integrated companies into vertically and/or horizontally separated companies. Focusing on the representative sample average firm, we find that complete horizontal and vertical disintegration resulting in the creation of separate nuclear, conventional, and hydro electric generation companies as well as a separate firm distributing power to final consumers, results in a statistically significant 13.5 percent increase in costs. Maintaining a horizontally integrated generator producing nuclear, conventional, and hydro electric generation while imposing vertical separation by creating a stand alone distribution company, results in a lower but still substantial and statistically significant cost penalty amounting to an 8.1 % increase in costs relative to a fully integrated structure. As these results imply that a vertically separated but horizontally integrated generation firm would need to reduce the costs of generation by 11% just to recoup the cost increases associated with vertical separation, even the costs associated with just vertical unbundling are quite substantial. Our paper is also the first academic paper we are aware of that systematically considers the impact of generation mix on vertical, horizontal, and overall scope economies. As a result, we are able to demonstrate that the estimated cost of unbundling in the electricity sector is substantially influenced by generation mix. Thus, for example, we find evidence of strong vertical integration economies between nuclear and conventional generation, but little evidence for vertical integration benefits between hydro generation and the distribution of power. In contrast, we find strong evidence suggesting the presence of substantial horizontal integration economies associated with the joint production of hydro generation with nuclear and/or conventional fossil fuel generation. These results are significant because they indicate that the cost of unbundling the electricity sector will differ substantially in different systems, meaning that a blanket regulatory policy with regard to the appropriateness of vertical and horizontal unbundling is likely to be inappropriate.

Selection, staging and sequencing in the recent Chinese privatization

Selection in privatization is a decision-making process of choosing state-owned enterprises (SOEs), prioritizing and sequencing privatizing events, and determining the extent of private ownership in partial privatization. We investigate this process in an important but rarely studied case of China. Based on the SOE population over 1998-2008, we track 49,456 wholly SOEs and identify 9,359 privatization cases over time. Our econometric analysis concludes: (i) The privatization selection is a complex decision-making process in which local governments balance between various economic, financial and political objectives. (ii) In the recent Chinese privatization, firm performance relates to the selection, staging and sequencing in privatization in an inverted-U fashion. The worse and the best performing SOEs are more likely to remain state-owned, maintain higher state holding when privatized, and are less likely to be privatized later in time. These patterns suggest the privatization reform slowdown and the underlying changes in the privatization policy.

Az innováció hatása a vállalati teljesítményre és versenyképességre (The impact of innovation activities on firm's performance and competitiveness)

A tanulmány az innovációnak a vállalati teljesítményre és a versenyképességre gyakorolt hatását vizsgálja, valamint a magyarországi innováció gazdasági környezetének néhány elemét próbálja feltérképezni a Budapesti Corvinus Egyetem Versenyképesség Kutató Központjának 2009-es felmérése alapján. A termékinnováció fontos szerepet játszik a versenyképes vállalatok sikerében, azonban - elsősorban adatbázisunk keresztmetszeti jellege miatt - az eljárásinnovációról ezt nem tudjuk megállapítani. Ugyancsak nem találtunk szignifikáns kapcsolatot az innováció és a termelékenység között. Az innovatív vállalatok nagyobb valószínűséggel vesznek részt a külkereskedelemben, nagyobb arányban vannak külföldi tulajdonban, s az innovációs folyamat során leginkább saját tudásbázisukra támaszkodnak. Az innováció egyik fő hátráltató tényezőjének tartják az állam szerepét, gyakran néznek szembe finanszírozási problémákkal és a piaci szereplők új termékek iránti igénytelenségével. _____ The paper deals with the impact of innovation on performance and competitiveness based on firm-level data. The research is based on a survey conducted by the Competitiveness Research Centre at Budapest Corvinus University. According to the econometric analysis, the firms that are more innovative are export oriented and foreign owned. Product innovation has an eminent role in competitiveness, but no significant relationship was found between innovation and productivity. As for sources of innovation, internal ones are more important than universities, customers or open sources. Firms themselves perceive legislation and taxation as highly important factors that hamper their innovation activity.

Essays on firm behavior and firm performance

This dissertation comprises three individual chapters in an effort to examine different explanatory variables that affect firm performance. Chapter Two proposes an additional determinant of firm survival. Based on a detailed examination of firm survival in the British automobile industry between 1895 and 1970, we conclude that a firm's selection of submarket (defined by quality level) influenced survival. In contrast to findings for the US automobile industry, there is no evidence of first-mover advantage in the market as a whole. However, we do find evidence of first-mover advantage after conditioning on submarket choice. Chapter Three examines the effects of product line expansion on firm performance in terms of survival time. Based on a detailed examination of firm survival time in the British automobile industry between 1895 and 1970, we find that diversification exerts a positive effect on firm survival. Furthermore, our findings support the literature with respect to the impacts of submarket types, pre-entry experience, and timing of entry on firm survival time. Chapter Four examines corporate diversification in U.S. manufacturing and service firms. We develop measures of how related a firm's diverse activities are using input-output data and the NAILS classification to construct indexes of "vertical relatedness" and "complementarity". Strong relationships between these two measures are found. We utilize profitability and excess value as the measure for firm performance. Econometric analysis reveals that there is no relationship between the degree of relatedness of diversification and firm performance for the study period.

Essays on Firm Heterogeneity with Empirical Applications in Economic History and Agricultural Economics

This thesis uses models of firm-heterogeneity to complete empirical analyses in economic history and agricultural economics. In Chapter 2, a theoretical model of firm heterogeneity is used to derive a statistic that summarizes the welfare gains from the introduction of a new technology. The empirical application considers the use of mechanical steam power in the Canadian manufacturing sector during the late nineteenth century. I exploit exogenous variation in geography to estimate several parameters of the model. My results indicate that the use of steam power resulted in a 15.1 percent increase in firm-level productivity and a 3.0-5.2 percent increase in aggregate welfare. Chapter 3 considers various policy alternatives to price ceiling legislation in the market for production quotas in the dairy farming sector in Quebec. I develop a dynamic model of the demand for quotas with farmers that are heterogeneous in their marginal cost of milk production. The econometric analysis uses farm-level data and estimates a parameter of the theoretical model that is required for the counterfactual experiments. The results indicate that the price of quotas could be reduced to the ceiling price through a 4.16 percent expansion of the aggregate supply of quotas, or through moderate trade liberalization of Canadian dairy products. In Chapter 4, I study the relationship between farm-level productivity and participation in the Commercial Export Milk (CEM) program. I use a difference-in-difference research design with inverse propensity weights to test for causality between participation in the CEM program and total factor productivity (TFP). I find a positive correlation between participation in the CEM program and TFP, however I find no statistically significant evidence that the CEM program affected TFP.

Determinants of Capital Structure of Swedish limited companies : Testing Trade-off Theory Against Pecking Order Theory

Research question- This thesis investigates the determinants of capital structure of the Swedish companies. In order to do so, the two dominant theories of the corporate structure are studied and their assumptions are tested. Thus, the study researches which one of the two theories is more appealing for the Swedish market. Methodology-The study follows a purely quantitative study, by conducting an econometric analysis. The data are collected from a secondary source and more particularly the "Retriever" database, which contains financial data of the Swedish companies. Findings- The findings indicate that the determinants of the corporate structure for the Swedish market do not differ from other studies which have been conducted in other countries. However, there is a difference when it comes to tax and non-tax shields. The results suggest that in most cases the Pecking Order Theory appears to be more representative for the Swedish market, since most of the coefficient appear to be in favour of it. Moreover, the significance of the effect of the industry for the financial leverage is confirmed.

Ventas en corto: análisis comparativo y propuesta para su implementación en el mercado de valores colombiano

Actualmente la Bolsa de Valores de Colombia adelanta un proyecto para dar vía libre a las ventas en corto de acciones en el mercado de capitales colombiano, a través de un instrumento conocido como transferencia temporal de valores (TTV) -- A partir de un análisis econométrico y del estudio de prácticas en otros mercados, el objetivo de este documento es examinar el esquema bajo el cual operarían las ventas en corto y proponer mejoras para facilitar la implementación de un mecanismo eficiente y de amplia acogida, cuya puesta en marcha contribuiría a la profundización y eficiencia del mercado de capitales y a una mayor participación de los agentes