HRM and the employment of older workers: Germany and Britain compared

This study examines Human Resource Management (HRM) policies and practices towards older workers in Britain and Germany. While it is widely suggested that older workers have to be better integrated into the labour market, youth-centric HRM is still prevalent. However, HRM is shaped by multiple and contradictory pressures from the international and national institutional environments. We test this dynamic by analysing two national surveys, the German firm panel (IAB)1 and the British Workplace and Employment Relations Survey (WERS).2 Our findings suggest that the institutional environment shapes HR policies and practices distinctively in both countries. We find that age discrimination at the workplace is more prevalent in Germany than in Britain, which can be explained by divergent institutional patterns. As a result, we argue that although both countries will have to continue fostering an age-neutral HR approach, this has to take country-specific institutional peculiarities into account.

Innovación social: una reflexión sobre los beneficios en su implementación en el Estado colombiano.

La innovación social es un tipo de innovación que promueve la búsqueda de soluciones enfocadas a los problemas que se presentan en la sociedad. Estas soluciones generan además un valor agregado que ayudan al crecimiento del país. En Colombia este tipo de iniciativas han empezado a tener una gran importancia y han empezado a promover condiciones de vida más favorables y justas que buscan generar un beneficio a la sociedad y contribuir al desarrollo del país. A partir de la historia de la innovación social, ejemplos y grandes literatos en la administración y la sociología, comprenderemos la importancia de la innovación en nuestro país.

Modelling firm innovation using panel probit estimators

Firm-level innovation is investigated using three probit panel estimators, which control for unobserved heterogeneity, and a standard probit estimator. Results indicate the standard probit model is misspecified and that inter-firm networks are important for innovation.

A business engineering approach to client relationship management in a knowledge based firm

This thesis examines Customer Relationship Management and how the capabilities of an organisation to innovate can be enhanced via its implementation in a Knowledge Based Firm. The research identifies current customer knowledge components within an organisation and identifies for future use, CRM components for implementation within a Knowledge Based Firm. Opinions from a panel of experts' are identified for best practice customer relationship strategy, the most important CRM processes and identification of customer knowledge components that will form the basis of implementing a successful CRM to gain a competitive advantage through enhancing the innovative capability for a Knowledge Based Firm.

Knowledge stocks, knowledge flows and innovation: Evidence from matched patents and innovation panel data

Successful innovation depends on knowledge – technological, strategic and market related. In this paper we explore the role and interaction of firms’ existing knowledge stocks and current knowledge flows in shaping innovation success. The paper contributes to our understanding of the determinants of firms’ innovation outputs and provides new information on the relationship between knowledge stocks, as measured by patents, and innovation output indicators. Our analysis uses innovation panel data relating to plants’ internal knowledge creation, external knowledge search and innovation outputs. Firm-level patent data is matched with this plant-level innovation panel data to provide a measure of firms’ knowledge stock. Two substantive conclusions follow. First, existing knowledge stocks have weak negative rather than positive impacts on firms’ innovation outputs, reflecting potential core-rigidities or negative path dependencies rather than the accumulation of competitive advantages. Second, knowledge flows derived from internal investment and external search dominate the effect of existing knowledge stocks on innovation performance. Both results emphasize the importance of firms’ knowledge search strategies. Our results also re-emphasize the potential issues which arise when using patents as a measure of innovation.

Board attributes that increase firm risk - evidence from the UK

Purpose – The aim of the paper is to identify the board attributes that significantly increase firm risk. The study aims to find if board size, percentage of non-executive directors, women on the board, a powerful CEO, equity ownership amongst executive board directors and institutional investor ownership, are associated with firm risk. This is the first study that examines which board attributes increase firm risk using a UK based sample. Design/methodology/approach – This empirical study collected secondary data from Bloomberg and Morningstar databases. The data sample is an unbalanced panel of 260 companies’ secondary data on FTSE 350 index in the UK, from 2005 to 2010. The data was statistically analysed using STATA. Findings – The study establishes the board attributes that were significantly related to firm risk. The results show that a board which can increase firm risk is one that is small in size,has high equity ownership amongst executive board directors and has high institutional investor ownership. Research limitations/implications – The governance culture and regulatory system in the UK is different from other countries. Since the data is a UK based sample, the results can lack generalisability. Practical implications – The results are useful for investors who invest in large firms, to have the knowledge about the board attributes that can increase firm risk. Regulators can also use the results to strengthen regulatory guidelines. Originality/value – This study fills the gap in knowledge in UK governance literature on the board attributes that can increase firm risk.

The graduate: Spillovers from the entry of the first worker with a college degree in a firm

A Work Project, presented as part of the requirements for the Award of a Double Degree in Economics from NOVA School of Business and Economics and Maastricht School of Business and Economics

Proactive R&D management and firm growth: a punctuated equilibrium model

The external environment is characterized by periods of relative stability interspersed with periods of extreme change, implying that high performing firms must practice exploration and exploitation in order to survive and thrive. In this paper, we posit that R&D expenditure volatility indicates the presence of proactive R&D management, and is evidence of a firm moving from exploitation to exploration over time. This is consistent with a punctuated equilibrium model of R&D investment where shocks are induced by reactions to external turbulence. Using an unbalanced panel of almost 11,000 firm-years from 1997 to 2006, we show that greater fluctuations in the firm's R&D expenditure over time are associated with higher firm growth. Developing a contextual view of the relationship between R&D expenditure volatility and firm growth, we find that this relationship is weaker among firms with higher levels of corporate diversification and negative among smaller firms and those in slow clockspeed industries.

The value of local partners in Brazil: the effects of ownership clusters and business group membership on firm value in emerging markets

Este estudo analisa como a classe de acionistas afeta o valor das empresas brasileiras listadas na bolsa de valores no ponto de vista da governança corporativa. O trabalho examina a interação entre o valor das empresas e cinco tipos de concentrações acionárias comumente presente em mercados emergentes: famílias, agentes públicos, investidores estrangeiros, executivos e investidores financeiros nacionais. A análise empírica demonstra que o mix e a concentração de participação acionária afeta significativamente o valor das empresas. Utilizando uma compilação única de dados em painel de 2004 a 2008, a presente pesquisa também desenvolve hipóteses sobre o efeito da participação em grupos econômicos para o valor das empresas. A investigação encontra evidências de que, apesar de sua importância para o desenvolvimento de empresas brasileiras, o capital familiar, instituições públicas, e investidores estrangeiros estão cedendo lugar a monitores mais especializados e menos concentrados, como executivos e instituições financeiras nacionais. Estes resultados indicam que a governança corporativa no Brasil pode estar alcançando níveis de maturidade mais elevados. Adicionalmente, apesar de não haver indicação da existência de correlação entre a participação em grupos econômicos e o valor das empresas, os resultados indicam que a presença de um tipo específico de acionista em uma empresa do grupo facilita investimentos futuros desta classe de acionista em outras empresas do mesmo grupo, sinalizando que os interesses acionários são provavelmente perpetuados dentro de uma mesma rede de empresas. Finalmente, a pesquisa demonstra que enquanto o capital familiar prefere investir em empresas com ativa mobilidade do capital, investidores internacionais e instituições públicas procuram investimentos em equity com menor mobilidade de capital, o que lhes garante mais transparência com relação ao uso dos recursos e fundos das empresas.

The firm. Techno-organizational changes, industrial relations and performances. An enquiry on Reggio Emilia local industrial system

It is not unknown that the evolution of firm theories has been developed along a path paved by an increasing awareness of the organizational structure importance. From the early “neoclassical” conceptualizations that intended the firm as a rational actor whose aim is to produce that amount of output, given the inputs at its disposal and in accordance to technological or environmental constraints, which maximizes the revenue (see Boulding, 1942 for a past mid century state of the art discussion) to the knowledge based theory of the firm (Nonaka & Takeuchi, 1995; Nonaka & Toyama, 2005), which recognizes in the firm a knnowledge creating entity, with specific organizational capabilities (Teece, 1996; Teece & Pisano, 1998) that allow to sustaine competitive advantages. Tracing back a map of the theory of the firm evolution, taking into account the several perspectives adopted in the history of thought, would take the length of many books. Because of that a more fruitful strategy is circumscribing the focus of the description of the literature evolution to one flow connected to a crucial question about the nature of firm’s behaviour and about the determinants of competitive advantages. In so doing I adopt a perspective that allows me to consider the organizational structure of the firm as an element according to which the different theories can be discriminated. The approach adopted starts by considering the drawbacks of the standard neoclassical theory of the firm. Discussing the most influential theoretical approaches I end up with a close examination of the knowledge based perspective of the firm. Within this perspective the firm is considered as a knowledge creating entity that produce and mange knowledge (Nonaka, Toyama, & Nagata, 2000; Nonaka & Toyama, 2005). In a knowledge intensive organization, knowledge is clearly embedded for the most part in the human capital of the individuals that compose such an organization. In a knowledge based organization, the management, in order to cope with knowledge intensive productions, ought to develop and accumulate capabilities that shape the organizational forms in a way that relies on “cross-functional processes, extensive delayering and empowerment” (Foss 2005, p.12). This mechanism contributes to determine the absorptive capacity of the firm towards specific technologies and, in so doing, it also shape the technological trajectories along which the firm moves. After having recognized the growing importance of the firm’s organizational structure in the theoretical literature concerning the firm theory, the subsequent point of the analysis is that of providing an overview of the changes that have been occurred at micro level to the firm’s organization of production. The economic actors have to deal with challenges posed by processes of internationalisation and globalization, increased and increasing competitive pressure of less developed countries on low value added production activities, changes in technologies and increased environmental turbulence and volatility. As a consequence, it has been widely recognized that the main organizational models of production that fitted well in the 20th century are now partially inadequate and processes aiming to reorganize production activities have been widespread across several economies in recent years. Recently, the emergence of a “new” form of production organization has been proposed both by scholars, practitioners and institutions: the most prominent characteristic of such a model is its recognition of the importance of employees commitment and involvement. As a consequence it is characterized by a strong accent on the human resource management and on those practices that aim to widen the autonomy and responsibility of the workers as well as increasing their commitment to the organization (Osterman, 1994; 2000; Lynch, 2007). This “model” of production organization is by many defined as High Performance Work System (HPWS). Despite the increasing diffusion of workplace practices that may be inscribed within the concept of HPWS in western countries’ companies, it is an hazard, to some extent, to speak about the emergence of a “new organizational paradigm”. The discussion about organizational changes and the diffusion of HPWP the focus cannot abstract from a discussion about the industrial relations systems, with a particular accent on the employment relationships, because of their relevance, in the same way as production organization, in determining two major outcomes of the firm: innovation and economic performances. The argument is treated starting from the issue of the Social Dialogue at macro level, both in an European perspective and Italian perspective. The model of interaction between the social parties has repercussions, at micro level, on the employment relationships, that is to say on the relations between union delegates and management or workers and management. Finding economic and social policies capable of sustaining growth and employment within a knowledge based scenario is likely to constitute the major challenge for the next generation of social pacts, which are the main social dialogue outcomes. As Acocella and Leoni (2007) put forward the social pacts may constitute an instrument to trade wage moderation for high intensity in ICT, organizational and human capital investments. Empirical evidence, especially focused on the micro level, about the positive relation between economic growth and new organizational designs coupled with ICT adoption and non adversarial industrial relations is growing. Partnership among social parties may become an instrument to enhance firm competitiveness. The outcome of the discussion is the integration of organizational changes and industrial relations elements within a unified framework: the HPWS. Such a choice may help in disentangling the potential existence of complementarities between these two aspects of the firm internal structure on economic and innovative performance. With the third chapter starts the more original part of the thesis. The data utilized in order to disentangle the relations between HPWS practices, innovation and economic performance refer to the manufacturing firms of the Reggio Emilia province with more than 50 employees. The data have been collected through face to face interviews both to management (199 respondents) and to union representatives (181 respondents). Coupled with the cross section datasets a further data source is constituted by longitudinal balance sheets (1994-2004). Collecting reliable data that in turn provide reliable results needs always a great effort to which are connected uncertain results. Data at micro level are often subjected to a trade off: the wider is the geographical context to which the population surveyed belong the lesser is the amount of information usually collected (low level of resolution); the narrower is the focus on specific geographical context, the higher is the amount of information usually collected (high level of resolution). For the Italian case the evidence about the diffusion of HPWP and their effects on firm performances is still scanty and usually limited to local level studies (Cristini, et al., 2003). The thesis is also devoted to the deepening of an argument of particular interest: the existence of complementarities between the HPWS practices. It has been widely shown by empirical evidence that when HPWP are adopted in bundles they are more likely to impact on firm’s performances than when adopted in isolation (Ichniowski, Prennushi, Shaw, 1997). Is it true also for the local production system of Reggio Emilia? The empirical analysis has the precise aim of providing evidence on the relations between the HPWS dimensions and the innovative and economic performances of the firm. As far as the first line of analysis is concerned it must to be stressed the fundamental role that innovation plays in the economy (Geroski & Machin, 1993; Stoneman & Kwoon 1994, 1996; OECD, 2005; EC, 2002). On this point the evidence goes from the traditional innovations, usually approximated by R&D investment expenditure or number of patents, to the introduction and adoption of ICT, in the recent years (Brynjolfsson & Hitt, 2000). If innovation is important then it is critical to analyse its determinants. In this work it is hypothesised that organizational changes and firm level industrial relations/employment relations aspects that can be put under the heading of HPWS, influence the propensity to innovate in product, process and quality of the firm. The general argument may goes as follow: changes in production management and work organization reconfigure the absorptive capacity of the firm towards specific technologies and, in so doing, they shape the technological trajectories along which the firm moves; cooperative industrial relations may lead to smother adoption of innovations, because not contrasted by unions. From the first empirical chapter emerges that the different types of innovations seem to respond in different ways to the HPWS variables. The underlying processes of product, process and quality innovations are likely to answer to different firm’s strategies and needs. Nevertheless, it is possible to extract some general results in terms of the most influencing HPWS factors on innovative performance. The main three aspects are training coverage, employees involvement and the diffusion of bonuses. These variables show persistent and significant relations with all the three innovation types. The same do the components having such variables at their inside. In sum the aspects of the HPWS influence the propensity to innovate of the firm. At the same time, emerges a quite neat (although not always strong) evidence of complementarities presence between HPWS practices. In terns of the complementarity issue it can be said that some specific complementarities exist. Training activities, when adopted and managed in bundles, are related to the propensity to innovate. Having a sound skill base may be an element that enhances the firm’s capacity to innovate. It may enhance both the capacity to absorbe exogenous innovation and the capacity to endogenously develop innovations. The presence and diffusion of bonuses and the employees involvement also spur innovative propensity. The former because of their incentive nature and the latter because direct workers participation may increase workers commitment to the organizationa and thus their willingness to support and suggest inovations. The other line of analysis provides results on the relation between HPWS and economic performances of the firm. There have been a bulk of international empirical studies on the relation between organizational changes and economic performance (Black & Lynch 2001; Zwick 2004; Janod & Saint-Martin 2004; Huselid 1995; Huselid & Becker 1996; Cappelli & Neumark 2001), while the works aiming to capture the relations between economic performance and unions or industrial relations aspects are quite scant (Addison & Belfield, 2001; Pencavel, 2003; Machin & Stewart, 1990; Addison, 2005). In the empirical analysis the integration of the two main areas of the HPWS represent a scarcely exploited approach in the panorama of both national and international empirical studies. As remarked by Addison “although most analysis of workers representation and employee involvement/high performance work practices have been conducted in isolation – while sometimes including the other as controls – research is beginning to consider their interactions” (Addison, 2005, p.407). The analysis conducted exploiting temporal lags between dependent and covariates, possibility given by the merger of cross section and panel data, provides evidence in favour of the existence of HPWS practices impact on firm’s economic performance, differently measured. Although it does not seem to emerge robust evidence on the existence of complementarities among HPWS aspects on performances there is evidence of a general positive influence of the single practices. The results are quite sensible to the time lags, inducing to hypothesize that time varying heterogeneity is an important factor in determining the impact of organizational changes on economic performance. The implications of the analysis can be of help both to management and local level policy makers. Although the results are not simply extendible to other local production systems it may be argued that for contexts similar to the Reggio Emilia province, characterized by the presence of small and medium enterprises organized in districts and by a deep rooted unionism, with strong supporting institutions, the results and the implications here obtained can also fit well. However, a hope for future researches on the subject treated in the present work is that of collecting good quality information over wider geographical areas, possibly at national level, and repeated in time. Only in this way it is possible to solve the Gordian knot about the linkages between innovation, performance, high performance work practices and industrial relations.

Three Essays on Age and Firm Performance

Old captains at the helm: Chairman age and firm performance Urs Waelchli and Jonas Zeller December, 2012 This paper examines whether the chairmen of the board (COBs) impose their life-cycles on the firms over which they preside. Using a large sample of unlisted firms we find a robust negative relation between COB age and firm performance. COBs age much like ‘ordinary’ people. Their cognitive abilities deteriorate and they experience significant shifts in motivation. Deteriorating cognitive abilities are the main driver of the performance effect that we observe. The results imply that succession planning problems in unlisted firms are real. Mandatory retirement age clauses cannot solve these problems. Corporate Aging around the World Jonas Zeller January, 2014 This paper examines whether firms internationally age as US firms do (Loderer, Stulz, and Wälchli, 2013). Using a large panel, I find that Tobin’s Q monotonically falls with firm Age across all nineteen countries in the sample. The decrease varies across countries but is generally extremely robust and economically significant. ROA, sales growth, and market share decrease over a firm’s lifetime in most countries as well. Furthermore, older firms reduce their capital expenditures and R&D outlays. Instead, they distribute more cash to their shareholders. Overall, the results suggest that corporate aging is not confined to the US but is a genuine phenomenon that affects listed firms worldwide. This evidence supports the hypothesis that corporate aging is driven by managers who optimally focus on managing their assets in place and neglect the development of growth opportunities. I finally ask whether the managers’ choice and with it the magnitude of the decline in Tobin’s Q is a function of country-level institutional settings. I find that most notably firms age faster in countries where employees are relatively well protected by labor regulation. Is employment protection the fountain of corporate youth? Claudio Loderer, Urs Wälchli, Jonas Zeller* September 2014 Acharya, Baghai, and Subramanian (2012, 2013) find that employment protection legislation (EPL) encourages innovation. We argue that this effect should be particularly strong in mature firms. We would therefore also expect EPL to boost growth opportunities. Using the natural Experiment created by the staggered passage of changes in EPL across seventeen countries, we find evidence that employment protection legislation does indeed stimulate Innovation efforts, especially in mature firms. The effect is stronger in countries in which patents are owned by the firm and in the context of regular contracts. Consistent with that, EPL encourages risk taking. Overall, however, there is Little evidence that the effect of EPL on innovation effort translates into higher firm value, not even in mature firms. EPL does motivate employees in those firms to put in a greater effort, as evidenced by stronger sales growth. Yet it also increases costs, reduces profitability, and depresses Tobin’s Q ratios in all firms, especially the mature ones, possibly because of the rigidities that characterize these firms [Loderer, Stulz, and Waelchli (2014)].

Tariff reductions and labor demand elasticities : evidence from Chinese firm-level data

International production fragmentation has been a global trend for decades, becoming especially important in Asia where the manufacturing process is fragmented into stages and dispersed around the region. This paper examines the effects of input and output tariff reductions on labor demand elasticities at the firm level. For this purpose, we consider a simple heterogenous firm model in which firms are allowed to export their products and to use imported intermediate inputs. The model predicts that only productive firms can use imported intermediate inputs (outsourcing) and tend to have larger constant-output labor demand elasticities. Input tariff reductions would lower the factor shares of labor for these productive firms and raise conditional labor demand elasticities further. We test these empirical predictions, constructing Chinese firm-level panel data over the 2000--2006 period. Controlling for potential tariff endogeneity by instruments, our empirical studies generally support these predictions.

Stability of complementarity between Japanese FDI and import of intermediate goods : agglomeration effects and parent-firm heterogeneity

This paper examines the duration of intermediate goods imports and its determinants for Japanese affiliates in China. Our estimations, using a unique parent-affiliate-transaction matched panel dataset for a discrete-time hazard model over the 2000–2006 period, reveal that products with a higher upstreamness index, differentiated goods, and goods traded under processing trade are less likely to be substituted with local procurement. Firms located in more agglomerated regions with more foreign affiliates tend to shorten the duration of imports from the home country. For parent-firm characteristics, multinational enterprises that have many foreign affiliates or longer foreign production experience import intermediate goods for a longer duration.

Una casa para Einstein: Konrad Wachsmann y la evolucion de un modelo prefabricado desde las casas "Christoph & Unmack A.G." al "General Panel System"

Este artículo estudia la evolución de un modelo de vivienda prefabricada en madera, ejemplificada en la casita de verano que construye Konrad Wachsmann para Albert Einstein en 1929 en Caputh, cerca de Potsdam. El físico deseaba construirse un "lugar de descanso", eligiendo la construcción en madera por su facilidad y rapidez de montaje, adaptabilidad, calidez y para que armonizara mejor con el medio ambiente en el paraje donde se insertaba. Konrad Wachsmann, que trabajaba para la firma de viviendas prefabricadas en madera "Christoph&Unmack A.G." le presentará un modelo prefabricado moderno. Esta tipología, que había evolucionado desde los diseños iniciales "nórdico escandinavos", pasando por el "jugendstil", hasta introducir un nuevo lenguaje de líneas puras, cubierta plana, y grandes ventanales iniciado por Poelzig, será ligeramente modificada por Einstein, que finalmente adjudica el encargo. Ayudado por Einstein a trasladarse a EEUU, Konrad Wachsmann continuará allí la labor de investigación sobre vivienda prefabricada junto con Walter Gropius, que dará como resultado el "General Panel System" y sus conocidas "Packaged Houses". A HOUSE FOR EINSTEIN: KONRAD WACHSMANN AND THE EVOLUTION OF A PREFABRICATED WOODEN HOUSING MODEL FROM " CHRISTOPH & UNMACK A.G." TO "GENERAL PANEL SYSTEM". This article studies the evolution of a prefabricated wooden housing model, exemplified in the summer house built by Konrad Wachsmann for Albert Einstein in 1929, in Caputh, near Potsdam. The Physician wanted to build a "resting house", choosing a wood construction because of its easy and fast assembly, adaptability, warmth and harmony with the environment where it would be inserted. Konrad Wachsmann, who worked for the wooden prefabricated houses firm "Christoph & Unmack AG", proposed Einstein a modern prefabricated wood model. This typology, which had evolved from the initial "Nordic Scandinavian" and "Jugendstil" designs to a new modern language initiated by Poelzig (with clean lines, flat roof, and large windows) will be slightly modified by Einstein, that finally hired the construction of the house. Aided by Einstein to move to USA, Konrad Wachsmann continued there his research work about prefabricated houses with Walter Gropius, giving as a results the "General Panel System" and the popular "Packaged Houses".