R&D employment effects of financial slack generated by R&D tax exemption: The importance of firm‐level contingencies

2021 ◽  
Author(s):  
Peter Teirlinck ◽  
André Spithoven ◽  
Johan Bruneel
Keyword(s):  
Firm Level ◽  
Employment Effects ◽  
Financial Slack

scholarly journals Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France

2019 ◽  
Vol 11 (1) ◽  
pp. 38-63 ◽  
Author(s):  
Youssef Benzarti ◽  
Dorian Carloni
Keyword(s):  
Value Added ◽  
Consumption Tax ◽  
Difference In Differences ◽  
Firm Level ◽  
Employment Effects ◽  
Level Data ◽  
Price Effects ◽  
Firm Level Data ◽  
Material Goods ◽  
Firm Owners

This paper evaluates the incidence of a large cut in value-added taxes (VATs) for French sit-down restaurants in 2009. In contrast to previous studies, which only focus on the price effects of VAT reforms, we estimate the effects of the VAT cut on four groups: workers, firm owners, consumers, and suppliers of material goods. Using a difference-in-differences strategy on firm-level data, we find that: firm owners pocketed more than 55 percent of the VAT cut; consumers, sellers of material goods, and employees shared the remaining windfall with consumers benefiting the least; and the employment effects were limited. (JEL H22, H25, L83)

scholarly journals Employment Effects of Innovation at the Firm Level

2007 ◽  
Vol 227 (3) ◽  
Author(s):  
Stefan Lachenmaier ◽  
Horst Rottmann
Keyword(s):  
Employment Growth ◽  
Manufacturing Firms ◽  
Firm Level ◽  
Employment Effects ◽  
Process Innovations ◽  
Positive Effects ◽  
Product Innovations ◽  
Patent Applications ◽  
Product And Process ◽  
Positive Effect

SummaryThis paper analyzes empirically the effects of innovation on employment at the firm level using a uniquely long panel dataset of German manufacturing firms. The overall effect of innovations on employment often remains unclear in theoretical contributions due to reverse effects. We distinguish between product and process innovations and additionally introduce different innovation categories. We find clearly positive effects for product and process innovations on employment growth with the effects for process innovations being slightly higher. For product innovations that involved patent applications we can identify an additional positive effect on employment.

scholarly journals The Employment Effects of Credit Market Disruptions: Firm-level Evidence from the 2008–9 Financial Crisis *

2013 ◽  
Vol 129 (1) ◽  
pp. 1-59 ◽  
Author(s):  
Gabriel Chodorow-Reich
Keyword(s):  
Bank Lending ◽  
Firm Level ◽  
Data Set ◽  
Employment Effects ◽  
Lower Likelihood ◽  
Banking Relationships ◽  
Firm Type ◽  
Employment Decline ◽  
Nonfinancial Firms ◽  
Medium Firms

Abstract This article investigates the effect of bank lending frictions on employment outcomes. I construct a new data set that combines information on banking relationships and employment at 2,000 nonfinancial firms during the 2008–9 crisis. The article first verifies empirically the importance of banking relationships, which imply a cost to borrowers who switch lenders. I then use the dispersion in lender health following the Lehman crisis as a source of exogenous variation in the availability of credit to borrowers. I find that credit matters. Firms that had precrisis relationships with less healthy lenders had a lower likelihood of obtaining a loan following the Lehman bankruptcy, paid a higher interest rate if they did borrow, and reduced employment by more compared to precrisis clients of healthier lenders. Consistent with frictions deriving from asymmetric information, the effects vary by firm type. Lender health has an economically and statistically significant effect on employment at small and medium firms, but the data cannot reject the hypothesis of no effect at the largest or most transparent firms. Abstracting from general equilibrium effects, I find that the withdrawal of credit accounts for between one-third and one-half of the employment decline at small and medium firms in the sample in the year following the Lehman bankruptcy.

Effects of unexpected financial slack on SMEs’ diversification and growth: evidence from China

2018 ◽  
Vol 9 (4) ◽  
pp. 500-518
Author(s):  
Xing Liu ◽  
Zhanming Jin
Keyword(s):  
Growth Performance ◽  
Cognitive Biases ◽  
Curvilinear Relationship ◽  
Geographic Diversification ◽  
Firm Level ◽  
Content Type ◽  
Financial Slack ◽  
Regulatory Policies ◽  
Managerial Behaviors ◽  
Industry Diversification

Purpose The purpose of this study is to investigate the relationship between unexpected financial slack and small- and medium-sized enterprises’ (SMEs) diversification and growth performance. Design/methodology/approach Using the phenomenon of IPO over-financed in China as the empirical context, the authors constructed a firm-level measure of unexpected financial slack based on over-financed capital resources and extended the nascent inquiry on unexpected slack. Findings The authors proposed and tested that, with unexpected slack obtained from IPO over-financed, SMEs did not engage in diversification until slack was extraordinarily high (a curvilinear relationship). And in such cases, SMEs preferred geographic diversification rather than industry diversification. Moreover, SMEs were able to sustain growth performance both in the short term and in the long term. Practical implications This study had important implications for regulators and managers. The findings of this study suggested that proper regulations on usage of over-financed capital helped SMEs’ sustain their growth performance. Regulatory policies could curb managers from cognitive biases to behave more prudently and deploy the resources more consciously. However, with sufficient resources, managers should also consider more explorative growth drivers such as diversification. Originality/value This study joined the efforts of extending the antecedents of slack formation from internal managerial behaviors to external uncertain factors. As the first study to explore the role of unexpected slack at firm level, the results of this study shed more light on the effects of unexpected slack resources.

The relationship between organizational slack and innovation: revisited

2014 ◽  
Vol 29 (1) ◽  
pp. 26-42 ◽  
Author(s):  
Fariss Terry Mousa ◽  
Jaideep Chowdhury
Keyword(s):  
Fixed Effect ◽  
Publicly Traded ◽  
Firm Level ◽  
Firm Innovation ◽  
Content Type ◽  
Financial Slack ◽  
Level Data ◽  
Economic Downturns ◽  
The Impact ◽  
The Relationship

Purpose – The slack-innovation relationship has interested scholars for years. The authors aim to delve into the impact of financial slack on firm innovation by replicating a classic study arguing that this relationship has an inverse U-shape. Design/methodology/approach – The sample consists of all US firms that were publicly traded between 1993 and 2011. The authors employ the standard econometrics methodology of panel regression with firm-fixed effect and time-fixed effect to estimate the regression equation of firm innovation on financial slack. Findings – The authors find that the relationship between financial slack and R&D investments is similar to that suggested by earlier authors, thus enhancing the generalizability of this important finding in management research. The authors also find that this relationship holds even during economic downturns. Originality/value – The authors replicate Nohria and Gulati's classic study by considering the impact of slack on innovation. The authors also move away from survey data, as used by Nohria and Gulati. The authors utilize actual firm-level data for a large sample of US publicly traded firms from 1993 to 2011, thus enhancing the generalizability of these findings.

scholarly journals Role of Trade in Growth and Poverty Reduction: A Review of Literature with Special Reference to India

2018 ◽  
Vol 4 (02) ◽  
Author(s):  
Komal . ◽  
Harinder Mohan
Keyword(s):  
International Trade ◽  
Poverty Reduction ◽  
International Market ◽  
Review Of Literature ◽  
Review Of The Literature ◽  
Firm Level ◽  
Poor Growth ◽  
Employment Effects ◽  
The Impact

The growing volumes of international trade and lowering of tariff barriers have triggered continuing debate and analysis on the impact of international trade on poverty. The United Nations has identified eradication of poverty – especially of extreme poverty – as its number one Millennium Development Goal (MDG). This paper tries to assess the relevance of trade in reducing poverty in India and promoting pro-poor growth through a survey of the existing literature and concludes that a strong performance on the international market can help reduce domestic poverty in developing countries. Through a review of the literature on this topic, the author finds that there is strong empirical evidence in favour of the growth enhancing effects of exports and trade in general. Furthermore, a number of detailed microeconomic studies using firm-level and household data show that exporting can lead to productivity, growth and directly reduce poverty through wage and employment effects.

Exploring Firm-Level Antecedents that Drive Motives of Internationalization: A Study of Knowledge Intensive Indian Firms

2020 ◽  
Vol 16 (4) ◽  
pp. 867-906
Author(s):  
Faisal M. Ahsan ◽  
Ashutosh Sinha ◽  
R Srinivasan
Keyword(s):  
Ownership Structure ◽  
Emerging Economy ◽  
Firm Characteristics ◽  
Host Countries ◽  
Firm Level ◽  
Family Control ◽  
Financial Slack ◽  
Knowledge Intensive

ABSTRACTWe study firm level antecedents that drive different motives of internationalization of emerging economy firms. Based on firm's resource based considerations of asset exploitation versus asset augmentation and locational advantages of host countries, we provide a framework to classify the motives of internationalization of emerging economy firms belonging to knowledge intensive industries. Motives of internationalization have been classified into three broad categories – market-seeking, opportunity-seeking, and strategic asset-seeking. We determine motives behind different modes of internationalization – alliances, acquisitions, and greenfield ventures. Drawing upon the adaptability, amalgamation, and ambidexterity (AAA) advantages from the springboard perspective, we find that firm characteristics like R&D investments, availability of financial slack, firm's ownership structure, and family control shape up its motive of internationalization.

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