scholarly journals Revisiting Complementarity between Japanese FDI and the Import of Intermediate Goods: Agglomeration Effects and Parent-firm Heterogeneity

2020 ◽  
Vol 19 (3) ◽  
pp. 90-106
Author(s):  
Tadashi Ito ◽  
Toshiyuki Matsuura ◽  
Chih-Hai Yang
Keyword(s):  
Small Firms ◽  
Firm Heterogeneity ◽  
Intermediate Goods ◽  
Data Set ◽  
Japanese Firms ◽  
Agglomeration Effects ◽  
Dynamic Perspective ◽  
Duration Of Trade ◽  
Discrete Time Hazard Model ◽  
Japanese Fdi

This study revisits the nexus between foreign direct investment (FDI) and international trade in the dynamic perspective, focusing on intermediate goods imports of affiliates of Japanese firms operating in China. To examine the effect of the formation of the agglomeration and the recent FDI made by small firms, both of which have been overlooked in the literature, we construct a unique parent-affiliate matched panel data set of trade in intermediate goods, and estimate a discrete-time hazard model over the 2000–06 period. We found that affiliates owned by firms in agglomerated regions in Japan have a shorter duration of trade in intermediate goods compared with affiliates owned by smaller Japanese firms.

R&D volatility and market value: the role of executive overconfidence

2019 ◽  
Vol 14 (2) ◽  
pp. 411-431
Author(s):  
Benlu Hai ◽  
Qingzhu Gao ◽  
Ximing Yin ◽  
Jin Chen
Keyword(s):  
Business Performance ◽  
Positive Impact ◽  
Market Value ◽  
Data Set ◽  
Content Type ◽  
Dynamic Perspective ◽  
Innovation Strategies ◽  
The Impact ◽  
The Relationship

Purpose Significant increase or decrease in research and development (R&D) expenditure may have an immense impact on market value. Based on the punctuated equilibrium theory, this paper aims to empirically analyze the impact of R&D volatilities on market value and the moderating effect of executive overconfidence. Design/methodology/approach The study uses the panel data set that covers 902 Shanghai and Shenzhen A-share manufacturing listed firms and multiple regression method to test the theoretical hypotheses. Findings The results show that both positive and negative R&D volatilities have a robust and significant positive impact on the market value. Further analysis shows that the executive overconfidence positively moderates the relationship between R&D volatilities and market value. Research limitations/implications In a rapidly changing and highly competitive environment, firms should recognize that the balance of innovation strategies will help to bring higher market value. Furthermore, firms could improve corporate governance to make the best of managerial characteristics, such as overconfidence, on the innovation decision-making process. Originality/value By pushing the static perspective to a dynamic perspective and empirically documenting the role of executive overconfidence, this study contributes to the literature on the relationship between R&D expenditure and market value, generating theoretical and practical insights for firms to improve innovation governance and innovation strategies to achieve better business performance.

scholarly journals Micro to Macro: Optimal Trade Policy With Firm Heterogeneity

Econometrica ◽  
2020 ◽  
Vol 88 (6) ◽  
pp. 2739-2776
Author(s):  
Arnaud Costinot ◽  
Andrés Rodríguez-Clare ◽  
Iván Werning
Keyword(s):  
Trade Policy ◽  
Small Firms ◽  
Firm Heterogeneity ◽  
Heterogeneous Firms ◽  
Point Of View ◽  
Foreign Firms ◽  
Empirical Observation ◽  
Self Selection ◽  
Export Subsidies ◽  
Selection Of

The empirical observation that “large firms tend to export, whereas small firms do not” has transformed the way economists think about the determinants of international trade. Yet, it has had surprisingly little impact on how economists think about trade policy. Under very general conditions, we show that from the point of view of a country that unilaterally imposes trade taxes to maximize domestic welfare, the self‐selection of heterogeneous firms into exports calls for import subsidies on the least profitable foreign firms. In contrast, our analysis does not provide any rationale for export subsidies or taxes on the least profitable domestic firms.

The Local Labor Market Effects of Korean Automotive Investments in the United States

2020 ◽  
pp. 016001762096484
Author(s):  
Eunbi Kim
Keyword(s):  
Labor Market ◽  
Trade Agreement ◽  
The United States ◽  
Competitive Strategies ◽  
Local Labor Market ◽  
Market Effects ◽  
The North ◽  
Japanese Firms ◽  
Employment Rates ◽  
Japanese Fdi

This study investigates the local labor market effects of automotive foreign direct investment (FDI) in Alabama in the wake of the North American Free Trade Agreement (NAFTA). Of particular interest is the effect of FDI originating from a nontraditional source country in comparison to investments by European and Japanese firms. Using 2005–2011 American Community Survey (ACS) data, we compare changes in employment rates and median weekly wages in three area types: areas with Korean FDI, areas with German and Japanese FDI and areas without FDI. Results show that Korean FDI leads to increased employment rates but decreased median weekly wages. We attribute these findings to price competitive strategies of Korean firms.

Using the eurostat-OECD definition of high-growth firms: a cautionary note

2015 ◽  
Vol 4 (1) ◽  
pp. 50-56 ◽  
Author(s):  
Sven-Olov Daunfeldt ◽  
Dan Johansson ◽  
Daniel Halvarsson
Keyword(s):  
Small Firms ◽  
High Growth ◽  
Growth Patterns ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Level Data ◽  
Growth Firms ◽  
Definition Of ◽  
Practical Implications

Purpose – High-growth firms (HGFs) have attracted an increasing amount of attention from researchers and policymakers, and the Eurostat-Organisation for Economic Co-operation and Development (OECD) definition of HGFs has become increasingly popular. The paper aims to discuss this issue. Design/methodology/approach – The authors use a longitudinal firm-level data set to analyze the implications of using the Eurostat-OECD definition. Findings – The results indicate that this definition excluded almost 95 percent of surviving firms in Sweden, and about 40 percent of new private jobs during 2005-2008. Research limitations/implications – The proportion of small firms and their growth patterns differ across countries, and the authors therefore advise caution in using this definition in future studies. Practical implications – Policy based on the Eurostat-OECD definition of HGFs might be misleading or even counterproductive. Originality/value – No previous studies have analyzed the implications of using the Eurostat-OECD definition of HGFs.

scholarly journals Effect of Work–Life Balance Practices on Firm Productivity: Evidence from Japanese Firm-Level Panel Data

2014 ◽  
Vol 14 (4) ◽  
pp. 1677-1708 ◽  
Author(s):  
Isamu Yamamoto ◽  
Toshiyuki Matsuura
Keyword(s):  
Panel Data ◽  
Firm Heterogeneity ◽  
Manufacturing Firms ◽  
Firm Level ◽  
Life Balance ◽  
Firing Costs ◽  
Japanese Firms ◽  
Long Run ◽  
Human Skills ◽  
Labor Hoarding

Abstract This article examines how firm practices that could contribute to worker attainment of work–life balance (WLB) affect the total factor productivity (TFP) of a firm, by using panel data of Japanese firms from the 1990s. We observed a positive correlation between the WLB practices and TFP among sampled firms. However that correlation vanished when we controlled for the unobserved firm heterogeneity, and we found no general causal relationship in which WLB practices increase firm TFP in the medium or long run. For firms with the following characteristics, however, we found positive and sizable effects: large firms, manufacturing firms, and firms that have exhibited labor hoarding during recessions. Since these firms are likely to incur large fixed employment costs, we infer that firms investing in firm-specific human skills or having large hiring/firing costs can benefit from WLB practices through a decrease in turnover or increase in recruiting effectiveness.

Sheepskin effects in Japan

2005 ◽  
Vol 26 (4) ◽  
pp. 320-335 ◽  
Author(s):  
Thomas K. Bauer ◽  
Patrick J. Dross ◽  
John P. Haisken‐DeNew
Keyword(s):  
Labor Market ◽  
Small Firms ◽  
Admission Policy ◽  
Large Firms ◽  
Data Set ◽  
Capital Theory ◽  
Content Type ◽  
The Usa ◽  
Recruitment System

PurposeThe purpose of this paper is to examine the role of sheepskin effects in the return to education in Japan.Design/methodology/approachThe paper provides a short description of the Japanese schooling and recruitment system. It then describes the data set and the empirical approach. Estimation results are presented for the various specifications. The baseline specification closely follows existing studies for the USA to facilitate comparability across the two countries. The paper further investigates whether there are significant firm‐size differences in the estimated sheepskin effects and whether sheepskin effects disappear with increasing job tenure.FindingsThe estimation results indicate that sheepskin effects explain about 50 percent of the total returns to schooling. The paper further finds that education as a signal is only important for workers in small firms with the size of these effects being similar to comparable estimates for the USA. Finally, the estimated degree effects decrease with firm tenure, in particular for small firms. These results could be explained by the particular recruitment system of large firms in Japan, which makes university diploma as a screening device unimportant for large firms and the admission policy of Japanese universities.Originality/valueBy investigating the role of sheepskin effects in a labor market that differs substantially from the labor market in the USA, the paper provides additional insights to the human capital theory‐screening hypothesis debate.

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