Credit Constraints and Increased Firm-level Production Fragmentation: Evidence from India

2022 ◽  
pp. 097491012110677
Author(s):  
Debarati Ghosh ◽  
Meghna Dutta
Keyword(s):  
Credit Constraints ◽  
Policy Implications ◽  
Technological Advancement ◽  
Firm Level ◽  
Financing Structure ◽  
Alternative Measures ◽  
Using Data ◽  
Level Production ◽  
Positive Effect ◽  
Production Fragmentation

Previous studies have underlined various rationales for production fragmentation from wage differentials, decreased trade costs, access to specialized skills and resources, access to new markets, and benevolent government policies, to technological advancement. However, the idea that a firm’s financing structure can influence its production structure remains less explored, more so empirically. Firms that are financially constrained find it difficult to complete the entire production process in-house and therefore tend to resort to production fragmentation. The current study investigates this link between the extent of credit constraints faced by firms and their outsourcing behavior using data from Indian manufacturing firms over a period of ten years. We also separately study this linkage for firms that tend to export more vis-à-vis firms that export less, to ascertain if increased exporting have relaxed the financial constraint of the firms. The results confirm the positive effect of credit constraints on outsourcing behavior. For a robustness check, subsample regressions and alternative measures of constraints are also analyzed. The study has important policy implications for developing countries such as India, where outsourcing may prove to be a profitable reorganization strategy for firms that are financially constrained.

Effect of E-Retail Product Category on Performance

2019 ◽  
pp. 152-168
Author(s):  
Erik Ernesto Vazquez
Keyword(s):  
Information Economics ◽  
Product Category ◽  
Sales Performance ◽  
Moderating Effect ◽  
Web Traffic ◽  
Firm Level ◽  
Conversion Rates ◽  
Using Data ◽  
Retail Products ◽  
Positive Effect

Literature on product categorization of e-retail products has adopted a consumer view and studied the direct effect on consumer-level variables such as purchase intent or customer satisfaction. In doing so, the moderating effect of product categorization of e-retail products on firm-level variables has been ignored. To address the implications of e-retail product categorization, this chapter asks the following question, What is the moderating effect of e-retail product category on sales performance? This chapter uses concepts of information economics, e-retailing, and the search-experience-credence (SEC) categorization of products to develop theoretical hypotheses. Using data from 500 US e-retailers, this chapter contends that the ease to evaluate retail products online has a positive effect on sales volume of e-retail firms. This effect is the result of increased web traffic and decreased conversion rates, which describes the e-retail market behavior with firm-level variables.

scholarly journals Determinants of credit constraints for agricultural wholesalers in China

2020 ◽  
Vol 23 (4) ◽  
pp. 563-577
Author(s):  
Lifang Hu ◽  
Rigoberto A. Lopez ◽  
Yinchu Zeng
Keyword(s):  
Economic Growth ◽  
Credit Constraints ◽  
Sample Selection ◽  
Probit Model ◽  
Nationwide Survey ◽  
Food Distribution ◽  
Policy Implications ◽  
Empirical Results ◽  
Capital Assets ◽  
Using Data

Following market reforms and economic growth since the late 1970s, agricultural wholesale markets in China have developed substantially and become increasingly important in food distribution. This paper investigates the determinants of credit constraints on agricultural wholesalers. A probit model with sample selection is estimated for credit constraints and demand using data collected via a nationwide survey of 1,422 agricultural wholesalers, of whom approximately 39% were designated as credit-constrained. Empirical results confirm that an absence of relatives in the business supports the notion of further discouraging potential borrowers from applying for credit in the first place. Moreover, the probability of being credit-constrained is significantly lower for legal corporations, wholesalers who have higher-value capital assets, larger-sized wholesalers, and those in a better micro-finance environment. Some policy implications are outlined.

Estimation of Elasticities of Substitution for CES Production Functions using Data on Selected Manufacturing Industries in Pakistan

1987 ◽  
Vol 26 (2) ◽  
pp. 161-178 ◽  
Author(s):  
George E. Battese ◽  
Sohail J. Malik
Keyword(s):  
Large Scale ◽  
Weighted Least Squares ◽  
Manufacturing Industries ◽  
Policy Implications ◽  
Production Functions ◽  
Small Scale ◽  
Least Squares Regression ◽  
Firm Level ◽  
Using Data ◽  
Asset Size

Firm-level stochastic CES production functions are specified for large and Small-scale firms in twelve manufacturing industries in Pakistan. Assuming that firms within specified asset-size categories for which aggregative data are available have the same levels of productive inputs, the elasticities of substitution of labour for capital are estimated, using weighted least-squares regression. For large-scale firms, the estimated elasticities are generally not significantly different from one, whereas for small-scale firms the elasticities are significantly smaller than one but greater than zero. These results indicate that there may exist more possibilities for the substitution of labour for capital in manufacturing industries in Pakistan than were claimed by earlier researchers. This finding has important policy implications for Pakistan's economic development.

A Smart Break? College Tenure Interruption and Graduating Student Outcomes

2015 ◽  
Vol 10 (2) ◽  
pp. 244-276 ◽  
Author(s):  
P. Wesley Routon ◽  
Jay K. Walker
Keyword(s):  
Academic Achievement ◽  
Student Outcomes ◽  
Policy Implications ◽  
Full Time ◽  
Negative Effects ◽  
Market Effects ◽  
Using Data ◽  
Internship Programs ◽  
Administrative Responsibilities ◽  
Positive Effect

Using data from a longitudinal survey of college students from over 400 institutions, we examine the impacts of occupational internship programs and voluntary academic leave on returning academic achievement, post-college ambitions, and general facets of the college experience. Previous literature on college internships has focused on labor market effects and the literature on academic leave has emphasized its causes. Much less has been done to analyze effects of these occurrences on collegiate outcomes. College internships are found to have a positive effect on grades, increase desires to work full-time or attend graduate school immediately following graduation, and slightly increase ambitions to have administrative responsibilities and be financially well off. Voluntary academic leave is found to have only negative effects on collegiate outcomes, including study habits and academic achievement upon return. Implied policy implications are that colleges and universities should champion internship programs but discourage college tenure interruption for other reasons.

scholarly journals Priority development areas as a tool for enterprises support in Russian monotowns

2021 ◽  
Vol 25 (6) ◽  
pp. 54-67
Author(s):  
S. G. Beleva ◽  
V. V. Veterinarov ◽  
G. S. Kozlyakov ◽  
O. V. Suchkova
Keyword(s):  
Firm Growth ◽  
Nearest Neighbor ◽  
Geographic Location ◽  
Ordinary Least Squares ◽  
Firm Level ◽  
Revenue Growth ◽  
The Status ◽  
Using Data ◽  
The City ◽  
Positive Effect

This paper aims to estimate the effectiveness of the Priority Development Areas (PDA) program in Russian monotowns at the firm level. Using data from the SPARK-Interfax database on Russian companies in 2014–2018, the authors estimate the effect of the PDA residency on the firms’ revenue growth in monotowns in Russia. The authors test two hypotheses. First, the status of the PDA resident is obtained by firms that have been successful in previous periods. Second, the PDA resident status does not have a positive effect on firm growth. To measure the treatment effect, the authors use the nearest neighbor propensity score matching method, which allows drawing conclusions about causality, as opposed to the ordinary least squares (OLS) method. The regressions consider the firm size, industry, and geographic location of the city. According to the results of the study, both hypotheses are confirmed. Resident status is determined by the gains in the company’s revenue for the two previous periods (the coefficients are significant in all specifications at the 5% level). The influence of residency on the firm’s revenue growth is neglected (becomes insignificant) when comparing enterprises with the same pre-2015 trends. Thus, the authors conclude that the success of the PDA program in Russian monotowns in terms of business support is questionable. The findings of the study are valid for enterprises established before 2015.

Peranan Ketua Pengurus dan Manajer Dalam Penyusunan dan Penerapan Laporan Keuangan Berbasis SAK ETAP Pada Koperasi di Kota Palembang

2019 ◽  
Vol 14 (2) ◽  
pp. 119
Author(s):  
Riza Syahputera ◽  
Martha Rianty
Keyword(s):  
Data Analysis ◽  
Sampling Technique ◽  
Financial Statements ◽  
Significant Positive Effect ◽  
Analysis Technique ◽  
Regression Test ◽  
Using Data ◽  
The City ◽  
Positive Effect

AbstractThis study aims to determine the effect of the role of the Chairperson and Cooperative Manager in the preparation and application of Financial Statements based on SAK ETAP in cooperatives in the city of Palembang. This research is a quantitative study using data obtained from questionnaires and measured using a Likert scale. The sampling technique used is purposive sampling. The sample used in this study was the Chairperson of the cooperative and the manager of the cooperative in the city of Palembang. The cooperatives studied were 203 cooperatives. The data analysis technique used is multiple linear regression test. The results showed that the role of cooperative leaders and managers had a significant positive effect on the preparation and application of SAK ETAP-based financial statements.Keywords : chairman, manager, SAK ETAP, cooperative

scholarly journals Determinants of Corporate Anti-Corruption Disclosure: The Case of the Emerging Economics

2021 ◽  
Vol 13 (6) ◽  
pp. 3462
Author(s):  
Maider Aldaz Odriozola ◽  
Igor Álvarez Etxeberria
Keyword(s):  
Empirical Studies ◽  
Geographical Area ◽  
Control Variable ◽  
Emerging Countries ◽  
Point Of View ◽  
Press Freedom ◽  
Negative Effects ◽  
Key Factor ◽  
Using Data ◽  
Positive Effect

Corruption is a key factor that affects countries’ development, with emerging countries being a geographical area in which it tends to generate greater negative effects. However, few empirical studies analyze corruption from the point of view of disclosure by companies in this relevant geographical area. Based on a regression analysis using data from the 96 large companies from 15 emerging countries included in the 2016 International Transparency Report, this paper seeks to understand what determinants affect such disclosure. In that context, this paper provides empirical evidence to understand the factors that influence reporting on anti-corruption mechanisms in an area of high economic importance that has been little studied to date, pointing to the positive effect of press freedom in a country where the company is located and with the industry being the unique control variable that strengthens this relationship.

scholarly journals Using Payroll Tax Variation to Unpack the Black Box of Firm-Level Production

2021 ◽  
Author(s):  
Youssef Benzarti ◽  
Jarkko Harju
Keyword(s):  
Black Box ◽  
Total Output ◽  
Tax Rates ◽  
Firm Level ◽  
Payroll Tax ◽  
Payroll Taxes ◽  
Input Factor ◽  
Experimental Variation ◽  
Quasi Experimental ◽  
Level Production

Abstract This paper uses quasi-experimental variation in payroll tax rates in Finland to investigate how firms use their input factors. We find that higher payroll tax rates lead to large employment responses and have no effects on employee-level earnings. As payroll taxes increase, firms substitute away from low-skilled, routine and manual workers. Higher firm-level payroll tax rates also slightly decrease the total output of firms. Our results imply that firm-level production and input factor choices are clearly affected by payroll taxes.

The Impact of the Business Environment on the Formalization of Informal Firms. The Case of Kosovo

Südosteuropa ◽  
2020 ◽  
Vol 68 (4) ◽  
pp. 505-529
Author(s):  
Kujtim Zylfijaj ◽  
Dimitar Nikoloski ◽  
Nadine Tournois
Keyword(s):  
Negative Impact ◽  
Positive Impact ◽  
Business Environment ◽  
Positive Influence ◽  
Policy Implications ◽  
Tax Reforms ◽  
Firm Level ◽  
Characteristics Analysis ◽  
Significant Negative Impact ◽  
The Impact

AbstractThe research presented here investigates the impact of the business environment on the formalization of informal firms, using firm-level data for 243 informal firms in Kosovo. The findings indicate that business-environment variables such as limited access to financing, the cost of financing, the unavailability of subsidies, tax rates, and corruption have a significant negative impact on the formalization of informal firms. In addition, firm-level characteristics analysis suggests that the age of the firm also exercises a significant negative impact, whereas sales volume exerts a significant positive impact on the formalization of informal firms. These findings have important policy implications and suggest that the abolition of barriers preventing access to financing, as well as tax reforms and a consistent struggle against corruption may have a positive influence on the formalization of informal firms. On the other hand, firm owners should consider formalization to be a means to help them have greater opportunities for survival and growth.

scholarly journals SME credit constraints and access to informal credit markets in Vietnam

2020 ◽  
Vol 47 (6) ◽  
pp. 787-807 ◽  
Author(s):  
Lan Archer ◽  
Parmendra Sharma ◽  
Jen-Je Su
Keyword(s):  
Peer Review ◽  
Credit Markets ◽  
Credit Constraints ◽  
Policy Implications ◽  
Informal Credit ◽  
Banking Services ◽  
Content Type ◽  
Credit Access ◽  
Access Policy ◽  
Correlated Random Effects

PurposeA review of literature has documented that accessing formal credit and other banking services has always been a crucial challenge for small and medium-sized enterprises (SMEs). The alternative, therefore, tends to be informal channels. However, the credit constraint vis-à-vis informal channel link does not appear to be well documented in the literature. This study aims to investigate whether credit constraints significantly affect the probability of accessing informal credit, as well as the credit values of Vietnamese SMEs.Design/methodology/approachThis study uses a trinary approach and correlated random-effects Probit and Tobit techniques to avoid the incidental coefficients problem.FindingsThe results suggest that relative to unconstrained and partially constrained firms, fully constrained firms tend to be more active in the informal credit markets, shown by their higher probability of informal credit access and larger credit values.Originality/valueTo the best of authors’ knowledge, this is the first study on Vietnam that takes a different approach to credit constraints and examines their impact on informal credit access. Policy implications arise and are discussed.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-11-2017-0543

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