scholarly journals Financing Constraints, Radical versus Incremental Innovation, and Aggregate Productivity

2019 ◽  
Vol 11 (2) ◽  
pp. 275-309 ◽  
Author(s):  
Andrea Caggese
Keyword(s):  
Risk Taking ◽  
Productivity Growth ◽  
Negative Relationship ◽  
Firm Dynamics ◽  
Incremental Innovation ◽  
Financing Constraints ◽  
Aggregate Productivity ◽  
Financing Frictions ◽  
Barrier To Entry ◽  
Firm’S Life Cycle

I provide new empirical evidence on the negative relationship between financial frictions and productivity growth over a firm’s life cycle. I show that a model of firm dynamics with incremental innovation cannot explain this evidence. However, further including radical innovation, which is very risky but potentially very productive, allows for the joint replication of several stylized facts about the dynamics of young and old firms and the differences in productivity growth in industries with different degrees of financing frictions. These frictions matter because they act as a barrier to entry that reduces competition and the risk-taking of young firms. (JEL D22, D24, D25, G32, L25, L60, O31)

scholarly journals Barriers to Reallocation and Economic Growth: The Effects of Firing Costs

2019 ◽  
Vol 11 (4) ◽  
pp. 235-270 ◽  
Author(s):  
Toshihiko Mukoyama ◽  
Sophie Osotimehin
Keyword(s):  
Economic Growth ◽  
Productivity Growth ◽  
Firm Dynamics ◽  
Aggregate Productivity ◽  
Dynamics Model ◽  
Firing Costs ◽  
Endogenous Innovation

We study how factors that hinder the reallocation of inputs across firms influence aggregate productivity growth. We extend Hopenhayn and Rogerson’s (1993) firm-dynamics model to allow for endogenous innovation. We evaluate the effects of firing taxes on reallocation, innovation, and productivity growth. We find firing taxes can have opposite effects on entrants’ innovation and incumbents’ innovation, and the overall outcome depends on the relative strengths of these forces. In the entrant-driven growth calibration, firing taxes reduce aggregate productivity growth, whereas aggregate productivity growth increases in the incumbent-driven growth calibration. (JEL D24, E23, E24, J23, J24, J62, K31, O31, O47)

Innovation, Management Practices, and Productivity

2018 ◽  
pp. 410-436
Author(s):  
Mary J. Benner
Keyword(s):  
Process Improvement ◽  
Productivity Growth ◽  
Management Practices ◽  
Innovation Management ◽  
Incremental Innovation ◽  
Future Research ◽  
Aggregate Productivity ◽  
Firm Level ◽  
Efficiency And Productivity ◽  
Exploratory Innovation

Economics scholars have studied innovation as the “residual” in explaining productivity growth. Other research has examined the influence of programs like Six Sigma or ISO 9000, practices expected to directly improve efficiency and productivity within firms. Separately, management research has explored the idea that practices focused on process improvement can shift an organization’s focus toward incremental innovation, “crowding out” more radical, exploratory innovation. Thus, a full assessment of the influence of both innovation and management practices on productivity must consider how management practices—adopted specifically to improve operational efficiency—influence innovation. This chapter combines insights from three largely disparate research streams, highlighting the tensions and the potentially unintended longer-term effects of particular management practices on innovation. The chapter sheds light on the tension between improvement in firm-level productivity, innovation, and aggregate productivity growth, provides alternative explanations for results from prior research, and suggests some directions for future research.

The ascension of executives' tenure, corporate risk-taking and corporate performance: evidence from Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Osama F. Atayah ◽  
Khakan Najaf ◽  
Ravichandran K. Subramaniam ◽  
Phaik Nie Chin
Keyword(s):  
Risk Taking ◽  
Corporate Performance ◽  
Stock Exchange ◽  
Generalized Method Of Moments ◽  
Negative Relationship ◽  
Ordinary Least Squares ◽  
Executive Management ◽  
Content Type ◽  
Top Executives ◽  
Corporate Risk

PurposeThis study aims to investigate the implication of top executives’ number of years of experience (tenure) on corporate risk-taking behaviour and corporate performance in Malaysian corporations.Design/methodology/approachTo test the hypothesis efficiently, the authors have extracted the data from Bloomberg for 788 listed companies of the Malaysian Stock Exchange. The methodology entails ordinary least squares regressions, quantile regression and dynamic system generalized method of moments model.FindingsFirst, the authors show that executive management tenure has a significant negative relationship with corporate risk-taking. It means that the long-tenured executives tend to undertake less risky strategies and decisions. Second, this study reveals that the longer executive management tenure has a positive relationship with corporate performance. Third, the moderating effect of corporate risk-taking with executive tenure (Tenure dummy*Risk) has a negative relationship with the corporate performance by 1%.Practical implicationsIt implies that the appointment of experienced executive management contributes towards corporate performance directly. However, experienced management trends take less risk, which eventually results in mitigating the corporate performance. On that basis, the findings are significant in highlighting the usefulness of executive leadership term and offers insights to academics, practitioners and policymakers.Originality/valueThis paper is novel since it is unique in evaluating the executive tenure and the preferences to handle risk strategies and how that impact the firm performance.

scholarly journals The Impact of Private Ownership Structure on Risk Taking by Pakistani Banks: An Empirical Study

2018 ◽  
Vol 6 (3) ◽  
Author(s):  
Muhammad Sajjad Hussain ◽  
Muhammad Muhaizam Bin Musa Musa ◽  
Muhammad Muhaizam Bin Musa Musa ◽  
Abdelnaser Omran Ali
Keyword(s):  
Ownership Structure ◽  
Risk Taking ◽  
Negative Impact ◽  
Negative Relationship ◽  
Financial Statements ◽  
International Standards ◽  
Bank Risk ◽  
Private Ownership ◽  
Private Banks ◽  
The Impact

The financial crisis of 2007-09 was converted the focus of researchers and regulators toward bank risk-taking and this study is also analyzed the private ownership structure impact on Pakistani bank’s risk-taking. This study selects the all Pakistani private banks for investigation and data is collected from financial statements from 2005 to 2016. Most of the past studies found a negative impact of private ownership structure on bank risk-taking and this study is also indicated the negative relationship between private ownership and bank risk-taking. On the other, non-performing loans are double than the international standards that highlighted the owner’s attention toward high risky investments for high return. Thus, this study suggests that check this relationship with other factors that forced the owner’s behavior toward risk.

Impact of general trust on bank risk-taking: the moderating effect of confidence in banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Heba Masoud ◽  
Mohamed Albaity
Keyword(s):  
Risk Taking ◽  
Developing Economies ◽  
Negative Relationship ◽  
Developed Countries ◽  
Moderating Effect ◽  
Bank Risk ◽  
World Value Survey ◽  
Mena Region ◽  
Content Type ◽  
General Trust

PurposeThis study examines the effect of general trust (GT) and confidence in banks (CIB) on bank risk-taking. Besides, it explores the moderating role of CIB on the relationship between GT and bank risk-taking.Design/methodology/approachSecondary data was obtained from the World Value Survey, World Bank and BankFocus from 2011 to 2018. Two-step system GMM estimator was used to examine the links between the GT and CIB with bank risk-taking in MENA region.FindingsResults indicated that both GT and CIB negatively influenced bank risk-taking. Moreover, CIB weakened the negative relationship between GT and bank risk-taking. However, the results were different for MENA region as compared to the full sample.Originality/valueThe studies on the link between trust and bank risk-taking are either carried out on an international sample or using a developed economies sample. However, the authors believe that developing economies might exhibit different relationships due to cultural and structural differences present in developed countries. Besides, the authors believe that testing the moderating effect of CIB could shed more light on the differences between developing and developed countries.

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