scholarly journals Procuring Firm Growth: The Effects of Government Purchases on Firm Dynamics

2015 ◽  
Author(s):  
Claudio Ferraz ◽  
Frederico Finan ◽  
Dimitri Szerman
Keyword(s):  
Firm Growth ◽  
Firm Dynamics ◽  
Government Purchases

scholarly journals Lack of Selection and Limits to Delegation: Firm Dynamics in Developing Countries

2021 ◽  
Vol 111 (1) ◽  
pp. 231-275
Author(s):  
Ufuk Akcigit ◽  
Harun Alp ◽  
Michael Peters
Keyword(s):  
United States ◽  
Developing Countries ◽  
Firm Growth ◽  
Firm Dynamics ◽  
Fixed Time ◽  
The United States ◽  
Factors Affecting ◽  
Poor Countries ◽  
Managerial Practices ◽  
Managerial Delegation

Delegating managerial tasks is essential for firm growth. Most firms in developing countries, however, do not hire outside managers but instead rely on family members. In this paper, we ask if this lack of managerial delegation can explain why firms in poor countries are small and whether it has important aggregate consequences. We construct a model of firm growth where entrepreneurs have a fixed time endowment to run their daily operations. As firms grow large, the need to hire outside managers increases. Firms’ willingness to expand therefore depends on the ease with which delegation can take place. We calibrate the model to plant-level data from the United States and India. We identify the key parameters of our theory by targeting the experimental evidence on the effect of managerial practices on firm performance from Bloom et al. (2013). We find that inefficiencies in the delegation environment account for 11 percent of the income per capita difference between the United States and India. They also contribute to the small size of Indian producers, but would cause substantially more harm for US firms. The reason is that US firms are larger on average and managerial delegation is especially valuable for large firms, thus making delegation efficiency and other factors affecting firm growth complements. (JEL D22, G32, L25, L26, O14)

Book Reviews

2011 ◽  
Vol 49 (4) ◽  
pp. 1291-1294
Keyword(s):  
Firm Growth ◽  
De Novo ◽  
Firm Dynamics ◽  
Assistant Professor ◽  
Entrepreneurial Firms ◽  
New Firms ◽  
Industrial Economics ◽  
National University ◽  
Knowledge Intensive ◽  
Start Ups

Markus Taussig of National University of Singapore reviews “Knowledge Intensive Entrepreneurship: The Birth, Growth and Demise of Entrepreneurial Firms” by Frédéric Delmar and Karl Wennberg. The EconLit abstract of the reviewed work begins, “Investigates the entrepreneurial processes of new firms' emergence, growth, and eventual demise and exit in the modern knowledge-intensive economy. Discusses the role of entrepreneurship and new firm dynamics for economic development; the knowledge intensive sector--theoretical concerns, research design, and data; the birth of new firms--the geography connection; firm exit; de novo and spinout start-ups--the organizational connection; and firm growth. Delmar is at EMLYON Business School and the Research Institute of Industrial Economics. Wennberg is Assistant Professor at the Stockholm School of Economics. Index.”

An Evolutionary Simulation Model of the Effect of Innovation and Firm Dynamics on Market Power

2016 ◽  
Vol 5 (3) ◽  
pp. 31-49 ◽  
Author(s):  
Juan Luis Santos ◽  
Tomás Mancha Navarro ◽  
Federico Pablo-Martí
Keyword(s):  
Market Power ◽  
Firm Growth ◽  
Evolutionary Model ◽  
Firm Dynamics ◽  
Current Crisis ◽  
Industrial Sectors ◽  
Product And Process Innovation ◽  
Evolutionary Simulation ◽  
Product And Process ◽  
Business Concentration

This paper presents an agent-based simulation with the main insights from business theory to study firm growth and firm dynamics in a stochastic evolutionary model. Firm growth behavior and firm dynamics are defined according to the results of a panel data for a set of manufacturing markets for the Spanish economy. Then the effect of the economic growth on firm dynamics and subsequently the effect on market power are determined. The article shows that since the emergence of the current crisis three industrial sectors have increased business concentration. These three sectors were the ones with the highest concentration out of the five sectors studied. Product and process innovation are also included in the model and how they modify production and demand. The model presented also shows how firms adapt to changes in desired product characteristics and the effect of crisis on these dynamics.

CAN STATISTICAL PHYSICS CONTRIBUTE TO THE SCIENCE OF ECONOMICS?

Fractals ◽  
1996 ◽  
Vol 04 (03) ◽  
pp. 415-425 ◽  
Author(s):  
MICHAEL H. R. STANLEY ◽  
LUÍS A. N. AMARAL ◽  
SERGEY V. BULDYREV ◽  
SHLOMO HAVLIN ◽  
HEIKO LESCHHORN ◽  
...  
Keyword(s):  
Firm Size ◽  
Growth Rates ◽  
Statistical Physics ◽  
Firm Growth ◽  
Building Blocks ◽  
Firm Dynamics ◽  
Scaling Theory ◽  
Time Interval ◽  
Large Firms ◽  
The Relationship

In recent years, a breakthrough in statistical physics has occurred. Simply put, statistical physicists have determined that physical systems which consist of a large number of interacting particles obey universal laws that are independent of the microscopic details. This progress was mainly due to the development of scaling theory. Since economic systems also consist of a large number of interacting units, it is plausible that scaling theory can be applied to economics. To test this possibility we study the dynamics of firm size. This may help to build a more complete characterization of the nature and processes behind firm growth. To date, the study of firm dynamics has primarily focused on whether small firms on average have higher growth rates than large firms. To a lesser extent, attention has been placed on the relationship between firm size and variation in growth rate. Our research goes beyond these questions by looking at the relationship between numerous firm characteristics and the entire distribution of growth rates. Thus, it may provide a better understanding of the mechanisms behind firm dynamics. In contrast to previous studies, this research analyzes data over many time scales, instead of just a single time interval. From a scientific standpoint, this work could be useful because it will affect the formulation of firm modeling—one of the basic building blocks of all economic analysis. In addition, this work will have practical applications. For example, there are Federal policies that are designed to encourage small businesses. While such policies might be justified on grounds other than their contribution to growth, any systematic difference in the growth rates of small and large firms might be relevant for evaluating such policies. Also, there has traditionally been a concern that an excessive amount of economic activity might become concentrated in a small number of firms. A more detailed understanding of the firm growth process will provide evidence for whether such concerns have any scientific foundation.

scholarly journals Advertising, Innovation, and Economic Growth

2021 ◽  
Vol 13 (3) ◽  
pp. 251-303
Author(s):  
Laurent Cavenaile ◽  
Pau Roldan-Blanco
Keyword(s):  
Economic Growth ◽  
Endogenous Growth ◽  
Firm Size ◽  
Firm Growth ◽  
Firm Heterogeneity ◽  
Negative Relationship ◽  
Firm Dynamics ◽  
Empirical Regularities

This paper analyzes the implications of advertising for firm dynamics and economic growth through its interaction with R&D. We develop a model of endogenous growth with firm heterogeneity that incorporates advertising decisions and calibrate it to match several empirical regularities across firm size. Our model provides microfoundations for the empirically observed negative relationship between both firm R&D intensity and growth and firm size. In the calibrated model, about half of the deviation from proportional firm growth is attributed to our novel advertising channel. In addition, R&D and advertising are substitutes, a prediction for which we find evidence in the data. (JEL D22, E23, H25, L25, M37, O32)

The Nature of Firm Growth

2021 ◽  
Vol 111 (2) ◽  
pp. 547-579
Author(s):  
Vincent Sterk ◽  
Petr Sedláček ◽  
Benjamin Pugsley
Keyword(s):  
Firm Size ◽  
Firm Growth ◽  
High Growth ◽  
Firm Dynamics ◽  
Dynamics Model ◽  
Firm Level ◽  
Firm Size Distribution ◽  
Ex Post ◽  
Ex Ante ◽  
Macroeconomic Effects

About one-half of all startups fail within five years, and those that survive grow at vastly different speeds. Using Census microdata, we estimate that most of these differences are determined by ex ante heterogeneity rather than persistent ex post shocks. Embedding such heterogeneity in a firm dynamics model shows that the presence of ex ante heterogeneity (i) is a key determinant of the firm size distribution and firm dynamics, (ii) can strongly affect the macroeconomic effects of firm-level frictions, and (iii) helps understand the recently documented decline in business dynamism by showing a disappearance of high-growth startups (“gazelles”) since the mid-1980s. (JEL D22, D24, E24, J23, L11, M13)

On Mechanisms of Realization of the Public Procurement of Construction Works (The Case of Road Const ruction)

2003 ◽  
pp. 68-80
Author(s):  
A. Dementiev ◽  
A. Zolotareva ◽  
A. Reus
Keyword(s):  
Public Procurement ◽  
Road Construction ◽  
International Experience ◽  
The Public ◽  
Government Purchases ◽  
Efficiency And Effectiveness ◽  
Construction Works ◽  
Budget Expenditure

The most important measures stimulating the increase of efficiency and effectiveness of budget expenditures on road construction are the improvement of pricing mechanisms and increasing efficiency of the procedures of government purchases of goods, works and services. The paper includes the analysis of main problems that arise in the process of government purchases and construction pricing with the reference to budget expenditure on road construction. It includes the review and analysis of international experience and possible measures of increasing the efficiency and effectiveness of government purchases and (road) construction pricing in Russia.

The Effect of Taxation and Corruption on Firm Growth: An Empirical Investigation for Vietnam

2016 ◽  
pp. 5-29
Author(s):  
Bich Le Thi Ngoc
Keyword(s):  
International Development ◽  
Firm Growth ◽  
Empirical Investigation ◽  
Manufacturing Firms ◽  
Economic Management ◽  
Tax Rate ◽  
Percentage Point Increase ◽  
Percentage Points ◽  
Point Increase ◽  
The Impact

The aim of this study is to analyze empirically the impact of taxation and corruption on the growth of manufacturing firms in Vietnam. The study employed pooled OLS estimation and then instrument variables with fixed effect for the panel data of 1377 firms in Vietnam from 2005 to 2011. These data were obtained from the survey of the Central Institute for Economic Management and the Danish International Development Agency. The results show that both taxation and corruption are negatively associated with firm growth measured by firm sales adjusted according to the GDP deflator. A one-percentage point increase in the bribery rate is linked with a reduction of 16,883 percentage points in firm revenue, over four and a half times bigger than the effect of a one-percentage point increase in the tax rate. From the findings of this research, the author recommends the Vietnam government to lessen taxation on firms and that there should be an urgent revolution in anti-corruption policies as well as bureaucratic improvement in Vietnam.

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