Business Service Industries Research Articles

Robust estimates of exporter productivity premia in German business services enterprises

A large and growing number of micro-econometric studies show that exporting firms are more productive than firms that sell their products on the home market only. This so-called exporter productivity premium qualifies as a stylized fact. Only recently researchers started to look at the role of extreme observations, or outliers, in shaping these findings. These studies use micro-econometric methods that are robust against outliers to show that very small shares of firms with extreme values drive the result. The large exporter productivity premium found for samples of firms including outliers are dramatically smaller in samples without these extreme observations. Evidence on this, however, is limited so far to firms from manufacturing industries. This note adds comparable evidence for firms from the business services industries. We find that the estimated exporter productivity premium is statistically significant and relevant from an economic point of view when a standard fixed effects estimator is used to control for unobserved firm characteristics, but that it drops to zero when a robust estimator is applied.F14

A non-parametric test for industrial specialization

We introduce a non-parametric microdata based test for industrial specialization and apply it to a single urban area. Our test employs establishment densities for specific industries, a population counterfactual, and a new correction for multiple hypothesis testing to determine the statistical significance of specialization across both places and industries. Results highlight patterns of specialization that are extremely varied, with downtown places specializing in a number of service sector industries, while suburban places specialize in both manufacturing and service industries. Business service industries are subject to more specialization than non-business service industries while the manufacturing sector contains the lowest representation of industries with specialized places. Finally, we compare results for specialization with localization and show that both measures contribute to our understanding of industry and place specific agglomerative forces.

International Consistency of Auditor Specialization

The objective of this paper is to investigate whether auditor industry specialization is consistent across countries. If the specialized knowledge of auditors can be transferred from one country to another, we can expect that international audit firms show consistent patterns of industry specialization across countries. The literature uses two constructs to measure specialization: the market share of an auditor in a specific market, and a portfolio approach focusing on the major industries in the portfolio of clients of the auditor. Using both approaches on data relating to 28,352 European companies, we find that some European industries, and more specifically the chemical and the business services industries, show a high degree of consistency with respect to the market shares of the international audit firms. We also find evidence of specialization of individual audit firms in specific industry segments.

Corporate Reputation And Technical Efficiency: Evidence From The Chemical And Business Services Industries

<p class="MsoNoSpacing" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-family: "Times New Roman","serif"; color: black; font-size: 10pt; mso-themecolor: text1;">Recent financial scandals have created uneasiness in our financial markets. This resulting crisis of confidence increases the importance of reliably assessing firm performance. How can investors and creditors confidently assess firm performance? Can firm reputation provide signals about firm performance and efficiency? The purpose of this paper is to examine the association between corporate reputation and efficiency, a dimension of firm performance. We obtain a measure of a firm’s technical efficiency by using Data Envelopment Analysis (DEA), a non-parametric technique. We use firms from America’s Most Admired Companies list of 2006 as our measure of firm reputation. Results support the hypothesis that firms with superior reputation operate more efficiently than matched firms in the business services (SIC = 73) and chemical (SIC = 28) industries. The results should be of interest to managers who engage in behavior leading to or maintaining a positive corporate reputation. Also, the results can increase individual investors’ confidence in investing companies with superior reputation. </span></p>

TRADEMARKS AS INNOVATION MEASUREMENT FOR KNOWLEDGE INTENSIVE BUSINESS SERVICES

Innovation measurement in the knowledge intensive business services (KIBS) industry is highly complex because of the lack of adequate indicators of innovation. A new empirical approach to such meas...

Being numerous does not yield efficiency - Productivity and entry-exit determinants in European business services

The paper investigates whether the poor productivity performance of the European business services industry is related to scale effects, market structure, and regulatory impacts. We apply parametric and nonparametric methods to estimate the productivity frontier and so obtain the distance of firms to the productivity frontier, using detailed industry-level panel data for 13 EU countries. Subsequently, we investigate how scale effects, market structure, and national regulation explain the distance with the productivity frontier. We find that that most scale advantages are exhausted after reaching a size of 20 employees. However, scale inefficiency is persistent over time, which suggests weak competitive selection. Market and regulation characteristics explain the persistence of X-inefficiency (sub-optimal productivity relative to the industry frontier). Entry and exit dynamics increase the productivity performance, while higher market concentration works out negatively. National regulatory differences also explain part of the productivity performance, especially if this affects exit behaviour and labour reallocation costs. The most efficient scale in European business services is achieved with close to 20 employees. Scale inefficiencies show a hump-shape pattern with strong potential scale-related productivity gains for the smallest firms, while the largest firms experience persistent scale- related diseconomies, suggesting that they operate in shielded monopolist markets. The smallest firms operate under competitive conditions, but they are too small to be efficient. And since this conclusion holds for about 95 out of every 100 European business services firms, this factor weighs heavily for the overall productivity performance of this industry.

Viewpoint: Canʼt Get No Satisfaction? The Real Truth Behind Patient Satisfaction Surveys

Viewpoint: Canʼt Get No Satisfaction? The Real Truth Behind Patient Satisfaction Surveys

“Making Connections”: Insights into Relationship Marketing from the Australasian Stock and Station Agent Industry

Relationship marketing has received little attention from business historians who have favored the study of branding, associational advertising, market research, and the role of marketing agencies, particularly in relation to modern consumer manufacturing. Although the term relationship marketing is of recent origin, we analyze its practice under a different guise, “connections,” over several centuries: we draw on the extensive archival evidence of a rural business services industry in Australia and New Zealand. Relationship marketing's emphasis upon close and enduring individual customer relationships mitigated uncertainty of performance and behaviour, on both sides of the transaction, created by a long and geographically extended supply chain. The success of these relationships contributed to the primary industry-led economic development of both nations.

“Making Connections”: Insights into Relationship Marketing from the Australasian Stock and Station Agent Industry

Relationship marketing has received little attention from business historians who have favored the study of branding, associational advertising, market research, and the role of marketing agencies, particularly in relation to modern consumer manufacturing. Although the term relationship marketing is of recent origin, we analyze its practice under a different guise, “connections,” over several centuries: we draw on the extensive archival evidence of a rural business services industry in Australia and New Zealand. Relationship marketing's emphasis upon close and enduring individual customer relationships mitigated uncertainty of performance and behaviour, on both sides of the transaction, created by a long and geographically extended supply chain. The success of these relationships contributed to the primary industry-led economic development of both nations.

Social Responsibility and Firm Efficiency in the Business Services Industry

Assumed performance benefits are often used as motives to drive coporate social responsibility (CSR) initiatives. Is improved efficiency among these performance benefits generated by CSR initiatives? This study empirically examines the association between corporate social responsibility and the efficiency dimension of firm performance. The relationship between corporate social responsibility and financial performance has received increasing and conflicting attention in recent years. Its role in maximizing shareholder wealth is still a subject of continued debate. Turning attention to efficiency examines another dimension of performance. Specifically, we examine the association between corporate social responsibility (CSR) and efficiency in the business services industry from 2005 to 2007. We measure efficiency using the relative efficiency score calculated by Data Envelopment Analysis (DEA). CSR is measured using Kinder, Lydenberg, and Domini (KLD), Inc. data. Results document evidence to support a positive association between CSR and firm efficiency. Documenting these potential efficiency benefits from CSR has important implications for CSR activities and initiatives particularly in our current turbulent economy. It supports recent work that links CSR with dimensions of improved competitiveness (Vilanova et al., 2009) including efficiency. The documented efficiency benefits of CSR are useful to businesses and support CSR strategies focused on “doing well by doing good”.

Cross-border acquisition abandonment and completion: The effect of institutional differences and organizational learning in the international business service industry, 1981–2001

Based on the concepts of North's (1990) political economy of national institutions and economic behavior, we investigate how formal and informal institutional features influence the likelihood that a cross-border acquisition deal will be completed, as well as the time taken for its completion after announcement. Additionally, we study how past experience with completed acquisition deals moderates the effects of institutional differences. We focus on a relatively new context – the pre-completion stage of acquisition processes. We test our hypotheses using data from 2389 announced cross-border acquisition deals in the international business service industry (1981–2001). We find that differences in national formal and informal institutions explain part of the variation in the likelihood that an announced cross-border acquisition deal will be completed, as well as the duration of the deal-making. In addition, organizational learning moderates the effects of institutional distance: past experience with completed cross-border acquisition deals increases the likelihood of a subsequent deal completion in institutionally closer environments, but shortens the deal duration in institutionally distant environments.

Reform and opening up in the area of circulation: a retrospect

中国流通领域的改革开放是建立社会主义市场经济体制的重要内容。改革开放之前，中国流通领域长期存在高度集中而又封闭分割的特征，国内与国外市场、内贸与外贸相互隔绝，存在两个管理体制和两种政策环境。经过30年的改革开放，中国流通领域的体制环境已经面貌一新，开放型现代流通体制框架已经初步建立，与WTO接轨的商务管理体制已见雏形，商贸服务业的产业延伸促进了体制创新。改革的主要经验是，以对外开放为先导，以开放促改革；改革遵循先易后难、边破边立、逐步完善的渐进路径；突破传统商品流通领域框架，建立了容纳更多服务业的新商务体制。改革经验的经济学含义是，选择出口导向开放战略作为改革突破口具有必然性；商品与服务流通的市场结构与人力资本存在内在联系；扩大非物质产品流通是体制创新的重要基础。 China's reform and opening up in the area of circulation are an important component of the establishment of a socialist market economy system. Prior to reform and opening up, this area had long been characterized by a high level of centralization, closedness and segmentation. The domestic market was isolated from the overseas market and internal trade from foreign trade, and each had its own management system and policy environment. The thirty years of reform and opening up, however, have put a new face on the institutional environment of circulation: an open and modern system of circulation has been basically established, an embryonic WTO‐consistent business administration system is taking shape, and the extension of business and trade service industries has facilitated institutional innovation. The main experience of reform is the following: first, taking opening up as the leading principle and making use of opening up to promote reform; second, following an incremental path of dealing with the easier issues before the harder ones, building up while you tear down, and gradual improvement; and third, breaking through the traditional framework of commodity circulation and establishing new business systems that accommodate more service industries. The economic implication of China's reform experience is as follows: an export‐oriented strategy must inevitably be chosen as the point of entry for reform; there is an inherent linkage between market structure and human capital in the circulation of goods and services; and expanding the circulation of non‐material goods is an important basis for institutional innovation.

The contribution of Information and Communication Technology investments to Greek economic growth: An analytical growth accounting framework

Information and Communication Technology (ICT) investments are the driving force behind the resurgence of growth in the developed countries during recent years. They are also the main reason for the increased growth rates of Total Factor Productivity (TFP). In this paper, we examine whether these relationship also hold for Greece. We use a neoclassical growth accounting model to identify the sources of growth and more specifically the role of ICT investments. We find that the contribution of ICT investments has increased during the period 1988–2003, but that this contribution is still lower than in the United States. During 1996–2003, ICT capital services contributed 0.75 to the total growth rate. We also examine the role of ICT investments at the industry level; we find that ICT investments have most benefited the Finance, Insurance, Real Estate and Business Services industries, and the Wholesale and Retail Trade industries. Finally, our results show that growth rates of TFP have also risen, a necessary condition to maintain the high growth rates of productivity in the future.

Innovation in a creative production system: the case of design

This article addresses the relatively neglected issue of variations in the degree of innovation and creativity within cultural production systems, paying particular attention to the design consultancy industry. It argues that design is a business-facing type of creative industry that differs in important ways from other types of cultural industries. It examines some of the implications of this argument for how we should understand innovation and its geography in the industry. It is argued that previous studies have paid too much attention to place-based creative inspiration, thereby downplaying the business ecosystems and firm architectures that drive innovation. It is argued that design innovation requires the combination of a wide range of different types of knowledge. Design emerges from interactions between different sites that synthesize and recombine knowledge so as to produce emergent effects and new designs. The article examines two of the key sites: the market or agency-client link and the design firm itself. It argues that relations with clients, and firm routines and competences, are much more important to design innovation than inter-firm co-operation or the local cultural environment. In conclusion it argues that economic geographers should be wary about using approaches to innovation derived from either cultural or manufacturing industries to explain the local ecology of design, but should devote more research to examining the distinctive logics of innovation in creative, knowledge intensive business service industries.

Business services and the knowledge economy in Malaysia

PurposeThis paper aims to argue that the World Bank‐sanctioned strategy of investing in knowledge economy infrastructure will not make a developing country competitive in the highest value activities such as research, design and innovation.Design/methodology/approachThe paper examines Malaysia's efforts to increase its national income and change its position from a “middle‐income” country to one with a standard of living equivalent to a developed country by 2020. Specifically, it analyses Malaysia's strategy of constructing a multimedia super corridor, a multibillion‐dollar state‐led project to attract knowledge‐intensive operations to Malaysia.FindingsDespite the creation of a world‐class infrastructure, the Malaysian government has not been successful in realising its original aim of creating a cutting‐edge multimedia research and development hub. Instead a thriving business support services sector has developed. Therefore, it is by no means a guaranteed way to close the gap between rich and poor nations.Research limitations/implicationsOfficial data relating to the activities of firms not only are limited but also have been made problematic by changes in categorisation over the relevant years. Analysis that is more conclusive requires the publication of official data with greater detail about firm activities and a standardised reporting format over time.Originality/valueThis is one of the first academic studies discussing the rise of the business services industry in Malaysia and its relationship with the MSC infrastructure development project.

Geographical externalities of local real estate markets

PurposeDespite the recent trend of off‐shoring branches of UK services industry to remote locations, urban theory has yet to enlist a theory of industrial rents that formally takes into account the properties of substitution between locations. The purpose of this paper is to elaborate on the Fujita, et al. model in order to develop theoretical foundations for a pricing theory of contemporary commercial real estate markets.Design/methodology/approachThe paper employs panel data methods for the simultaneous estimation of local market rent structures, which include a complex of spill‐over effects from all other parts of the national market. The estimations are based on time series of locally adjusted estimates of tenancy demand and supply proxies for 48 UK office centres. Influences from the entity of UK regions are considered by applying a variety of deterministic and stochastic structural variability tests. The estimated structures are subjected to multivariate co‐integration tests for an examination of the stability of structural differentials.FindingsThe paper appears to find considerable support to the hypothesis that rental spill‐overs exist across the network of office centres in the UK. It suggests that the structure of these markets is characterised by certain properties of substitution and complementarity that have generally been observed in a wide range of real consumer or producer markets. This finding is critical to the development of a policy theory for national planning, which takes into account the impacts of local planning policies on national aggregate economic welfare.Research limitations/implicationsThis analysis is limited by the unavailability of a coherent theoretical micro‐economic framework, which may be the focus of further research.Originality/valueThe focus of this paper is on offices and business services industry but the principles can be extended to include industrial space. The paper questions some of the central assumptions and methodological approaches used in existing industrial location theory. It proposes a model that considers location pricing and allocation in relation to strategies to improve the spatial organisation of multinational services firms.

Institute of Directors’ certificate in company direction

The chief executive of the NHS, David Nicholson, is on record as saying that in the next couple of years he wants a doctor to be applying for every chief executive position advertised. Even if this is not achieved within this ambitious timeframe, it is widely acknowledged that clinicians must be more engaged in the direction and management of the NHS. If this is to be achieved, it is essential that more doctors undertake further development of their management knowledge and skills. Current directors (both established, and new to the role), and senior executives preparing to become directors, in public, private, and not for profit organisations. The participants on my course represented a range of business backgrounds, namely manufacturing, retail, and service industries; I was the only health professional. I had been a consultant in palliative medicine for more than 12 years, and director of medical services in a …

THE EFFECT OF ACQUISITION EXPERIENCE, INSTITUTIONAL CONTEXT AND NATIONAL CULTURE ON CROSS-BORDER MERGER ABANDONMENT AND COMPLETION.

In this study, we offer a first attempt to explain two phenomena that, to the best of our knowledge, were ignored in the literature: (a) the likelihood that an announced M&A deal will be abandoned or completed; and (b) the duration between the announcement and completion of an M&A deal. In so doing, we shift the attention from post-M&A performance to the pre-M&A process. We believe the latter is interesting in its own right, as many announced M&A deals are never completed or take a long time to be finalized. We explored these issues by applying an extended transaction cost perspective, merging in insights from behavioral and institutional theories. That is, we construct experience (behavioral theory) and distance (institutional theory) variables that we argue to affect the level of an M&A deal's transaction costs. We test our hypotheses with of 3,851 international M&A events that were announced in the worldwide business service industry between 1981 and 2001. A complex set of results is produced, suggesting that indeed firm experience and country distance affect M&A completion and duration.

What Do Census Data Tell Us About Headquarters Location?

This article provides insight into several topics that are closely linked with firms’ decisions on headquarters location. Reviewing previous studies, the author examines characteristics of firms that have stand-alone headquarters and compares them with the characteristics of firms that perform management at their production facilities. The frequency of openings and closings of headquarters is also examined. The locations of headquarters are further compared with the geographical distribution of other economic activities among major U.S. metropolitan areas. The author then shifts the focus to New York City, which is often considered the nation’s primary headquarters center, and compares New York’s Primary Metropolitan Statistical Area’s share of headquarters with its share of business service industries. The author then looks into the distribution of headquarters and other service industries in Manhattan, points out their differences, and provides possible explanations.

Does Mentor Support Increase Women's Career Advancement More than Men's? The Differential Effects of Career and Psychosocial Support

Based on past research on mentoring, this study examined whether mentor career support helped women's career advancement more than it did men's, and more than psychosocial (emotional) support did. The sample of 3220 Australians, chiefly from the public sector and finance and business service industry, was surveyed twice, a year apart. Mentor career support increased women protégés' advancement more than it did men's, whereas psychosocial support generally reduced women's advancement more than it did men's. Unexpectedly, female mentors, not males, had the strongest effects, both helping and hindering their protégé's advancement. Mentor support was not related to men's advancement. Why mentoring was differently related to men's and women's advancement was discussed.