Firm-level Survey Research Articles

The COVID-19 pandemic and firms’ E-learning use: implications for inequality in training opportunities

This paper investigates whether the adoption of E-learning by firms contributed to offset the decrease in firm-sponsored training during the COVID-19 pandemic. Using a novel firm level survey linked with administrative data on the universe of workers within those firms, I study the role of E-learning in firms’ training activities during the crisis. I find that the COVID-19 pandemic substantially decreased firm-sponsored training by up to 11 percentage points. However, firms’ ability to use E-learning nullifies this negative effect. Furthermore, the differential capabilities of firms to apply E-learning might exacerbate already prevalent inequalities in training opportunities.

The impact of mobile money adoption on firm innovation

Using firm-level survey data for 16 Sub-Saharan African countries, we find evidence that mobile money adoption increases firms’ innovation. Further analysis shows that mobile money fosters innovation by improving firms’ liquidity through greater access to trade credit and bank loans. Our findings suggest that policy measures to stimulate innovation in developing countries could focus on incentivizing firms to adopt mobile money.

Selection and adoption of water purification technologies in the bottled water industry in India

Today, more than sixty per cent of the global bottled water manufacturing takes place in the countries of the global south. Despite being a low-tech sector, the industry is heavily influenced by the advancement and adoption of new water purification technologies and science-based regulations introduced by regulatory agencies. This paper examines the factors and mechanisms through which selection and adoption take place in this sector. The study draws upon firm-level surveys, expert interviews, ethnographic data, and select court cases and policy reports. We find that economic (firm’s size, firm’s age, and ownership structure) and socio-environmental factors (environmental subjectivities of major actors, regulatory (in-) capacity, role of supporting institutions) shape the pattern and combinations of technological adoption and technological changes at the firm level to meet the goals of “safety” and “quality”. However, the use of certain technologies are not devoid of serious environmental and public health concerns. The regulatory actors need to pay closer attention to the direct and indirect impacts of technology use on public health, the economy and the environment to make public policies more just and to meet sustainable development goals.

Understanding eco-innovation in the Hungarian wine sector

PurposeA growing body of literature analyzes eco-innovation in the wine industry, specifically focusing on the internal and external factors that contribute to sustainable innovation in wineries. The purpose of this study is to classify wineries according to their eco-innovation strategy and investigate variations in innovation groups concerning networking and socio-demographic characteristics.Design/methodology/approachThe authors use an original firm-level survey conducted between June 2022 and January 2023 to study eco-innovation practices of 234 Hungarian winemakers using four groups of indicators: marketing, organizational, process and product innovations. The authors apply principal component analysis and cluster analysis to identify eco-innovation dimensions and group wineries. The authors also investigate the relationship between eco-innovation strategies, determinants and firm-specific characteristics.FindingsThe estimations identify two innovation modes: with Cluster 1 (characterized by innovative wineries) surpassing Cluster 2 (comprising less innovative wineries) in all aspects. Marketing and process innovations were more widespread than product and organizational innovations. The results confirm the importance of firm and manager characteristics, corporate organization and size, age and education of management influence innovation activity.Research limitations/implicationsThe cross-sectional nature of the survey provides a snapshot of the wine industry. To identify changing trends, it is beneficial to conduct follow-up research and ongoing monitoring for a more comprehensive understanding of the dynamics of eco-innovation over time. The study offers valuable information about the Hungarian wine sector, but generalization of results to other geographic areas or wine-producing regions should be careful. The unique characteristics of particular regions might have a different effect on the dynamics of eco-innovation. Comparative studies across different wine regions or countries may reveal regional variations in eco-innovation strategies and the impact of local contexts.Practical implicationsThe study highlights the priority of human elements, such as the commitment of owners and managers to sustainability in driving force for innovation. The ability of businesses to absorb new knowledge and the exchange of information within organizations is crucial in promoting innovation. Considering the results of the survey, managers should proactively strive to improve knowledge transfer and information sharing within their organizations and establish cooperative alliances with universities, research institutes, suppliers, industry bodies and associations and global consultancy firms. Such knowledge-based cooperation can counterweight the innovative inertia of the micro and small enterprises representing the Hungarian wine sector.Social implicationsTo address the issue of “innovative inertia” faced by micro and small businesses in the wine sector, policymakers may implement focused supports, such as educational initiatives and grants, to augment their understanding and promote sustainable innovation. They should initiate intra- and inter-cluster connections and cooperations. Incentives, such as tax reduction or financial support, may stimulate wineries to introduce eco-innovation practices. Policymakers could also streamline the process of obtaining funding or grants for wineries interested in investing in cutting-edge solutions, such as renewable energy or advanced cultivation technologies to accelerate the adoption of sustainable practices.Originality/valueThis study contributes to the eco-innovation literature by providing insights into the drivers and practices of wineries in Hungary. The results emphasize the significance of networking, sharing of knowledge and firm/manager-specific characteristics in influencing eco-innovation in the wine industry.

Reverse logistics and financial performance in a developing country context: the moderating role of analytics capability

Purpose This paper aims to examine the financial outcome of reverse logistics among firms in a developing country. The authors draw on the organizational information processing theory to propose that analytics capability moderates the relationship between reverse logistics and financial performance. Design/methodology/approach The authors collected firm-level survey data from 200 manufacturing firms in Ghana, a developing country in sub-Saharan Africa. Partial least squares structural equations modeling is used to examine the proposed relationships, and the moderating effects are further probed using Hayes PROCESS. Findings The empirical results show that reverse logistics is negatively related to financial performance. However, analytics capability attenuates this negative relationship, such that firms with high analytics capability obtain a positive relationship between reverse logistics and financial performance. Practical implications Firms in developing countries should combine their reverse logistics strategies with developing analytics capabilities that help minimize uncertainties and increase the efficient collection and use of information to reduce the cost of reverse logistics. Originality/value This paper examines how reverse logistics relates to financial performance in low-resource contexts. Beyond the novelty of the context, it explores the information processing needs of reverse logistics systems and provides empirical data to support analytics capability. This has yet to be considered in prior studies.

Sisterhood in COVID-19’s she-cession: does stronger female representation mean weaker female discrimination?

PurposeGender equality is an important issue targeted all around the world, see, for example, the Gender Equality Strategy articulated by the European Union (EU). These goals were hindered by COVID-19, which caused a well-documented she-cession: females were hit harder than males. This paper shows that a “sisterhood behaviour” can mitigate the effects of the she-cession: female decision-makers were more likely to favour other females in recruitment and retention.Design/methodology/approachMotivated by theories from psychology and industrial demography, we hypothesise a so-called sisterhood effect or homophily: female decision-makers are more likely to favour other females in recruitment and retention. We use firm-level survey data from 19 European countries collected before and during the first wave of the COVID-19 pandemic, and we apply a difference-in-differences methodology to test the hypothesised sisterhood behaviour.FindingsOur study finds that in firms where the top manager was a woman, gender discrimination was less likely or even not at all presented, i.e. COVID-19 did not decrease the proportion of female employees.Practical implicationsThe results suggest that promoting gender equality in leadership dimensions can also moderate discrimination at the level of the employees. Therefore, in a wider context, gender equality goals are interrelated.Originality/valueTo the best of the author’s knowledge, this paper is the first attempt to analyse the existence of the theories mentioned before in a manager – employee relationship using firm-level data from the COVID-19 period.

Uncertainty and credit conditions: Non-linear evidence from firm-level data

The financial frictions channel highlights the importance of credit conditions for the transmission of rising uncertainty. Using German firm-level survey data for the period 2003 to 2015, we document that a surge in a firm’s business uncertainty worsens its credit conditions. Particularly, we demonstrate that this effect depends on the level of uncertainty: low uncertainty nearly triples the effect compared to high uncertainty episodes. To provide an interpretation, we consider a process in which a firm’s credit conditions are driven by banks’ expectations about the future level of business uncertainty. Increases in uncertainty serve as a signal to update these expectations. Calibrating such a process using our dataset generates a stronger revision of expectations and a larger deterioration of credit conditions under low uncertainty.

Firm automation and global value-chain participation: cross-country analysis

ABSTRACT Using detailed firm-level survey data obtained from the World Bank, the present study examines the role of automation technology in shaping the participation of firms in global value chains (GVCs). For the empirical analysis, a sample of firms from 20 economies over 2016–2019 is obtained. To examine the automation-GVC nexus, the study employs a multilevel probit model, which accounts for the hierarchical structure of the data used. The results stemming from the empirical analysis highlight that automation adoption by firm is positively associated with a firm’s decision to participate in GVCs. Moreover, the results emanating from the multilevel probit analysis are robust to different measures of firm participation in GVC, multiple sub-sample analysis, and endogeneity correction.

Does the Ability to Work Remotely Alter Labor Force Attachment? An Analysis of Female Labor Force Participation

At the onset of the COVID-19 pandemic, a large share of the employed switched to remote work. According to the Bureau of Labor Statistics (BLS)'s Current Population Survey (CPS), almost 40 percent of workers were working remotely in May 2020 because of the pandemic (figure 1, purple line), adding to the evidence from other individual- and firm-level surveys.

Technological Uncertainty and Standardization Strategies: A Coopetition Framework

Standards may be arrived at through various coordination mechanisms, including cooperation, coopetition, or competition. This article explores how technological uncertainty affects the coordination mechanism for standardization. The article is based on the Community Innovation Survey, a sizeable firm-level survey representative of the Luxembourgish economy. The econometric analysis finds evidence that firms facing technological uncertainty will choose for standardization through competition and coopetition.

Allocative Efficiency between and within the Formal and Informal Manufacturing Sectors in Zimbabwe

Abstract Resource misallocation has the potential to reduce aggregate total factor productivity and undermine industrial development. Aggregate productivity losses are found to be particularly pronounced in emerging economies where large market frictions impede efficient resource allocation. Available estimates, however, almost entirely exclude firms in the informal sector that in some countries, such as Zimbabwe, make up a high share of overall production and employment. The exclusion of informal firms can result in either an over- or under-estimate of the aggregate productivity losses from misallocation. This paper, therefore, uses firm-level survey data to analyze how market distortions contribute to the misallocation of resources within and between the formal and informal manufacturing sectors in Zimbabwe. Applying the approach developed by Hsieh and Klenow (2009) to firm-level microdata, the results reveal extensive resource misallocation in both the formal and informal manufacturing sector. Market shares of informal firms are found to be low relative to their productivity—an outcome associated with relatively large capital market distortions. Misallocation is also more pronounced among relatively productive firms, thus exacerbating aggregate losses in total factor productivity (TFP). Estimates indicate that aggregated gains in TFP of 151.4 percent can be realized through efficient resource allocation.

Does Administrative Reform Improve the Business Environment in China? A Mixed-Method Analysis Based on Administrative Burden Theory

Does administrative reform boost the favorable business environment? What is the mechanism underlying such reform? This study explores the relationship between administrative reform and the business environment in China via a mixed-method approach. This paper extends administrative burden theory to government-company interactions and then proposes a framework that bridges administrative reform and the business environment. Based on firm-level survey data and case data, this quantitative analysis confirms that administrative reform can significantly boost the favorable business environment and that administrative burden is a mediating variable during this process. The qualitative comparative analysis contends that there are three different configurations that can boost the favorable business environment: collaborative governance, government-driven, and enterprise-driven configurations. Theoretically, this paper extends the administrative burden theory, which brings companies into this theory as new actors. We also provide reform advice for practitioners.

Exports, Irreversible Investments and Product Market Uncertainty: The Role of Trade Intermediaries

ABSTRACT This paper uses the theoretical underpinnings of the real options theory framework to investigate whether uncertainty affects a firms’ decision to directly export versus indirectly export and to determine whether indirect exports may offset the negative effects of uncertainty on export intensity. Using firm-level survey data of 40 emerging countries, we find that uncertainty and firms’ export intensity are negatively correlated. We also find that an increase in uncertainty increases a firms’ willingness to export through trade intermediaries. These results when considered holistically imply that trade intermediaries are able to countervail the negative effect of uncertainty on firms’ export intensity.

Complementarity between product and process innovation in small and micro-enterprises in Johannesburg, South Africa

ABSTRACT Innovation is important to firms’ productivity, competitiveness, agility, resilience and growth. The success of a firm’s innovation strategy depends in part on how it combines and absorbs different innovation activities. Using the Crépon-Duguet-Mairesse (CDM) structural model, this paper analyses complementarity between product and process innovation for the case of small and micro manufacturing firms in Johannesburg, South Africa. The empirical analysis utilises rich new firm-level survey data that, unlike most firm surveys, includes micro-sized firms as well as informal enterprises. Our results show strong evidence of complementarity between product and process innovations in their effects on firm performance. The results suggest that firm size, capital intensity, firm age, innovation expenditure and financial constraints are key variables associated with complementarity. We extend the specifications used in previous studies to take account of the contextual setting, with split samples by firm formality, ownership and size. We find evidence of complementarity in formal firms only. Our results also show stronger effects of complementarity in micro-firms and foreign-owned firms. The findings have relevance for promoting innovation and for enhancing the effects of innovation on firm performance among micro- and small enterprises (MSEs) in a developing country context.

Corporate social responsibility: Formal versus informal firms

AbstractIn this article, using both cross‐country data including 73 countries, as well as a novel data from a firm level survey covering 1000 firms in Turkey, I investigate the relationship between informality and corporate social responsibility (CSR). Using the firm‐level data, I ask whether corporate social responsibility scores (CSR) and its relationship with firm's expected performance and profitability are different for firms mainly operating in the formal and informal sector. Cross‐country data reveals a significant negative correlation between CSR and informal sector size. On the other hand, using the firm‐level data, I find that firms that tend to engage in informal economic activities have significantly lower CSR scores. Moreover, CSR scores and firms' expected performance are generally positively correlated and this correlation is much less (and even not significantly different from zero in some cases) for informal firms. I also find some evidence that the main reason behind these results might be that firms mainly operating in the informal sector are spending significantly less to R&D and advertising as the relationship between these variables and the firm's performance and profitability is less pronounced for these firms.

The impact of corruption on SMEs’ access to finance: Evidence using firm-level survey data from developing countries

The present paper estimates the impact of bureaucratic corruption on access to finance for small and medium enterprises (SMEs) in the manufacturing sectors of 79 developing countries. Corruption can make it difficult for businesses to obtain financing by reducing profits, increasing credit demand, increasing the likelihood of bankruptcy, creating uncertainty about future profits, and exacerbating the asymmetric information problem between borrowers and lenders. Consistent with this viewpoint, our findings show that corruption significantly increases the likelihood of a manufacturing SME being financially constrained. A one standard deviation increase in the prevalence of corruption leads to a 3.5–4.9% point increase in the likelihood or probability of a manufacturing SME being financially constrained. In countries with credit bureaus and more freely functioning credit markets, the increase in the likelihood of being financially constrained due to higher corruption is much smaller. We argue and provide evidence that these heterogeneities stem from the specific ways in which corruption affects SMEs’ access to finance. Thus, the heterogeneities help to raise confidence against the omitted variable bias and reverse causality concerns with our estimation. We also find that higher corruption makes it more difficult for SMEs to access finance in more competitive product markets, as well as for small compared to medium-sized firms. The findings have important policy implications for anti-corruption initiatives, financial development, and the level of competition in product markets.

Employee ownership in the UK

PurposeThe paper traces the development of employee ownership in the UK since the 1980s. It proposes that employee ownership is a function of macro-level contexts and micro-level decisions, with the latter framed and guided by the former. The macro context comprises the regulatory framework and the provision of incentives to adopt employee ownership. The paper shows how the evolution of these has led to a steep increase in employee ownership in the last eight years.Design/methodology/approachThe paper draws on several sources of empirical data to chart the development of employee ownership in the UK since the 1980s and to identify the current features of employee ownership. Two firm-level surveys conducted in 2015 and 2020/21 are supplemented by qualitative case study data collected in the early 1990s. An annual census of all employee-owned firms facilitates a comprehensive overview of the current state of UK employee ownership.FindingsIt is found that there has been a steep increase in the number of UK employee-owned firms since 2014 after several decades of uneven growth. This is attributed to the introduction of new incentives and to refinements of the regulatory framework. Over the period, there has been a shift from hybrid employee ownership, combining direct and indirect forms, to indirect ownership associated with the employee ownership trust model.Originality/valueThe paper provides an original history of employee ownership in the UK using rich and unique data, along with the most comprehensive picture of current employee ownership to date.

Un-Incorporation and Conditional Misallocation: Firm-Level Evidence from Sri Lanka

Abstract Un-incorporated firms are usually found less productive than their incorporated counterparts. However, little is known about the misallocation conditional on firms’ incorporation status and their productivity. This paper investigates the resource misallocation across un-incorporated firms and gauges the consequent aggregate productivity loss in comparison with their incorporated counterparts. We examine the question by using firm-level survey data from Sri Lanka’s manufacturing sector for 2005–2017 that provide unique information about firms’ corporation status. Our findings suggest that misallocation is more severe in unincorporated firms than in incorporated ones, leading to extra 42 % aggregate TFP loss to the former. By comparing the sources of misallocation between the two types of firms, we find capital is more misallocated relative to output and there is a stronger positive correlation between firm-specific distortion and productivity across the unincorporated firms. Our findings suggest that the un-incorporated firms suffer additional productivity loss at the aggregate level due to misallocation.

Upgrading through global, regional or national value chains? Firm-level evidence from the East African textiles & apparel sector

This paper introduces the concept of value chain directionality to investigate how orientation to different value chains has implications for productive learning and industrial outcomes. We develop and test this concept building on a purposefully designed firm-level survey focused on the textile and apparel value chain in East Africa. Tanzanian and Kenyan textiles and apparel firms lie on a spectrum in terms of their engagement with national, regional and global value chains (NVCs, RVCs and GVCs), with outcomes varying with value chain directionality. GVC firms focus on a narrow range of lower-value functions (mostly garment assembly) while RVC and NVC firms perform a wider range of functions including vertical integration to textile manufacture and higher-value activities such as design and branding, but cases of functional upgrading were rare in all groups. GVC firms were closer to the technological frontier, but RVC and NVC firms were similarly engaged in process upgrading. GVC firms tended to have more complex products than RVC and NVC firms, and only GVC firms had recently engaged in product upgrading. Crucially, results in the area of end market upgrading confirmed the hypothesis that RVCs have the potential to serve as ‘learning grounds’, or ‘stepping stones’ to more demanding but potentially lucrative global markets. In other outcomes, GVCs appear to offer greater prospects for rapid employment generation but RVCs and NVCs tend to favour backward integration by incorporating more locally sourced inputs.

Political regimes and firms' decisions to pay bribes: theory and evidence from firm-level surveys

AbstractThis paper makes the most of the observed actions of bribe takers and givers from the World Bank Enterprise Surveys and studies how a taker's action influences a giver's decision to pay bribes. To motivate our empirical study, we consider Kaufmann and Wei's (1999) Stackelberg game between a tax authority and a firm that undergoes tax inspection. The model predicts that, when the authority can use its action as a credible threat for the firm's profitability, the authority disturbs the firm by inspecting more, and the firm is more likely to pay bribes. Consistent with the theoretical prediction, we find correlational evidence that the propensity to pay bribes increases with the number of inspection visits, particularly for non-democratic countries.