Types Of Firms Research Articles

Assessing the size and growth of the US wetland and stream compensatory mitigation industry.

Interest has focused on quantifying the size and scope of environmental markets, particularly those that offset ecosystem impacts or restore natural infrastructure to improve habitat or promote clean air and water. In this paper, we focus on the US wetland and stream compensatory mitigation market, asking: what types of firms make up the mitigation "industry"? What are the economic impacts-i.e., the "size"-of the mitigation industry? How has this industry changed over time? We present the results of a national survey of mitigation firms and construct an input-output model of the industry's economic impacts and employment. We also develop a comparative, 2014 model of the industry using data from a previous study of the broader, ecological restoration economy. Our findings suggest that the (2019, pre-COVID) mitigation industry collects annual revenues (direct economic impacts) in excess of $3.5 billion, which, along with additional indirect (supply chain) and induced (spillover) economic impacts, combine to over $9.6 billion in total output and support over 53,000 total jobs. We estimate 2014-2019 growth of ~35.2 percent in revenues, ~32.6 percent in total economic impacts, and a compound annual growth rate (CAGR) of 5.25%. This places the mitigation industry within the range of other, well-established industries within the technical services sector. We suggest establishing North American Industry Classification System (NAICS) codes specifically for ecological restoration and mitigation firms, an essential step in generating accurate and consistent employment estimates in the future, particularly at sub-national geographic scales.

The gender gap in performance reviews

Performance reviews are correlated with compensation, promotion, and career decisions in the labor market. Using data from Reflektive, formerly an employee performance management company, I examine gender differences in over 100,000 performance reviews for 170 companies across 12 different industries. I find that women rate their performance lower than men, and these differences persist when accounting for external manager and peer reviews of the worker's performance. The gender gap in how women versus men rate themselves as compared to their managers persists across different types of industries, firms, reviewers, and workers, highlighting the generalizability of the results. These findings may have implications for self-promotion in other high-stakes labor market settings.

The Direct Effect of Corporate Law on Entrepreneurship

Abstract From 1946 to 1983, US states modernized their corporate law by adopting the Model Business Corporation Act (MBCA), a compendium of legal best practices. Better corporate law increased entrepreneurship. After the adoption of the MBCA, the number of new local corporations increased by 26% on average, half of which was substitution from other firm types, and the rest was net-new firms. States that only partially adopted saw no benefit, and the largest increases were concentrated in regions with ex ante lower quality law. At the individual level, people in states adopting the MBCA also report higher self-employment levels, but not higher wage employment or labor force participation. Consistent with the MBCA increasing efficiency and decreasing regulatory capture, the effect was larger for women, black, and those located outside the central city.

Designing policy based on entrepreneurial venture type: the effects of innovation, hiring practices and patent ownership on enterprise development

PurposeThe Italian government enacted two laws: ruling innovative startups (Law 221/2012) and innovative SMEs (Law Decree 3/2015), respectively. Despite renowned differences between them, the parameters selected and included in these laws are the same: investments in research and development (R&D) activities, hiring specialized researchers and holding patents/property rights. Taking a cue from the Italian case, the following research question emerges: whether small business policies, concerning innovative startups and SMEs, should be differentiated to be effective and support enterprise development. The Italian case is invoked to offer suggestions and recommendations to policymakers around the world.Design/methodology/approachStochastic frontier analyses (SFA) were conducted by using data provided by the Italian Ministry of Economic Development (MISE) about 14,595 innovative startups and 2,338 innovative SMEs.FindingsStatistical results reveal that enterprise development processes are different between innovative startups and SMEs. Innovative startups may start a virtuous model, while innovative SMEs may not. This corroborates the idea that small business policies need to be differentiated in order to be effective.Originality/valueUnlike other papers, small businesses are not considered as a whole. Innovative startups and SMEs are two different types of firms, so specific investigations are conducted to remark on the already-known differences and disclose new ones.

The impact of green finance policy on total factor productivity: Based on quasi-natural experiment evidence from China

Treating the implementation of green finance policy as a quasi-natural experiment, we explore its effect on the total factor productivity of firms, then perform several tests to illustrate the stability of this effect, and then explain this effect based on financing constraint and technological innovation. It has been found that the green finance policy has an inhibitory effect on total factor productivity, which is validated in various tests including the parallel trend test, the heterogeneity treatment effect test, and the robustness test including the placebo test and endogeneity test. The heterogeneity analysis shows that different ownership types and industry type of firms have different impacts on this effect. Further extended analysis reveals that the policy leads to the flow of financial resources from polluting firms to non-polluting firms. There is no significant improvement in technological innovation in non-polluting firms, while there is a significant decline in technological innovation in polluting firms due to lack of credit support. Finally, we make several recommendations based on our findings to achieve precise implementation of the green finance policy.

Export duration and firm markups: evidence from China

Against the backdrop of China’s upgrading of its openness to the outside world, analyzing the impact of export markets on a firm’s markup—an important indicator of a firm’s pricing power and market power—is of great significance for improving the firm’s international competitiveness and the benefits of the global value chain. This study theoretically and empirically examines the effect of export duration on firm markups using micro data from Chinese manufacturing enterprises. According to a theoretical study, an increase in export duration will result in an increase in firm markups via the “production efficiency” channel but a decrease in firm markups via the “market-based pricing” channel. Therefore, the impact of an increase in export duration on the markups of firms is uncertain. Results of the empirical analysis reveal that the positive impact of an increase in export duration on the markups of Chinese manufacturing firms via the “production efficiency” channel is higher than the negative impact of an increase in export duration via the “market-based pricing” channel. Overall, the increase in export duration has a positive impact on Chinese manufacturing companies’ markups. This conclusion is valid after a series of robustness tests. Further analysis reveals that the impact of export duration on the markups of different types of Chinese manufacturing firms differs, and significant heterogeneity exists. This research can help us better understand how Chinese export firms fall into the “low markup trap” and offer fresh insight into how export markets affect company markups.

Assessing innovation spillovers from publicly funded R&D and innovation support: Evidence from the UK

Knowledgeembodied, explicit, and tacit - drives innovation. Research and development and other knowledge creation activities play a key role, as does the type of external knowledge sourcing central to models of open innovation. As knowledge is a semi-public or public good, however, firms may also obtain knowledge unintentionally through spillovers. We provide the first comprehensive analysis of the innovation spillovers from publicly funded R&D and innovation support activities in the UK to non-participating firms. Analysis is based on matched data from Gateway to Research, the UK Innovation Survey and the Business Structures Database. Conceptually we differentiate between horizontal (intra-industry), vertical (inter-industry) and university spillovers, each of which have different impacts. We also differentiate between the type of firms impacted by spillovers of each type and their position inside and outside clusters. Both reflect firms’ ability to appropriate spillover benefits. Spillovers prove weak in some instances and often limited in scale. University spillovers prove weak, although there is some evidence of a positive effect on patenting in high-tech and larger firms, and on new-to-the-market innovation in low-tech firms. Horizontal spillovers effects prove strongest in some rather specific regions, perhaps reflecting the relevance of industrial clustering in mediating knowledge spillovers, while vertical (inter-industry) effects prove more significant across a wider range of areas. Our study sheds new light on the mechanisms through which investment in the public science system has unintended innovation effects.

Recruiting and integrating international high-skilled migrants – Towards a typology of firms in rural regions in Germany

In rural regions in Germany, significant demographic shifts have raised the question as to whether increased employment of international high-skilled migrants can help to address pressing challenges, i.e., a shortage of labor, a lack of corporate internationalization, and reduced innovation activities. While firms play a key role in this context by actively recruiting migrants and harnessing their skills and competences, little is still known about how they differ in harnessing the potential of high-skilled migrants. With this as a starting point, we develop a typology of firms that distinguishes between four types of firms (introverted, absorptive, enthralled, and outgoing firms). Using the example of Thuringia, a predominantly rural federal state in East Germany, and based on a method mix that includes quantitative and qualitative elements, we explore these types in detail, analyze their spatial distribution and discuss options to unlock the potential associated with the employment of international high-skilled migrants.

The competition between legal and illegal firms in the market: Theoretical models and empirical evidence

The main aim of this paper is to study the phenomenon of the coexistence of firms with illegal characteristics and firms showing legal behaviour in developed economies by using an evolutionary competition model known as the Lotka-Volterra equations. Enterprises in a ‘legal system’ obey the extant laws, particularly market rules, while enterprises in an ‘illegal system’ disregard them. Illegal enterprises have a competitive advantage over legal enterprises, yet they cannot survive if legal enterprises disappear completely. The numerical solution of the Lotka-Volterra equations are used to show how there can be a situation of coexistence between legal and illegal enterprises and how state intervention can help reduce illegality in an economic system. This paper outlines a new approach to address the problem of coexistence because it uses non-linear and evolutionary tools to define the competition between legal and illegal firms. The research gap presented in this paper is addressed using the predator-prey scheme to model the competition between legal and illegal firms, which is perceived as the competition between two populations with different fitness levels (survival probabilities). This competition gives rise to three different types of possible equilibrium outcomes: survival of only legal firms, survival of only illegal firms and coexistence of these two types of firms. An empirical analysis of an Italian case study confirms the results of this paper's theoretical model.

Small, Smart and Sustainable: Networking to Develop the Medicinal and Aromatic Plants Value-Chain in Portugal

Abstract The paper aims to study the use of medicinal and aromatic plants (MAP) farmers’ networking activities to overcome challenges in the development of their business. MAPs are mostly cultivated in small farms located in rural territories. This presents many challenges in different dimensions of business development through the value-chain, namely in commercialization. That is why networking and collaboration with other actors may have an important role, by providing the scale and critical resources towards business success and value-chain sustainable development. The paper draws on a purposefully collected set of data on a network of Portuguese producers of MAP, organized under the EPAM project. The data was collected through a questionnaire and quantitatively analyzed in order to understand: i) how MAP farmers perceive the importance of networks for the development of their businesses? ii) How are networks enabling farmers with different profiles to develop their businesses? The results confirm the importance of networks for the development of these businesses, namely with other firms. However, it is possible to identify some diversity in the assessment of the role of those networks, both by taking into consideration the location of the farms and their positioning in the value-chain. The study contributes to a better understanding of how networking contributes to overcome barriers in the sustainable development of an agri-food value-chain, by stressing a variety of networking proposes and partners and the existence of differences across types of firms.

Improving relative performance evaluation process of employees within a peer group

PurposeRelative performance evaluation (RPE) is a widely practiced employee appraisal process in the services industry. In a global delivery model, teams are spread across different geographical locations. The team members work on various tasks under the guidance of different managers and at times under more than one manager for performing the same task. Such complexities make RPE of the team members quite challenging. The paper proposes a methodical step-by-step approach to simplify the evaluation process without compromising on the rigour.Design/methodology/approachRPE has followed three different approaches. First is the traditional way, wherein evaluators had a common meeting to discuss and arrive at relative evaluation and ranking of members of the peer group employees. In the second, the number of evaluators and employees in a peer group were split in to 2 subgroups. The evaluators provided independent ratings and rankings. Simple mathematical tool then derived the combined ranking. In the third approach, each evaluator evaluated each employee in the peer group and provided the relative ranking for each employee. Again, mathematical tools provided the final ranking considering inputs from all evaluators. All the three evaluation approaches were analysed through an inter-rater agreement method.FindingsAll the three approaches for evaluation provided similar results giving confidence that less time-consuming methods could be adopted by evaluators without compromising on the rigour of the evaluation. The outcome of the exercise proved effective as the complaints reaching the ombudsmen reduced as compared to the earlier years. Considerable evaluation time was also saved. The study described in this paper is carried out in a non-unionized, Indian private sector services firm. Its effectiveness in other set ups is yet to be tested.Research limitations/implicationsThe research is carried out in the Indian Engineering services firm operating in the Knowledge based sector. Though study results are encouraging, the adaptability of methodology across different sectors and geographies is yet to be tested. More broad based studies are needed to evaluate suitability across firms and regions.Practical implicationsRelative evaluation exercise is challenging for evaluators. Although openness in evaluation is desired, it also makes evaluators uncomfortable in appearing to be taking sides or being opposing a candidate's ranking. The proposed approach brings in anonymity to each evaluator without scarifying individual evaluation.Social implicationsThe proposed methodology can be deployed across different services industries as the proposed methodology is business domain agnostic. It can be easily ported and tailored to align with an individual organization's evaluation philosophy. The suitability and effectiveness of the method can be studied under various types of firms like manufacturing, private, public, NGO, labour oriented, etc. As the proposed method reduces efforts, the stake holders can focus on understanding the relation between employee performance measurement, employee engagement, and long-term outcomes related to employee performance evaluation.Originality/valueThe proposed employee evaluation method leverages inter-rater reliability and agreement tool as a consensus approach to the relative performance ranking exercise. Such an approach to relative performance ranking is original as no prior studies with such an approach are found in the existing Literature.

Aligning strategy and digitalisation activity as an incremental or radical innovation in family farms

PurposeDigitalisation is perceived as a new process that may add value to firms. Current theoretical understanding assumes it should be part of a firm's strategy to respond to multiple pressures in the business environment. This paper explores the occurrence of digitalisation in a rare context, that of the English agricultural industry in the United Kingdom, a place disproportionality filled with family firms. The general understanding of digitalisation in family firm settings remains embryonic. The authors' explorations make theoretical contributions to research at the intersection of rural entrepreneurship, family business and innovation.Design/methodology/approachUtilising a purposive, qualitative approach, primary data was collected from multiple interviews with 28 UK family farms, and secondary data from another 164. Interview transcripts were coded using NVivo, along with secondary data from reports, observations and websites.FindingsThe authors present empirical evidence illustrating how digitalisation manifests incrementally and radically in different types of family farms. The authors present a model that shows the areas of farming that have, and continue to be, digitalised. This increases analytical precision when identifying digitalisation activities that differ depending on the strategy to either scale or diversify. The authors propose that incremental digitalising occurs to a great extent during a scaling strategy, and that radical digitalising occurs to a smaller extent during diversification strategies in family farms.Research limitations/implicationsThis research uses a sample of family-run farms from the UK agricultural sector to explore nuanced elements of digitalisation. It should therefore be explored in other types of family firms located in different sectors and geographies.Practical implicationsThis research is important because family farms are under increasing pressure and have limited financial resources to deal with the digitalisation agenda. Therefore, empirical evidence helps other farms in similar situations. The authors found digitalisation investments, that tend to be capital intensive, only matter for scalers and less so for diversifiers. Family farms can use the model presented as a tool to evaluate their farm. The tool helps them define what to do, and ideate the potential activities that might be digitalised, to feed into their wider strategy.Social implicationsFamily firms, in particular farms, are critical to many economies. The general consenses currently assumes all family firms should digitalise, yet the authors' evidence suggests that this is not the case. It is important to create policies that are sensitive to the needs of different types of businesses, in this case between family firm scalers and diversifiers, instead of simply incentivising digitalisation using a blanket approach usually by offering financial aid. Understanding how digitisation can support (or not) family firm resilience and growth in an effective and efficient manner can have significant benefit to individual firms, and across industries.Originality/valueThe proposed model extends theoretical understanding linking strategy, digitalisation activity and innovation in family farms. It shows that digitalisation is a key building block of scaling strategies, maximising digitalisation to increase efficiency. Yet, diversifying family farms minimise digitalisation, whereby they only digitalise a small amount of the farming activity. This empirical evidence contrasts with the wider narrative that farmers are slower at using new technology. This research found that some are slower because it does not align with their strategy. However, sometimes digitalisation aligns with their strategy during external changes, in which case the diversifiers are quick to act.

The abatement effect of total emission control policy: Evidence from China

The Total Emission Control (TEC) policy has been implemented in China for >20 years and plays a pivotal role in China's environmental governance system. Given the current reality of prominent environmental issues in China, there is ongoing controversy regarding whether the TEC policy has effectively reduced pollution as desired. Inspired by this, this paper takes the TEC policy implemented in the 11th Five Year Plan as an example, and based on the manually collected city-level SO2 emission reduction targets, we construct a difference-in-differences evaluation framework to investigate the abatement effect of the TEC policy. The results demonstrate a significant reduction in SO2 emissions resulting from the implementation of the TEC policy. A series of identification tests verify the robustness of the findings. The mechanism analysis shows that the end-of-pipe treatment and cleaner production are important channels to achieve the abatement effect, while the scale effect is deemed insignificant. Heterogeneity analysis shows that the policy effect varies significantly across different types of firms and regions. The conclusions contribute not only to a comprehensive understanding of the TEC policy, but also provide an important practical value for building a modern pollution control system and promoting the construction of ecological civilization.

Does the value-added tax reduction policy promote a firm’s green innovation? Evidence from China

ABSTRACT Based on the quasi-natural experiment of the Notice on Policies Related to the Simplified Value-added Tax Rate in 2017, this paper constructs a difference-in-difference model to shed light on the impact of the value-added tax reduction policy on a firm’s green innovation and its potential mechanism. The results reveal that after the implementation of the value-added tax reduction policy, the green innovation level of firms affected by the policy shock has significantly improved, and this conclusion remains consistent after a series of robustness tests. From the type of firms’ green innovation, the enforcement of the value-added tax reduction policy spurs firms’ substantive green innovation, but has limited impact on firms’ strategic green innovation. The mechanism test finds that easing financing constraints is an important channel for tax reduction policies to affect firms’ green innovation activities. In addition, the analysis indicates that the positive effect of the value-added tax reduction policy on green innovation is more pronounced among firms with more government innovation subsidies, stronger human capital, and higher capital intensity.

Does being Shariah-compliant affect capital structure decision: evidence from emerging markets

Purpose This paper aims to examine the relationship between Shariah compliance and corporate capital structure decisions. This study explores the variation of capital structure speed of adjustment. Design/methodology/approach The authors’ sample includes a sample of the largest 200 nonfinancial firms trading in the Malaysian and Pakistan stock markets. This study uses ordinary least squares and dynamic two-step system generalized method of moments to test the hypotheses of the study. Findings The results show that Shariah-compliant firms use a lower level of leverage than the noncomplaint firms. Moreover, while both types of firms have optimal capital structures, the speed of adjustment toward the targets is slower for Shariah-complaint firms than non-Shariah-compliant firms. This variation can be seen through the different levels of market imperfection experienced by the two types of firms. Shariah-compliant firms follow Islamic rules that restrict the type and degree of leverage, thus affecting the availability of external funding to Shariah-compliant firms. Research limitations/implications The findings call for more development and innovation of financing instruments that comply with Shariah rules that will increase of supply of external funds for Shariah-compliant firms and, thus, reduce market imperfections that are faced by Shariah-compliant firms. Originality/value The study contributes to the limited number of studies that examine the nexus between conventional corporate theories and Islamic corporate finance.

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.

The Changing Firm and Country Boundaries of US Manufacturers in Global Value Chains

This paper documents how US firms organize goods production across firm and country boundaries. Most US firms that perform physical transformation tasks in-house using foreign manufacturing plants in 2007 also own US manufacturing plants; moreover, manufacturing comprises their main domestic activity. By contrast, “factoryless goods producers” outsource all physical transformation tasks to arm's-length contractors, focusing their in-house efforts on design and marketing. This dis tinct firm type is missing from standard analyses of manufacturing, growing in importance, and increasingly reliant on foreign suppliers. Physical transformation “within-the-firm” thus coincides with substantial physical transformation “within-the-country ,” whereas its performance “outside-the-firm” often also implies “outside-the-country.” Despite these differences, factoryless goods producers and firms with foreign and domestic manufacturing plants both employ relatively high shares of US knowledge workers. These patterns call for new models and data to capture the potential for foreign production to support domestic innovation, which US firms leverage around the world.

Tariff discrimination for co-existence of domestic and foreign firms with increasing marginal costs

When foreign exporters and domestic firms are allowed to produce under asymmetrically increasing marginal costs, the high-cost exporter is handicapped, whereas the low-cost exporter is subsidized in a discriminatory tariff regime. Thus, the profit of the high-cost (low-cost) exporter is smaller (larger) under discriminatory tariffs than under uniform ones. Regardless of the domestic firm type, total output, consumer surplus, low-cost exporter profits, and social and global welfare are always greater under discriminatory tariffs than under uniform ones. Even when exporters and low- and high-cost domestic firms coexist, our main results hold, while both types of domestic firm prefer uniform tariffs to discriminatory ones.

Family firm heterogeneity and patenting. Revising the role of size and age

This study offers a comprehensive framework for evaluating the moderating effects of size and age on the relationship between family ownership and innovation. The research hypotheses are tested on a large sample of Italian firms observed over the 2010–2017 period using a zero-inflated nonlinear count model. To refine the understanding of firm heterogeneity, we employ a three-way interaction approach. Results show that the patenting gap between FFs and non-FFs is sensitive to size and age. Compared to non-FFs, FFs underperform when they are small and young, or large and mature, with no substantial differences seen in other types of firms. By referring to the Socioemotional Wealth theory, we find that the founder effect, which differs over a firm’s life, is behind a good deal of these findings.

Financial Constraints, Sectoral Heterogeneity, and the Cyclicality of Investment

Abstract While investment in most sectors declines in response to a contractionary monetary policy shock, investment in the manufacturing sector increases. Using manually digitized aggregate income and balance sheet data for the universe of US manufacturing firms, I show this increase is driven by the types of firms which are least likely to be financially constrained. A two-sector New Keynesian model with financial frictions can match these facts; unconstrained firms take advantage of the decline in the user cost of capital caused by the monetary contraction, while constrained firms are forced to cut back. Removing firm financial constraints in the model dampens the response of manufacturing output to monetary shocks by about 25%.