Corporate Social Responsibility and Firm Financial Performance: The Mediating Role of Productivity
Iftekhar Hasan, Nada Kobeissi, Liuling Liu, Haizhi Wang
Journal of Business Ethics,
No. 3,
2018
Abstract
This study treats firm productivity as an accumulation of productive intangibles and posits that stakeholder engagement associated with better corporate social performance helps develop such intangibles. We hypothesize that because shareholders factor improved productive efficiency into stock price, productivity mediates the relationship between corporate social and financial performance. Furthermore, we argue that key stakeholders’ social considerations are more valuable for firms with higher levels of discretionary cash and income stream uncertainty. Therefore, we hypothesize that those two contingencies moderate the mediated process of corporate social performance with financial performance. Our analysis, based on a comprehensive longitudinal dataset of the U.S. manufacturing firms from 1992 to 2009, lends strong support for these hypotheses. In short, this paper uncovers a productivity-based, context-dependent mechanism underlying the relationship between corporate social performance and financial performance.
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Transferability of Skills across Sectors and Heterogeneous Displacement Costs
Moises Yi, Steffen Müller, Jens Stegmaier
American Economic Review: Papers and Proceedings,
No. 5,
2017
Abstract
We use rich German administrative data to estimate new measures of skill transferability between manufacturing and other sectors. These measures capture the value of workers' human capital when applied in different sectors and are directly related to workers' displacement costs. We estimate these transferability measures using a selection correction model, which addresses workers' endogenous mobility, and a novel selection instrument based on the social network of workers. Our results indicate substantial heterogeneity in how workers can transfer their skills when they move across sectors, which implies heterogeneous displacement costs that depend on the sector to which workers reallocate.
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The Drivers of Revenue Productivity: a New Decomposition Analysis with Firm-level Data
Filippo di Mauro, Giordano Mion, Daniel Stöhlker
ECB Working Paper,
No. 2014,
2017
Abstract
This paper aims to derive a methodology to decompose aggregate revenue TFP changes over time into four different components – namely physical TFP, mark-ups, quality and production scale. The new methodology is applied to a panel of EU countries and manufacturing industries over the period 2006-2012. In summary, patterns of measured revenue productivity have been broadly similar across EU countries, most notably when we group them into stressed (Italy, Spain and Slovenia) and non-stressed countries (Belgium, Finland, France and Germany). In particular, measured revenue productivity drops for both groups by about 6 percent during the recent crisis. More specifically, for both stressed and non-stressed countries the drop in revenue productivity was accompanied by a substantial dip in the proxy we use for TFP in quantity terms, as well as by a strong reduction in mark-ups.
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Asymmetric Investment Responses to Firm-specific Uncertainty
Julian Berner, Manuel Buchholz, Lena Tonzer
Abstract
This paper analyzes how firm-specific uncertainty affects firms’ propensity to invest. We measure firm-specific uncertainty as firms’ absolute forecast errors derived from survey data of German manufacturing firms over 2007–2011. In line with the literature, our empirical findings reveal a negative impact of firm-specific uncertainty on investment. However, further results show that the investment response is asymmetric, depending on the size and direction of the forecast error. The investment propensity declines significantly if the realized situation is worse than expected. However, firms do not adjust their investment if the realized situation is better than expected, which suggests that the uncertainty effect counteracts the positive effect due to unexpectedly favorable business conditions. This can be one explanation behind the phenomenon of slow recovery in the aftermath of financial crises. Additional results show that the forecast error is highly concurrent with an ex-ante measure of firm-specific uncertainty we obtain from the survey data. Furthermore, the effect of firm-specific uncertainty is enforced for firms that face a tighter financing situation.
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R&D Cooperation with Scientific Institutions: A Difference-in-difference Approach
Gunnar Pippel, V. Seefeld
Economics of Innovation and New Technology,
No. 5,
2016
Abstract
Economists and business managers have long been interested in the impact of research and development (R&D) cooperation with scientific institutions on the innovation performance of firms. Recent research identifies a positive correlation between these two variables. This paper aims to contribute to the identification of the relationship between R&D cooperation with scientific institutions and the product and process innovation performance of firms by using a difference-in-difference approach. In doing so, we distinguish between two different types of scientific institutions: universities and governmental research institutes. For the econometric analyses, we use data from the German Community Innovation Survey. In total, data from up to 560 German service and manufacturing firms are available for the difference-in-difference analyses. The results suggest that R&D cooperation with universities and governmental research institutes has a positive effect on both product innovation and process innovation performance of firms.
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On the Trail of Core–periphery Patterns in Innovation Networks: Measurements and New Empirical Findings from the German Laser Industry
Wilfried Ehrenfeld, Toralf Pusch, Muhamed Kudic
Annals of Regional Science,
No. 1,
2015
Abstract
It has been frequently argued that a firm’s location in the core of an industry’s innovation network improves its ability to access information and absorb technological knowledge. The literature has still widely neglected the role of peripheral network positions for innovation processes. In addition to this, little is known about the determinants affecting a peripheral actors’ ability to reach the core. To shed some light on these issues, we have employed a unique longitudinal dataset encompassing the entire population of German laser source manufacturers (LSMs) and laser-related public research organizations (PROs) over a period of more than two decades. The aim of our paper is threefold. First, we analyze the emergence of core–periphery (CP) patterns in the German laser industry. Then, we explore the paths on which LSMs and PROs move from isolated positions toward the core. Finally, we employ non-parametric event history techniques to analyze the extent to which organizational and geographical determinates affect the propensity and timing of network core entries. Our results indicate the emergence and solidification of CP patterns at the overall network level. We also found that the paths on which organizations traverse through the network are characterized by high levels of heterogeneity and volatility. The transition from peripheral to core positions is impacted by organizational characteristics, while an organization’s geographical location does not play a significant role.
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Taking the First Step - What Determines German Laser Source Manufacturers' Entry into Innovation Networks?
Jutta Günther, Muhamed Kudic, Andreas Pyka
International Journal of Innovation Management,
No. 5,
2015
Abstract
Early access to technological knowledge embodied in the industry’s innovation network can provide an important competitive advantage to firms. While the literature provides much evidence on the positive effects of innovation networks on firms’ performance, not much is known about the determinants of firms’ initial entry into such networks. We analyze firms’ timing and propensity to enter the industry’s innovation network. More precisely, we seek to shed some light on the factors affecting the duration between firm founding and its first cooperation event. In doing so, we apply a unique longitudinal event history dataset based on the full population of German laser source manufacturers. Innovation network data stem from official databases providing detailed information on the organizations involved, subject of joint research and development (R&D) efforts as well as start and end times for all publically funded R&D projects between 1990 and 2010. Estimation results from a non-parametric event history model indicate that micro firms enter the network later than small-sized or large firms. An in-depth analysis of the size effects for medium-sized firms provides some unexpected findings. The choice of cooperation type makes no significant difference for the firms’ timing to enter the network. Finally, the analysis of geographical determinants shows that cluster membership can, but do not necessarily, affect a firm’s timing to cooperate.
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