Understanding the determinants of firm performance is important if we want to improve how we do business. This column presents new research on corporate efficiency in Europe, highlighting the importance of firm characteristics such as firm ownership. Evidence suggests that a mix of majority and minority shareholders drives efficiency.
Jan Hanousek, Evžen Kočenda, Anastasiya Shamshur, Sunday, July 19, 2015 - 00:00
Hassen Arouri, Caroline Freund, Antonio Nucifora, Bob Rijkers, Friday, July 3, 2015 - 00:00
If more firms are established in developing countries, more jobs are created. But which type of firm creates the most jobs? This column presents evidence from Tunisia suggesting that once you’re established as a new and promising firm, it’s harder than it should be to grow and create jobs. Weak firm dynamics and imperfections in the market prevent the best firms from flourishing.
Laura Alfaro, Anusha Chari, Fabio Kanczuk, Thursday, January 22, 2015 - 00:00
Florian Mayneris, Sandra Poncet, Monday, October 13, 2014 - 00:00
Ejaz Ghani, William Kerr, Stephen D O'Connell, Thursday, October 2, 2014 - 00:00
Chiara Criscuolo, Peter N. Gal, Carlo Menon, Monday, May 26, 2014 - 00:00
Young firms are known to play a central role in job creation. This column presents the results of a new OECD project on the dynamics of employment (DynEmp) based on an innovative methodology using firm-level data. It confirms that young firms play a central role in creating jobs, and in enhancing growth and innovation. Public policies can help by enabling firms to experiment, and by fostering the reallocation of resources towards the most productive firms. Structural reforms to product, labour, and capital markets, as well as bankruptcy laws that do not overly penalise failure, are particularly relevant.
Leonardo Iacovone, Vijaya Ramachandran, Friday, February 7, 2014 - 00:00
There is an urgent need for job creation in Africa yet something seems to be stunting firm growth. This column shows that African firms are about 20% smaller than their counterparts in other locations. It suggests small firms put the brake on growth as the burden of dealing with government and labour costs may increase with size, or perhaps as they start facing trust issues between managers and workers.
Danielken Molina, Marc Muendler, Monday, May 27, 2013 - 00:00
Exporting is essential for economic development. But can firms move from local sales to export sales? How do firms prepare for exporting? This column presents new research showing that worker mobility is an important mechanism by which exporter knowledge spreads through the economy.
Alex Edmans, Vivian W Fang, Emanuel Zur, Saturday, February 16, 2013 - 00:00
The stock market is a powerful tool for controlling corporations’ behaviour. But which is better, a highly liquid market or a number of large blockholders? This column argues in favour of liquidity. Evidence suggests that policymakers should not reduce stock liquidity through greater regulation. While the idea that liquidity encourages short-term trading – rather than long-term governance – sounds intuitive, deeper analysis shows that liquidity is beneficial because it encourages large shareholders to form in the first place, and allows shareholders to punish underperforming firms through selling their stake.
Andrea Ariu, Sunday, December 23, 2012 - 00:00
International trade is traditionally thought of as goods crossing borders. Trade in services, however, is becoming increasingly important for high-income countries. This column, using Belgian firm-level data from 1995-2005, argues that trade in goods and services differ deeply in key aspects such as firm participation rates, size and frequency of shipments, entry and exit rates in foreign markets and in growth strategies.
Laura Alfaro, Paola Conconi, Harald Fadinger, Patrick Legros, Andrew Newman, Sunday, December 2, 2012 - 00:00
Increasingly, people are pointing the finger of blame for economic woe at large firms. This column argues that organisation design is often affected by government trade policy. If firm organisation design has implications for consumer welfare (in terms of prices and quality of product), evidence suggests that governments should make sure that in future, trade policy and corporate governance policy are more complementary.
Thierry Mayer, Florian Mayneris, Loriane Py, Friday, September 28, 2012 - 00:00
Since the 1980s governments in the US, UK and France have been implementing ‘enterprise zones’ to tackle inequalities within cities. This column examines the latest French experiment in the 2000s. It suggests that the zones were largely successful in attracting small firms, but that this was mostly due to opportunistic relocation within municipalities.
Lorenzo Caliendo, Ferdinando Monte, Esteban Rossi-Hansberg , Friday, August 31, 2012 - 00:00
Firms that reorganise production to grow account for almost 40% of the value added created in the manufacturing sector. They add layers of management, increase by 7% the average hours worked in the firm, and reduce the average wage at pre-existing layers of managers or workers by 11%. This column presents new stylised facts about the way firms organise production and explains how recent advances in economic theory can help to understand these findings.
Chad Syverson, Friday, June 25, 2010 - 00:00
This column summarises a wealth of literature that tries to understand what determines productivity, which is often referred to as a measure of our ignorance. It concludes with a call for more data – including currently unmeasured aspects of business’s production practices such as producer-level prices. While collecting more data is costly, this column argues that there is much to be gained in exchange.
Laura Alfaro, Anusha Chari, Saturday, December 12, 2009 - 00:00
What microeconomic forces drove the structural transformation of India’s economy in recent decades? This column studies firm-level data and portrays a dynamic economy driven by the growth of private and foreign firms. But the Indian economy did not go through an industrial shakeout phase driven by creative destruction. The endurance of incumbent firms prevented a dramatic microeconomic transformation.
Gianmarco I.P. Ottaviano, Filippo di Mauro, Daria Taglioni, Tuesday, March 10, 2009 - 00:00
This column analyses the impact of the euro’s adoption upon European firm’s productivity and international competitiveness. The euro produced significant competitiveness gains for relatively small economies such as Finland, Belgium, and Austria. If Denmark and Sweden had joined the euro area in recent years, they would have enjoyed gains equivalent to a 5% across-the-board reduction in trade frictions.