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Book part
Publication date: 7 June 2013

Nhuong Tran, Norbert Wilson and Diane Hite

The purpose of the chapter is to test the hypothesis that food safety (chemical) standards act as barriers to international seafood imports. We use zero-accounting gravity…

Abstract

The purpose of the chapter is to test the hypothesis that food safety (chemical) standards act as barriers to international seafood imports. We use zero-accounting gravity models to test the hypothesis that food safety (chemical) standards act as barriers to international seafood imports. The chemical standards on which we focus include chloramphenicol required performance limit, oxytetracycline maximum residue limit, fluoro-quinolones maximum residue limit, and dichlorodiphenyltrichloroethane (DDT) pesticide residue limit. The study focuses on the three most important seafood markets: the European Union’s 15 members, Japan, and North America.Our empirical results confirm the hypothesis and are robust to the OLS as well as alternative zero-accounting gravity models such as the Heckman estimation and the Poisson family regressions. For the choice of the best model specification to account for zero trade and heteroskedastic issues, it is inconclusive to base on formal statistical tests; however, the Heckman sample selection and zero-inflated negative binomial (ZINB) models provide the most reliable parameter estimates based on the statistical tests, magnitude of coefficients, economic implications, and the literature findings. Our findings suggest that continually tightening of seafood safety standards has had a negative impact on exporting countries. Increasing the stringency of regulations by reducing analytical limits or maximum residue limits in seafood in developed countries has negative impacts on their bilateral seafood imports. The chapter furthers the literature on food safety standards on international trade. We show competing gravity model specifications and provide additional evidence that no one gravity model is superior.

Details

Nontariff Measures with Market Imperfections: Trade and Welfare Implications
Type: Book
ISBN: 978-1-78190-754-2

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Book part
Publication date: 19 September 2014

Venkat Kuppuswamy, George Serafeim and Belén Villalonga

Using a large sample of diversified firms from 38 countries we investigate the influence of several national-level institutional factors or “institutional voids” on the…

Abstract

Using a large sample of diversified firms from 38 countries we investigate the influence of several national-level institutional factors or “institutional voids” on the value of corporate diversification. Specifically, we explore whether the presence of frictions in a country’s capital markets, labor markets, and product markets, affects the excess value of diversified firms. We find that the value of diversified firms relative to their single-segment peers is higher in countries with less-efficient capital and labor markets, but find no evidence that product market efficiency affects the relative value of diversification. These results provide support for the theory of internal capital markets that argues that internal capital allocation would be relatively more beneficial in the presence of frictions in the external capital markets. In addition, the results show that diversification can be beneficial in the presence of frictions in the labor market.

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Article
Publication date: 10 December 2019

Vincent Flifli, Peter Adebola Okuneye and Dare Akerele

The purpose of this paper is to study an innovative rice value chain financing system (VCFS) established in Benin, to identify the determinants of producers and processors…

Abstract

Purpose

The purpose of this paper is to study an innovative rice value chain financing system (VCFS) established in Benin, to identify the determinants of producers and processors access to formal credit, both at intensive and extensive margins. It focuses on multi-stakeholder platforms (MSP) which connect producers and processors in need of credit to potential financial lenders.

Design/methodology/approach

The empirical analysis uses rich cross-sectional survey data collected in Northern Benin in 2018. The sample consists of 215 rice producers and 217 rice processors randomly selected through a multi-stage sampling and interviewed with structured questionnaires. The empirical models analyze the determinants of the likelihood to receive a credit and the amount of credit received. To account for the sample selection and censored nature of the main outcome variable, the study considers a Heckman two-stage model coupled with a Tobit model for robustness checks.

Findings

The study finds that the MSP are effective in increasing access to formal credit and the amount borrowed. Producers and processors who are members of the MSP are more likely to receive credit and, conditional on being approved for credit borrower, a larger amount. Other key factors that significantly explain access to credit include the use of soft guarantee for securing a loan, the degree of participation in the platform and demographic characteristics. These findings are consistent across the Heckman and Tobit models.

Research limitations/implications

The study attempts to rigorously analyze the factors explaining producers and processors access to credit using cross-sectional survey data. But it has some limitations. The main limitation is the type of data used. Ideally, one would like to run a randomized control trial (RCT) to randomly assign participation in the MSP to causally estimate its impact of access to credit. The second-best option would be to have a panel data covering the period before and after the establishment of the platform. However, in the absence of an RCT or panel data, the study resorts to cross-sectional data and empirical models that account for sample selection bias and the censored nature of the credit received.

Practical implications

One of the key findings of the study is that participation in the MSP (through different value chain stages associations) increases access to formal credit. This highlights an important and effective mechanism, a well-coordinated value chains that integrated lenders, that policymakers can leverage to facilitate access to credit in the agricultural sector.

Social implications

Access to credit is important to boost agricultural productivity and income. Hence, the findings of the study have social implications in terms of poverty reduction in rural areas.

Originality/value

The study contributes to earlier theories and empirical studies on the demand for credit. It focuses on an innovative VCFS, increasingly adopted in many developing countries, adds originality and value to the understanding of mechanisms to unlock agricultural actors’ access to credit in low-income countries.

Details

Agricultural Finance Review, vol. 80 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Abstract

The changes in women’s and men’s work lives have been considerable in recent decades. Yet much of the recent research on gender differences in employment and earnings has been of a more snapshot nature rather than taking a longer comparative look at evolving patterns. In this paper, we use 50 years (1964–2013) of US Census Annual Demographic Files (March Current Population Survey) to track the changing returns to human capital (measured as both educational attainment and potential work experience), estimating comparable earnings equations by gender at each point in time. We consider the effects of sample selection over time for both women and men and show the rising effect of selection for women in recent years. Returns to education diverge for women and men over this period in the selection-adjusted results but converge in the OLS results, while returns to potential experience converge in both sets of results. We also create annual calculations of synthetic lifetime labor force participation, hours, and earnings that indicate convergence by gender in worklife patterns, but less convergence in recent years in lifetime earnings. Thus, while some convergence has indeed occurred, the underlying mechanisms causing convergence differ for women and men, reflecting continued fundamental differences in women’s and men’s life experiences.

Details

Gender Convergence in the Labor Market
Type: Book
ISBN: 978-1-78441-456-6

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Article
Publication date: 6 June 2016

Dan Huang, Dong Lu and Jin-hui Luo

The purpose of this paper is to examine whether and how the extent of religion in a firm’s social environment affects corporate innovation and innovation efficiency from…

Abstract

Purpose

The purpose of this paper is to examine whether and how the extent of religion in a firm’s social environment affects corporate innovation and innovation efficiency from the perspectives of religion-related risk aversion and religion-based social norms.

Design/methodology/approach

Using a sample of 8,601 Chinese firm-year observations from 2007 to 2012, this paper examines the relationship between religion and innovation intensity, as well as innovation efficiency. A battery of checks, that is, adopting Heckman selection model, using a province-level measure of religiosity and an alternative measure of innovation intensity, and taking the stochastic frontier analysis method to capture corporate innovation efficiency, are conducted to alleviate the concern of self-selection and to guarantee the robustness of the findings of this paper.

Findings

This paper finds strong evidence that firms registered in more religious regions, that is, regions with more Buddhist monasteries within a certain radius, undertake fewer innovation activities as measured by the ratio of R&D investment over total sales income but achieve higher innovation efficiency reflected by the value-relevance of R&D investment.

Originality/value

This paper complements the existing literature by suggesting that religion can serve as an informal social mechanism and performs a “less is more” effect in disciplining corporate innovation activities.

Details

Nankai Business Review International, vol. 7 no. 2
Type: Research Article
ISSN: 2040-8749

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Article
Publication date: 6 April 2012

Helga Kristjánsdóttir

The purpose of this paper is to seek a clearer understanding of how firms involved in power intensive industries participate in foreign direct investment. The paper asks…

Abstract

Purpose

The purpose of this paper is to seek a clearer understanding of how firms involved in power intensive industries participate in foreign direct investment. The paper asks the following questions: how skilled are the employees available for hire? What kind of pollution restrictions will be applied to the plant? Is the infrastructure in place to enable free transport of the necessary materials? All of these are factors that can be analyzed on a national level, and are major factors in government policy.

Design/methodology/approach

The research is designated to explain how macro policy can be directed towards firms in the power intensive industry, to impact the competitiveness within the industry. Skilled labor differences is reflecting governmental policy in its willingness to contribute to education. Infrastructure can be viewed as an indicator for long‐term policy planning by the government. The pollution variable reflects on macro policy emphasis by governments, by presenting their emission targets. Investment cost variable gives indication of government policy concerning the ease with which foreign investors can enter into and invest in a particular country. The case country is Iceland, an isolated island that is unable to export its abundance directly and therefore must do so through foreign direct investment.

Findings

The findings indicate that source countries are attracted by the level of skill in Iceland at the beginning stage of operations when faced with fixed threshold cost. Once the plants have overcome fixed costs, there are positive impacts on marginal investment, the more skilled the source country is compared to the host. Other factors that proved to be important in this case study are distance, infrastructure, government stability, pollution quotas, and the fishing resource.

Originality/value

The relative friendliness a country's policies display towards an industry can make a huge difference when it comes to how successful a business can be, so studying these national‐level policies can help an individual determine what kind of direction to take on the day‐to‐day operational decisions.

Details

International Journal of Energy Sector Management, vol. 6 no. 1
Type: Research Article
ISSN: 1750-6220

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Article
Publication date: 1 February 2013

Fei Peng, Lili Kang and Jun Jiang

This paper aims to investigate the role that institutional shareholders play in acquisition decisions using micro data in the Chinese stock market during 2003‐2008.

Abstract

Purpose

This paper aims to investigate the role that institutional shareholders play in acquisition decisions using micro data in the Chinese stock market during 2003‐2008.

Design/methodology/approach

Acquisition decision is the selection and coordination process of shareholders as strategic alliances, which is determined by corporate acquisition ability, composition of institutional shareholders and concentration of tradable share (TS) in China. The paper uses the Heckman selection model to surmount the selection biases in acquisition decision.

Findings

The paper finds that institutional shareholders, including qualified foreign institutional investors (QFII), social security funds (SSF), security firms (SF) and security investment funds (SIF), as well as TS concentration, affect acquisition probability rather than annual acquisition scale. SSF, SIF and TS concentration can increase acquisition probability while QFII decreases it.

Research limitations/implications

This paper suggests a strategic alliance model in which institutional shareholders choose whether to collaborate with controlling shareholders and management. However, detailed information of the selection and coordination process is unavailable in the authors' data. Future research need provide more evidence of this postulate.

Originality/value

The paper contributes to the published literature in three ways. First, it offers a model to understand the selection and coordination process of acquisition decision. Second, it investigates whether institutional shareholders could effectively monitor annual acquisition scale. Third, it identifies the Heckman selection problem that institutional shareholders could affect PLCs' acquisition decision on whether to acquire rather than how much to acquire.

Details

Management Decision, vol. 51 no. 1
Type: Research Article
ISSN: 0025-1747

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Book part
Publication date: 19 October 2020

Sophia Ding and Peter H. Egger

This chapter proposes an approach toward the estimation of cross-sectional sample selection models, where the shocks on the units of observation feature some…

Abstract

This chapter proposes an approach toward the estimation of cross-sectional sample selection models, where the shocks on the units of observation feature some interdependence through spatial or network autocorrelation. In particular, this chapter improves on prior Bayesian work on this subject by proposing a modified approach toward sampling the multivariate-truncated, cross-sectionally dependent latent variable of the selection equation. This chapter outlines the model and implementation approach and provides simulation results documenting the better performance of the proposed approach relative to existing ones.

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Article
Publication date: 12 March 2018

Kathleen Grace

Small businesses file taxes in accordance with the personal income tax code because they are considered flow-through entities. Thus, personal income tax reforms directly…

Abstract

Purpose

Small businesses file taxes in accordance with the personal income tax code because they are considered flow-through entities. Thus, personal income tax reforms directly affect the incentives small business owners face regarding employment and operations. The paper aims to discuss these issues.

Design/methodology/approach

The authors use the changes in personal income tax rates during the 1993 and 2001-2003 reforms and micro-level data to estimate the effect of statutory tax rate changes on small business employment decisions.

Findings

The authors add two contributions to the current literature: first, the author allow for intertemporal tax planning and second, the author allow the firm’s decision to employ labor to be correlated with the firm’s wage bill decision. Estimation of a Heckman selection model for wage bills shows that the probability that a business will employ labor is 1.18 percent higher when current tax rates increase by one percentage point and 0.70 percent lower when future rates are expected to increase by one percentage point. Among firms that already employ labor, the median wage bill elasticity with respect to current tax rates is −0.64. These estimates are larger than those reported in previous research because my model includes future taxes and allows for correlation between the firm’s employment and wage bill decisions. Omitting the intertemporal tax responses biases the estimates of previous researchers upwards, whereas assuming the two firm decisions are independent biases estimates towards zero.

Originality/value

This paper has been cited in publications published in Journal of Entrepreneurship and Public Policy.

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Article
Publication date: 13 November 2018

Nina Gorovaia

The purpose of this paper is to explore the determinants, transactional alignment and performance outcomes of franchise contract length using transaction costs theory…

Abstract

Purpose

The purpose of this paper is to explore the determinants, transactional alignment and performance outcomes of franchise contract length using transaction costs theory (TCT) and resource-based theory (RBT).

Design/methodology/approach

The author hypothesizes that franchisors choose contract length according to TCT and RBT arguments. TCT explains the safeguarding function of contracts: the franchisors will offer longer contracts when franchisees’ specific investments are high and environmental uncertainty is low. RBT highlights the knowledge leverage function of contracts: the franchisors will offer longer contracts when the brand name and intangible knowledge assets are high. Franchise companies that design contract length aligned with transactional attributes will perform better. The author tests the misalignment hypothesis and comparative performance of franchise contracts by estimating two-stage least squares regression and Heckman two-stage procedure that control for endogeneity and self-selection.

Findings

Empirical data from the German franchise sector support the hypotheses. In addition to the safeguarding function, franchise contracts have an important knowledge leverage function. Longer contracts perform better due to the development of relational strategic assets and stronger commitment.

Research limitations/implications

Franchisors must offer longer contracts when specific investments of franchisees, brand name, intangible knowledge assets are high, and environmental uncertainty is low. Franchisors should invest in the development of relational strategic assets and offer longer contracts for the benefit of superior performance.

Originality/value

The study addresses the significant question of transactional alignment and comparative performance of franchise contracts. It empirically confirms the importance of RBT in explaining contractual choices and performance.

Details

International Journal of Retail & Distribution Management, vol. 47 no. 7
Type: Research Article
ISSN: 0959-0552

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