Industrial organisation

Alessandra Bonfiglioli, Rosario Crinò, Gino Gancia, 10 June 2018

To date there has been little systematic evidence on the role of firms in explaining country performance. This column explores how the products of firms from all over the globe fare in competition in the US market. Results show that the countries that capture larger market shares have more exporters, producing higher-quality products, with a more dispersed distribution of firm attributes. Larger and richer markets are characterised by a more dispersed distribution of sales and quality, and a higher incidence of superstar firms.

Francesco Decarolis, Leonardo M. Giuffrida, Elisabetta Iossa, Vincenzo Mollisi, Giancarlo Spagnolo, 31 May 2018

Governments across the world procure a huge range of goods and services, and ensuring that procurement contracts are negotiated and executed properly can save a great deal of time and money. This column uses evidence from the US to show the effect of staff competence on procurement wastage. Improving the competence of bureaus to the 90thpercentile of the distribution would save an average of $102,619 and 54.5 days per contract.

Theo Nyreröd, Giancarlo Spagnolo, 28 May 2018

The European Commission has recently proposed a directive that provides horizontal protection for whistleblowers in the EU. This could put the EU on a par with the US with respect to protection, but recent episodes of retaliation suggest that it may not be enough. This column compares the whistleblower protection policies in the EU and the US and argues that reward programmes are particularly appropriate for specific regulatory areas where wrongdoing can cause substantial harm.

Alexandra L. Cermeño, 23 May 2018

Knowledge hubs are generally located in large and dynamic population clusters, but there is little empirical evidence on what has driven the location of services in the economy, particularly the knowledge-intensive ones that form these hubs. This column describes how the geography of services across the US has been influenced by the interaction between county and industry characteristics. The presence of large markets enhanced the agglomeration of services mainly through linkages with other services and manufacturing firms. 

Philipp-Bastian Brutscher, Jonas Heipertz, Christopher Hols, 23 April 2018

Despite an extensive literature examining the optimal financing mix, little work exists on firms’ preferences over specific debt financing characteristics. This column uses experimental data from Europe to analyse the link between different external financing characteristics and investment decisions. The findings suggest that modest improvements in financing terms can more than double the probability of investment. Investment decisions are particularly sensitive to interest rates and collateral requirements.

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