Gary Gorton, Alexander Zentefis, 16 July 2020

Corporate culture is an important determinant of firm performance but has often been overlooked in economic research. This column presents a theory of the firm based on corporate culture. In firms, employees develop a product in house according to shared values, customs, and norms that each stem from a shared culture. Firms exist because, at times, corporate culture fulfils production more efficiently than detailed contracts would. Further, consistent with empirical evidence, this study shows how some mergers and acquisitions can fail and why corporate cultures are often hard to change once in place.

Pablo Brañas, Antonio Cabrales, Guillermo Mateu, Anxo Sánchez, Angela Sutan, 22 May 2019

Pre-negotiation interactions, such as shared meals, are viewed as a valuable means to build trust and rapport so as to improve the outcomes of the negotiation. Even tax authorities acknowledge this – business meals tend to be tax-deductible, at least in part. This column puts this folk wisdom to the test using a controlled negotiation simulation experiment with MBA students. It finds that there is no difference in negotiation outcomes whether or not pre-negotiation socialising took place.

Aline Bütikofer, Sissel Jensen, Kjell G. Salvanes, 29 November 2018

A recent literature argues that a ‘motherhood penalty’ is a main contributor to the persistent gender wage gap in the upper part of the earnings distribution. Using Norwegian registry data, this column studies the effect of parenthood on the careers of high-achieving women relative to high-achieving men in a set of high-earning professions. It finds that the child earnings penalty is substantially larger for mothers with an MBA or law degree than for mothers with a STEM or medical degree.

Florencio Lopez de Silanes, Joseph McCahery, Dirk Schoenmaker, Dragana Stanišić, 21 August 2015

While small and medium-sized enterprises are important for economic growth and employment, we have little insight in their financing needs. Using a novel methodology, this column presents new research that estimates the gap between demand and supply of financing in several European countries. We find that the financing gap is three to five times larger than that of US SMEs. Initiatives under the Capital Markets Union umbrella can help to reduce this financing gap.

Ejaz Ghani, William Kerr, Stephen O'Connell, 22 February 2013

Although its economic development has been impressive, recent events have sparked debate about India’s gender inequality. This column argues that Indian women’s levels of entrepreneurship and participation in the labour force are some of the lowest in the world. India’s economic growth and shared prosperity depends upon successfully utilising both its male and female workforce, and improving this balance is an important step towards sharing the benefits of India’s growth. Economically and socially, gender equality should be a no-brainer for policymakers.

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