Misallocation and Total Factor Productivity in Italy: Evidence from Firm‐Level Data

Over the last two decades, total factor productivity (TFP) in Italy decreased by 0.2% per year, while increasing on average in the Euro‐area countries. This decline suggests the existence of large inefficiencies in the allocation of resources, making the Italian case particularly interesting and suitable in order to study the role of misallocation. In this article, I quantify the within‐industry misallocation of inputs in Italy over the period 1993–2011, by applying the Hsieh and Klenow's methodology. Using a micro‐level longitudinal dataset of Italian manufacturing firms, I find that, in the hypothetical absence of distortions, aggregate TFP in manufacturing would be boosted by 58% in 1993, by 67% in 2006 and by 80% in 2011. This leads to a twofold conclusion: first, misallocation plays a crucial role in determining the inefficiency level of the Italian manufacturing sector; second, misallocation has increased over time. Given the magnitude of the results obtained and the policy implications related thereto, I take a step ahead by checking to what extent the degree of misallocation can be attributed to specific characteristics of the Italian firms: it emerges that misallocation is higher for firms located in the south and at low‐technological intensity, as well as for small or young firms.     

纵向差异下的连接外部性和网络结构分析

在寡头竞争的市场环境里,相互竞争的企业通常会与竞争对手建立连接,从而影响他们在产品市场上竞争的方式。本文我们建立两阶段博弈模型研究企业建立连接的激励以及由此而形成的网络结构形态。在博弈的第一期,具有纵向差异化的企业决定是否与其竞争对手建立连接;企业观察到连接结果后在第二期进行价格竞争。本文的分析显示均衡网络结构与连接效应、连接成本和消费者偏好有关,均衡网络可能仅是一个企业与其它所有企业建立连接的星型网络结构,也可能是没有任何企业建立连接的空网络结构。本文还分析了均衡网络和社会有效网络之间的关系,发现均衡网络和社会有效网络并不总是一致的,从社会计划者的角度看,企业建立连接可能存在激励不足,因此公共政策应该鼓励企业建立连接。     

Inefficient Investment Waves

We show that firms' individually optimal liquidity management results in socially inefficient boom‐and‐bust patterns. Financially constrained firms decide on the level of their liquid resources facing cash‐flow shocks and time‐varying investment opportunities. Firms' liquidity management decisions generate simultaneous waves in aggregate cash holdings and investment, even if technology remains constant. These investment waves are not constrained efficient in general, because the social and private value of liquidity differs. The resulting pecuniary externality affects incentives differentially depending on the state of the economy, and often overinvestment occurs during booms and underinvestment occurs during recessions. In general, policies intended to mitigate underinvestment raise prices during recessions, making overinvestment during booms worse. However, a well‐designed price‐support policy will increase welfare in both booms and recessions.     

Cyber Security Risk Management: Public Policy Implications of Correlated Risk,Imperfect Ability to Prove Loss,and Observability of Self‐Protection

The correlated nature of security breach risks, the imperfect ability to prove loss from a breach to an insurer, and the inability of insurers and external agents to observe firms’ self‐protection efforts have posed significant challenges to cyber security risk management. Our analysis finds that a firm invests less than the social optimal levels in self‐protection and in insurance when risks are correlated and the ability to prove loss is imperfect. We find that the appropriate social intervention policy to induce a firm to invest at socially optimal levels depends on whether insurers can verify a firm's self‐protection levels. If self‐protection of a firm is observable to an insurer so that it can design a contract that is contingent on the self‐protection level, then self‐protection and insurance behave as complements. In this case, a social planner can induce a firm to choose the socially optimal self‐protection and insurance levels by offering a subsidy on self‐protection. We also find that providing a subsidy on insurance does not provide a similar inducement to a firm. If self‐protection of a firm is not observable to an insurer, then self‐protection and insurance behave as substitutes. In this case, a social planner should tax the insurance premium to achieve socially optimal results. The results of our analysis hold regardless of whether the insurance market is perfectly competitive or not, implying that solely reforming the currently imperfect insurance market is insufficient to achieve the efficient outcome in cyber security risk management.     

竞争环境下新创企业产量柔性技术战略决策研究

考虑新创企业与成熟企业相互竞争,重点研究竞争环境下,两企业的产量柔性技术选择及产能投资决策。首先分析了四种不同策略组合下两企业的最优产能决策、新创企业的最大生存概率以及成熟企业的最大利润;然后用传统博弈论的方法得出了二者的竞争均衡,并分析影响两企业产量柔性战略决策的因素;最后用数值实验进行验证。研究结果表明：在竞争中,新创企业更加关注成本因素,倾向于选择成本较小的无柔性技术;成熟企业对市场需求的波动更为敏感,当市场需求波动较大时,选择产量柔性技术能提高其收益;当产量柔性技术单位产量调整成本较大时,选择无柔性技术对两企业更为有利。     

ON THE RELATIVE EFFICIENCY OF PERFORMANCE PAY AND NONCONTINGENT INCENTIVES

We report evidence from a large field experiment that compares the effectiveness of contingent and noncontingent incentives in eliciting costly effort for a large range of payment levels. The company with which we worked sent 7,250 letters asking customers to complete a survey. Some letters promised to pay amounts ranging from $1 to $30 upon compliance (contingent incentives), whereas others already contained the money in the request envelopes (noncontingent incentives). Compared to no payment, very small contingent payments lower the response rate while small noncontingent payments raise the response rate. As expected, response rates rise with the size of the incentive offered. The response rate in the noncontingent incentives rises more rapidly for low amounts of incentive, but then flattens out and reaches lower levels than under contingent payments. We discuss how the optimal policy regarding the use of each size and type of incentives crucially depends on firms’ objectives.     

Charisma and organizational change: A multilevel study of perceived charisma,commitment to change,and team performance

What makes people perceive a leader as charismatic, and how do team leaders obtain performance outcomes from their followers? We examine leaders in times of organizational change and investigate the mechanisms through which leaders' change-promoting behaviors are associated with team performance. In a multilevel mediation model, we propose that the indirect relationship between change-promoting behaviors and team performance is sequentially transmitted through followers' perceptions of charisma and followers' commitment to change. A study of 33 leaders and 142 followers provides empirical support for the model, using multilevel structural equation modeling to analyze top-down relationships between leaders and followers and bottom-up relationships between followers and team outcomes. Results suggest that team leaders are perceived as more charismatic when they engage in change-promoting behaviors. These behaviors facilitate team performance through individual followers' perceived charisma and commitment to change.     

不对称双寡头企业技术创新投资决策研究

许多研究技术创新投资决策的期权博弈文献忽视了企业之间的投资成本和经营成本的不对称性,本文研究成本不对称双寡头企业技术创新投资决策问题。首先,导出企业投资收益函数和投资临界值。接着对存在的三种均衡,即抢占均衡、序列均衡和同时投资均衡进行了分析讨论,结果表明,成本不对称程度较小和先动优势不大情况下,企业将同时投资;当先动优势较大的情况下,低成本企业将先投资成为领先者;当企业成本不对称程度很大时,企业将序列执行投资期权。最后,结合案例进行数值计算,验证了理论分析结果。     

Internationalization of Developing Country Firms into Developed Countries: The Role of Host Country Knowledge-Based Assets and IPR Protection in FDI Location Choice

Foreign direct investment (FDI) from developing to developed countries is a widespread phenomenon in the global economy. The literature suggests that such investments frequently follow a motive to seek knowledge-based assets, with the goal of augmenting the firm's resource base through internationalization. We argue that the prevalence of this motive may direct developing country firms' FDI toward developed countries with relatively stronger knowledge-based assets and weaker intellectual property rights (IPR) protection and that this effect is amplified when both conditions coincide. Furthermore, we suggest that the respective importance of knowledge-based assets and IPR protection diminishes as developing countries augment their own knowledge-based assets and that the importance of asset seeking as an internationalization motive for the country's firms declines compared with other motives such as institutional escapism. We investigate our model with FDI data including investment flows from 85 developing countries to 35 developed countries during 2009–2014. We find that developing country firms prefer investing in developed countries with stronger knowledge-based assets and weaker IPR protection. These criteria attract even more FDI when both co-occur. Furthermore, the influence of weaker host country IPR protection on the location decision diminishes for firms originating from home countries with higher stocks of knowledge-based assets.     

网络外部性下不对称企业技术创新投资决策研究

许多研究技术创新投资决策期权博弈的文献大都假定企业是同质的和企业创新产品之间具有负的外部性,本文研究正网络外部性条件下成本不对称企业技术创新投资决策问题.首先,导出企业投资收益函数和投资临界值,接着对存在的2种均衡,即序列均衡和同时投资均衡进行分析讨论,结果表明,均衡的结果依赖于成本不对称程度和网络外部性的共同作用.最后,结合案例进行数值计算,验证了理论分析结果.     

Strategic Decisions of New Technology Adoption under Asymmetric Information: A Game‐Theoretic Model*

In this paper we explore strategic decision making in new technology adoption by using economic analysis. We show how asymmetric information affects firms' decisions to adopt the technology. We do so in a two‐stage game‐theoretic model where the first‐stage investment results in the acquisition of a new technology that, in the second stage, may give the firm a competitive advantage in the product market. We compare two information structures under which two competing firms have asymmetric information about the future performance (i.e., postadoption costs) of the new technology. We find that equilibrium strategies under asymmetric information are quite different from those under symmetric information. Information asymmetry leads to different incentives and strategic behaviors in the technology adoption game. In contrast to conventional wisdom, our model shows that market uncertainty may actually induce firms to act more aggressively under certain conditions. We also show that having better information is not always a good thing. These results illustrate a key departure from established decision theory.     

MANAGING CREDIT BUBBLES

We study a dynamic economy where credit is limited by insufficient collateral and, as a result, investment and output are too low. In this environment, changes in investor sentiment or market expectations can give rise to credit bubbles, that is, expansions in credit that are backed not by expectations of future profits (i.e., fundamental collateral), but instead by expectations of future credit (i.e., bubbly collateral). Credit bubbles raise the availability of credit for entrepreneurs: this is the crowding‐in effect. However, entrepreneurs must also use some of this credit to cancel past credit: this is the crowding‐out effect. There is an “optimal” bubble size that trades off these two effects and maximizes long‐run output and consumption. The equilibrium bubble size depends on investor sentiment, however, and it typically does not coincide with the “optimal” bubble size. This provides a new rationale for macroprudential policy. A credit management agency (CMA) can replicate the “optimal” bubble by taxing credit when the equilibrium bubble is too high and subsidizing credit when the equilibrium bubble is too low. This leaning‐against‐the‐wind policy maximizes output and consumption. Moreover, the same conditions that make this policy desirable guarantee that a CMA has the resources to implement it.     

ON‐THE‐JOB SEARCH AND MORAL HAZARD

We analyze the interaction between intertemporal incentive contracts and search frictions associated with on‐the‐job search. In our model, agency problems call for wage contracts with deferred compensation. At the same time workers do on‐the‐job search. Deferred compensation improves workers' incentives to exert effort but distorts their on‐the‐job search decisions. We show that deferred compensation is less attractive when the value to the worker–firm pair of on‐the‐job search is high. Moreover, the interplay between search frictions and wage contracts creates feedback effects. If firms in equilibrium use contracts with deferred compensation, fewer firms with vacancies enter the on‐the‐job search market, and this in turn reduces the distortions created by deferred compensation. These feedback effects between the incentive contracts used and the activity level in the search markets can lead to multiple equilibria: a low‐turnover equilibrium where firms use deferred compensation, and a high‐turnover equilibrium where they do not. Furthermore, the model predicts that firms are more likely to use deferred compensation when search frictions are high and when the gains from on‐the‐job search are small.     

具有网络外部性的产品兼容性决策分析

通过Stachelberg竞争模型,本文研究了在具有网络外部性的市场中,拥有专有技术的主导厂商对其兼容技术的授权动机问题。并且得到了主导厂商在纵向兼容决策中最优厂商数量的控制的关系。     

How Leaders Affect Followers’ Work Engagement and Performance: Integrating Leader−Member Exchange and Crossover Theory

Drawing on leader?member exchange and crossover theory, this study examines how leaders’ work engagement can spread to followers, highlighting the role of leader?member exchange as an underlying explanatory process. Specifically, we investigate if leaders who are highly engaged in their work have better relationships with their followers, which in turn can explain elevated employee engagement. For this purpose, we surveyed 511 employees nested in 88 teams and their team leaders in a large service organization. Employees and supervisors provided data in this multi‐source design. Furthermore, we asked the employees to report their annual performance assessment. We tested our model using multilevel path analyses in Mplus. As hypothesized, leaders’ work engagement enhanced leader?member exchange quality, which in turn boosted employee engagement (mediation model). Moreover, employee engagement was positively linked to performance and negatively linked to turnover intentions. As such, our multilevel field study connects the dots between work engagement research and the leadership literature. We identify leaders’ work engagement as a key to positive leader?follower relationships and a means for promoting employee engagement and performance. Promoting work engagement at the managerial level may be a fruitful starting point for fostering an organizational culture of engagement.     

Leadership and Effectiveness in the Context of Gender: The Role of Leaders' Verbal Behaviour*

This field study focuses on verbal consideration, which is a leadership behaviour that expresses esteem for the follower and her or his work, knowledge and opinion. It was assumed that the relationship between verbal consideration and various outcomes is moderated by the leader's gender. One‐hundred‐and‐forty leaders and 455 of their direct followers were surveyed in a one‐wave questionnaire study in Germany. Male and female leaders showed the same degree of verbal consideration as rated by their followers. Verbal consideration is related to three out of four outcome variables for both sexes. One unexpected moderating effect of leaders' gender was found: followers of male leaders displaying verbal consideration report less ‘irritation’ (a state of exhaustion considered a threat to good task fulfilment). One explanation may be that male leaders get ‘extra credit’ for showing verbal consideration as it may be thought to entail special effort, whereas for female leaders it may be seen as normal and routine. This assumption should be examined in further studies in order to get more information about the different mechanisms by which female and male leaders reach the same quality of outcomes.     

Understanding the Followers of Toxic Leaders: Toxic Illusio and Personal Uncertainty

Toxic leaders are one of the main threats to the wellbeing of people in the workplace and in society in general, and followers play a critical role in constructing and maintaining toxic leaders. In this narrative review, we draw on Bourdieu's concept of illusio and incorporate it with the social and cognitive psychology approaches in an attempt to frame the dynamic system that sustains toxic leadership through continued support of the followers. More specifically, as we introduce the illusio perspective in a process‐relational context to the toxic leadership discussion, we (i) address the allure of toxic leaders as an incentive for followers to join the toxic illusio as a way to cope with their high personal uncertainty and (ii) illustrate the mechanisms and processes that motivate followers of toxic leaders to remain in the toxic illusio once they join. In this context, we also briefly discuss and differentiate between the ethical and moral dimensions of toxic leadership.     

A Nonatomic‐Game Approach to Dynamic Pricing under Competition

We study a revenue management problem involving competing firms. We assume the presence of a continuum of infinitesimal firms where no individual firm has any discernable influence over the evolution of the overall market condition. Under this nonatomic‐game approach, the unanimous adoption of an equilibrium pricing policy by all firms will yield a market‐condition process that in turn will elicit the said policy as one of the best individual responses. For both deterministic‐ and stochastic‐demand cases, we show the existence of equilibrium pricing policies that exhibit well‐behaving monotone trends. Our computational study reveals many useful insights, including the fact that only a reasonable number of firms are needed for our approach to produce near‐rational pricing policies.     

Leading well: Challenges to researching leadership in occupational health psychology – and some ways forward

ABSTRACT

Studies on the effects of leadership in occupational health psychology build on the assumption that leaders influence their followers’ health and well-being. Although this assumption has received support, this introductory paper to a special issue of Work & Stress on leadership argues that a number of questions regarding leadership and follower health and well-being remain unanswered. We identify four issues that we argue warrant further attention. First, what is “good” leadership? Particular leadership types are associated with increases in employee performance, but since this will involve higher effort expenditure, adverse outcomes for employee health are to be expected. Although many types of leadership are associated with favourable outcomes, we still need to identify the leadership characteristics can be identified that account for these positive outcomes. Second, how can good leadership be promoted? There is a need to develop interventions that are effective in promoting desirable leadership styles. Third, what are the inter-mediate and long-term effects of leadership on follower health? Finally, we need to understand the boundary conditions for good leadership, including the resources available to leaders. Based on these considerations, we conclude that further research is needed to fully understand the effects of leadership on employee health and well-being.     

Effective leadership and the allocation and exercise of power in organizations

We experimentally investigate whether delegation can be an effective leadership behavior to motivate followers. In particular, we study how the allocation and exercise of power – the right to choose projects – by leaders affects the subsequent implementation of the chosen projects by followers. To isolate the pure motivational effect of delegation, we focus on whether the amount of effort that followers exert to implement the exact same project depends on who has chosen the project and on what information was available when making the project choice. We find that followers implement projects efficiently if they have chosen them themselves, but reduce implementation effort if the same projects are imposed on them by leaders. But this motivational effect of delegation is persistent if and only if followers must implement projects that they themselves would not have chosen.