To what extent is social security spending associated with enhanced firm-level performance? A case study of SMEs in Indonesia

Although the relationship between social protection and enterprise performance is much debated in the literature, evidence is particularly limited in the case of small and medium-sized enterprises in developing economies. Using census data from 2010 to 2014, this article examines how the provision of social security influenced business performance in Indonesia. The author finds that increased social security spending of 10 per cent is associated with a per-worker revenue gain of up to 2 per cent. Moreover, profits are not found to decrease with increased social protection coverage, suggesting that increasing worker benefits may be a worthwhile business investment.     

Organisation et institution: vers une socioéconomie de la firme?

The paper aims at showing that beyond its economic nature the firm is an organized social institution. The theory of the firm does not succeed in unifying in a single analytical framework both its institutional and organizational dimensions. In contrast, organization theory – notably organizational sociology – deals with the intertwining of these two existential elements of firms. The cross-fertilization which occurs between these two social sciences can be used to propose a real socio-economic theory of the firm.     

Institutions matter: The case of Vietnam

The paper investigates institutional reforms in Vietnam and their impact on the economic performance of firms. Using the provincial competitiveness index 2006 (PCI06) and firm-level data in Vietnam in 2005, the results show that provincial competitiveness is economically and statistically significant in explaining cross-province differences in firm performance. We find that a 1% point improvement in government practice could increase the daily value-added of an average firm by an amount equivalent to nearly three times per capita GDP per day. The results show that an improvement in providing market information, more secure land tenure and labor training assistance has a positive effect on firm performance. By contrast, weaknesses in the judiciary system and administrative reforms impede growth of non-state firms. The findings indicate that governance is an important obstacle to the development of the non-state sector in Vietnam.     

Informality in a micro economy: Measurement,composition and consequences

This article measures the extent of – and unrecorded income generated by – informal employment in a micro economy characterized by poor governance. Household survey and census data are used to estimate the number of informal workers in Northern Cyprus and analyse the characteristics of informal employment, for the period 2004–11. Informal workers are mostly comprised of citizens with no social security registration, illegally employed immigrants or second‐job holders who have not registered their second jobs. In terms of value added, the estimated size of the informal economy is 9.1 per cent and 12.2 per cent of GNP in 2006 and 2011, respectively.     

On the expansion of the market and the decline of the family

Over the past two hundred years, large, modern firms have tended to replace small, family businesses. In parallel, the family has declined as a social institution. We suggest that these developments are interrelated. Because information of cheating in market transactions spreads only gradually in large markets, the reputation of the family firm could support contractual performance only in small, traditional markets. As markets grew in size, this reputational mechanism could no longer operate. The small, family firm was then replaced by the large, modern firm. This transition led to a decrease in the importance of the family.      

Cooperation,job security,and wages in a dual labor market equilibrium

By introducing cooperation among individuals working within a firm, this paper constructs a model generating a dualistic competitive equilibrium with differentials in wages and job security in an industry with product demand uncertainty. Primary firms offer high job security to promote cooperation and achieve high productivity. Secondary firms merely take advantage of ability to adjust employment. Wage differentials arise because cooperation is more productive among members of the same social group and thus different groups of workers face different labor demand. In contrast to the Arrow-Debreu economy, firms making long-term decisions and those making short-term decisions coexist in the equilibrium.     

COSTLY EXTERNAL FINANCE AND INVESTMENT EFFICIENCY IN A MARKET EQUILIBRIUM MODEL

The corporate finance literature suggests that a financially constrained firm invests less than an identical unconstrained firm. This does not imply that financial frictions cause firms to invest less than in a frictionless economy. When firms compete for investment funds, an increase in financial frictions can lead individual firms to increase their investment levels. A greater than the frictionless level of investment is likely in low-productivity firms, in cash-rich firms, and in firms with cheap external capital. Government programs that make capital cheaper for small firms may lead to lower levels of investment for all firms and decrease efficiency (JEL O16, E22, E44, G20)     

The role of local stakeholders in transforming economic upgrading into social upgrading in Ethiopian textile and garment firms

The authors examine the links between economic and social upgrading in a developing country with stringent industry policy and employment legislation, focusing on the strategies of local firms participating in global apparel production networks. Based on the 2015 case studies of five textile and garment firms in Ethiopia, they find that employment security and physical well-being were driven mainly by government labour regulations negotiated by local employers, workers and trade unions rather than by global buyers and conclude that upgrading and downgrading can occur simultaneously within a firm.     

The Sociology of Innovation: Organizational,Environmental, and Relative Perspectives

Innovation is risky. New products and firms are subject to high failure rates. To minimize the risk associated with innovation, most scholars agree that firms should engage simultaneously in two types of activities: exploring new alternatives and exploiting existing competencies. Firms that simultaneously engage in explorative and exploitative activities are called ambidextrous organizations. Research on ambidextrous organizations, however, inadequately considers the importance of the environment in which organizations operate for innovation success. The sociological view of innovation fills this gap by emphasizing the importance of social context for explaining innovative outcomes. The sociology of innovation highlights, first, the structural arrangements – characteristics of social networks, organizations, and institutions – that influence innovation and, second, the relative nature of innovation – whether an object is considered novel depends on one's vantage point. Drawing on the relative view of innovation, I develop a typology that outlines several paths to innovation with respect to two vantage points: the organization and the environment. I argue that minimizing the risks associated with innovation is most likely to occur when firms follow the path of innovation that consists of generating novel solutions that simultaneously exploit knowledge and resources that are both available to the firm and in the firm's environment.     

Contracts, Individual Revenue and Performance

In some jobs individual workers have control over revenue, effort and productivity. These jobs include professional firms for law, medicine and consulting. They include personal services in areas from hair styling to taxi driving. The firm offers contracts that allow for a sharing of risks and rewards. These incentives include a split of output between the firm and worker and employee ownership. For U.S. real estate agents, a choice is available between splitting revenue with the firm or retaining 100?% above a fixed prepaid minimum. These are equity and sequential debt contracts. Under the sequential debt contract, effort increases but output per hour declines. Separately, agents increase effort and productivity if offered ownership in the firm, effectively a claim on others?? performance.     

Exploring the contributions of human and social capital to productivity

In this article we investigate how human and social capital contribute to individual productivity. We study three firms that complete all their tasks as projects. The employees in all firms initiate and organise their projects. We collected archival data from the firms on performance, human capital, tenure, gender and their project activities. Social network data are generated from interviews and a survey. We find that social capital is the most important factor to determine productivity. We found mixed effects from human capital; only in one firm did human capital have a noticeable effect on productivity; tenure has no effects on productivity.     

Networks of organizational learning and adaptation in retail TNCs

Abstract In this article we contribute to a growing body of literature concerned with the socio‐cultural dynamics of learning and adaptation inside firms. Specifically, we apply a ‘competence‐based’ view of the firm to a newly emerging breed of retail‐industry transnational corporations (TNCs). We situate these firms within the context of ‘relational networks’ and then consider – from a geographical perspective – the complex interplay between ‘extra‐firm’ networks and ‘intra‐firm’ networks, and between store‐based learning and organizational adaptation. We argue that the competitiveness of the retail TNC increasingly rests upon its ability to adapt the portfolio of retail formats to different and rapidly changing business environments by mobilizing and blending knowledge from multiple locations. This, it is suggested, is leading to the emergence of a ‘reflexive’ or ‘hybridized’ model of retail globalization.     

Social network and family business: Uncovering hybrid family firms

What does it mean for a private enterprise in China to be embedded in a family? Our purpose here is twofold: (1) use social network analysis to describe what it means for a firm to be embedded in a family, (2) reveal from the application a new kind of firm, not family, yet akin to family. Armed with data on a large probability sample of private enterprises — a third of which meet ownership and employment criteria of being family businesses — we uncover a category of “hybrid family firms” that look modern in the style of firms that exclude family, but operate socially in ways similar to family firms. Our conclusion from summary statistics on the sample is that there are no differences in average performance level or network advantage for the three categories of businesses: family firms, hybrid family firms, and family-excluded firms. The fact that CEOs of family firms and hybrid family firms more often turn to family as key business contacts is a fact about network composition that raises no question about network mechanisms. Whether the CEO turns to more or fewer family contacts, government help is more likely with stronger political connections, and business success and survival are more likely with a large, open network. That said, the look-modern, act-traditional hybrid family firms stand alone in prospering with a CEO embedded in a closed business network. Recognition of hybrid family firms adds to the literature’s illustrations of social network analysis used to distinguish types of businesses and business people, and extends the population of organizations within which governance and strategy are likely to be better understood when viewed through a family logic.     

THE SOCIAL GEOGRAPHY OF GENDER-SWITCHING IN VIRTUAL ENVIRONMENTS ON THE INTERNET

The virtual social worlds of the internet give people unparalleled control over the construction and presentation of their identities. Gender-switching is perhaps the most dramatic example of how people exercise this control. It occurs when people present a gender that is different from their biological sex. While gender-switching figures prominently in academic commentaries and popular writings about on-line social life, there is little systematic research on the phenomenon. On-line surveys of two stratified random samples (N's=233 and 202) of MOO users were conducted. The majority of participants (60 per cent) in social MOOs (popular text-based internet social venues) had never engaged in gender-switching, while the majority in role-playing MOOs were either gender-switching currently (40 per cent) or had done so in the past (16.7 per cent). More than half of those who currently gender-switched did so for less than 10 per cent of their time on-line. In spite of the freedom to use indeterminate or even plural gender identities, most participants who switched genders (78.7 per cent) did so within traditional binary conventions (male to female, female to male). The primary reason for gender-switching was the desire to play roles of people different from one's self. The primary barrier to gender-switching was the belief that it is dishonest and manipulative. Attitudes toward gender-switching and on-line participation were better predictors of gender-switching than personal background demographics or personality measures. The images of gender-switching that emerge from this first systematic study of the phenomenon are considerably more benign than that usually portrayed in the literature. Gender-switching appears to be practised by a minority of MOO users for a small percentage of their time on-line. Gender-switching within MOOs of all kinds might best be understood as an experimental behaviour rather than as an enduring expression of sexuality, personality, or gender politics.     

Parental education, children's performance and the transition to higher secondary education: trends in primary and secondary effects over five Dutch school cohorts (1965–99)

According to Boudon, social background affects educational transitions as a result of differences in children's academic performance (primary effects) and differences in transition probabilities given children's level of academic performance (secondary effects). This study addresses historical changes in both primary and secondary effects on the educational transition from primary school to higher secondary education in the Netherlands. In addition, it considers changes over time in the relative importance of these effects. The study compares five cohorts of Dutch pupils, specifically those enrolling in secondary education in 1965, 1977, 1989, 1993 and 1999, and it employs counterfactual analyses. The main findings are that secondary effects have been stable and primary effects have fluctuated to some extent. As a result, the proportion of the total effect of social background accounted for by primary effects has increased somewhat, from 53 per cent to 58 per cent.     

INNOVATION: ITS PUBLIC AND PRIVATE ASPECTS AND SOME OF THEIR EMPIRICAL IMPLICATIONS FOR MERGERS

Innovators may have incentives to incur the expense of the search for new knowledge even if others can use the results without contributing to the costs of the search for them. Why? Assume firms choose their actions independently. Assume new knowledge is a free public good: a firm can make the product at lower cost even if it spends nothing on research, if another does the research. The most plausible noncooperative equilibrium in this situation is stochastic: firms will decide what to do on the basis of a random device. The theory determines the probability that the firm spends nothing, or something, on research. In consequence, no firm can be certain that a rival will do the research; no firm can be certain of becoming a free rider. In consequence, there will be no relation on average between returns on research-outlays and size of outlays; but the yield on research always will be positive. Innovation can lead to differences among firms, but these differences should not persist, as firms can gain by eliminating them. In a non-cooperative equilibrium, where firms have different cost conditions, the allocation of output among them is inefficient. Such inefficiency can be eliminated if information about methods of production is sold, say by way of licensing. But royalty receipts are a very small fraction of total revenues, even in research and development intensive industries such as chemicals and scientific instruments. Merger is another avenue of cooperation. The theory which assumes research results are private predicts a positive relation between merger activity and technical change. Empirical evidence for the 1879–1930 inverval supports this prediction.     

MAKING FRIENDS TO INFLUENCE OTHERS: ENTRY AND CONTRIBUTION DECISIONS THAT AFFECT SOCIAL CAPITAL IN AN ASSOCIATION

We examine factors affecting entry and contribution to an association that provides different goods using social capital formed by heterogeneous firms that lobby in a political economy environment. We identify how associations attract the most productive firms or the least productive firms in an industry and explain how such associations differ in their intensive and extensive marginal contributions to social capital. We find that the level of regulatory stringency, association products including capital goods for members or lobbying to influence regulation, and government influenceability affect membership and contribution decisions. These results vary with firm productivity. Often, an increase in government influenceability increases social capital in associations composed of highly productive firms because they prefer to influence policy while less productive firms prefer more association‐produced production inputs. (JEL D71, D73)     

RENT-SEEKING FIRMS, CONSUMER GROUPS, AND THE SOCIAL COSTS OF MONOPOLY

Do consumers' consumer-surplus (CS)–defending activities increase the social costs of monopoly compared to when consumers are inactive? Given just one rent-seeking firm, consumers ' CS-defending activities generally increase the social costs of monopoly, but given two or more rent-seeking firms, such activities generally reduce the social costs. (JEL D72, L12)     

Internal vs. External Successions and Their Effect on Firm Performance

An examination of 165 top management successionsin U.S. firms during 1989-91 reveals that externalsuccessions are more likely in small firms, in firmswith poor economic performance, and in firms which offer the successor several top positions (forexample, Chairman and CEO). This last findingillustrates that successor's interests and demands (suchas organizational power) are also important indetermining the final match between manager and firm. Wealso find that, on average, the postsuccessionperformance of external successors is superior to thatof internal successors. This could indicate that theBoard of Directors faces an agency problem, leadingit to appoint too often from inside.     

Are labour inspections effective when labour regulations vary according to the size of the firm? Evidence from Peru

This article analyses the impact of enforcement of four labour standards (pension system enrolment, minimum wage, maximum weekly working hours and written employment contract) on compliance in Peru, where labour regulations and penalties vary according to firm size. The author uses household survey data to analyse a factor not previously studied – adjustment by firms through downsizing to benefit from lower fines and less stringent regulations. The empirical findings indicate that enforcement efforts have little effect on either the degree of compliance or the size of firms.