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This study examines the distributive and welfare effects of cross‐ownership by firms in a general equilibrium economy on the product and factor markets. The cross‐ownership of equities, such as collusion, tends to be anticompetitive, thereby narrowing the wage gap between skilled and unskilled labor in the short term with the existing number of firms. In the capital market, reducing capital cost through cross‐ownership causes new firms to enter the market in the long term. This firm‐entry effect induced by cross‐ownership through an increase in the number of competitors generates a competitive force that exacerbates wage inequality and reduces welfare in the economy. [ABSTRACT FROM AUTHOR]

This paper investigates how sectoral linkages amplify or diminish misallocation at the intensive and extensive margins. Our analysis is based on a multisector general equilibrium model with input–output linkages, heterogeneous entrepreneurial abilities, and endogenous occupational choice. Distortions affect the intensive use of production inputs and they also impact the agents' occupational decisions, misallocating the mass and type of entrepreneurs in different sectors of production. When the most distorted sectors are upstream (downstream), input–output linkages amplify (diminish) the loss from entreprenurial misallocation. We calibrate the model to the US and quantify the output losses from sectoral corporate taxes, decomposing the role of networks and the extensive margin decisions. We find that sectoral linkages quadruple the loss from the misallocation of entrepreneurs. We study an entry subsidy program, showing that it should target those sectors whose marginal entrepreneurs suffer larger profit losses, even if they are not necessarily the most distorted. [ABSTRACT FROM AUTHOR]

Using UK data, we present greater empirical detail on the puzzling firm dynamics that emerged during coronavirus disease 2019 (COVID-19). We show that firm entry increased during the pandemic across several countries, and this contrasts with typical recessions where firm entry declines. Additionally, the rise in firm entry is driven by individual entrepreneurs creating companies for the first time, particularly in online retail. We find evidence that firm creation responded significantly to declines in retail footfall and that firms created during the pandemic are more likely to exit and less likely to post jobs. Overall, this implies that despite surging firm creation during the pandemic, the overall employment effect is limited. Finally, we find that the primary contributor to limited employment creation is the shift in ownership composition of new entrants during COVID. [ABSTRACT FROM AUTHOR]

Survey evidence tells us that stock prices reflect the risks investors associate with long-run technological change. However, there is a shortage of models that can rationalize long-run risks. Unlike the previous literature assuming a fixed number of products, our model allows for new product varieties that appear in the form of new firms which face entry costs and delay in the entry process. The fixed variety model has a significant limitation in translating macroeconomic volatility into asset return volatility. Our model with growing varieties induces endogenous low-frequency fluctuations in productivity driving large, persistent variations in consumption growth and asset prices. It also changes the valuation of assets through the increase in the volatility of the pricing kernel (with a positive long-run component) and leads to higher excess returns. Our model is motivated by a simple recursively identified VAR model containing quarterly US data 1992Q3-2018Q4 with the following list of variables: total factor productivity, output, a measure of firm entry, and the excess return on stocks. [ABSTRACT FROM AUTHOR]

We examine undesirable competition in an asymmetric Cournot oligopoly under foreign competition and indirect taxation. We find that entry of inefficient domestic firms benefits consumers, while that of efficient foreign firms may hurt consumers when the number of foreign firms is relatively small. This result is different from that obtained in Dinda and Mukherjee (2014) which ignore foreign competition. We thus identify another important factor, the nationality of entrant firms, that affects the effect of entry on consumers under the welfare-maximizing tax policy. Our main finding is robust to the introduction of increasing marginal costs across firms. However, we find that (i) when foreign firms act as leaders, entry of (either domestic or foreign) firms always benefits consumers, which indicates that the moves of domestic and foreign firms (simultaneously or sequentially) are critical to the welfare implications under foreign competition. This result is in contrast to the finding by Wang et al. (2019b); and (ii) when efficient firms are partially foreign owned, entry of both domestic and foreign firms may hurt consumers under certain conditions. Hence, factors such as the mode of competition and the degree of foreign ownership are important for the competition authorities to develop relevant policies in an open economy. [ABSTRACT FROM AUTHOR]

Public administrations have been adopting information and communication technologies (ICT) to transform their internal organization and provide better public services to citizens and firms. However, the external benefits, despite being deemed relevant, have been empirically overlooked. We first explore the relation between ICT diffusion in public administrations and business demography at the municipal level by studying the Italian context. Our results show that ICT diffusion in the PA contributes to significantly reducing the death rate of firms and boosting their turnover rate. The adoption of ICT in the PA also exerts a positive impact on the firm birth rate, although it is not statistically significant. These results shed light on the importance of promoting e‐government and framing coherent digital agendas as public instruments for supporting entrepreneurship and regional economic development. [ABSTRACT FROM AUTHOR]

This article examines how high-speed internet development across Chinese provinces affects firm employment and average annual wages. The authors exploit a national policy reform by which the government launched a project to improve internet speed in 2000 and devise a difference-in-differences with a continuous treatment method for empirical identification. The authors first find that high-speed internet significantly increases employment and slightly reduces average wages. Specifically, after one percentage point increase in the number of fixed-line users per capita at the province level, there is a 0.14 percent increase in firm employment and a 0.06 percent decrease in average wages, respectively. Also, this paper shows that the gains and losses from high-speed internet on firm performance are likely to have risen from the higher probability of firm entry and the improvement of productivity in existing firms. Third, the authors find rich heterogeneity across firm ownership, size, and regional characteristics. [ABSTRACT FROM AUTHOR]

Abstract Although wage inequality is an important and widely studied issue, the literature is vastly silent on the relationship between firm entry and exit and the wage dispersion between firms. Using a 50% random administrative sample of West German establishments over the period 1976–2017, I study wage dispersion dynamics between and within the groups of entering, exiting, and incumbent establishments by examining the distribution of average wages across establishments. The results show that entering establishments became increasingly unequal over time, thereby contributing to the rise in wage dispersion between establishments. However, exit rates of young and low-wage establishments have dampened this effect. These findings suggest considering the consequences for wage inequality when designing and assessing policy instruments for firm entry and exit.

Using Chinese manufacturing enterprises during 2006-2014 as research sample, we examine the effect of adoption of industrial robots on firm entry and its mechanism. The empirical results show that the application of industrial robots can significantly improve the number of new enterprises, total industrial output value, the sales revenue of main business products and the entry rate of new enterprises. After the robustness tests such as solving endogeneity problems and changing the measurement of key variables by constructing Bartik instrumental variables, the conclusion is still valid. The mechanism analysis reveals that first, the application of industrial robots has a certain substitution effect on labor demand. The real labor cost is relatively low in areas with high installation density of industrial robots, thus promoting the scale of firm entry. Second, the application of industrial robots can improve the productivity and profits of enterprises, thus attracting new enterprises. The heterogeneity analysis shows that the adoption of industrial robots has a larger impact on the market entry of non-state-owned enterprises (non-SOEs) than on that of state-owned enterprises (SOEs) ; and compared with technology-intensive industries, it has a larger impact on new enterprises in labor-intensive and capital-intensive industries. In addition, it has a larger effect on new enterprises in areas with higher level of marketization. [ABSTRACT FROM AUTHOR]

In this paper, we provide a general equilibrium analysis of corporate profit tax on income distribution, unemployment, and wage inequality. With firm dynamics in industrial sector, we identify a new channel through which profit tax affects income and wage inequality: profit tax cut will widen not only the wage gap between skilled and unskilled labor, but also exacerbate the wage inequality of unskilled labor among different sectors. The welfare effect of profit tax cut depends on unemployment deepening (labor‐distortion effect) and more manufacturing firms enter the market (business‐creation effect), eroding the market share of incumbent firms (business‐stealing effect). [ABSTRACT FROM AUTHOR]

The article investigates the effect of crime on firm entry rates in Italian provinces over the period 2007–2016. The extant literature focuses mainly on the relationship between crime and the sorting of new businesses. The present paper contributes to this stream of work by estimating the effect of crime on the overall propensity to engage in entrepreneurial activities across a national territory. We measure the extent to which property and violent crime affect firm entry rates using an instrumental variable approach in which the instrument for criminal activity is the effective abortion rate. Our findings suggest that crime has a negative, sizable impact on firm entry. The results are robust to alternative instrumental variables and firm entry indicators. This empirical exercise emphasizes the need to consider loss of new business activities as a downstream effect when computing the social costs of crime. [ABSTRACT FROM AUTHOR]

We apply border discontinuity analysis to measure the impact of marginal tax rates on capital income, property, sales, and income on establishment entry on either side of state borders. Establishments are more likely to enter on the side of the border with the lower marginal tax rates. The biggest differences in start-up rates are at borders with the largest tax rate differences, with property tax rate differences mattering most. We rank borders by the differences in start-ups due to tax structure, and we rank states by their distortionary tax structures. The greatest distortion in start-ups due to tax rates is at the Wyoming-Idaho border with an 8.6% lower probability of start-ups on the Idaho side. The most distortionary tax structure is Rhode Island's at 14.2% lower probability of entry, but it is not as heavily disadvantaged at the border because its neighbor, Connecticut, has the third most distortionary tax structure. Plain English Summary: State tax rates affect start-ups at state borders. State taxes on property, sales, personal income, and corporate income affect the side of the border start-ups tend to select. A state with a one-point higher tax rate in each of the four taxes will have a 3.2% lower probability of a start-up than its neighboring state. Property taxes have the greatest adverse effect on start-ups because new firms must pay property taxes, even if they have no sales or income. The greatest distortion in start-ups due to tax rates is Wyoming's 8.6% advantage compared to Idaho. Some states with the most distortionary tax structures are not disadvantaged at their borders because their neighbors also have high tax rates. Rhode Island has the most distortionary tax structure, but it is not as heavily disadvantaged at the border because its neighbor, Connecticut, has the third most distortionary tax structure. [ABSTRACT FROM AUTHOR]

Although wage inequality is an important and widely studied issue, the literature is vastly silent on the relationship between firm entry and exit and the wage dispersion between firms. Using a 50% random administrative sample of West German establishments over the period 1976–2017, I study wage dispersion dynamics between and within the groups of entering, exiting, and incumbent establishments by examining the distribution of average wages across establishments. The results show that entering establishments became increasingly unequal over time, thereby contributing to the rise in wage dispersion between establishments. However, exit rates of young and low-wage establishments have dampened this effect. These findings suggest considering the consequences for wage inequality when designing and assessing policy instruments for firm entry and exit. [ABSTRACT FROM AUTHOR]

This paper examines the short‐ and long‐run effects of manufacturing capital utilisation on income distribution and social welfare of an economy. A rise in manufacturing capital utilisation lowers the effective cost of capital. This increases the demand for capital in the urban sector, which raises firm output and profitability but reduces the availability of capital in the rural sector. Unskilled wage is lowered. Thus, a rise in manufacturing capital utilisation increases income inequality in the short run. In the long run, due to the firm‐entry effect, a rise in manufacturing capital utilisation further exacerbates the inequality situation. Empirical analysis confirms the theoretical findings. In particular, a one per cent increase in manufacturing capital utilisation leads to about 0.58% increase in income inequality, of which the contribution from the firm‐entry effect is about 28%. [ABSTRACT FROM AUTHOR]

This paper examines the effects of privatizing China's state-owned enterprises (SOEs) on wage distribution and the welfare of the economy. Privatizing profitable SOEs can narrow wage inequality and improve welfare, and it is however accompanied by a business dynamism effect that can widen the skilled-unskilled wage gap. Using China's split share structure reform in 2005 as a quasi-natural experiment, we empirically demonstrate for profitable SOEs a positive relationship between partial privatization and wage gap. Our findings are consistent with the plan to wind down unprofitable SOEs that would not survive without government subsidies. • This paper examines the effects of privatizing China's SOEs on wages and welfare. • Privatization accompanied by firm entry can widen the skilled-unskilled wage gap. • Predictions regarding the distributive effect of privatizing SOEs are confirmed. [ABSTRACT FROM AUTHOR]

Revolving credit is the prime determinant of short-run household liquidity and comoves positively with product variety and negatively with unemployment. I develop a theory of feedback between revolving credit and product development and examine its ability to explain labor market volatility. Extending the Mortensen–Pissarides model with an endogenous borrowing constraint and free entry of monopolistically competitive firms reproduces stylized facts in the data and amplifies both productivity and financial shocks through mutual causality. Higher debt limits encourage firm entry and raise product variety (the entry channel), and greater variety makes default more costly and thereby raises the equilibrium debt level (the consumption value channel). Though productivity shocks are sufficient to generate higher volatility, financial shocks are essential in approximating the time series patterns of unemployment, vacancies, and revolving credit in the data, and reproduce the rise in unemployment during the Great Recession. [ABSTRACT FROM AUTHOR]

We examine the impact of corporate taxation on entrepreneurship, using a quasi-natural experiment, which substantially reduced the corporate tax rate for start-ups located in inland municipalities in Portugal. Using a difference-in-differences approach and IV regression, we find that the tax reform increased firm entry and new firm job creation. The entrepreneurs who took advantage of this tax reform are relatively older, and are better-educated individuals. Their start-ups are relatively larger, more productive, and are more likely to survive the first 3 years. These findings suggest that corporate taxation is an imperative constraint for entrepreneurship, particularly for high-quality entrepreneurs. These better-educated individuals find it easier to overcome the hurdles of tax legislation and to make use of the opportunities created by a specific tax reform. [ABSTRACT FROM AUTHOR]

Copyright of Društvena Istraživanja is the property of Institute of Social Sciences Ivo Pilar and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Previous macro‐ and micro‐level evidence indicate that fluctuations in idiosyncratic uncertainty have an important effect on investment, both directly and indirectly through financial market frictions. The objective of this paper was to explore, beyond the two traditional and complementary channels, a new one: firm entry. By utilizing a novel and large dataset on Greek firms covering the entire economy over the period 2000–2014 and employing a panel‐VAR methodology, we examine and evaluate the impact of shocks to the number of startups, idiosyncratic uncertainty, and financial conditions on the investment growth at the industry level. Our findings can be summarized as follows. First, a shock to the number of new firms has significant effects on investment that persist for many years. Second, although all the three variables are important drivers of investment growth dynamics, uncertainty has the largest impact (explaining about the 15% of the variability of investment growth), firm creation follows (it explains about the 7%), while financial conditions have the smallest direct effect (explaining the 3.5%). Finally, we demonstrate that firm entry constitutes an important propagation mechanism for the transmission of uncertainty shocks in the investment growth trajectories. [ABSTRACT FROM AUTHOR]

A nascent body of research suggests that economic freedom is positively associated with entrepreneurial activity. Most of this literature is based on cross-countries analyses, although there is significant regional heterogeneity in entrepreneurial activity and the institutional and policy context within countries. The literature also largely overlooks the potential for the entrepreneurial inducing effects of economic freedom to drive less efficient firms out of the market. Additionally, economic freedom is a multi-dimensional construct comprised of numerous underlying aspects of the institutional and policy environment, but most studies have employed a composite economic freedom measure to assess its impact on entrepreneurial activity. I contribute to these gaps in the literature by decomposing the recently developed Metropolitan Economic Freedom Index into its underlying institutional indicators to explore their potential impact on the firm entry and firm exit rates for a sample of nearly 300 US cities over the period 1972–2012. [ABSTRACT FROM AUTHOR]

Economic freedom facilitates the market selection mechanism that enables the Schumpeterian creative destruction process. I develop a framework depicting how economic freedom, which reduces entry barriers and transaction costs, acts as an external enabler that facilitates the creation of firms and jobs. It also facilitates the market correction device, potentially serving as a disabling force to allow firm and job destruction. Using a novel metropolitan statistical area–level dataset, I investigate empirically the role of local economic freedom on dynamism for a sample of nearly 300 U.S. cities over the period 1972–2012. My results confirm that economic freedom is positively associated with firm and job creation, but it has no effect on firm and job destruction. [ABSTRACT FROM AUTHOR]

Motivated by empirical evidence, we develop an incentive contracting model under oligopolistic competition to study how incumbent firms adjust managerial incentives following deregulation policies that enhance competition. We show that firms elicit higher managerial effort by offering stronger incentives as an optimal response to entry, as long as incumbent firms act as production leaders. Our model draws a link between an industry-specific feature, the time needed to build production capacity, and the effect that product market competition has on executive compensation. We offer novel testable implications regarding how this industry-specific feature shapes the incentive structure of executive pay. • Managerial firms in oligopoly offer stronger managerial incentives as Stackelberg leaders. • By contrast, firms offer weaker managerial incentives as Cournot competitors. • Social welfare is higher under Stackelberg competition than under Cournot competition. [ABSTRACT FROM AUTHOR]

This paper analyzes the effect of command-and-control regulation on firms' incentives for pollution abatement, market structure, and social welfare. We consider a regulation under which firms are not allowed to produce if they were found in noncompliance with the preset emissions standard during the government's imperfect inspection. In the case of the ex ante monopoly, a loose standard coupled with an intensive inspection effectively induces perfect compliance. In the case of the ex ante duopoly, the intensified inspection directly creates market entry barriers, but it also induces firms to increase abatement investments for better environmental compliance, which indirectly promotes market competition. Moreover, a firm invests more in pollution abatement if it is initially cleaner or more production-efficient than its rival, or if it has fewer potential rival. We also find that regulatory tightening may harm social welfare by reducing the probability of entry, and social welfare may be higher under monopoly than under duopoly when government inspection is sufficiently intensive. [ABSTRACT FROM AUTHOR]

Young firms are known to grow at a faster rate than incumbents. With administrative firm data from Germany, we show that the higher growth rates indeed translate into upward mobility within the sector-specific firm size distribution. Young firms are therefore not only able to catch up with incumbents, but also able to grow larger in absolute values. Recentered influence function regression results reveal that young firms cause significant rank mobility within the stock of firms, which even holds when the local skewness of the firm size distribution is accounted for. The results clearly indicate a Schumpeterian growth process where young firms challenge established ones. [ABSTRACT FROM AUTHOR]

Nine out of the last ten recessions in the United States have been preceded by an increase in the price of oil as noted by Hamilton [ Palgrave Dictionary of Economics ]. Given the small share of energy in gross domestic product this phenomenon is difficult to explain using standard models. In this paper, I show that firm entry can be an important transmission and amplifying channel for energy price shocks. The results from the baseline dynamic stochastic general equilibrium (DSGE) model predict a drop in output that is two times the impact in a model without entry. The model also predicts an increase in energy prices would lead to a decline in real wages, investment, consumption, and return on investment. Additionally, using US firm level data, I demonstrate that a rise in energy prices has a negative impact on firm entry as predicted by the DSGE model. This lends further support toward endogenizing firm entry when analyzing the effects of energy price shocks. [ABSTRACT FROM AUTHOR]

Using data on the universe of taxable retail sales, retail firm start-ups, and retail firm exits in Iowa from 1992 through 2011, we test whether patterns of retail firm entry and exit are consistent with churning. Consistent with churning, the same factors that increase retail sales in a local market also increase new retail firm entry and either increase or do not affect retail firm exit. Evidence suggests that there is more churning in urban than in rural markets. Similar evidence is found using a sample of national firm entry and exit into local markets. If churning increases productivity growth, then the greater churning rate in urban markets is another source of agglomeration advantages in thick markets. [ABSTRACT FROM AUTHOR]

This paper examines the short and long‐term effects of urbanisation, via favourable urban development policies, on income distribution and social welfare for a developing country, in which the urban manufacturing sector is characterised by imperfect competition and free entry. Urbanisation shifts rural workers to the highly productive urban sector, while causing production in urban firms to expand because of scale economies. However, urbanisation may worsen wage inequality between skilled and unskilled labour in the short term. In the long term, urbanisation can attract new firms to the urban sector and favourable urban development policies may result in excessive entry of firms, which can amplify wage inequality in the economy. This entry‐amplifying effect is confirmed empirically, especially for low and lower‐middle‐income countries. If the entry effect is not considered, the impact of urbanisation on wage inequality could be understated by 13% for low and lower‐middle‐income countries. [ABSTRACT FROM AUTHOR]

We study how international trade and exporting affect the cyclicality of establishment creation. We build a general equilibrium model with two features: (i) new establishments start small and grow gradually and (ii) exporters are persistently bigger and more productive than nonexporters. When establishments creation costs fluctuate with aggregate productivity, the model generates procyclical fluctuations in domestic establishments and importers. Without international trade, entry is weakly countercyclical and too smooth. The model generates reasonable fluctuations in the stock of importers, exporters, and domestic establishments. With an entry margin, output is hump‐shaped following a productivity shock and this hump is stronger with trade. [ABSTRACT FROM AUTHOR]

Using a rich data set of the Dutch manufacturing sector between 1995 and 2010, we investigate the effect of foreign direct investment (FDI) on domestic new firm entry. The emerging empirical literature has focused on the direct relationship between FDI and entry, but has not explored the mechanisms behind the observed effect. Drawing on a simultaneous equations model, our analysis features both the direct effect of FDI as well as indirect effects through two channels: industry competition and wages. We estimate the parameters through 3SLS and take into account the endogeneity of competition and wages with respect to entry. Our results show that there is a significant negative direct effect of FDI on entry. At the same time, FDI decreases competition and increases wage levels, which then impact entry positively and negatively, respectively. The total effect of FDI is negative, but small and virtually disappears after one year. Policy implications are discussed. [ABSTRACT FROM AUTHOR]

We examine the effect of foreign bank presence on new firm entry in 83 economies over the 2005–2013 period. The empirical findings show that foreign bank presence exerts a positive and significant effect on firm entry. This effect subsides in countries with strong creditor rights, while it strengthens in economies with high depth of credit information sharing. In further analysis, we find that the type of credit information sharing provider matters. The positive effect of foreign bank presence on firm entry strengthens in the presence of a private credit bureau, whereas it is subdued in the presence of a public credit registry. Finally, we find some evidence that cultural and information sharing distance between home and host economies weakens the positive effect of foreign bank presence on firm entry. In terms of policy, attracting foreign banks while strengthening credit information sharing through private credit bureaus could benefit entrepreneurship in host economies. [ABSTRACT FROM AUTHOR]

There is a growing body of literature highlighting the positive contributions of migration and diasporas to economic growth, innovation and productivity. One of the channels facilitating these effects is entrepreneurship. This paper provides novel empirical evidence concerning the link between migration and firm entry across Italian regions during the period 2004-14, and it explores the role of ethnic concentration in this context. The results show that the stock of foreign population is positively correlated with firm entry. Furthermore, this relationship varies across business sectors and firms' legal status, and it benefits from the existence of local networks within diaspora communities in the host region. [ABSTRACT FROM AUTHOR]

In this paper, we aim to empirically analyze the determinants of firm entry and exit in Russia using a regional-level panel data for the years of 2008–2014, with special emphasis on institutional failures and the politico-economic impact of external crises. We found that these two elements exhibit statistically significant and economically meaningful effects both on the creation and destruction of Russian firms, controlling for potentially explanatory factors. Our empirical results also suggest that the process of firm entry and exit is manifold across Russian regions due to their heterogeneity. Nevertheless, a surprisingly robust estimate of the world oil price (irrespective of the difference in target regions) suggests a possible high exposure of each Russian region to a global crisis. This comes from the importance of oil trade with the world and, accordingly, the ongoing crisis may bring a harmful influence to regeneration of Russian businesses.

This paper studies the role of the exchange rate regime for trade of new products. It first provides VAR evidence that a rise in external productivity shifts trade away from new products and more so in fixed regimes. Then, it presents a model with firm dynamics in line with this evidence. We argue that exchange rate policy can affect firms’ entry decisions with consequences for the competitiveness of a country’s exports well beyond the short run. In our setup, fixed exchange rates can foster the competitiveness of firms that trade new products, while flexible rates favor firms that produce mature products.

This article studies firm entry dynamics in Poland—an emerging Central and Eastern European (CEE) economy with significant regional disparities. In particular, it examines both long- and short-run drivers of new firm creation in the Polish NUTS-2 regions and the role of firm entries for the region’s economic activity by investigating the propagation of shocks to firm entry on regional GDP, nonagricultural employment, and the total number of firms. Results indicate that regional economic structures significantly affect new firm creation. Some important results are also obtained with regard to the role of firm entry in regional development patterns in Poland. [ABSTRACT FROM AUTHOR]

We analyze how the Syrian refugee inflows into Turkey affected firm entry and performance. To estimate the causal effects, we use instrumental variables, difference-in-differences, and synthetic control methodologies. The results suggest that hosting refugees is favorable for firms. Total firm entry does not seem to be significantly affected. However, there is a substantial increase in the number of new foreign-owned firms. In line with the increase in new foreign-owned firms, there is some indication of growth in gross profits and net sales. [ABSTRACT FROM AUTHOR]

This paper sheds light on the international spillovers of China's reforms in upgrading industrial capabilities, liberalizing capital account, internationalizing the renminbi, and transition to flexible exchange rates. Drawing on two-country New Keynesian model of endogenous entry and portfolio adjustment, we find that China's industrial upgrading that peddles on yuan appreciation lifts all boats through global production network irrespective of capital account convertibility, degree of renminbi internationalization, and exchange rate reform. Feasibility of appreciation-driven upgrading is called into question, however, when renminbi reform and capital account liberalization go in parallel. We also show that international spillovers disappear once renminbi internationalization is associated with liberalized capital account and flexible renminbi exchange rates. [ABSTRACT FROM PUBLISHER]

Copyright of Regional Studies is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study sheds light on the operation of Japanese competition policy by focusing on a public procurement bid-rigging case in the construction industry. The analysis demonstrates a firm-entry effect on the construction market and shows that the bidding and winning price levels before an investigation by the Japan Fair Trade Commission were higher than they were after the investigation. According to these results, price levels in the bid-rigging period were approximately 6% higher than with competition, and the result is statistically significant. Firm entry is associated with an approximate 2% price reduction, an effect that comes from introducing competition into a coordinated setting. [ABSTRACT FROM AUTHOR]

The effects that corruption and tax policy have on entrepreneurship and firm growth have been often studied in the literature. This current article adds to that literature by evaluating how the interaction effect between corruption and tax policy influences firm entry at the US state level, using a panel data set of all 50 US states between 2001 and 2014. Overall, the findings are consistent with the literature and suggest that while high levels of corruption and relatively burdensome tax policy have a negative effect on firm entry, high levels of corruption tend to dampen the negative effects associated with relatively high tax rates. Potential policy implications are discussed within this article. [ABSTRACT FROM AUTHOR]

We address the question of what determines new firm formation in developing countries. Because of the influence that this may have on the design of firm entry policies, our main concern is whether the determinants of new firm formation are the same and/or have the same impact in developed and developing countries. We discuss arguments put forward in the literature that may support the existence of differences in the determinants of firm creation between developed and developing countries. We also analyse the results found on the determinants of formal firm entry in developing countries and compare these results with those found in developed countries. Our main conclusion is that policy makers in developing economies should be careful when using evidence from developed countries to design firm entry-promoting policies. [ABSTRACT FROM AUTHOR]