The Competitive Firm's Response to Risk
Title | The Competitive Firm's Response to Risk PDF eBook |
Author | Lindon J. Robison |
Publisher | MacMillan Publishing Company |
Pages | 344 |
Release | 1987 |
Genre | Business & Economics |
ISBN |
Journal of Agricultural Economics Research
Title | Journal of Agricultural Economics Research PDF eBook |
Author | |
Publisher | |
Pages | 328 |
Release | 1987 |
Genre | Agriculture |
ISBN |
What is the Impact of Increased Business Competition?
Title | What is the Impact of Increased Business Competition? PDF eBook |
Author | Sónia Félix |
Publisher | International Monetary Fund |
Pages | 57 |
Release | 2019-12-13 |
Genre | Business & Economics |
ISBN | 1513521519 |
This paper studies the macroeconomic effect and underlying firm-level transmission channels of a reduction in business entry costs. We provide novel evidence on the response of firms' entry, exit, and employment decisions. To do so, we use as a natural experiment a reform in Portugal that reduced entry time and costs. Using the staggered implementation of the policy across the Portuguese municipalities, we find that the reform increased local entry and employment by, respectively, 25% and 4.8% per year in its first four years of implementation. Moreover, around 60% of the increase in employment came from incumbent firms expanding their size, with most of the rise occurring among the most productive firms. Standard models of firm dynamics, which assume a constant elasticity of substitution, are inconsistent with the expansionary and heterogeneous response across incumbent firms. We show that in a model with heterogeneous firms and variable markups the most productive firms face a lower demand elasticity and expand their employment in response to increased entry.
The Journal of Agricultural Economics Research
Title | The Journal of Agricultural Economics Research PDF eBook |
Author | |
Publisher | |
Pages | 528 |
Release | 1987 |
Genre | Agriculture |
ISBN |
Risk, Uncertainty and Profit
Title | Risk, Uncertainty and Profit PDF eBook |
Author | Frank H. Knight |
Publisher | Cosimo, Inc. |
Pages | 401 |
Release | 2006-11-01 |
Genre | Business & Economics |
ISBN | 1602060053 |
A timeless classic of economic theory that remains fascinating and pertinent today, this is Frank Knight's famous explanation of why perfect competition cannot eliminate profits, the important differences between "risk" and "uncertainty," and the vital role of the entrepreneur in profitmaking. Based on Knight's PhD dissertation, this 1921 work, balancing theory with fact to come to stunning insights, is a distinct pleasure to read. FRANK H. KNIGHT (1885-1972) is considered by some the greatest American scholar of economics of the 20th century. An economics professor at the University of Chicago from 1927 until 1955, he was one of the founders of the Chicago school of economics, which influenced Milton Friedman and George Stigler.
Agricultural Economics Research
Title | Agricultural Economics Research PDF eBook |
Author | |
Publisher | |
Pages | 584 |
Release | 1987 |
Genre | Agriculture |
ISBN |
Bank Competition and Firms' Risk-Taking
Title | Bank Competition and Firms' Risk-Taking PDF eBook |
Author | Sudipta Basu |
Publisher | |
Pages | 63 |
Release | 2019 |
Genre | |
ISBN |
Research shows that bank competition affects general economic and banking-related outcomes, but much less is known about how it impacts firms' risk-taking. By exploiting staggered regulatory reforms across different U.S. states, we show that bank competition significantly reduces borrowers' risk-taking. In response to bank competition, firms invest in more capital-intensive but less risky projects: they increase capital expenditures and maintain stable R&D expenses, while reducing R&D risk. We also find that the decline in risk-taking is concentrated in operating accruals' volatility. Bank competition motivates lower borrowers' risk-taking through two mechanisms: (1) eroding borrowers' ability to commit to long-term relationship with banks, and (2) increasing the availability of cheaper credit. Further, risk reduction is more pronounced for firms that are more bank-dependent, smaller, less transparent, and receive cheaper loans after the regulatory reforms.