It is known that small firms rely mainly on the CEO’s individual knowledge for developing innovations. Recent work suggests that this approach is inefficient since it underutilizes other employees’ knowledge. We study to which extent using CEOs, managers and non-managerial employees’ ideas enhances small firms’ innovation performance. A Heckman selection model on 305 small firms shows that not ...

This study uses a unique firm-level dataset to examine how falling trade costs from 1993-2001 affected entry, exit, productivity, and exporting in the Korean manufacturing sector. We verify many of the predictions of recent heterogeneous-firm models of international trade. For example, falling trade costs reduced entry by new Korean firms, increased their probability of exit, and reduced the ma...

In the world where the only thing one can trust in is lack of confidence, for organizations to respond to this wavy environment, they need innovation, which by itself has a central role in the movement toward the comparative advantage and supreme performance. Although many researchers have in the past been carried out investigating the effect of innovation on organization's performance, it seem...

The importance of innovation for sustained competiveness is well stated in the literature. However, most product innovation research has so far focused on large firms or small high tech, start-up or spin-off companies. This study investigates innovation process practices in small established firms through the use of five managerial levers considered to determine the process. Based on a case-stu...

We propose a heteroscedastic regression model to identify the determinants of the dispersion in interest rates on loans granted to small and medium sized enterprises. We interpret unexplained deviations as evidence of the banks’ discretionary use of market power in the loan rate setting process. “Discretion” in the loan-pricing process is most important, we find, if: (i) loans are small and unc...

Serial correlation in annual growth rates carries a lot of information on growth processes – it allows us to directly observe firm performance as well as to test theories. Using a 7-year balanced panel of 10 000 French manufacturing firms, we observe that small firms typically are subject to negative correlation of annual growth rates, whereas larger firms display positive correlation. Furtherm...

Using data from the Motor Carrier Management Information System, we model crashes as a function of firm characteristics, with a focus on the employment relationship. We find that very small firms (one driver, one truck) and firms that contract with owner operators have fewer crashes than employee-only companies, once other firm characteristics and exposure are controlled. Additionally, though v...

This paper studies discretionary charges, which I define to be fees and levies that are collected at the discretion of local officials, as firm output distortions. I document that there is an inverted-U relationship between size of firms and discretionary charges paid by firms in China. I build a simple political economy model that captures interactions between firms and local officials. These ...

This paper used data from firms operating in twenty Latin American countries to evaluate whether firms’ perceptions about the nature and predictability of governments’ regulatory policies, the prevalence of intervention in the domestic economy, and the degree to which corruption served as an obstacle to business activity influenced firms’ growth. The paper also tested whether firms’ size or mul...

This study examines the relation of corporate earnings management to firm size. We observe that firm size plays differing roles in earnings management: Small-sized firms engage in more earnings management to avoid reporting losses than largeor medium-sized firms. On the other hand, largeand medium-sized firms exhibit more aggressive earnings management to avoid reporting earnings decreases than...