Found 3 article(s) for author 'Firm Performance'

Are economic rents good for development? Evidence from the manufacturing sector

Are economic rents good for development? Evidence from the manufacturing sector. Eric Werker, December 2018, Paper, “Are rents, or excess profits, good for development? Rents could induce firms to lobby or bribe governments to preserve the status quo; on the other hand, rents may promote growth by giving firms the needed funds to make investments in fixed capital or research and development. To test this question empirically, we use a panel of manufacturing data at the industry-country-year level, and measure rents by the mark-up ratio. We find that the relationship between rents and growth is strongly negative, with the results being primarily driven by the poorer countries (or those with worse institutions) in the sample.Link

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Shareholder Activism on Sustainability Issues

Shareholder Activism on Sustainability Issues. George Serafeim, July 25, 2016, Paper, “A growing number of investors are now engaging companies on environmental, social and governance (ESG) issues, in addition to traditional executive compensation, shareholder rights, and board of directors’ topics. In 2013, nearly 40 percent of all shareholder proposals submitted to Russell 3000 companies related to ESG issues, representing a 60 percent increase since 2003 (Proxy Voting Analytics, 2014). The topics of ESG proposals are diverse, ranging from disclosure of political contributions and compliance with human rights policies, to the adoption of a climate change policy. The purpose of this paper is to test the effect that ESG proposals have on firms’ subsequent ESG performance and market valuation.Link

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Profits and Economic Development

Profits and Economic Development. Eric Werker, April 3, 2014, Paper. “Are rents, or excess profits, good for development? Using industry-level manufacturing data, this paper demonstrates a negative effect of rents, measured by the mark-up ratio, on productivity growth. The negative effect is strongest in poor countries, suggesting that high profits stymie economic development rather than enable it. Consistent with the rent-seeking mechanism of our model, we find that high rents are associated with a slower reduction in tariffs. A country’s average mark-up in manufacturing is a strong negative predictor of…” Link Verified October 11, 2014

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