Pehr-Johan Norbäck - Academia.edu (original) (raw)

Papers by Pehr-Johan Norbäck

Social Science Research Network, 2022

Social Science Research Network, 2011

In many countries entrepreneurship is promoted through tax reductions for small businesses and by... more In many countries entrepreneurship is promoted through tax reductions for small businesses and by various government support schemes. We analyze the effects of such policies to subsidize small businesses in a setting where both the risk-return characteristics of the selected innovation project and the mode of commercialization chosen by entrepreneurs (market entry versus sale to an incumbent firm) are endogenous. We show that government programs to support small businesses foster market entry by entrepreneurs but, at the same time, give an incentive to choose low risk projects, due to the existence of limited loss offset provisions. This points to a basic trade-off between the goals of raising competition in technology-intensive markets and the desire of governments to foster risky 'breakthrough' innovations.

Social Science Research Network, 2008

In this paper we construct a model in which entrepreneurial innovations are sold into oligopolist... more In this paper we construct a model in which entrepreneurial innovations are sold into oligopolistic industries and where adverse selection problems between entrepreneurs, venture capitalists and incumbents are present. We show that as exacerbated development by better-informed venture-backed firms is used as a signal to enhance the sale price of developed innovations, venture capitalists must be sufficiently more efficient in selecting innovative projects than incumbents in order to exist in equilibrium. Otherwise, incumbents undertake early preemptive, acquisitions to prevent the venture-backed firms' signaling-driven investment, despite the risk of buying a bad innovation. We finally show at what point the presence of active venture capitalists increases the incentives for entrepreneurial innovations.

Social Science Research Network, Dec 18, 2017

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

Social Science Research Network, 2010

Social Science Research Network, 2014

We develop a theory of innovation for entry and sale into oligopoly, and show that inventions of ... more We develop a theory of innovation for entry and sale into oligopoly, and show that inventions of higher quality are more likely to be sold (or licensed) to an incumbent due to strategic product market effects on the sales price. Such preemptive acquisitions by incumbents are shown to stimulate the process of creative destruction by increasing the entrepreneurial effort allocated to high-quality invention projects. Using data on patents granted to small firms and individuals, we find evidence that high-quality inventions are sold under preemptive bidding competition. Asymmetric information problems are shown to be solved by verification through entry for sale.

RePEc: Research Papers in Economics, Oct 25, 2012

In this paper we show, theoretically and empirically, that stronger employment protection legisla... more In this paper we show, theoretically and empirically, that stronger employment protection legislation (EPL) in a host country has important and differing effects on the various activities of multinational enterprises (MNEs). Using micro data on affiliates to Swedish multinational firms in 20 countries for the period of 1965-1998, we find that increased stringency in EPL is associated with fewer investments in new affiliates and lower employment in existing affiliates. We also find that it is mainly affiliate exports that are affected negatively by stronger EPL, while the impact on local sales is small. This is in accordance with our theoretical model, which predicts that the impact of EPL on the costs of competing firms is likely to put affiliates at a smaller disadvantage when selling for the local market than in the production for exports.

The World Economy, Apr 6, 2016

This paper attempts to understand foreign direct investment (FDI) heterogeneity and offers useful... more This paper attempts to understand foreign direct investment (FDI) heterogeneity and offers useful insights about aggregation issues in FDI estimations by carrying out a spatial econometric analysis using affiliate‐level data on sales activities of Swedish multinational corporations around the globe. The results indicate that the multilayered nature of aggregation in FDI matters for empirical analysis. Affiliate‐level host‐country and third‐country sales activity provides evidence of a negative spatial lag or substitution of FDI in space, broadly supporting the export‐platform theory. For exports back to Sweden, we find a positive spatial lag suggesting agglomeration of production activities and vertical specialisation. The sequential aggregation from affiliate level to firm and country level provides evidence of a severe scale problem particularly in export‐platform FDI. This aggregation bias is likely present in many of the country‐level analyses in previous literature.

Social Science Research Network, 2016

In a recent meta study, Disdier and Head (2008) summarize 103 empirical studies that find that th... more In a recent meta study, Disdier and Head (2008) summarize 103 empirical studies that find that the (absolute value of the) distance coefficient in a gravity estimation of bilateral exports does not fall over time. Including zero-trade flows is suggested as a solution to this "distance-puzzle" (Felbermayr and Kohler, 2006). However, as shown by Helpman, Melitz, and Rubinstein (2008), HMR henceforth, for cross-section data, including zero-trade flows will rather increase-and not decrease-estimated distance coefficients, due to omitted firmlevel heterogeneity. Using industry level data over 28 industries for a time span ranging from 1978 to 2003, we first confirm earlier results that the distance coefficient increases over time using OLS. We then show that the bias from not controlling for firm heterogeneity in OLS rises over time, whereas the non-linear estimation of HMR leads to a declining distance coefficient over time. Our estimates are also shown to capture reductions in trade costs related to distance, since the estimated distance coefficients are strongly correlated with the time pattern in freight costs reported by Hummels (2007).

Oxford Economic Papers-new Series, Dec 1, 2011

We provide a model that explains the following empirical observations: i) private ownership is mo... more We provide a model that explains the following empirical observations: i) private ownership is more efficient than public ownership, ii) privatizations are associated with increases in efficiency and iii) the increase in efficiency predates the privatization. The two key mechanisms explaining the results are: (i) a government owner keeping control takes into account the negative effect on employment of investment and (ii) a privatizing government has a stronger incentive to invest than an acquiring firm: the government exploits the fact that investments increase the sales price not only due to the increase in the acquirer's profit, but also due to a reduced profit for the non-acquirer.

The World Economy, Jul 23, 2015

Despite the strong pace of globalization, the distance eect on trade is persistent or even growin... more Despite the strong pace of globalization, the distance eect on trade is persistent or even growing over time (Disdier and Head, 2008). To solve this distance puzzle, we use the recently developed gravity equation estimator from Helpman, Melitz and Rubinstein (2008), HMR henceforth. Using industry-level data in 28 industries from 1978 to 2003, we nd that the distance coecient increases over time when OLS is used, while the non-linear estimation of HMR leads to a decline in the distance coecient over time. The distance puzzle thus arises from a growing bias of OLSestimates. The latter is explained by globalization more signicantly reducing the downward bias from omitting zero trade ows than it reduces the upward bias from omitting the number of heterogeneous exporting rms. Furthermore, we show that including zero-trade ows cannot solve the distance puzzle. The HMR estimates are strongly correlated with the time pattern in freight costs reported by Hummels (2007).

International Business Review

Abstract The advantages of multinational enterprises (MNEs) over domestic firms have been widely ... more Abstract The advantages of multinational enterprises (MNEs) over domestic firms have been widely acknowledged in several streams of literature. However, a more refined analysis on the sources of their advantages is lacking. Exploiting minimum wage hikes in China as an exogenous shock, we theorize that, due to multinational advantages, the employment of multinational subsidiaries may be less affected by minimum wages than that of domestic firms, and that their multinational advantages arise from both operational and financial advantages. Using nation-wide longitudinal firm data from 1998 to 2007 and border discontinuity design (BDD) to estimate the causal effects, we find supportive evidence for our hypotheses. We contribute to the literature on multinational advantages and minimum wages.

SSRN Electronic Journal, 2019

When should entrepreneurs choose to enter the market with a start-up? And when should they sell t... more When should entrepreneurs choose to enter the market with a start-up? And when should they sell their invention or business idea? New research on how entrepreneurs decide between entry and sale offers significant insights for policy makers concerned about economic welfare.

SSRN Electronic Journal, 2010

Our model reconciles seemingly contradictory empirical evidence on venture capital activity. Desp... more Our model reconciles seemingly contradictory empirical evidence on venture capital activity. Despite the venture capital-backed companies' superior long-run performance, stock markets react more negatively to their acquisitions than to other private acquisitions. Moreover, venture capital intensive industries show higher patent count, but not higher total factor productivity growth. We explain both contradictions through the venture capitalists' incentive to signal their companies' value prior to exiting. Such incentives increase their companies' investments, patenting, and performance; but inflate investment costs and acquisition prices. We generate novel testable predictions for the interaction of patent law, early-stage financing, and long-run performance of private acquisitions.

Includes bibliographical references. Also available via the InternetAvailable from British Librar... more Includes bibliographical references. Also available via the InternetAvailable from British Library Document Supply Centre- DSC:3597. 9512(no 3998) / BLDSC - British Library Document Supply CentreSIGLEGBUnited Kingdo

We …nd an inverse u-shaped relation between birth day and the likelihood to receive the Ballon d&... more We …nd an inverse u-shaped relation between birth day and the likelihood to receive the Ballon d'or award (the best football player in the world). We develop a multi-period skill formation model with selection into elite education. We show that late born (underdogs) needs to work harder in order to make it into the elite education. However, too late born will not make the cut o¤. Late born-but not too late born-will thus end up with the highest skill level as grown up (the educated underdog). Using detailed data on the performance of Swedish elite football players we …nd further support for the predictions of the model.

This study explores how relative skilled-wage premia affect FDI. Contrary to previous studies bas... more This study explores how relative skilled-wage premia affect FDI. Contrary to previous studies based on factor endowment differences, we find strong support for vertical FDI, in the sense that more FDI is conducted in countries where unskilled labor is relatively cheap. In addition, we find that relative skill-premia also affect FDI activities that have previously been associated with horizontal FDI, i.e. local affiliate sales. Consequently, the potential effects of changes in the relative wage costs on international production reallocation within MNEs are large. In fact, if not for the 8 % rise in the US skilled wage premium relative to the average host country between 1986-1994, annual US affiliate sales abroad in relation to US GDP would have been half a percentage point higher.

Abstract: This paper uses affiliate level data from Swedish multinationals to examine the impact ... more Abstract: This paper uses affiliate level data from Swedish multinationals to examine the impact of tax treaties on both overall affiliate sales and the composition of those sales. In line with previous results, we find little evidence for an effect of treaties on the level of total sales. We do, however, find that a tax treaty increases the probability of investment by a firm in a given country. In addition, we find that a treaty reduces exports to the parent but increases imports of intermediate inputs from the parent. This is consistent with treaties increasing the effective host tax. This suggests that tax treaties impact the behavior of multinationals along some dimensions but not along others.

CESifo: Macro, 2012

We show how temporary ownership by private equity firms affects industry structure, competition a... more We show how temporary ownership by private equity firms affects industry structure, competition and welfare. Temporary ownership leads to strong investment incentives because equilibrium resale prices are determined by buyers incentives to block rivals from obtaining assets. These incentives benefit consumers, but harm rivals in the industry. Evaluating optimal antitrust policy, we underscore that an active private equity market can aid antitrust authorities by triggering welfare-enhancing mergers and by preventing concentration in the industry. By spreading the cost of specializing in restructuring over multiple markets, private equity firms have stronger incentives than incumbents to invest in acquiring specialized restructuring skills.