The Portuguese economy is generally supposed to be extremely rigid. Red tape and lack of flexibil... more The Portuguese economy is generally supposed to be extremely rigid. Red tape and lack of flexibility in the labour market, would hinder the adjustment of the economic structure to new situations, namely to the challenges created by the recent EEC membership and the future completion of the Internal Market. Bureaucracy, imposing costs and increasing the lags between detection of profit opportunities and entry into the market to exploit them, and labour law, constraining the quick response to market requirements would be, according to this dominant view the main obstacles to new firm formation, to the growth of existing firm growth and to productive investment in general.1
This chapter studies entry dynamics in Portugal in the period 1982-86. The findings are that (i) ... more This chapter studies entry dynamics in Portugal in the period 1982-86. The findings are that (i) entry and exit are deterred by economies of scale and product differentiation and (ii) sunk costs are only important to the displacement process in which less efficient firms are replaced by more efficient ones. Long-run industry structure appears to depend on the number of efficiently scaled plants that markets can accommodate, whereas the speed of convergence towards the long-run equilibrium depends on past profits and the degree of cost sunkness. Speed of convergence, long-run profits and market volatility are found to be correlated significantly.
While a great deal of research has explored how international marketing strategy influences perfo... more While a great deal of research has explored how international marketing strategy influences performance, researchers have paid scant attention to understanding changes to international marketing strategy resulting from firm reaction to past performance. In this study, organizational learning theory addresses when and how international marketing strategy will change. Employing data from over 500 exporters, the results, which are consistent with theoretical predictions, indicate that (1) firms are generally not prone to ...
While a great deal of research has explored how international marketing strategy influences perfo... more While a great deal of research has explored how international marketing strategy influences performance, researchers have paid scant attention to understanding changes to international marketing strategy resulting from firm reaction to past performance. In this study, organizational learning theory addresses when and how international marketing strategy will change. Employing data from over 500 exporters, the results, which are consistent with theoretical predictions, indicate that (1) firms are generally not prone to ...
ABSTRACT Using a laboratory experiment we investigate how skew influences choices under risk. We ... more ABSTRACT Using a laboratory experiment we investigate how skew influences choices under risk. We find that subjects make significantly riskier choices when the distribution of payoffs is positively skewed, these choices being driven in part by the shape of the utility function but also by subjective distortion of probabilities. A utility model with probability distortion calibrated on laboratory data is able to explain why most gamblers in public lotteries buy only a small number of tickets. JEL Codes: D81; C91.
ABSTRACT This paper analyses the effect of business conditions on new firm starts. The birth of n... more ABSTRACT This paper analyses the effect of business conditions on new firm starts. The birth of new firms displays a pro-cyclical behaviour, more firms being created when GDP is growing fast and the interest rate is low. The entry response to industry profitability is tempered by the level of sunk costs; for a given profit signal, more entry occurs where sunk costs are low.
International Journal of Industrial Organization, 1993
ABSTRACT This paper presents an overview of the importance of entry in Portuguese manufacturing, ... more ABSTRACT This paper presents an overview of the importance of entry in Portuguese manufacturing, according to the type of entrant, and investigates its determinants, it being found that they differ according to the pre-entry position of the potential entrant. We found that de novo entry is sensitive to most entry barriers, and even deterred by entry of firms established in the industry or in related industries. The plant creation decision of these latter firms is affected by economies of scale: they refrain from opening new establishments when economies of scale are important, since they can expand output within their installed plants.
Abstract We analyze different modes of terminating international joint ventures, namely closure a... more Abstract We analyze different modes of terminating international joint ventures, namely closure and acquisition. We find that the antecedents of the joint venture and the arrangements made at its creation affect the likelihood of the venture being terminated by acquisition and the identity of the partner that makes the acquisition. In contrast, the initial decisions regarding asset specificity and the size of the venture affect the likelihood of closure, but not that of acquisition. We also focus on the time patterns of terminations, ...
We follow firms created in Portuguese manufacturing in 1983 and study the determinants of their l... more We follow firms created in Portuguese manufacturing in 1983 and study the determinants of their lifetime. One fifth of them died during the first year of their lives, and only 50% survived for four years. Duration and limited-dependent variable models are employed to ascertain the relative importance of industry and firms specific variables to explain the period between firm birth and its disappearance from economic activity. New firm failure varies negatively with firm start-up size, the number of plants operated by the firm and the industry growth ...
This paper uses a laboratory experiment to investigate how the skew of a payoff distribution infl... more This paper uses a laboratory experiment to investigate how the skew of a payoff distribution influences choices under risk. We find a statistically significant preference for positive skew under low and high stakes. We find that the preference for skew is driven by subjective distortion of probabilities and the shape of the utility function. We find that 54% of subjects make choices consistent with Expected Utility Theory (EUT) whereas 46% do not. Among the EUT individuals 47.5% love skew, 49% are indifferent to it, and 3.5% are skew averse. Among the non-EUT individuals 58% like skew and 42% are skew averse. We discuss the economic implications of our findings for gambling in state lotteries and inventive activity. We show that a RDU model calibrated with our estimated parameters is able to explain why individuals only buy from 1 to 10 lottery tickets and why some individuals become inventors.
The Portuguese economy is generally supposed to be extremely rigid. Red tape and lack of flexibil... more The Portuguese economy is generally supposed to be extremely rigid. Red tape and lack of flexibility in the labour market, would hinder the adjustment of the economic structure to new situations, namely to the challenges created by the recent EEC membership and the future completion of the Internal Market. Bureaucracy, imposing costs and increasing the lags between detection of profit opportunities and entry into the market to exploit them, and labour law, constraining the quick response to market requirements would be, according to this dominant view the main obstacles to new firm formation, to the growth of existing firm growth and to productive investment in general.1
This chapter studies entry dynamics in Portugal in the period 1982-86. The findings are that (i) ... more This chapter studies entry dynamics in Portugal in the period 1982-86. The findings are that (i) entry and exit are deterred by economies of scale and product differentiation and (ii) sunk costs are only important to the displacement process in which less efficient firms are replaced by more efficient ones. Long-run industry structure appears to depend on the number of efficiently scaled plants that markets can accommodate, whereas the speed of convergence towards the long-run equilibrium depends on past profits and the degree of cost sunkness. Speed of convergence, long-run profits and market volatility are found to be correlated significantly.
While a great deal of research has explored how international marketing strategy influences perfo... more While a great deal of research has explored how international marketing strategy influences performance, researchers have paid scant attention to understanding changes to international marketing strategy resulting from firm reaction to past performance. In this study, organizational learning theory addresses when and how international marketing strategy will change. Employing data from over 500 exporters, the results, which are consistent with theoretical predictions, indicate that (1) firms are generally not prone to ...
While a great deal of research has explored how international marketing strategy influences perfo... more While a great deal of research has explored how international marketing strategy influences performance, researchers have paid scant attention to understanding changes to international marketing strategy resulting from firm reaction to past performance. In this study, organizational learning theory addresses when and how international marketing strategy will change. Employing data from over 500 exporters, the results, which are consistent with theoretical predictions, indicate that (1) firms are generally not prone to ...
ABSTRACT Using a laboratory experiment we investigate how skew influences choices under risk. We ... more ABSTRACT Using a laboratory experiment we investigate how skew influences choices under risk. We find that subjects make significantly riskier choices when the distribution of payoffs is positively skewed, these choices being driven in part by the shape of the utility function but also by subjective distortion of probabilities. A utility model with probability distortion calibrated on laboratory data is able to explain why most gamblers in public lotteries buy only a small number of tickets. JEL Codes: D81; C91.
ABSTRACT This paper analyses the effect of business conditions on new firm starts. The birth of n... more ABSTRACT This paper analyses the effect of business conditions on new firm starts. The birth of new firms displays a pro-cyclical behaviour, more firms being created when GDP is growing fast and the interest rate is low. The entry response to industry profitability is tempered by the level of sunk costs; for a given profit signal, more entry occurs where sunk costs are low.
International Journal of Industrial Organization, 1993
ABSTRACT This paper presents an overview of the importance of entry in Portuguese manufacturing, ... more ABSTRACT This paper presents an overview of the importance of entry in Portuguese manufacturing, according to the type of entrant, and investigates its determinants, it being found that they differ according to the pre-entry position of the potential entrant. We found that de novo entry is sensitive to most entry barriers, and even deterred by entry of firms established in the industry or in related industries. The plant creation decision of these latter firms is affected by economies of scale: they refrain from opening new establishments when economies of scale are important, since they can expand output within their installed plants.
Abstract We analyze different modes of terminating international joint ventures, namely closure a... more Abstract We analyze different modes of terminating international joint ventures, namely closure and acquisition. We find that the antecedents of the joint venture and the arrangements made at its creation affect the likelihood of the venture being terminated by acquisition and the identity of the partner that makes the acquisition. In contrast, the initial decisions regarding asset specificity and the size of the venture affect the likelihood of closure, but not that of acquisition. We also focus on the time patterns of terminations, ...
We follow firms created in Portuguese manufacturing in 1983 and study the determinants of their l... more We follow firms created in Portuguese manufacturing in 1983 and study the determinants of their lifetime. One fifth of them died during the first year of their lives, and only 50% survived for four years. Duration and limited-dependent variable models are employed to ascertain the relative importance of industry and firms specific variables to explain the period between firm birth and its disappearance from economic activity. New firm failure varies negatively with firm start-up size, the number of plants operated by the firm and the industry growth ...
This paper uses a laboratory experiment to investigate how the skew of a payoff distribution infl... more This paper uses a laboratory experiment to investigate how the skew of a payoff distribution influences choices under risk. We find a statistically significant preference for positive skew under low and high stakes. We find that the preference for skew is driven by subjective distortion of probabilities and the shape of the utility function. We find that 54% of subjects make choices consistent with Expected Utility Theory (EUT) whereas 46% do not. Among the EUT individuals 47.5% love skew, 49% are indifferent to it, and 3.5% are skew averse. Among the non-EUT individuals 58% like skew and 42% are skew averse. We discuss the economic implications of our findings for gambling in state lotteries and inventive activity. We show that a RDU model calibrated with our estimated parameters is able to explain why individuals only buy from 1 to 10 lottery tickets and why some individuals become inventors.
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Papers by Jose Mata