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on Business Economics |
| By: | Buhai, Sebastian (Department of Economics, Aarhus School of Business); Cottini, Elena (Department of Economics, Aarhus School of Business); Westergaard-Nielsen, Niels (Department of Economics, Aarhus School of Business) |
| Abstract: | This paper estimates the impact of work environment health and safety practice on …rm performance, and examines which …rm-characteristic factors are associated with good work conditions. We use Danish longitudinal register matched employer-employee data, merged with …rm business accounts and detailed cross-sectional survey data on workplace conditions. This enables us to address typical econometric problems such as omitted variables bias or endogeneity in estimating i) standard production functions augmented with work environment indicators and aggregate employee characteristics and ii) …rm mean wage regressions on the same explanatory variables. Our …ndings suggest that improvement in some of the physical dimensions of the work health and safety environment (speci…cally, "internal climate" and "repetitive and strenuous activ- ity") strongly impacts the …rm productivity, whereas "internal climate" problems are the only workplace hazards compensated for by higher mean wages. |
| Keywords: | Occupational health and safety; Work environment; Production function estimation; Firm performance; Compensating wage differentials |
| JEL: | J28 J31 L23 |
| Date: | 2008–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:aareco:2008_013&r=bec |
| By: | Kalemli-Ozcan, Sebnem; Papaioannou, Elias; Peydró-Alcalde, José Luis |
| Abstract: | Standard theory predicts that financial integration leads to a lower degree of business cycle synchronization. Surprisingly, cross-country studies find the opposite. Our contribution is to document the theoretically predicted negative effect of financial integration on business cycle synchronization as a robust regularity. We use a confidential dataset on banks' international bilateral exposure over the past three decades in a panel of twenty developed countries. The rich panel structure allows us to control for time-invariant country-pair factors and global trends that affect both financial integration and business cycle patterns. In contrast to previous empirical work we find that a higher degree of financial integration is associated with less synchronized output cycles. We also employ two distinct instrumental variable approaches to identify the one-way effect of integration on synchronization. These specifications reveal that the component of banking integration predicted by legislative-regulatory harmonization policies and the nature of the bilateral exchange rate regime has a negative effect on output synchronization. |
| Keywords: | Banks; Business Cycles; Co-movement; Financial Integration; Financial Regulation |
| JEL: | E32 F15 F36 G21 O16 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7292&r=bec |
| By: | Miao, Jianjun; Wang, Pengfei |
| Abstract: | We present an analytically tractable general equilibrium business cycle model that features micro-level investment lumpiness. We prove an exact irrelevance proposition which provides sufficient conditions on preferences, technology, and the fixed cost distribution such that any positive upper support of the fixed cost distribution yields identical equilibrium dynamics of the aggregate quantities normalized by their deterministic steady state values. We also give two conditions for the fixed cost distribution, under which lumpy investment can be important to a first-order approximation: (i) The steady-state elasticity of the adjustment rate is large so that the extensive margin effect is large. (ii) More mass is on low fixed costs so that the general equilibrium price feedback effect is small. Our theoretical results may reconcile some debate and some numerical findings in the literature. |
| Keywords: | generalized (S;s) rule; lumpy investment; general equilibrium; business cycles; marginal Q; exact irrelevance proposition |
| JEL: | E32 E22 |
| Date: | 2009–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14977&r=bec |
| By: | Holinski Nils; Vermeulen Robert (METEOR) |
| Abstract: | This paper analyzes the empirical link between asset prices, consumption and the trade balance using a global macroeconometric model developed by Pesaran, Schuermann, and Weiner (2004). The model is estimated for 29 countries with quarterly data over the period 1981Q1 - 2006Q4. Motivated by increasing international financial and real integration, and pronounced cycles in stock and housing prices, we employ generalized impulse response functions for a group of five of the world''s most industrialized countries and show that shocks to asset prices transmit into consumption decisions and subsequently into the trade balance. We refer to this transmission channel as the international wealth effect and find it to be present in the US, UK and, to a lesser extent, in France, but absent in Japan and Germany. |
| Keywords: | macroeconomics ; |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umamet:2009021&r=bec |
| By: | Herzer, Dierk; Kemper, Niels; Zamparelli, Luca |
| Abstract: | One of the central hypotheses of the neoclassical growth literature is the balanced- growth hypothesis, which predicts that output, consumption, and investment grow at the same rate. Empirically, this implies that the consumption-to-output ratio and the investment-to-output ratio must be stationary and that consumption and investment must be cointegrated with output. This paper tests these implications with respect to Germany, using unit root tests and cointegration techniques that allow for an endogenously determined structural break. We find that the long-run growth path of the German economy is consistent with the balanced-growth hypothesis if we allow for a structural break associated with the worldwide productivity slowdown of the early 1970s. |
| Keywords: | Balanced growth × Unit roots × Cointegration × Endogenous structural breaks |
| JEL: | C32 D91 E23 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14944&r=bec |
| By: | Eric Van Tassel |
| Abstract: | In this paper we analyze a repeated game in which an intermediary offers unsecured loans to entrepreneurs using future credit denial to induce repayment. To finance the loans, the intermediary uses a combination of equity capital and external funds. We focus on a moral hazard problem that emerges between the intermediary and the less informed external investors over a costly loan monitoring choice. The presence of informed borrowers in the lender’s portfolio turns out to act as a substitute for capital requirements. The result is that the lending strategy utilized by the intermediary minimizes the moral hazard problem but implies the intermediary’s balance sheet is fragile to exogenous risk. |
| Keywords: | Moral hazard; Capital requirements; Bank regulation; Repayment incentives |
| JEL: | G21 G28 O16 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:fal:wpaper:09003&r=bec |
| By: | Baldursson, Fridrik M.; von der Fehr, Nils-Henrik M. |
| Abstract: | We consider an industry with firms that produce a final good emitting pollution to different degree as a side effect. Pollution is regulated by a tradable quota system where some quotas may have been allocated at the outset, i.e. before the quota market is opened. We study how volatility in quota price affects firm behaviour, taking into account the impact of quota price on final-good price. The impact on the individual firm differs depending on how polluting it is - whether it is `clean' or `dirty'- and whether it has been allocated quotas at the outset. In the absence of long-term or forward contracting, the optimal initial quota allocation turns out to resemble a grandfathering regime: clean firms are allocated no quotas - dirty firms are allocated quotas for a part of their emissions.With forward contracts and in the absence of wealth effects initial quota allocation has no effect on firm behaviour. |
| Keywords: | regulation; effluent taxes; tradable quotas; uncertainty; risk aversion; environmental management |
| JEL: | Q38 D81 L51 Q28 D9 H23 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14994&r=bec |
| By: | Harashima, Taiji |
| Abstract: | A theory of total factor productivity (TFP) is needed to explain why substantial differences in international income have been observed. This paper presents a theory of TFP that incorporates workers’ innovations. Because workers are human and capable of creative intellectual activities, they can create innovations even if these innovations are minor. The creative activities of ordinary workers have been almost entirely neglected in economics even though the importance of workers’ learning activities has been emphasized by the theories of learning-by-doing and human capital. I examine this creative element and show that innovations created by ordinary workers are indispensable for efficient production. A production function incorporating workers’ innovations is shown to have a Cobb-Douglas functional form with a labor share of about 70%. The production function offers a microfoundation of the Cobb-Douglas production function and more importantly indicates that heterogeneous parameter values with regard to workers’ innovations are essential factors of the currently observed substantial income difference across economies. |
| Keywords: | Innovation: Total factor productivity; Experience curve effect; Convergence hypothesis; Cobb-Douglas production function |
| JEL: | O11 E23 J24 D24 O31 O14 |
| Date: | 2009–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:14978&r=bec |
| By: | Duffy, David (ESRI) |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp291&r=bec |