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on Business Economics |
| By: | Diego A. Cerdeiro; Cian Ruane |
| Abstract: | After impressive growth in the 2000s, China's productivity has more recently stagnated. We use firm-level data to analyze productivity and firm dynamism trends from 2003 to 2018. We document six facts that together show a decline in China’s business dynamism. We show that (i) the revenue share of young firms has declined, (ii) the life-cycle growth of young firms relative to older incumbents has slowed, (iii) weaker life-cycle growth can be explained by slower productivity growth and weaker investment in intangibles, (iv) younger and smaller firms are more capital constrained than their older and larger counterparts, (v) the responsiveness of capital growth to the marginal product of capital has declined, and (vi) large productivity gaps between SOEs and private firms persist. We find that business dynamism is weaker in provinces where SOEs account for a larger share of the capital stock. Our results suggest that declining private business dynamism is an important factor in explaining China's sluggish TFP growth and that SOE reform could boost productivity growth indirectly by stimulating business dynamism. |
| Keywords: | China, total factor productivity, growth, business dynamism.; business dynamism; life-cycle growth; SOE reform; China's productivity; dynamism trend; Productivity; Public enterprises; Total factor productivity; Capital productivity; Aging |
| Date: | 2022–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2022/032&r= |
| By: | Rettl, Daniel A. (University of Georgia); Schandlbauer, Alexander (University of Southern Denmark); Trandafir, Mircea (University of Southern Denmark) |
| Abstract: | When workers are in bad health, their productivity declines. We investigate whether the health of employees affects firm performance, taking advantage of the severity of the seasonal influenza seasons as a source of exogenous variation. We find that firms whose employees are particularly affected by influenza experience reductions in their return on assets and in net income. These results are not driven by firm-specific characteristics, as we find the same relationship between influenza severity and firm performance within firms, at the establishment level. We also document substantial heterogeneity in the effects, with small firms and labor-intensive firms driving our findings. This suggests that labor is an important driver of firm performance and that capital-intensive and larger firms are better able to shift resources in response to temporary shocks to their workforce. Back-of-the-envelope calculations suggest that smaller firms may be better off subsidizing vaccination programs for their employees. |
| Keywords: | seasonal influenza, health shock, firm performance |
| JEL: | L25 I12 G30 J31 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15147&r= |
| By: | Czarnitzki, Dirk; Fernández, Gastón P.; Rammer, Christian |
| Abstract: | Artificial Intelligence (AI) is often regarded as the next general-purpose technology with a rapid, penetrating, and far-reaching use over a broad number of industrial sectors. A main feature of new general-purpose technology is to enable new ways of production that may increase productivity. So far, however, only very few studies investigated likely productivity effects of AI at the firm-level; presumably because of lacking data. We exploit unique survey data on firms' adoption of AI technology and estimate its productivity effects with a sample of German firms. We employ both a cross-sectional dataset and a panel database. To address the potential endogeneity of AI adoption, we also implement an IV approach. We find positive and significant effects of the use of AI on firm productivity. This finding holds for different measures of AI usage, i.e., an indicator variable of AI adoption, and the intensity with which firms use AI methods in their business processes. |
| Keywords: | Artificial Intelligence,Productivity,CIS data |
| JEL: | O14 O31 O33 L25 M15 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:22005&r= |
| By: | Altunbas, Yener; Gambacorta, Leonardo; Reghezza, Alessio; Velliscig, Giulio |
| Abstract: | We match firm-corporate governance characteristics with firm-level carbon dioxide (CO2) emissions over the period 2009-2019 to study the relationship between gender diversity in the workplace and firm carbon emissions. We find that a 1 percentage point increase in the percentage of female managers within the firm leads to a 0.5% decrease in CO2 emissions. We document that this effect is statically significant, also when controlling for institutional differences caused by more patriarchal and hierarchical cultures and religions. At the same time, we show that gender diversity at the managerial level has stronger mitigating effects on climate change if females are also well-represented outside the organization, e.g. in political institutions and civil society organizations. Finally, we find that, after the Paris Agreement, firms with greater gender diversity reduced their CO2 emissions by about 5% more than firms with more male managers. JEL Classification: G12, G23, G30, D62, Q54 |
| Keywords: | carbon emissions, female managers, global warming, green economics, Paris agreement |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20222650&r= |
| By: | Mr. Matthieu Bellon; Salma Khalid; Jillie Chang; Pilar Villena; Juan Carlos Paliza; Ms. Era Dabla-Norris |
| Abstract: | Our study uses administrative data on firm-to-firm transactions and quasi- experimental variation in the rollout of electronic invoicing reforms in Peru to study the diffusion of e-invoicing through firm networks and its effect on tax compliance. We find that voluntary e-invoicing adoption is higher amongst firms with partners who are mandated to adopt e-invoicing, implying positive technology adoption spillovers. Spillovers are stronger from downstream partners and from export-oriented firms. Firms are less likely to continue transacting with a partner who has been mandated into e-invoicing, with the effect only partially reversed if both firms adopt e-invoicing, suggesting that network segmentation may occur. Smaller firms who transact with partners mandated into e-invoicing report 11 percent more sales and pay 17 more VAT in the year that their partner is mandated to adopt e-invoicing, suggesting positive spillovers in tax compliance behavior for this subset of firms. |
| Keywords: | VAT, tax compliance, technology spillovers, firm transaction data |
| Date: | 2022–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2022/057&r= |
| By: | Davis, Steven J.; Haltiwanger, John C.; Handley, Kyle; Lerner, Joshua; Lipsius, Ben; Miranda, Javier |
| Abstract: | The effects of private equity buyouts on employment, productivity, and job reallocation vary tremendously with macroeconomic and credit conditions, across private equity groups, and by type of buyout. We reach this conclusion by examining the most extensive database of U.S. buyouts ever compiled, encompassing thousands of buyout targets from 1980 to 2013 and millions of control firms. Employment shrinks 13% over two years after buyouts of publicly listed firms - on average, and relative to control firms - but expands 13% after buyouts of privately held firms. Post-buyout productivity gains at target firms are large on average and much larger yet for deals executed amidst tight credit conditions. A post-buyout tightening of credit conditions or slowing of GDP growth curtails employment growth and intra-firm job reallocation at target firms. We also show that buyout effects differ across the private equity groups that sponsor buyouts, and these differences persist over time at the group level. Rapid upscaling in deal flow at the group level brings lower employment growth at target firms. |
| Keywords: | administrative data,business cycle,credit conditions,employment,private equity,productivity |
| JEL: | D24 G24 G32 G34 J23 J63 L25 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhdps:102022&r= |
| By: | Stojcic, Nebojsa; Pylak, Korneliusz; Jurlina Alibegovic, Dubravka |
| Abstract: | We investigate the impact of a decade-long large public entrepreneurial infrastructure investment programme in an emerging European economy. Using a unique dataset, we examine the short-run firm, city and inter-city effects of entrepreneurial zones (EZs). EZs have a positive impact on business investment, sales and especially export revenues of firms located within them. Positive economic effects of EZs are limited on host and neighbouring towns and cities, decrease with distance and eventually become negative. This points to the localised nature of EZs effects and their potential for spatial redistribution and clustering of economic activity. |
| Keywords: | Entrepreneurial zones; spillover effects; firm performance; exports; economic incentives; emerging economies |
| JEL: | L26 O12 R38 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:112395&r= |
| By: | Carl Gaigné; Anne-Célia Disdier; Cristina Herghelegiu |
| Abstract: | We examine whether standards raise the quality of traded products by correcting market failures associated with information asymmetry on product attributes. Matching a panel of French firm-product-destination export data with a dataset on sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBTs), we find that such quality standards enforced on products by destination countries: (i) favor the export probability of high-quality firms provided that their productivity is high enough; (ii) raise the export sales of high-productivity high-quality firms at the expense of low-productivity and low-quality firms; (iii) improve the average quality of consumption goods exported by France. We then develop a simple new trade model under uncertainty about product quality, in which heterogeneous firms can strategically invest in quality signaling, to rationalize these empirical results on quality and selection effects. |
| Keywords: | firm exports, quality standards, information asymmetry, product quality, heterogeneity |
| JEL: | D21 D22 F12 F14 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:202111&r= |
| By: | Redha Fares; Amélie Guillin |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:eru:erudwp:wp22-04&r= |
| By: | Doran, Kirk (University of Notre Dame); Gelber, Alexander (University of Pennsylvania); Isen, Adam (U.S. Department of the Treasury) |
| Abstract: | We compare winning and losing firms in lotteries for H-1B visas, matching administrative data on these lotteries to administrative tax data on U.S. firms and to approved U.S. patents. Winning one additional H-1B visa crowds out about 1.5 other workers at the firm. Additional H-1Bs have insignificant and at most modest effects on firm innovation. More general evidence from the universe of U.S. firms and the universe of H-1B visas using alternative estimation strategies is consistent with these results. Firms that hire H-1Bs grow faster and innovate more because they are different in other ways from firms that do not. |
| Keywords: | immigration, highly skilled workforce, innovation, employment |
| JEL: | J00 J08 J15 J23 J24 J48 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15146&r= |
| By: | Philippe Askenazy (CMH - Centre Maurice Halbwachs - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique); Thomas Breda (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Vladimir Pecheu (AMU - Aix Marseille Université) |
| Abstract: | The existence of a peak at 49 employees in the firm size distribution in France, followed by a permanent decrease in the number of firms has been the starting point of political discourses and academic studies on the cost of size-dependent regulations at 50-employee. These features of the distribution are visible when firm size is declared by employers in fiscal data but not when it is reconstructed from individual-level social security data. This working paper explores these differences both from statistical and institutional viewpoints. It provides evidence showing that a large proportion of employers manipulate the firm size they declare in their fiscal documents. This manipulation generates the particular shape of the size distribution in the fiscal data. We discuss the rationale for such behavior: the key point is that the under-declaration in fiscal data is not subject to substantial sanctions and it can allow firms not to comply with the labor law. Event studies and comparisons of firms below and above the 50-employee threshold suggest that this threshold may only have limited effects on firm performance or growth potential. Consequently the welfare costs of the regulations at 50-employee might be smaller than what was found by some of the studies that assume a perfect compliance with the law. |
| Keywords: | Regulations,Firm size,Firm dynamics,Economic cost,Noncompliance Regulations,Non-compliance |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-03614750&r= |