nep-bec New Economics Papers
on Business Economics
Issue of 2024‒04‒15
six papers chosen by
Vasileios Bougioukos, London South Bank University

  1. Trustworthiness of Firm Valuations: Bias and Market Perception in Compliance with Capital Market Regulations By Koresh Galil; Eli El-Al; Ilanit Gavious
  2. Technological Synergies, Heterogeneous Firms and Idiosyncratic Volatility By Jesús Fernández-Villaverde; Yang Yu; Francesco Zanetti
  3. Quantifying Qualitative Survey Data with Panel Data Structure By Alexandros Botsis; Christoph Görtz; Plutarchos Sakellaris
  4. Unpacking Economic Uncertainty — Measuring the Firm, Sector and Aggregate Components By Siavash Mohades; Giulia Piccillo; Tania Treibich
  5. Parental Leave, Worker Substitutability, and Firms' Employment By Huebener, Mathias; Jessen, Jonas; Kühnle, Daniel; Oberfichtner, Michael
  6. Product Design in a Cournot Duopoly By Daniel;

  1. By: Koresh Galil (BGU); Eli El-Al (BGU); Ilanit Gavious (BGU)
    Keywords: Firm Valuation, Regulation, Fair Value, Bias, Market Perception
    Date: 2023
  2. By: Jesús Fernández-Villaverde; Yang Yu; Francesco Zanetti
    Abstract: This paper shows the importance of technological synergies among heterogeneous firms for aggregate fluctuations. First, we document six novel empirical facts using microdata that suggest the existence of important technological synergies between trading firms, the presence of positive assortative matching among firms, and their evolution during the business cycle. Next, we embed technological synergies in a general equilibrium model calibrated on firm-level data. We show that frictions in forming trading relationships and separation costs explain imperfect sorting between firms in equilibrium. In particular, an increase in the volatility of idiosyncratic productivity shocks significantly decreases aggregate output without resorting to non-convex adjustment costs.
    Keywords: technological synergies, heterogeneous firms, idiosyncratic uncertainty
    JEL: C63 C68 C78 E32 E37 E44 G12
    Date: 2024–03
  3. By: Alexandros Botsis; Christoph Görtz; Plutarchos Sakellaris
    Abstract: We develop a novel methodology to quantify forecasts based on qualitative survey data. The methodology is generally applicable when quantitative information is available on the realization of the forecasted variable, for example from firm balance sheets. The method can be applied to a wide range of panel datasets, including qualitative surveys on firm-level forecasts or household expectations. As an application, we employ a panel of Greek manufacturing firms and quantify firms’ forecast errors of own sales growth. In this context, we conduct a variety of exercises to demonstrate the methodology’s validity and accuracy.
    Keywords: expectations, firm data, forecast errors, survey data
    JEL: C53 C83 D22 D84 E32
    Date: 2024–03
  4. By: Siavash Mohades; Giulia Piccillo; Tania Treibich
    Abstract: We introduce a novel method for measuring economic uncertainty at the firm, sector, and aggregate levels using sales volatility and validate it by comparison with existing macroeconomic uncertainty measures. We use Compustat firms data in the period 2000-2022 to construct our uncertainty measures for the U.S. economy. Our findings highlight that 1) macroeconomic conditions are the predominant source of firms’ uncertainty, 2) diverse firm traits yield notable heterogeneity, and 3) the manufacturing sector exhibits the highest uncertainty among sectors. Our findings shed light on the importance of firm and sectoral heterogeneity in studying uncertainty and its effects on economic activity.
    Keywords: measuring uncertainty, firm heterogeneity, balance sheet data, business fluctuations
    JEL: D80 D22 E32 L11 L25
    Date: 2024
  5. By: Huebener, Mathias (Bundesinstitut für Bevölkerungsforschung (BiB)); Jessen, Jonas (IZA); Kühnle, Daniel (University of Duisburg-Essen); Oberfichtner, Michael (Institute for Employment Research (IAB), Nuremberg)
    Abstract: Motherhood and parental leave are frequent causes of worker absences and employment interruptions, yet we know little about their effects on firms. Based on linked employer-employee data from Germany, we examine how parental leave absences affect small- and medium-sized firms. We show that they anticipate the absence with replacement hirings in the six months before childbirth. A 2007 parental leave reform extending leave absences reduces firm-level employment and total wages in the first year after childbirth, driven by firms with few internal substitutes for the absent mother. However, we do not find longer-term effects on firms' employment, wage-bill, or likelihood to shut down. We find that the reform increases replacement hirings, but firms directly affected do not respond to longer expected absences of mothers by subsequently hiring fewer young women. Overall, our findings show that extended parental leave does not have a lasting impact on firms when these can anticipate the absences.
    Keywords: parental leave, worker absences, worker substitutability
    JEL: J16 J18 J24
    Date: 2024–03
  6. By: Daniel (University of Pavia);
    Abstract: Product design is studied in a simple duopoly where firms compete à la Cournot, goods are hedonically differentiated and consumers have preferences defined over characteristics. What we find is that, in equilibrium, firms choose the same product’s design. This results in horizontal product differentiation being minimal.
    Keywords: Hedonic Product Differentiation, Horizontal Differentiation, Product Design, Cournot Competition
    JEL: D43 L13 L20
    Date: 2024–03

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