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on Business Economics |
| By: | Harrigan, James; Reshef, Ariell; Toubal, Farid |
| Abstract: | We study the impact of techies — engineers and other technically trained workers — on firm-level productivity. We first report new facts on the role of techies in the firm by leveraging French administrative data and unique surveys. Techies are STEM-skill intensive and are associated with innovation, as well as with technology adoption, management, and diffusion within firms. Using structural econometric methods, we estimate the causal effect of techies on firm-level Hicks-neutral productivity in both manufacturing and non-manufacturing industries. We find that techies raise firm-level productivity, and this effect goes beyond the employment of R\&D workers, extending to ICT and other techies. In non-manufacturing firms, the impact of techies on productivity operates mostly through ICT and other techies, not R\&D workers. Engineers have a greater effect on productivity than technicians. |
| Keywords: | productivity, R&D, ICT, techies, STEM skills |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:2401&r=bec |
| By: | Kathryn Bonney; Cory Breaux; Catherine Buffington; Emin Dinlersoz; Lucia Foster; Nathan Goldschlag; John Haltiwanger; Zachary Kroff; Keith Savage |
| Abstract: | Timely and accurate measurement of AI use by firms is both challenging and crucial for understanding the impacts of AI on the U.S. economy. We provide new, real-time estimates of current and expected future use of AI for business purposes based on the Business Trends and Outlook Survey for September 2023 to February 2024. During this period, bi-weekly estimates of AI use rate rose from 3.7% to 5.4%, with an expected rate of about 6.6% by early Fall 2024. The fraction of workers at businesses that use AI is higher, especially for large businesses and in the Information sector. AI use is higher in large firms but the relationship between AI use and firm size is non-monotonic. In contrast, AI use is higher in young firms although, on an employment-weighted basis, is U-shaped in firm age. Common uses of AI include marketing automation, virtual agents, and data/text analytics. AI users often utilize AI to substitute for worker tasks and equipment/software, but few report reductions in employment due to AI use. Many firms undergo organizational changes to accommodate AI, particularly by training staff, developing new workflows, and purchasing cloud services/storage. AI users also exhibit better overall performance and higher incidence of employment expansion compared to other businesses. The most common reason for non-adoption is the inapplicability of AI to the business. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:24-16&r=bec |
| By: | Jean-Luc Arregle (EM - EMLyon Business School); Andrea Calabrò (IPAG Business School); Michael A. Hitt (Texas A&M University [College Station], TTU - Texas Tech University [Lubbock]); Liena Kano (University of Calgary); Christian Schwens (Universität zu Köln = University of Cologne) |
| Abstract: | Over the past decade, a consensus has crystallized recognizing the significance of family firm internationalization in international business (IB) research. This recognition comes with substantial opportunities, yet it also presents challenges, such as the pressing need for a more cohesive integration of the family business and IB domains. In this article, we (re)emphasize the relevance of family firm internationalization for IB research considering three IB grand challenges and two important aspects of internationalization where family firms can particularly contribute. We also propose several theoretical and methodological avenues for future studies to help further increase the understanding of family firm internationalization and of IB theories. Finally, we provide an overview of the core insights from the articles included in the related special issue and develop integrative conclusions about the research. |
| Keywords: | Family firm, internationalization |
| Date: | 2024–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04514340&r=bec |
| By: | Paul Lavery (Adam Smith Business School, University of Glasgow); John Tsoukalas (The Productivity Institute, The University of Glasgow); Nick Wilson (Leeds University Business School) |
| Keywords: | Private equity buyouts; productivity; investment; firm growth |
| JEL: | F14 G01 G32 G34 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:anj:wpaper:041&r=bec |
| By: | Rustam Jamilov (University of Oxford); Alexandre Kohlhas (University of Oxford); Oleksandr Talavera (University of Birmingham); Mao Zhang (University of St Andrews) |
| Abstract: | We propose an empirically-motivated theory of business cycles, driven by fluctuations in sentiment towards a small number of firms. We measure firm-level sentiment with computational linguistics and analyst forecast errors. We find that 50 firms can account for over 70% of the unconditional variation in U.S. sentiment and output over the period 2006-2021. The “Granular Sentiment Index”, measuring sentiment towards the 50 firms, is dominated by firms that are closer to the final consumer, i.e. are downstream. To rationalize our findings, we embed endogenous information choice into a general equilibrium model with heterogeneous upstream and downstream firms. We show that attention centers on downstream firms because they act as natural “information agglomerators”. When calibrated to match select moments of U.S. data, the model shows that orthogonal shocks to sentiment of the 20% most downstream firms explain more than 90% of sentiment-driven (and 20% of total) aggregate fluctuations. |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:2414&r=bec |
| By: | Le Xu (Shanghai Jiao Tong University); Yang Yu (Shanghai Jiao Tong University); Francesco Zanetti (University of Oxford; Centre for Economic Policy Research (CEPR)) |
| Abstract: | We assemble a novel firm-level dataset to study the adoption and termination of suppliers over business cycles. We document that the aggregate number and rate of adoption of suppliers are procyclical. The rate of termination is acyclical at the aggregate level, and the cyclicality of termination encompasses large differences across producers. To account for these new facts, we develop a model with optimizing producers that incur separate costs for management, adoption, and termination of suppliers. These costs alter the incentives to scale up production and to replace existing with new suppliers. Both forces are critical to replicating the observed cyclicality in the adoption and termination rates at the producer and aggregate levels. Sufficiently high convexity in management relative to adjustment costs is required to replicate the observed decrease in the procyclicality of termination of suppliers with the size of producers. The optimal policy entails subsidies to management and adjustment costs. |
| Keywords: | management and adjustment costs, adoption and termination of suppliers, business cycles |
| JEL: | E32 L14 L24 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:2416&r=bec |
| By: | Jésus Fernández-Villaverde; Yang Yu; Francesco Zanetti; Jesús Fernández-Villaverde |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11000&r=bec |
| By: | Francesco Zanetti; Le Xu; Yang Yu |
| Abstract: | We assemble a novel firm-level dataset to study the adoption and termination of suppliers over business cycles. We document that the aggregate number and rate of adoption of suppliers are procyclical. The rate of termination is acyclical at the aggregate level, and the cyclicality of termination encompasses large differences across producers. To account for these new facts, we develop a model with optimizing producers that incur separate costs for management, adoption, and termination of suppliers. These costs alter the incentives to scale up production and to replace existing with new suppliers. Both forces are critical to replicating the observed cyclicality in the adoption and termination rates at the producer and aggregate levels. Sufficiently high convexity in management relative to adjustment costs is required to replicate the observed decrease in the procyclicality of termination of suppliers with the size of producers. The optimal policy entails subsidies to management and adjustment costs. |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cnn:wpaper:24-006e&r=bec |
| By: | Matthias Kehrig; Nicolas Vincent |
| Abstract: | We document that most dispersion in marginal revenue products of inputs occurs across plants within firms rather than between firms. This is commonly thought to reflect misallocation: dispersion is “bad.” However, we show that eliminating frictions hampering internal capital markets in a multi-plant firm model may in fact increase productivity dispersion and raise output: dispersion can be “good.” This arises as firms optimally stagger investment activity across their plants over time to avoid raising costly external finance, instead relying on reallocating internal funds. The staggering in turn generates dispersion in marginal revenue products. We use U.S. Census data on multi-plant manufacturing firms to provide empirical evidence for the model mechanism and show a quantitatively important role for good dispersion. Since there is less scope for good dispersion in emerging economies, the difference in the degree of misallocation between emerging and developed economies looks more pronounced than previously thought. |
| Keywords: | Misallocation, Productivity Dispersion, Multi-Plant Firms, Internal Capital Markets. |
| JEL: | E2 G3 L2 O4 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:24-13&r=bec |
| By: | Jesus Fernandez-Villaverde (University of Pennsylvania); Yang Yu (Shanghai Jiaotong University); Francesco Zanetti (University of Oxford) |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:2412&r=bec |
| By: | Bridget Kauma (University of Sussex); Giordano Mion (ESSEC Business School) |
| Keywords: | Firm-level dataset, Merging, BSD, FAME, VAT, FICUS, FARE, Productivity, Markups, UK, France, regional disparities, density |
| JEL: | R12 D24 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:anj:wpaper:039&r=bec |