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on Business Economics |
| By: | James M. Brand; Mert Demirer; Connor Finucane; Avner A. Kreps |
| Abstract: | Computing technologies have become critical inputs to production in the modern firm. However, there is little large-scale evidence on how efficiently firms use these technologies. In this paper, we study firm productivity and learning in cloud computing by leveraging CPU utilization data from over one billion virtual machines used by nearly 100, 000 firms. We find large and persistent heterogeneity in compute productivity both across and within firms, similar to canonical results in the literature. More productive firms respond better to demand fluctuations, show higher attentiveness to resource utilization, and use a wider variety of specialized machines. Notably, productivity is dynamic as firms learn to be more productive over time. New cloud adopters improve their productivity by 33% in their first year and reach the productivity level of experienced firms within four years. In our counterfactual calculations, we estimate that raising all firms to the 80th percentile of productivity would reduce aggregate electricity usage by 17%. |
| JEL: | D24 L86 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32938 |
| By: | Ratna Sahay (Center for Global Development; National Council of Applied Economic Research (NCAER)); Navya Srivastava (National Council of Applied Economic Research (NCAER)); Mahima Vasishth (Bocconi University; National Council of Applied Economic Research (NCAER)) |
| Abstract: | Globally, women’s share in corporate leadership has been steadily rising, including in India. The female director mandate under The Companies Act (2013) in India marked a significant step toward gender-inclusive corporate leadership, requiring listed firms to have at least one woman on their board. Within a year, the percentage of listed firms without women on board plummeted from 53 percent to less than 10 percent. Despite this progress, India still lags in the share of women in middle and senior management roles at only 17 percent, compared to nearly 33 percent for the world. This paper documents the status of gender-inclusive corporate leadership and uses the woman director mandate in the Act to study its relationship with firm outcomes, including financial performance and corporate culture in India. Interestingly we find that firms, on average, were appointing more women than mandated by the Act, suggesting the favorable impact of the current government’s signal to foster women-led development and the positive experience gained by firms. At the same time, newly appointed women were younger and more educated than their male counterparts and their average number of directorship (the “stretch factor”) increased significantly compared to men. Combining personnel-level data from NSE-listed firms with firm performance data and employing a reverse difference-in-difference econometric strategy, we find that having at least one woman on board is associated with higher economic performance and financial stability. Additionally, using almost 400, 000 employee reviews scraped from a company review platform, we find that higher shares of women in board positions correlate positively with employee ratings and sentiment scores only when firms also hire women in top management positions. This analysis highlights the business case of appointing more women at the top. |
| Keywords: | Women’s Leadership, Firm Performance, Firm Culture |
| JEL: | J16 L25 M59 |
| Date: | 2024–09–17 |
| URL: | https://d.repec.org/n?u=RePEc:cgd:wpaper:704 |
| By: | Ratna Sahay (National Council of Applied Economic Research, Delhi); Navya Srivastava (National Council of Applied Economic Research, Delhi); Mahima Vasishth (National Council of Applied Economic Research, Delhi) |
| Abstract: | TGlobally, women’s share in corporate leadership has been steadily rising, including in India. The female director mandate under The Companies Act (2013) in India marked a significant step toward gender-inclusive corporate leadership, requiring listed firms to have at least one woman on their board. Within a year, the percentage of listed firms without women on board plummeted from 53 percent to less than 10 percent. Despite this progress, India still lags in the share of women in middle and senior management roles at only 17 percent, compared to nearly 33 percent for the world. This paper documents the status of gender-inclusive corporate leadership and uses the woman director mandate in the Act to study its relationship with firm outcomes, including financial performance and corporate culture in India. Interestingly we find that firms, on average, were appointing more women than mandated by the Act, suggesting the favorable impact of the current government’s signal to foster women-led development and the positive experience gained by firms. At the same time, newly appointed women were younger and more educated than their male counterparts and their average directorship “stretch factor†increased significantly compared to men. Combining personnel-level data from NSE-listed firms with firm performance data and employing a reverse difference-in-difference econometric strategy, we find that having at least one woman on board is associated with higher economic performance, financial stability, and lower financial risk. Additionally, using almost 400, 000 employee reviews scraped from a company review platform, we find that higher shares of women in board positions correlate positively with employee ratings and sentiment scores only when firms also hire women in top management positions. This analysis highlights the business case of appointing more women at the top. |
| Keywords: | Women’s Leadership, Firm Performance, Firm Culture |
| JEL: | J16 L25 M59 |
| Date: | 2024–05–24 |
| URL: | https://d.repec.org/n?u=RePEc:nca:ncaerw:170 |
| By: | Marcus Roesch (Erasmus School of Economics); Michiel Gerritse (Erasmus School of Economics); Bas Karreman (Erasmus School of Economics) |
| Abstract: | Do workers in multinational enterprises (MNEs) build stronger CVs? We track the careers of all workers entering the Dutch labor market over the years 2006-2021 and find large and portable wage premia of MNE employment experience. Workers with experience at MNEs instead of domestic firms earn up to 14% higher wages within the MNE, and up to 11% higher wages after moving to another firm. Consistent with a model of MNEs that leverage the value of their employment experience, we find that MNEs hire more juniors, pay lower starting wages, and are more selective towards senior workers than domestic firms. |
| Keywords: | multinationals, experience wage premia, firm organization, AKM, knowledge spillovers, Netherlands |
| JEL: | F23 F66 J24 J31 |
| Date: | 2024–01–03 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20240005 |
| By: | Álvaro Castillo; Ana Sofía León; Antonio Martner; Matías Tapia |
| Abstract: | We study the effect of idiosyncratic firm shocks on the earnings and employment trajectories of workers. We use a matched employer-employee census between 2007 and 2019 for Chile, a developing economy with a significant degree of earnings inequality. The dataset allows us to explore different dimensions of heterogeneity for workers. Our results suggest that the pass-through of changes in firm sales on the wages of continuing workers can be significant, especially for large negative shocks, and that the effects vary significantly with labor market conditions. We show that responses along the extensive margin of employment also play a relevant role, as workers can face a significant risk of displacement. Our findings suggest that considering the earnings of workers who leave the firm after a negative shock provides a more precise assessment of how firms transfer risks to workers since displacement can have relevant implications. |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:chb:bcchwp:1010 |
| By: | Jacopo Gambato; Bernhard Ganglmair; Julia K. Krämer |
| Abstract: | This chapter explores the interaction between the enforcement of and compliance with difficult-to-enforce rules in the context of data regulation. We focus on the effect of the introduction of the GDPR and its transparency principle on the readability of privacy policies for a large sample of German firms. Germany has a system of state-level data protection authorities. These data regulators enforce the same rules but face diverse funding situations, allowing for an ideal setting to study the role of a regulator's capacity in firms' compliance decisions. We find that while, on average, the GDPR lead to less readable policies, firms active in industries that have in the past received more regulatory scrutiny and those active in jurisdictions of better-funded data regulators exhibit a stronger compliance with the GDPR's readability requirement. These results exemplify a more general interaction between regulators' enforcement activity and firms' regulatory compliance. |
| JEL: | D22 K20 L51 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32913 |
| By: | Kristin F. Butcher; Deniz Civril; Sari Pekkala Kerr |
| Abstract: | We use the Longitudinal Business Database to examine the impact of state-level paid parental leave laws in California, New Jersey, and Rhode Island on firms. Our main estimation strategy uses multi-unit firms and compares within-firm changes in outcomes for establishments in treated and untreated states. We find that paid parental leave laws reduce employment in firms’ establishments in treated states. We investigate heterogeneity of the effects by pre-mandate share of workers in an industry that were women, and find that there is no systematic evidence that firms reduce employment more in industries with a higher share of women employees. |
| Keywords: | Paid Leave; Employment; Productivity |
| JEL: | H75 J13 J18 J21 J23 J31 J63 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedhwp:98827 |
| By: | JaeBin Ahn (International Monetry Fund); Shekhar Aiyar (National Council of Applied Economic Research, Delhi); Andrea F. Presbitero (International Monetry Fund) |
| Abstract: | This paper provides cross-country firm-level evidence on productivity spillovers from foreign direct investment (FDI), separately for greenfield FDI and cross-border mergers and acquisitions (M&As). The granularity of bilateral sector-level FDI datasets allows for addressing possible endogeneity issues by applying a two-step approach whereby an exogenous FDI measure is constructed from a gravity-type regression of bilateral FDI flows. When looking at the effects of greenfield investments on firm labor productivity we find: i) positive intraindustry spillover effects for firms located in advanced countries, and ii) positive backward spillover effects for firms located in emerging and developing countries. These spillovers are driven entirely by FDI from advanced countries. The results from cross-border M&As are noisier, with weakly suggestive evidence for positive intra-industry spillovers in advanced countries but negative backward spillovers in emerging markets and developing countries. |
| Keywords: | Foreign direct investment; Cross-border M&A; Intra-industry spillovers; Backward spillovers; Forward spillovers |
| JEL: | F14 F21 F23 F60 |
| Date: | 2024–05–24 |
| URL: | https://d.repec.org/n?u=RePEc:nca:ncaerw:172 |
| By: | Lo\"ic Mar\'echal; Nathan Monnet |
| Abstract: | We use a methodology based on a machine learning algorithm to quantify firms' cyber risks based on their disclosures and a dedicated cyber corpus. The model can identify paragraphs related to determined cyber-threat types and accordingly attribute several related cyber scores to the firm. The cyber scores are unrelated to other firms' characteristics. Stocks with high cyber scores significantly outperform other stocks. The long-short cyber risk factors have positive risk premia, are robust to all factors' benchmarks, and help price returns. Furthermore, we suggest the market does not distinguish between different types of cyber risks but instead views them as a single, aggregate cyber risk. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.08728 |