|
on Business Economics |
| By: | Hack, Lukas; Rostam-Afschar, Davud |
| JEL: | E31 E43 E52 E58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc24:302376 |
| By: | Julien Albertini (Université Lumière Lyon 2, CNRS, Université Jean Monnet Saint-Etienne, emlyon business school, GATE, 69007, Lyon, France); Xavier Fairise (GAINS, Le Mans Université); Anthony Terriau (GAINS, Le Mans Université) |
| Abstract: | This paper explores the differentiated effects of corporate tax changes based on firm characteristics and evaluates the potential impact of a tax system modulated by both firm size and age. Using tax rate variations across U.S. states and comparing adjacent counties across state borders, we find that corporate taxes significantly reduce employment in small and young firms, while having no notable impact on large and older firms. We then develop a model to analyze firm dynamics throughout their life cycle under different tax regimes. Our simulations show that a corporate tax system adjusted by both firm size and age is more effective than one based solely on size (and even more so than a system with a single rate). This approach lightens the tax burden on highly productive young firms and shifts it toward less productive older firms, ultimately boosting employment and welfare without reducing the fiscal surplus. |
| JEL: | H25 H32 J21 J23 E61 E62 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:gat:wpaper:2410 |
| By: | Busso, Matías; Fentanes, Oscar |
| Abstract: | What determines the aggregate and distributional effects of new transportation infrastructure? One key overlooked channel is the role that infrastructure policy plays in changing the incentives of firms to enter, exit, and grow--in turn generating endogenous changes in local productivity. In this paper, we document and quantify the importance of this channel by using detailed Mexican microdata and a spatial general-equilibrium model that incorporates firm dynamics. Leveraging random delays in the construction of highways, we empirically show that productivity grows in places with better transportation infrastructure. Firms play a critical role in driving these results: highways increase firms' size, entry rates, survival rates, and total factor productivity. Then, by calibrating our model on census data between 1998 and 2018, we find that new highways over this period increased welfare and income by half a percent, similar to its costs in terms of GDP. Moreover, we find substantial spatial reallocation of workers and production. Nearly half of these effects are explained by endogenous changes in local productivity, which is driven by firm dynamics. |
| Keywords: | Economic geography;firm dynamics;Infrastructure |
| JEL: | R12 D24 O18 O54 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:13759 |
| By: | Joonkyu Choi; Nathan Goldschlag; John Haltiwanger; J. Daniel Kim |
| Abstract: | Using administrative data from the U.S. Census Bureau, we introduce a new public-use database that tracks activities across firm growth distributions over time. With these new data, we uncover several key trends for high-growth firms---critical engines of innovation and economic growth. First, the share of firms that are high-growth has steadily decreased over the past four decades, driven not only by falling rates of entrepreneurship but also languishing growth among existing firms. Second, this decline is particularly pronounced among young and small firms, while the share of high-growth firms has been relatively stable among large and old firms. We also find rich variation across states and sectors. To facilitate future research, we highlight how these data can be used to address various research questions. |
| Keywords: | Organizational Growth; Entrepreneurship; High-Growth Firms; Business Dynamism; Publicly Available Dataset |
| JEL: | L11 L25 L26 O30 O40 |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:2024-74 |
| By: | Bernardo Caldarola; Luca Fontanelli |
| Abstract: | Recent empirical evidence finds positive associations between digitalisation and industry concentration. However, ICT may not be all alike. We investigate the effect of the purchase of cloud services on the long run size growth rate of French firms. Our findings suggest that cloud services positively impact firm growth rates, with smaller firms experiencing more significant benefits compared to larger firms. This evidence suggests that the diffusion of cloud technologies may help mitigate concentration in the era of the digital transition by favouring the digitalisation and growth of smaller firms, especially when the cloud services provided are more advanced. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.17035 |
| By: | Domenico Ferraro (Arizona State University); Damián Pierri (ESCP Business School - Universidad Autónoma de Madrid) |
| Abstract: | We develop an equilibrium business cycle model of multi-plant firms with perfectly competitive product and labor markets. Plant-level production features a minimumlabor requirement, leading to occasionally binding capacity constraints at the firm level. The aggregate production function is kinked, displaying constant returns toscale when the economy is below capacity and decreasing returns when at capacity. We calibrate the model to U.S. data and show that the effects of distorting taxes are highly nonlinear and state-dependent, varying systematically with the state of the business cycle. The aggregate hours elasticity is higher in recessions and decreases with the size of the labor tax cut. Moreover, it differs from the structural preference parameter determining the individual-level labor supply elasticity. |
| Keywords: | Minimum labor requirement; Hours constraints; Capacity utilization; State dependence; Labor taxes; Aggregate hours elasticity |
| JEL: | E22 E23 E24 E32 E62 H24 H25 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:341 |
| By: | Nicola Gagliardi (CEBRIG and DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles); Elena Grinza (Department of Economics, Social Studies, Applied Mathematics and Statistics, University of Turin); François Rycx (CEBRIG and DULBEA, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles. IRES (UCLouvain)) |
| Abstract: | In this paper, we investigate the impact of rising temperatures on firm productivity using longitudinal firm-level balance-sheet data from private sector firms in 14 European countries, combined with detailed weather data, including temperature. We begin by estimating firms’ total factor productivity (TFP) using control-function techniques. We then apply multiple-way fixed-effects regressions to assess how higher temperature anomalies affect firm productivity – measured via TFP, labor productivity, and capital productivity. Our findings reveal that global warming significantly and negatively impacts firms’ TFP, with the most adverse effects occurring at higher anomaly levels. Labor productivity declines markedly as temperatures rise, while capital productivity remains unaffected – indicating that TFP is primarily affected through the labor input channel. Our moderating analyses show that firms involved in outdoor activities, such as agriculture and construction, are more adversely impacted by increased warming. Manufacturing, capital-intensive, and blue-collar-intensive firms, compatible with assembly-line production settings, also experience significant productivity declines. Geographically, the negative impact is most pronounced in temperate and mediterranean climate areas, calling for widespread adaptation solutions to climate change across Europe. |
| Keywords: | Climate change, Global warming, Firm productivity, Total factor productivity (TFP), Semiparametric methods to estimate production functions, Longitudinal firm-level data |
| JEL: | D24 J24 Q54 |
| Date: | 2024–08–21 |
| URL: | https://d.repec.org/n?u=RePEc:ctl:louvir:2024010 |
| By: | Daniel Huerta; Chris Mothorpe |
| Abstract: | The function of a REIT manager is to effectively and profitably manage a real estate portfolio. Among the ways to achieve this goal is to improve performance by managing market exposure through geographic diversification. Previous research recognizes the role of portfolio geographic diversification on efficiency and firm value. For example, Campbell, Petrova and Sirmans (2003) explain REIT property acquisitions produce wealth benefits when companies reconfirm their geographical focus suggesting firms benefit from more geographically concentrated portfolios. Similarly, Hartzell, Sun and Titman (2014) find that as REITs increase the geographical dispersion of their properties, firm value significantly decreases, also suggesting a REIT geographical diversification discount. More recently, Feng, Pattanapanchai, Price and Sirmans (2021) find a relationship between the level of firm transparency and the benefit of geographical diversification; that is, less transparent firms benefit from geographical concentration while more transparent firms benefit from diversification. Relatedly, Zhu and Lizieri (2022) suggest REITs with more geographically concentrated portfolios observe higher risk when the portfolio is exposed to more volatile property markets but if portfolios are geographically diversified, the effect of local market risk decreases. In sum, the evidence of whether geographical diversification improves or decreases REIT efficiency and value remains inconclusive. In this paper, we explore the impact of geographical diversification from an international perspective. We find that although most U.S. equity REITs tend to concentrate assets in the continental United States, a non-trivial portion of the U.S. REIT market tends to diversify internationally. Therefore, we raise the question of whether the strategy of international geographical diversification is value-enhancing. |
| Keywords: | REIT international diversification; Reit Performance; REIT Portfolio Management; REIT value |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2024-117 |