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on Business Economics |
| By: | Pérez Reyna, David (Universidad de los Andes); Rozada-Najar, Angie (Banco de la República); Suaza, Fausto (Universidad de los Andes) |
| Abstract: | Using a unique dataset combining Colombian firm, bank, and credit registry data from 2006 to 2021, we investigate the relationship between bank productivity and the productivity of firms they lend to. We find a positive correlation that strengthened after 2017. We posit a theoretical model to rationalize this finding: more productive banks optimally choose to lend to more productive firms because they can better afford the fixed costs of accessing higher-quality firm profiles. |
| Keywords: | firm productivity; bank productivity; lending relationships; productivity measurement |
| JEL: | D24 E44 G21 |
| Date: | 2025–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:col:000089:021298 |
| By: | Paolo Carioli; Dirk Czarnitzki; Gastón P Fernández Barros |
| Abstract: | Artificial Intelligence (AI) is considered to be the next general-purpose technology, with the potential of performing tasks commonly requiring human capabilities. While it is commonly feared that AI replaces labor and disrupts jobs, we instead investigate the potential of AI for overcoming increasingly alarming skills shortages in firms. We exploit unique German survey data from the Mannheim Innovation Panel on both the adoption of AI and the extent to which firms experience scarcity of skills. We measure skills shortage by the number of job vacancies that could not be filled as planned by firms, distinguishing among different types of skills. To account for the potential endogeneity of skills shortage, we also implement instrumental variable estimators. Overall, we find a positive and significant effect of skills shortage on AI adoption, the breadth of AI methods, and the breadth of areas of application of AI. In addition, we find evidence that scarcity of labor with academic education relates to firms exploring and adopting AI. |
| Keywords: | Artificial Intelligence, CIS data, skills shortage |
| Date: | 2024–02–08 |
| URL: | https://d.repec.org/n?u=RePEc:ete:ceswps:735893 |
| By: | Joel Kariel; Anthony Savagar |
| Abstract: | We develop a theoretical framework to investigate the link between rising scale economies and stagnating productivity. Our model features heterogeneous firms, imperfect competition, and firm selection. We demonstrate that scale economies generated by fixed costs have distinct impacts on aggregate productivity compared to those driven by returns to scale. Using UK data, we estimate long-run increases in both fixed costs and returns to scale. Our model implies that this should increase aggregate productivity through improved firm selection and resource allocation. However, increasing markups can offset the productivity gain. Higher markups cushion low-productivity firms' revenues, allowing them to survive, and constrain firm output, which limits exploitation of scale economies. |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2411.18461 |
| By: | Matthew R. Denes; Spyridon Lagaras; Margarita Tsoutsoura |
| Abstract: | Platform intermediation of goods and services has considerably transformed the U.S. economy. We use administrative data on U.S. tax returns to study the role of the gig economy on entrepreneurship. We find that gig workers are more likely to become entrepreneurs, particularly those who are lower income, younger, and benefit from flexibility. We track all newly created firms and show that gig workers start firms in similar industries as their gig experience, which are less likely to survive and demonstrate higher performance. Overall, our findings suggest on-the-job learning promotes entrepreneurial entry and shifts the types of firms started by entrepreneurs. |
| JEL: | G30 J21 J22 J24 L26 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33347 |
| By: | Sergey Bondarkov; Victor Ledenev; Dmitriy Skougarevskiy |
| Abstract: | The Russian Financial Statements Database (RFSD) is an open, harmonized collection of annual unconsolidated financial statements of the universe of Russian firms in 2011-2023. It is the first open data set with information on every active firm in the country, including non-filing firms. With 56.6 million geolocated firm-year observations gathered from two official sources, the RFSD features multiple end-user quality-of-life improvements such as data imputation, statement articulation, harmonization across data providers and formats, and data enrichment. Extensive internal and external validation shows that most statements articulate well while their aggregates display higher correlation with the regional GDP than the previous gridded GDP data products. We also examine the direction and magnitude of the reporting bias by comparing the universe of firms that are required to file with the actual filers. The RFSD can be used in various economic applications as diverse as calibration of micro-founded models, estimation of markups and productivity, or assessing industry organization and market power. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.05841 |
| By: | Kaul, Rupali; Anderson, Stephen J.; Chintagunta, Pradeep K.; Vilcassim, Naufel |
| Abstract: | Academics and practitioners acknowledge the value of customer feedback in improving firm performance. Companies routinely solicit feedback from different customer subsets. However, the extent to which this feedback impacts nonsolicited customers depends on whether firms implement meaningful business-level changes that resonate with customers. This paper assesses customer feedback’s impact on firm learning and business improvements as well as its spillover effects on nonsolicited customers using a randomized, controlled field experiment conducted in Rwanda over two years. We hypothesize that private feedback seeking could operate through two broad mechanisms: (a) directly influencing solicited customers and/or (b) prompting firms to improve their offerings, leading to spillover effects on other customers. Our results demonstrate a 38.2% increase in recall and a 77.4% increase in purchases for customers not engaged in the feedback process. The analysis further suggests that business-level changes driven by customer feedback fuel these spillovers. Additionally, customer feedback seeking significantly improves treatment firm performance, resulting in a 62.0% revenue increase and 54.5% profit increase compared with control firms. Our study also introduces a basic customer feedback-seeking technology for small businesses to improve performance. These findings can guide firms in leveraging customer feedback to undertake business changes and generate greater revenues/profits. |
| Keywords: | customer feedback; emerging markets; entrepreneurship; feedback spillover; firm learning; small firm growth |
| JEL: | L81 J50 |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125615 |
| By: | Hennicke, Moritz |
| Abstract: | I study the impact on workers of restructuring communist firms during the transition to capitalism. Drawing on close to the universe of communist state-owned enterprises under the authority of the German privatization agency in the 1990ies, I am able to link firms across industries and districts to workers and their labor market outcomes before and after exposure to firm restructuring. I study effects of two treatments: First, I find that the advent of market competition through firm closures by the privatization agency increases unemployment. Second, I estimate that the genesis of private ownership in the form of privatizations lowers household income and well-being of workers. To explore the role of ownership, I conduct event studies at the firm level and find that privatized firms downsize compared to firms remaining state-owned. Building a conceptual framework on the idea that the transition implied large temporary uncertainties, the shrinking of privatized firms might have followed from a higher desire by private owners to reduce exposure to risk as opposed to the state. |
| Date: | 2023–04–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:jext7 |
| By: | MORIKAWA Masayuki |
| Abstract: | While it is generally agreed that reducing the gender wage gap is desirable, different policy measures would be effective in addressing the problem, depending on what causes the gap. This study measures the relationships between firms’ compositions of workers, productivity, and wages―the “productivity-wage gap†―using panel data from 2015 to 2021 constructed from an original survey of Japanese firms linked with the Basic Survey of Japanese Business Structure and Activities. These results indicate that, on average, female workers’ wages are not lower than their contributions to firm productivity. Second, we do not find female workers’ wages to be higher than productivity in firms with labor unions and female directors on their boards. Third, part-time workers’ wages are higher relative to their productivity levels. Fourth, the wages of highly educated workers are lower relative to their productivity levels. Fifth, when firm fixed effects are controlled for, the productivity-wage gap for female workers and highly educated workers cannot be precisely estimated, indicating that unobserved firm characteristics are behind the gap observed cross-sectionally. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25008 |
| By: | Aguilera, Ruth V.; J. Bermejo, Vicente; Capapé, Javier; Cuñat, Vicente |
| Abstract: | We examine expectation documents’ effectiveness as an activism tool. We use the Norwegian sovereign wealth fund’s release of a corporate governance expectation document as a natural experiment. We introduce a novel, three-way analytical decomposition of the firms, the fund, and their joint response to this document. Firms’ governance practices adapt to the fund’s new portfolio-wide governance preferences, with heterogeneous responses across ownership and firm characteristics. The fund’s investment policies also change, even at the expense of financial returns. Overall, our research demonstrates the potential effectiveness of expectation documents as an emerging, low-cost activism tool for universal investors. |
| Keywords: | expectation documents; corporate goverance; institutional ownership |
| JEL: | F30 G32 G34 |
| Date: | 2024–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:122267 |
| By: | Eric BOND; HOANG Trang; MA Yan; MAKIOKA Ryo |
| Abstract: | The paper studies the effect of R&D investments by parent multinational corporations (MNC) and their affiliates on the decisions of those affiliates to purchase intermediate inputs across different locations. We first develop a theoretical model of R&D and sourcing decisions to provide potential mechanisms and to guide our empirical analysis. Our fixed-effects regression results imply that, first, higher affiliate R&D expenditures are associated with a higher share of the affiliate’s purchases from local firms. Second, higher R&D expenditures by affiliates in other countries (i.e., those under the same parent firm but located in a different foreign country) are associated with a higher share of affiliate purchases from those countries. Third, we find that the affiliate’s R&D expenditures are negatively correlated with the purchase share from the parent home country and from the parent firm. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25007 |