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on Business Economics |
| By: | Amiti, Mary; Duprez, Cedric; Konings, Jozef; Van Reenen, John |
| Abstract: | Using firm-to-firm transactions, we show that starting to supply a ‘superstar’ firm (large domestic firms, exporters and multinationals) boosts productivity by 8% after three years. Placebos on starting relationships with smaller firms and novel identification strategies support a causal interpretation of “superstar spillovers”. Consistent with a model of technology transfer, we find bigger treatment effects from technology-intensive superstars and also falls in markups (in order to win superstar contracts). We also show that firms that start supplying superstar firms enjoy a ‘dating agency’ effect — an increase in the number of new buyers that is particularly strong within the superstar firm’s network. Taken together, the results suggest an important role for raising productivity through superstars’ supply chains regardless of multinational status. |
| Keywords: | FDI; productivity; spillovers |
| JEL: | F23 O30 F21 |
| Date: | 2024–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124676 |
| By: | Bruno Merlevede; Pablo Muylle (-) |
| Abstract: | Since the late 2000s, shocks and crises of various types have led to a revival of state intervention around the world. This paper builds a large firm-level dataset to analyze state ownership of firms in Europe for the period 2002-18. We confirm the underperformance of state-owned enterprises (SOEs) relative to privately-owned enterprises (POEs) found in earlier literature for this recent period for a range of firm-level performance indicators. We also examine the impact of SOEs on private firms. We find that larger SOE presence in an industry is associated with lower productivity growth and lower productivity levels among private firms in that industry, but does not affect industry dynamics in terms of entry and exit. This suggests potential aggregate productivity gains from reallocating resources from SOEs to POEs. Further, we show that employment is more stable and crisis-resistant at SOEs, and that SOEs are a more stable source of downstream input demand for other firms. Leveraging our dataset's cross-country nature, we find that SOEs are complements to, rather than substitutes for, lower quality institutions. |
| Keywords: | State ownership, Firm performance, Productivity, Spillover e ects, Privatization, Business dynamism |
| JEL: | H11 L25 L32 O47 P31 P52 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:25/1105 |
| By: | Kim, Seula (Pennsylvania State University) |
| Abstract: | This paper investigates how worker beliefs and job prospects impact the wages and growth of young firms, as well as the aggregate economy. Building a heterogeneous-firm directed search model where workers gradually learn about firm types, I find that learning generates endogenous wage differentials for young firms. High-performing young firms must pay higher wages than equally high-performing old firms, while low-performing young firms offer lower wages than equally low-performing old firms. Reduced uncertainty or labor market frictions lower the wage differentials, thereby enhancing young firm dynamics and aggregate productivity. The results are consistent with U.S. administrative employee-employer matched data. |
| Keywords: | Wage Differentials, Firm Dynamics, Learning, Search Frictions, Uncertainty |
| JEL: | E20 E24 J31 J41 J64 L25 L26 M13 M52 M55 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17655 |
| By: | Marydas, Sneha (RS: GSBE MGSoG, Maastricht Graduate School of Governance); Mathew, Nanditha (Maastricht Graduate School of Governance, RS: GSBE MORSE, RS: GSBE MGSoG); De Marzo, Giordano; Pietrobelli, Carlo (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn) |
| Abstract: | In this study, using a novel dataset that matches firm-level data with online job vacancy data, we investigate the effects of firms’ digital technology adoption on future hiring and the dynamics of hiring and training, focusing on different types of technologies and categories of occupations. First, we examine the impact of adopting different types of digital technologies, namely AI, Advanced ICT, and Basic ICT, on future firm hiring. Our findings reveal that less advanced digital jobs (eg. Basic ICT, Advanced ICT) are substituted by more advanced digital jobs (eg. AI), while the advanced technology adoption by firms leads to increased overall hiring of non-digital roles. Second, we show that there is a positive relationship between training and new hiring only for one occupational category, namely, managers, with no significant relationship for other occupations. Third, we investigate the joint effect of training and technology adoption for firm performance. Our findings reveal that digital technology adoption enhances a firm’s financial performance only when combined with internal staff training. The sole exception is AI, which yields positive performance benefits even in the absence of training. |
| JEL: | O33 O12 L20 D22 |
| Date: | 2025–02–07 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2025004 |
| By: | Sebastián Fanelli (CEMFI); Juan Carlos Hallak (UBA-CONICET); Yin Yongkun (Shandong University) |
| Abstract: | Two facts distinctively separate exporter dynamics from firm dynamics. One is the strikingly low survival rate of new entrants into export markets. The second is that new entrants survive less than re-entrants. We argue that these two facts are critical to discipline exporter dynamics models because many sources of firm heterogeneity (e.g. fixed costs) do not affect survival rates when firms time their entry decision optimally. We extend a standard exporter dynamics model by positing that firms experiment to resolve an uncertain component in foreign-market profitability. We estimate the model using customs data from Peru. Despite its parsimony, having only four relevant parameters, the model matches the survival profile of entrants and re-entrants. It is also sufficiently rich to deliver predictions about many exporter dynamics facts highlighted in the literature. Finally, we exploit variation across products and markets to provide additional evidence supporting the model’s experimentation mechanism. |
| Keywords: | Exporter dynamics, uncertainty, experimentation, foreign demand, geometric Brownian motion. |
| JEL: | F10 F12 F14 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:aoz:wpaper:354 |
| By: | Kim, Gueyon (University of California, Santa Cruz); Lee, Dohyeon (Amazon); Pozzoli, Dario (Copenhagen Business School) |
| Abstract: | This paper examines how offshoring affects worker skill demands and studies its implications for wage inequality. Using Danish administrative data, we find that offshoring increases firm-level demand for higher skills in occupations with high exposure to foreign competition. This effect is more pronounced in low-productivity firms, highlighting distributional impacts across firms. By constructing a Becker-type worker-firm matching model in a global economy, we demonstrate underlying mechanisms and quantify the role of offshoring-induced adjustments. Offshoring increases firm similarity in worker skill and wages within high-exposed jobs, leading to a decrease in between-firm inequality—a contrast to the effects of technological change. |
| Keywords: | offshoring, worker-firm matching, segregation by skill, wage inequality, between-firm inequality |
| JEL: | C78 F14 F16 J24 J31 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17663 |
| By: | Elodie Andrieu (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); John Morrow (QMUL - Queen Mary University of London) |
| Abstract: | How do firms diffuse resources and do they spillover outside headquarter intensive areas? We show R&D subsidies induce French firms to hire new workers, often in new establishments and commuting zones. Using subsidy induced labor demand shocks and past employment patterns, we estimate a within industry spillover elasticity of .26 to non-subsidy firms, rising to .35 for openings outside of headquarter areas. Spillovers are also significant across firm branches and for firms. While subsidies are nominally awarded to headquarters, firms expand to distribute spillovers more broadly. |
| Keywords: | Multi-establishment Firms, Subsidies, Directed Growth, Spillovers |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:psewpa:halshs-04721319 |
| By: | Elisabetta Iossa (CEIS & DEF, University of Rome "Tor Vergata"); Chiara Latour (University of Stockholm) |
| Abstract: | Do firms with higher legality standards contribute to better procurement outcomes? We address this question in the context of Italian public works procurement, by combining contract-level data on procurement and firm-level data on legality scores, using the Legality Rating System managed by the Italian Antitrust Authority. We find that higher legality scores are positively associated with a significant and economically important improvement in procurement efficiency, measured by shorter time delays and lower extra costs. |
| Keywords: | Cartels, corruption, firm efficiency, legality, procurement |
| JEL: | H57 K40 L4 |
| Date: | 2025–02–10 |
| URL: | https://d.repec.org/n?u=RePEc:rtv:ceisrp:592 |
| By: | Rebeca Anguren (BANCO DE ESPAÑA); Gabriel Jiménez (BANCO DE ESPAÑA); José-Luis Peydró (BANCO DE ESPAÑA) |
| Abstract: | We study the short-term effects of both tighter and looser bank capital requirements on bank risk-taking in a crisis period. We exploit credit register data matched with firm and bank level data in conjunction with changes in capital requirements stemming from Basel III, including the introduction of a SME supporting bank capital factor in the European Union. We find that tighter capital requirements reduce the supply of bank credit to firms, while looser capital requirements mitigate the credit supply effects of increasing capital. Importantly, at the loan level (credit supply), banks more affected by capital requirements temporarily change less the supply of credit to riskier than to safer firms, and these asymmetric effects occur for both the tightening and the loosening of bank capital requirements. Finally, these effects are also important at the firm-level for total credit availability and for firm survival. Interestingly, our results suggest that those banks most impacted by the tighter Basel III capital requirements prioritize credit among ex-ante riskier firms to avoid their closure, consistent with loan evergreening. |
| Keywords: | bank capital requirements, credit supply, bank risk-taking, Basel III, loan evergreening |
| JEL: | G21 G28 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2508 |
| By: | Gideon Ndubuisi; Solomon Owusu |
| Abstract: | This paper examines the effect of global value chain (GVC) participation on firm job growth volatility and the role of product quality in shaping this relationship. We find robust evidence suggesting that embeddedness in GVC reduces firm volatility, especially for firms that produce and export higher-quality products in the value chain. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:aer:wpaper:9705d6c4-3a3e-4eb9-b4d7-ed909f8ebd4c |
| By: | Jérôme Héricourt; Jean Imbs; Lise Patureau |
| Abstract: | We examine the response of investment to real estate prices among French firms from 1994 to 2015. Using newly introduced methods and specifications, we find that investment sensitivity to real estate prices decreases with firm size: The smallest firms are at least three times more responsive to changes in collateral value compared to the largest firms. We impute these estimates onto other countries where available data lack firm-level detail. This approach allows us to assess the aggregate sensitivity of investment to real estate prices across different countries. Our results indicate significant variation in the sensitivity of aggregate investment to real estate shocks, driven by cross country differences in the size distribution of firms. |
| Keywords: | Collateral Channel;Firm Heterogeneity;Cross-Country Study;Micro and Macro Estimates |
| JEL: | D31 E25 E44 G01 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2024-13 |