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on Business Economics |
| By: | Martha Stinson; Sean Wang |
| Abstract: | We introduce the Business Dynamics Statistics of Human Capital (BDS-HC) tables, a new Census Bureau experimental product that provides public-use statistics on the workforce composition of firms and its relationship to business dynamics. We use administrative W-2 filings to combine population-level worker demographic data with longitudinal business data to estimate the demographic and educational composition of nearly all non-farm employer businesses in the United States between 2006 and 2022. We use this newly constructed data to document the evolution of employment, entry, and exit of employers based on their workforce compositions. We also provide new statistics on the interaction between firm and worker characteristics, including the composition of workers at startup firms. We find substantial changes between 2006 and 2022 in the distribution of employers along several dimensions, primarily driven by changing workforce compositions within continuing firms rather than the reallocation of employment between firms. We also highlight systematic differences in the business dynamics of firms by their workforce compositions, suggesting that different groups of workers face different economic environments due to their employers. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-20 |
| By: | Fontanelli, Luca; Guerini, Mattia; Miniaci, Raffaele; Secchi, Angelo |
| Abstract: | While artificial intelligence (AI) adoption holds the potential to enhance business operations through improved forecasting and automation, its relation with average productivity growth remain highly heterogeneous across firms. This paper shifts the focus and investigates the impact of predictive artificial intelligence (AI) on the volatility of firms’ productivity growth rates. Using firm-level data from the 2019 French ICT survey, we provide robust evidence that AI use is associated with increased volatility. This relationship persists across multiple robustness checks, including analyses addressing causality concerns. To propose a possible mechanisms underlying this effect, we compare firms that purchase AI from external providers (“AI buyers”) and those that develop AI in-house (“AI developers”). Our results show that heightened volatility is concentrated among AI buyers, whereas firms that develop AI internally experience no such effect. Finally, we find that AI-induced volatility among “AI buyers” is mitigated in firms with a higher share of ICT engineers and technicians, suggesting that AI’s successful integration requires complementary human capital. |
| Keywords: | Dairy Farming, Production Economics, Research and Development/Tech Change/Emerging Technologies, Resource/Energy Economics and Policy |
| Date: | 2025–04–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:355806 |
| By: | Abdoulaye Kané; Nadine Levratto |
| Abstract: | This paper investigates how local factors at the local and firm levels affect French construction firms' productivity (labour productivity and total factor productivity). We use a multilevel model to disentangle firm-specific and location-specific effects. The results cover the period 2009-2019 and confirm the importance of firm-specific determinants of productivity, mainly age and size. Our results also emphasise the influence of location and local characteristics. We find that the local unemployment rate hurts productivity, and our results bring some evidence of the existence of positive external agglomeration effects. These results remain robust to analysis by company size. |
| Keywords: | French construction firms; Heterogeneity of productivity; Localisation Factors; Multilevel Models |
| JEL: | C31 D24 L74 R15 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2025-19 |
| By: | Sanja Samirana Pattnayak |
| Abstract: | This study contributes to the literature on digitalisation in developing countries by examining its role in export intensity and firm productivity in Indian manufacturing from 2000 to 2021. Using fixed effects and the system generalised method of moments (GMM) model, the analysis draws on firm-level data from the Prowess database, encompassing approximately 11, 000 manufacturing firms. The findings reveal that digitalisation amongst India’s manufacturing firms is positively associated with both export intensity and productivity, after accounting for firm characteristics and heterogeneity. Specifically, a 1% increase in digital intensity corresponds to a 0.16% increase in exports. This effect is further enhanced when expenditure on internet services and software development is included, raising the export impact to 0.21% per 1% increase in digital intensity. Additionally, the results indicate that a 1% increase in digitalisation intensity leads to a 0.8% growth in total factor productivity. These findings have significant policy implications, particularly as digitalisation increasingly shapes the global and Indian economies. They underscore the need for strategies to promote digital adoption in manufacturing to enhance competitiveness and productivity. |
| Keywords: | digitalisation; productivity; exports; servicification; manufacturing; India |
| JEL: | C33 D24 F14 J24 L60 O33 |
| Date: | 2025–03–19 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-39 |
| By: | Gert Bijnens (Economics and Research Department, National Bank of Belgium); Sam Desiere (Ghent University); Tiziano Toniolo (IRES/LIDAM, UCLouvain) |
| Abstract: | Policies supporting small businesses are popular among policymakers but often criticised by economists for their potential to distort the economy. This paper provides a comprehensive evaluation of a unique policy that subsidises the first employee. Empirically, we find that the policy led to a surge in the number of firms employing exactly one employee, without a noticeable effect on the number of firms with two or more employees. A simple frictionless general equilibrium model of occupational choices predicts the empirical facts remarkably well. Leveraging our model, we show that the general equilibrium effects on wages and aggregate output are likely to be small. However, the policy is expensive. Our findings support the traditional view that size-dependent subsidies distort the optimal allocation of resources.. |
| Keywords: | size-dependent policies; firm entry; small firms; wage subsidies; payroll taxes. |
| JEL: | D22 H25 J08 L25 L26 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202503-473 |
| By: | Mufaddal Baxamusa |
| Abstract: | I investigate whether the differences in R&D expenditures as reported in BRDIS and Compustat can be explained by the firm having multiple R&D establishments by using the data from LBD and BRDIS to classify the firms into single R&D establishments and multi-R&D establishment firms. |
| Keywords: | BRDIS, LBD, Compustat |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:cen:tnotes:25-04 |
| By: | Alessia Matano (AQR-IREA, University of Barcelona and Università di Roma “La Sapienza”); Paolo Naticchioni (Roma Tre University and IZA) |
| Abstract: | This paper investigates the relationship between China’s import competition and the innovation strategies of domestic firms. Using firm level data from Italy spanning 2005-2010 and employing IV fixed effects estimation techniques, we find that the impact of China’s import competition on innovation varies depending on the type of goods imported (intermediate vs. final). Specifically, imports of final goods boost both product and process innovation, while imports of intermediate goods reduce both. Additionally, we extend the analysis to consider the role of unions in moderating these responses. We find that, in unionized firms, imports' impact on innovation is mitigated, specifically to protect workers' employment prospects |
| Keywords: | China’s Import Competition, Final and Intermediate Goods, Product and Process Innovation, Unions, IV Fixed effects estimations. JEL classification: C33, L25, F14, F60, O30, J50 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:aqr:wpaper:202501 |
| By: | Alloysius Joko PURWANTO (Economic Research Institute for ASEAN and East Asia (ERIA)); Ridwan Dewayanto RUSLI (Cologne University of Applied Sciences and University of Luxembourg); Hafis Pratama Rendra GRAHA (Bandung Institute of Technology); Sirichai KOONAPHAPDEELERT (Chiang Mai University); Reza Miftahul ULUM (University of Indonesia); Citra Endah Nur SETYAWATI (Economic Research Institute for ASEAN and East Asia (ERIA)); Nadiya PRANINDITA (Economic Research Institute for ASEAN and East Asia (ERIA)); Ryan Wiratama BHASKARA (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | This study analyses the impact of the COVID-19 pandemic on a firm's total factor productivity (TFP) using Korean firm-level data from 2016 to 2021. The study reveals that the pandemic had a heterogeneous impact on firm TFP depending on the firm's operational characteristics, specifically whether the firm is a multinational enterprise (MNE) or a pure exporter (non-MNE). Whilst the pandemic had a more significant negative impact on the TFP of pure exporters than other firms, MNEs were less affected by the pandemic shock than pure exporters. This implies that whilst both firms were exposed to negative demand shocks on a global scale, MNEs were better equipped to handle supply-side uncertainties through international diversification. The study identifies certain characteristics of MNEs that helped buffer the pandemic shock, such as shedding labour, high R&D intensity, and more diversification via foreign subsidiaries. These characteristics enabled MNEs to mitigate the pandemic shock and even increase their TFP during the pandemic. |
| Keywords: | Global Pandemic; COVID-19; firm productivity; resource allocation; labour shedding; R&D; MNEs; international diversification; pure exporting firms |
| JEL: | D24 F23 F40 H12 I18 |
| Date: | 2025–03–04 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-38 |