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on Business Economics |
| By: | Aleksander S. Kritikos; Mika Maliranta; Veera Nippala; Satu Nurmi |
| Abstract: | We examine how the gender of business-owners is related to the wages paid to female relative to male employees working in their firms. Using Finnish register data and employing firm fixed effects, we find that the gender pay gap is – starting from a gender pay gap of 11 to 12 percent – two to three percentage-points lower for hourly wages in female-owned firms than in male-owned firms. Results are robust to how the wage is measured, as well as to various further robustness checks. More importantly, we find substantial differences between industries. While, for instance, in the manufacturing sector, the gender of the owner plays no role for the gender pay gap, in several service sector industries, like ICT or business services, no or a negligible gender pay gap can be found, but only when firms are led by female business owners. Businesses in male ownership maintain a gender pay gap of around 10 percent also in the latter industries. With increasing firm size, the influence of the gender of the owner, however, fades. In large firms, it seems that others – firm managers – determine wages and no differences in the pay gap are observed between male- and female-owned firms. |
| Keywords: | entrepreneurship, gender pay gap, discrimination, linked employer-employee data |
| JEL: | J16 J24 J31 J71 L26 M13 |
| Date: | 2024–04–19 |
| URL: | https://d.repec.org/n?u=RePEc:pst:wpaper:343 |
| By: | Konstantins Benkovskis (Latvijas Banka); Styliani Christodoulopoulou (European Central Bank); Olegs Tkacevs (Latvijas Banka) |
| Abstract: | This study examines the adoption of digital technologies by Latvian firms, focusing on the factors influencing adoption decisions and the impact of these technologies on firm performance. Using firm-level responses to the digitalisation survey, the paper covers four technologies: broadband internet, webpages, web sales, and EDI sales. The results suggest that larger firms, exporters, and those employing ICT specialists along with a higher-skilled workforce, are more inlined to adopt digital technologies. The provision of relevant training programmes for both ICT and non-ICT staff is essential for fostering technology adoption, particularly for more complex systems like web sales. To assess the impact of digitalisation on firm performance, the study employs a difference- in-differences approach, finding that webpage adoption positively affects turnover and employment, particularly in the manufacturing sector. EDI sales also enhance firm performance, boosting turnover and employment. The study emphasises the need for complementary investments in workforce skills, ICT training, and organisational re-structuring to fully realise the benefits of digital transformation. |
| Keywords: | digital technologies, e-commerce, firm performance |
| JEL: | D22 O14 O33 L25 J23 J24 F14 |
| Date: | 2025–04–11 |
| URL: | https://d.repec.org/n?u=RePEc:ltv:dpaper:202501 |
| By: | Arnemann, Laura; Buhlmann, Florian; Ruf, Martin; Voget, Johannes |
| Abstract: | In this paper, we investigate the effect of higher personal income taxes on CEO and firm performance in publicly traded US firms. In response to higher taxes on compensation, CEOs are less likely to reach performance goals and spend more time working in boards outside of their firm. At the same time, firm performance drops before eventually recovering as investment projects with below average profitability are disregarded and due to adjustments in CEO compensation. |
| Keywords: | Executive Compensation, Personal Income Taxation, Firm Performance |
| JEL: | H24 M12 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:313010 |
| By: | Krieger, Bastian; Scrofani, Stefania; Strecke, Linus |
| Abstract: | We explore the association between signaling and conducting innovation collaborations with public research organizations and firms' revenues from firm and market novelties. Based on data from the German Community Innovation Survey 2023 and web-based indicators, firms conducting collaboration report higher revenues from market novelties, suggesting their relevance for the performance of more radical innovations. Firms signaling collaboration through website content report higher revenues from firm novelties, suggesting relevance for the performance of more incremental innovations. These findings indicate distinct mechanism in how collaborations with public research organizations relate to innovation performance. |
| Keywords: | University-Industry Transfer, Innovation Performance, Signaling |
| JEL: | O31 O36 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:312575 |
| By: | Luca Fontanelli; Mattia Guerini; Raffaele Miniaci; Angelo Secchi |
| 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: | Artificial intelligence, productivity growth volatility, coarsened exact matching |
| Date: | 2025–04–07 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/12 |
| By: | Rebecca Jack (University of Nebraska-Lincoln); Daniel Tannenbaum (University of Nebraska-Lincoln); Brenden Timpe (University of Nebraska-Lincoln) |
| Abstract: | We document the dynamics of career paths around parenthood, capturing worker advancement within firms and across firms with differing pay rates. Using a new linkage between administrative data on U.S. workers’ fertility and labor market histories, we show that the parental earnings gap is partly explained by mothers transitioning to lower-paying firms. Firm downgrading is driven by parents who take an extended absence from the labor force. Mothers who move to lower-paying firms see improved job amenities but less generous fringe benefits. The firm’s contribution to the parental earnings gap rises over time and reaches one-third by the child’s 11th birthday. |
| Keywords: | Parental earnings gap, employer-employee, fertility, lower-paying firms, reallocation |
| JEL: | J13 J16 J22 J31 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:upj:weupjo:25-412 |
| By: | Luca Fontanelli (University of Brescia, Department of Economics and Management, CMCC Foundation – Euro-Mediterranean Center on Climate Change); Mattia Guerini (University of Brescia, Deparment of Economics and Management and Fondazione Eni Enrico Mattei); Raffaele Miniaci (University of Brescia, Department of Economics and Management); Angelo Secchi (PSE – University Paris 1 Pantheon-Sorbonne, CMCC Foundation – Euro-Mediterranean Center on Climate Change) |
| 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: | Artificial intelligence, productivity growth volatility, coarsened exact matching |
| JEL: | D20 J24 O14 O33 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2025.11 |
| By: | Jarkko Harju; Toni Juuti; Tuomas Matikka |
| Abstract: | Using full-population data from Finland, we show that individuals at the top of the income distribution are significantly more likely to start new incorporated businesses compared to others. There is no similar selection based on parental income, but more than half of new entrepreneurs have entrepreneurial parents. Individual income gains from entrepreneurship are similar across different background characteristics, but parental entrepreneurship and personal income are positively linked to key firm-level outcomes such as productivity and job creation. This highlights the importance of the intergenerational transmission of entrepreneurial skills and suggests that businesses established by high-income individuals generate largest positive spillovers. |
| JEL: | L26 J24 J3 |
| Date: | 2024–08–29 |
| URL: | https://d.repec.org/n?u=RePEc:pst:wpaper:346 |
| By: | MATSUURA Toshiyuki; SAITO Hisamitsu |
| Abstract: | Using Japanese plant product-level data, this study focuses on the impact of increasing import competition pressure on changes in product portfolios by examining product entry and exit. We also consider the role of R&D activities at the plant level. While previous research on the adjustment of product portfolios for multi-product firms has emphasized the narrowing of products to core products, we show that firms engaged in R&D activities actively replace existing products with new ones and expand into new business fields due to increased import competition. These results are consistent with those of several studies on the relationship between competition and innovation. We also find that these effects are more pronounced in regions with larger public R&D stocks and in high-tech sectors. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25020 |
| By: | Parag Mahajan (University of Delaware) |
| Abstract: | I study how access to foreign-born workers impacts firms and local economics in times of acute crisis. The 2020 H-2B visa lottery randomly gave some U.S. firms the chance to hire low-wage, migrant workers during the height of the COVID-19 pandemic. Using administrative data across three government agencies, I find that access to H-2B workers led to decreased business closures, increased revenues, increased payroll, and increased employment in 2020. I also find suggestive evidence that these effects spilled over to non-participant firms within the same county. |
| Keywords: | migrant workers, H-2B visa, COVID-19 pandemic, firm dynamics |
| JEL: | J23 F22 J61 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:upj:weupjo:25-414 |
| By: | Sydnee Caldwell (University of California-Berkeley and NBER); Ingrid Haegele (LMU and IAB); J?rg Heining (IAB) |
| Abstract: | We use novel surveys of firms and workers, linked to administrative employer-employee data, to study the prevalence and importance of individual bargaining in wage determination. We show that simple survey questions accurately elicit firms’ bargaining strategies. Using the elicited strategies for 772 German firms, we document that the majority of firms are willing to engage in individual wage bargaining. Labor market factors predict firms’ strategies better than firm characteristics. Survey responses from nearly 10, 000 full-time workers indicate that most worker-firm interactions begin with the worker rejecting the offer and remaining at the incumbent firm. There is substantial heterogeneity in workers’ bargaining behavior, which translates into within-firm wage inequality. Firms that set pay via individual bargaining have a 3 percentage point higher gender wage gap. |
| Keywords: | wage bargaining, employer-employee, Germany, wage inequality, gender wage gap |
| JEL: | D83 J31 J41 J53 L21 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:upj:weupjo:25-413 |
| By: | Julian Tiedtke |
| Abstract: | This paper examines the impact of automation investments on employment dynamics and workforce composition using administrative data from Portugal. I exploit the lumpiness of automation imports in a difference-in-differences event study design. My results show that automation creates jobs in small firms but leads to job losses in larger ones. This pattern holds across a wide range of firm types, industries and types of automation technologies. Most importantly, automation favors low-educated, routine-blue-collar workers in routine-intensive jobs over highly skilled workers like STEM professionals. These findings challenge the view of automation as inherently skill-biased |
| Keywords: | Automation, Employment, Firm heterogeneity, Deskilling |
| Date: | 2025–04–03 |
| URL: | https://d.repec.org/n?u=RePEc:ssa:lemwps:2025/09 |
| By: | Kazakis, Pantelis |
| Abstract: | The rapid adoption of artificial intelligence (AI) in the corporate world has raised important questions about its impact on firm performance. This paper examines whether investments in AI—measured by the share of AI-skilled workers—are associated with improvements in firm efficiency. The analysis reveals that AI investment alone does not lead to higher efficiency. That is, firms employing more AI-skilled labor do not, on average, perform more efficiently than others. However, the results show that this relationship depends on firm context. Firms operating in more competitive markets appear to benefit more from AI investment. Additionally, firms that engage more heavily in tax avoidance also realize greater efficiency gains from AI, possibly due to their more aggressive or strategic resource allocation practices. |
| Keywords: | artificial intelligence (AI), firm efficiency, market power, tax avoidance |
| JEL: | D40 E22 G30 H26 L11 |
| Date: | 2025–04–02 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124246 |
| By: | Marion Leroutier; Hélène Ollivier |
| Abstract: | This paper shows that even moderate air pollution levels, such as those in Europe, harm the economy by reducing firm performance. Using monthly firm-level data from France, we estimate the causal impact of fine particulate matter (PM2.5) on sales and worker absenteeism. Leveraging exogenous pollution shocks from local wind direction changes, we find that a 10 percent increase in monthly PM2.5 exposure reduces firm sales by 0.4 percent on average over the next two months, with sector-specific variation. Simultaneously, sick leave rises by 1 percent. However, this labor supply reduction explains only a small part of the sales decline. Our evidence suggests that air pollution also reduces worker productivity and dampens local demand. Aligning air quality with WHO guidelines would yield economic benefits on par with the costs of regulation or the health benefits from reduced mortality. |
| Keywords: | cost of air pollution, absenteeism, firm performance. |
| JEL: | Q53 H23 I10 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11785 |