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on Business Economics |
| By: | Rikard FORSLID; Toshihiro OKUBO |
| Abstract: | This paper explores how firm’s internalization strategies - specifically exporting and foreign direct investment (FDI) - relate to their product scope. We develop a model incorporating firm heterogeneity and multi-product firms. The most productive firms engage in FDI and produce the broadest range of products. Firms with intermediate productivity levels tend to export, offering fewer product varieties than FDI firms. In contrast, low-productivity firms typically operate domestically and have the smallest product scope. The model also predicts that the ratio of the product scope of exporters and domestic firms and the ratio of FDI firms and exporters should decline as the difficulty of expanding the product scope increases. The Japanese firm-level data support the theoretical predictions. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25053 |
| By: | Aghion, Philippe; Bunel, Simon; Jaravel, Xavier; Mikaelsen, Thomas; Roulet, Alexandra; Søgaard, Jakob |
| Abstract: | Using French firm-level data on AI adoption from 2017-2020, we find that, first, firms adopting AI are larger and more productive and skill intensive. Second, difference-in-difference estimates reveal an increase in firm-level employment and sales after AI adoption, suggesting that the induced productivity gains allow firms to grow and outweigh potential displacement effects. Third, occupations classified in recent work as substitutable with AI expand. Fourth, AI usage is a relevant dimension of heterogeneity in the labor demand response: We find positive employment growth for certain uses (e.g., information and communications technology security) and negative for others (e.g., administrative processes). |
| JEL: | R14 J01 |
| Date: | 2025–05–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128375 |
| By: | Mahdi Kohan Sefidi |
| Abstract: | Production networks, dynamic systems of firms linked through input-output relationships, transmit microeconomic shocks into macroeconomic fluctuations. While prior studies often assume static networks, real-world economies feature continuous firm entry (node addition) and exit (node deletion). We develop a probabilistic model to analyze how these dynamics affect production volatility and network resilience. Integrating Leontief input-output frameworks with controllability theory. By quantifying fluctuations as expected values under probabilistic node dynamics, we identify trade-offs between adaptability and stability. Methodologically, we unify Kalman rank criteria and minimum input theory, offering policymakers insights to balance innovation-driven entry with safeguards against destabilizing exits. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.10154 |
| By: | Emilio Colombo; Luca Michele Portoghese; Patrizio Tirelli |
| Abstract: | Is the roll-out of (fast)broadband connections a driver of firms' total factor productivity (TFP) growth in the European Union? Does broadband generate convergence or polarisation? In this regard, which firms benefit most from a broadband connection and is the traditional divide between rural and urban deployment areas important? To answer these questions, we estimate the effects of broadband coverage shocks on individual firms' TFP growth, exploiting broad firm-level coverage from the ORBIS dataset and a relatively long time span (2011–2022) over which broadband shocks are observed. Broadband shocks permanently raise firms' TFP, but their effect is uneven: fast-growth firms improve their relative position. They are more beneficial for the TFP of firms in non-digital sectors, supporting the view that internet connectivity is a general-purpose technology. Firms in urban areas are also better equipped to benefit from increased broadband connectivity. TFP responses to fast-broadband shocks are almost muted. |
| JEL: | L25 D24 L9 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dis:wpaper:dis2504 |
| By: | Ashraf, Nava (London School of Economics); Bandiera, Oriana (London School of Economics); Minni, Virginia (University of Chicago Booth School of Business); Zingales, Luigi (University of Chicago) |
| Abstract: | We evaluate a firm’s unusual, worker-centered, solution to the agency problem: enabling employees to reduce the cost of effort rather than pushing them with performance rewards. We randomize the roll-out of the firm’s “Discover Your Purpose” intervention among 2, 976 white-collar employees and evaluate their outcomes over two years. We find that performance increases because the low performers either leave the firm or improve in their current jobs. The trade-off between meaning and pay flattens as those with low meaning and high pay leave the firm. Treatment also reshapes stated priorities and reduces gender gaps in preferences and behaviors, including uptake of parental leave. A cost-benefit analysis reveals high returns that are shared between the firm and the employees through higher bonuses. Finally, we show that observational data obscure these gains, causing firms to underestimate the intervention’s true value. |
| Keywords: | meaning-making, worker performance, worker motivation, incentives |
| JEL: | J2 J3 M5 C93 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17904 |
| By: | Ferreira, Bianca; Ndiaye, Fatima; Silva, Costa |
| Abstract: | This paper examines the application of financial ratios and panel data analysis in evaluating firm performance and socio-economic dynamics. Through a systematic review of recent literature, we highlight how financial ratios—such as liquidity, profitability, and leverage metrics—serve as critical diagnostic tools for assessing corporate health, particularly in crisis contexts. Meanwhile, panel data analysis enhances longitudinal insights, enabling researchers to identify causal relationships and long-term trends across industries and economies. Our synthesis reveals methodological gaps, including the underutilization of hybrid approaches that integrate ratio analysis with advanced econometric techniques. By bridging these analytical approaches, researchers can generate more robust insights for financial decision-making and policy formulation. |
| Keywords: | Financial Ratios, Panel Data Analysis, Firm Performance, Corporate Resilience |
| JEL: | M41 |
| Date: | 2025–05–08 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124723 |
| By: | Tadashi ITO; Toshiyuki MATSUURA |
| Abstract: | Using firm-level data from Japan, this study examines how firms restructure in response to import competition from China, with a focus on employment adjustments and industry switching. The results indicate that many firms reduced their workforce in response to rising imports, with production workers experiencing the most substantial job losses. An analysis of the time lag in the effects of import shocks suggests that while the number of production workers declines immediately following an increase in imports, broader employment adjustments and industry switching typically occur after a delay of two or more years. Moreover, a comparison between firms that switched industries and those that did not shows that non-switching firms faced more severe negative impacts from import competition. Offshoring plays a critical role in mitigating these adverse effects. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25059 |
| By: | Lee, Jinkook |
| Abstract: | Korea's cultural content industry has seen rapid growth. Key drivers include improved content quality, a maturing digital ecosystem, and increasingly interconnected business networks. As the industry takes on a more prominent role in the national economy-generating a significant production inducement effect-policy efforts should focus on strengthening copyright protection and enforcement, advancing digital transformation among small and midsize firms, and diversifying export markets through deeper industry linkages. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kdifoc:319701 |