|
on Business Economics |
| By: | Conteduca, Francesco Paolo; Panon, Ludovic |
| Abstract: | Can firm-level markup adjustments affect the aggregate cost of large, localized shocks? Using firm-level data from Italy, we show that natural disasters lead to a persistent decline in markups among affected manufacturing firms, especially for high-productivity ones. We implement an oligopolistic competition model with idiosyncratic shocks directly on firm-level data and invert it to recover productivity for firms impacted by the 2012 Northern Italy earthquake. We then quantify how markup adjustments shape aggregate manufacturing productivity and welfare. Our baseline results suggest that markup changes amplified the aggregate productivity and welfare losses of the earthquake by approximately 20%. |
| Keywords: | Natural Disasters, Markups, Oligopolistic Competition, Aggregate Productivity, Misallocation, Firm Heterogeneity |
| JEL: | D22 D43 O47 Q54 |
| Date: | 2024–12–17 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125324 |
| By: | Yoshiki Ando |
| Abstract: | Motivated by the substantial growth and upfront investments of venture capital (VC) backed firms observed in administrative US Census data, this paper develops a firm dynamics model over the life cycle. In the model, startups choose the source of financing from VC, Angel investors, or banks, depending on their growth potential, and invest in innovation. The calibrated model explains the life-cycle dynamics of firms with different sources of financing and implies that venture capitalists’ advice accounts for around 22% of the growth of VC-backed firms. A counterfactual economy without VC financing would lose aggregate consumption by around 0.4%. |
| Keywords: | Venture capital, firm dynamics, innovation, upfront investment, defaultable debt, endogenous sorting |
| JEL: | D22 D25 E22 G24 G30 O32 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-38 |
| By: | Ashraf, Nava; Delfino, Alexia; Glaeser, Edward L.; Solmone, Irene |
| Abstract: | In the World Bank Enterprise Survey, the share of entrepreneurs who are women first rises and then falls with national income, while female labor force participation has the opposite U-shaped pattern. We present a model in which gender-based disadvantages, such as discrimination and household obligations, deter firm formation in poor countries and complex firm formation in rich countries. In middle-income countries, high returns to entrepreneurship offset gender-based costs, and firms remain simple. We document that female-owned firms are smaller and simpler. Larger firms are more productive. The female entrepreneurship rate is associated with female education, weak kinship ties, and Buddhism. |
| JEL: | R14 J01 N0 |
| Date: | 2025–05–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128372 |
| By: | Krieger, Bastian; Füner, Lena; Prüfer, Malte |
| Abstract: | Public procurement offers sizable market opportunities for young firms. We investigate the firm- and founder-level characteristics determining young firms' decision to apply for public tenders, as well as the procurers' selection of an awardee. We distinguish between observable and unobservable characteristics as well as price-based tenders (tenders awarded solely on the price criterion) and criteria-based tenders (tenders awarded based on additional criteria next to the price). Using representative survey data for 4, 314 young firms in Germany, we estimate a multinomial two-stage selection model. In the first stage, firms decide to "not apply, " to "apply for price-based tenders, " or to "apply for criteria-based tenders." In the second stage, procurers choose the awardee among the applicants of each tender type. We find the firm and founder determinants largely differ with regard to the first and second stage, as well as price- and criteria-based tenders. |
| Keywords: | Public procurement, Young firms |
| JEL: | H57 L26 O38 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:319891 |
| By: | Evan K. Rose; Yotam Shem-Tov |
| Abstract: | This paper studies the earnings and employment penalties associated with a criminal record. Using a large-scale dataset linking criminal justice and employer-employee wage records, we estimate two-way fixed effects models that decompose earnings into worker’s portable earnings potential and firm pay premia, both of which are allowed to shift after a worker acquires a record. We find that firm pay premia explain a small share of earnings gaps between workers with and without a record. There is little evidence of variable within-firm premia gaps either. Instead, components of workers’ earnings potential that persist across firms explain the bulk of gaps. Conditional on earnings potential, workers with a record are also substantially less likely to be employed. Difference-in-differences estimates comparing workers’ first conviction to workers charged but not convicted or charged later support these findings. The results suggest that criminal record penalties operate primarily by changing whether workers are employed and their earnings potential at every firm rather than increasing sorting into lower-paying jobs, although the bulk of gaps can be attributed to differences that existed prior to acquiring a record. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-39 |
| By: | Shapiro, Daniel; Estrin, Saul; Carney, Michael; Liang, Steven |
| Abstract: | We explore the nature of business groups (BGs) and their affiliates in emerging markets through the lens of the coordination failures associated with economic development. We propose that BGs develop distinct economic and political capabilities that provide affiliates with access to the complementary resources required for successful exporting. We further argue that these capabilities are context-specific, based on the market and political institutions of the home country. We propose that the BG advantage in supporting affiliate exporting increases as market institutions strengthen but is reduced (strengthened) as political systems become more democratic (autocratic). We apply Tobit estimation methods to a large sample of firms from emerging and developing countries at different stages of institutional development and find consistent evidence in favour of our hypotheses. We develop a framework to analyse alternative BG internationalization paths in a comparative institutional context. |
| Keywords: | business groups; exporting; coordination failures; emerging markets; market institutions; political systems |
| JEL: | J50 |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:119277 |
| By: | Alexander Kohlhas; Vladimir Asriyan |
| Abstract: | We document a substantial rise in the accuracy of U.S. firms' expectations since the early 2000s, closely linked to firm-size dynamics and consistent with major advances in data-processing technologies. To study the macroeconomic implications, we develop a model of information production, in which information enables firms to optimize their scale, product choice, and pricing strategies. While information enhances the efficiency of resource allocation, it also facilitates price discrimination. The laissez-faire equilibrium is inefficient, warrants corrective policy interventions, and advances in data-processing technologies have ambiguous effects on social welfare. Calibrating our model to U.S. firm-level data, we find that data-processing advances have significantly increased TFP over the past two decades (5.3-6.7%), primarily by helping firms determine their optimal scale. Yet, the welfare benefits of these improvements have been modest (0.1-2.1%). Restricting data use, especially by large firms, could trigger larger welfare gains. |
| Keywords: | price discrimination, misallocation, rent-extraction, information frictions, expectations, optimal policy, data economy, product choice, data regulation |
| JEL: | E10 E60 C53 D83 D84 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1486 |
| By: | Blesse, Sebastian; Buhlmann, Florian; Heil, Philipp; Rostam-Afschar, Davud |
| Abstract: | We study firm responses to local policies through a survey experiment, providing randomized information on the competitiveness of business tax rates and highway access in their headquarters' municipality. Firms often misperceive local policy competitiveness, especially for tax rates. Investment decisions respond asymmetrically to tax competitiveness. Positive tax rank information reduces investment intentions in neighboring municipalities. Compared to this, negative tax news increase relocation plans. However, most firms receiving bad news plan to continue investing in their headquarters' municipality, indicating home bias. These effects are strongest for mobile firms and corporations. Negative infrastructure news lower location satisfaction but do not influence investment. |
| Keywords: | tax competition, infrastructure, firm location, survey experiment |
| JEL: | H25 H32 H71 H72 H73 L21 R38 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:319894 |
| By: | Tarik Alperen Er; Burak Deniz; Ibrahim Yarba |
| Abstract: | This paper investigates the firm heterogeneity in the evolution of loan spreads over the credit cycle in Türkiye. Using the combination of credit registry and administrative datasets, our bankfirm level analysis shows that small- and medium-sized enterprises (SMEs) and firms that are riskier and more prone to financial frictions pay higher loan interest rates. The results also reveal that loan spreads of these firms decrease and converge to the spreads of large and financially sound firms during expansion periods. Our firm-level analysis indicates that these findings persist at the firm level. Our results suggest that SME loan spreads rise more than those of larger firms during tightening periods. This reveals the asymmetric deterioration in SMEs’ lending conditions relative to large firms. On the other hand, the significant role of firm riskiness on loan spreads weakens during expansion periods. However, these findings are valid only for loans extended by private banks but not state-owned banks. Our findings lend support to policy makers’ prudent approaches over the credit cycle. |
| Keywords: | Loan Spreads, Credit Cycle, SMEs, State-Owned Banks |
| JEL: | E32 E5 G21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:tcb:wpaper:2510 |
| By: | Ramon Caminal |
| Abstract: | This paper presents a theoretical framework for stuyding language choices in cultural and media markets. From a positive point of view, the analysis emphasizes that the share of consumption in the minority language in a specific product category crucially depends on the availability of content with a local focus (targetting local consumers). We argue that such a prediction can help rationalize the large dispersion in the presence of the minority language across different product categories widely observed. In the case of Catalonia, we document that the percentage of consumption in the minority language (Catalan) provided by private firms is quite large for theater, negligible for cinema and television, and intermediate for books and radio. Differences in the relative weight of content with a local focus can account for a substantial portion of this dispersion. From a normative point of view, we show that market forces tend to provide too few products in the minority language relative to the social optimum (insufficient linguistic diversity), even when products with a local focus abound. Public policies fostering local content and the use of the minority language are also discussed. |
| Keywords: | language, content, business stealing, better preference matching |
| JEL: | D43 L13 L82 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1485 |
| By: | Sampi, James; Vostroknutova, Ekaterina |
| Abstract: | This paper examines the impact of two interventions by Colombia's competition authority to enforce competition in the sugar market on firm performance in downstream sectors. Using an exogenous identification strategy, the analysis finds that following the competition authority’s intervention against collusion in 2015, downstream firms expanded production but did not increase productivity or profitability margins, consistent with the removal of supply constraints imposed by cartelization. In contrast, the 2011 intervention against abuse of dominance increased the profitability margins of downstream firms, without altering production scale or labor intensity, consistent with input price reductions and stable consumer demand. Robustness checks, including propensity score matching, confirm the reliability of these findings. The results show that antitrust enforcement works through different channels, depending on the type of anti-competitive behavior. The results also highlight the importance of targeted and continuous antitrust enforcement in addressing market distortions. |
| Date: | 2025–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11155 |
| By: | Barigozzi, Francesca; Cremer, Helmuth; Canta, Chiara |
| Abstract: | This paper studies how firms’ ownership choices and workers’ intrinsic motivation jointly shape service quality and market outcomes in labor-intensive, mission-driven sectors. Two organizations first choose whether to operate as standard for-profit or as mission-oriented firms, and then compete in both the labor and the user markets. Mission-oriented firms have higher unit costs but attract better-motivated workers. Service quality is endogenously determined through the sorting of intrinsically motivated workers and depends on the firm’s ownership type. We show that all market structures—standard, mission-oriented, or mixed— can arise in equilibrium, and that mixed structures can be Pareto superior by efficiently allocating the most motivated workers to the mission-oriented firm while preserving the cost advantage of the other firm. While equilibrium outcomes generally diverge from the social optimum due to externalities and lack of coordination, they are both driven by the trade-off between cost-efficiency and motivation. The model helps explain the coexistence of heterogeneous ownership structures observed in some sectors—such as the nursing homes sector—and identifies conditions under which such diversity is welfare-enhancing. |
| Keywords: | mission-driven sectors; mission-oriented firms; workers’ motivation; endogenous; market structure; welfare. |
| JEL: | J21 L13 L31 |
| Date: | 2025–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:130749 |
| By: | Jan Malek; Jo Seldeslachts; Reinhilde Veugelers |
| Abstract: | This paper provides empirical evidence on which M&A deals spur innovation, and which stifle it. To do so, we consider not only the product market position of the acquiring firm, but also the position of both target and acquirer in the technology space. Focusing on the antidiabetic drugs market, our dataset tracks the lifecycle and patenting of all individual antidiabetic projects in development between 1997 and 2017. We show that most terminations of acquired projects occur while the projects are still far from product market entry. Nevertheless, a number of these early-stage acquisitions have a positive impact on innovation. These cases arise when incumbents acquire projects close to their own projects in product markets, but only if these projects are also close in technology markets. Those deals are associated with increased subsequent patenting, which is consistent with the exploitation of technological synergies. Our results point to the crucial role of combining both product market and technology market positions in assessing the innovation effects of pharmaceutical M&As. |
| Keywords: | M&As, innovation, R&D, pharmaceutics, technology, novelty, patents |
| JEL: | L41 L65 O31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2128 |
| By: | Mulyukova, Alina |
| Abstract: | This paper investigates the impact of services sector liberalization on product innovation of downstream manufacturing firms. Leveraging firm-product panel data from India and employing a shift-share research design, I find that services liberalization significantly increases firms' product portfolio. Allowing foreign investments in the banking sector decreases firm's credit-constraint and increases the amount of interest payments on short-term loans. This shows that services liberalization reduces firms' fixed costs of product innovation. Firms diversify into input-similar industries which changes the distribution of sales across products with the core product experiencing the most pronounced decline in the sales share. |
| Keywords: | Product mix, services liberalization, India |
| JEL: | F10 F61 D22 L8 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:320414 |
| By: | Jonathan Vogel; Andreas Kostøl; Sigurd Galaasen; Joan Monrà s |
| Abstract: | What is the effect of immigration on native labor-market outcomes? An extensive literature identifies the differential impact of immigration on natives employed in jobs that are more exposed to immigrant labor (supply exposure). But immigrants consume in addition to producing output. Despite this, no literature identifies the impact on natives employed in jobs that are more exposed to immigrant consumption (demand exposure). We study native labor-market effects of supply and demand exposures to immigration. Theoretically, we formalize both measures of exposure and solve for their effects on native wages. Empirically, we combine employer-employee data with a newly collected dataset covering electronic payments for the universe of residents in Norway to measure supply and demand exposures of all native workers to immigration induced by EU expansions in 2004 and 2007. We find large, positive, and persistent effects of demand exposure to EU expansion on native worker income. |
| Keywords: | immigration |
| JEL: | J2 J61 F22 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1496 |
| By: | Lemos, Sara (University of Leicester) |
| Abstract: | No empirical evidence has ever been reported that the large inflow of accession immigrants – following the 2004 expansion of the European Union – led to a fall in wages or employment, or a rise in unemployment in the UK between 2004 and 2006. This immigration shock was unexpectedly larger and faster – as well as more concentrated into areas and occupations – than anticipated, seemingly more akin to an exogenous supply shock than most immigration shocks. Exploiting rich but underused individual level data from the Lifetime Labour Market Database (LLMDB) we estimate the effect of this immigration shock on wages, employment and unemployment of natives and previously existing immigrants in the UK. We confirm once again the finding of little evidence that the inflow of accession immigrants led to a fall in wages, a fall in employment, or a rise in unemployment of natives in the UK between 2004 and 2006. However, we uncover, for the first time, novel evidence of adverse employment and unemployment effects for low paid existing immigrants as a result of the accession immigration inflow. This is more severe for low paid immigrants and young low paid immigrants as well as for long term unemployed immigrants. |
| Keywords: | wages, employment, immigration, Central and Eastern Europe, UK |
| JEL: | J22 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18000 |
| By: | Xiangyun Yin (Faculty of Economics, Osaka University of Economics and Law and Graduate School of Economics, Kobe University, JAPAN); Yosuke Sasaki (Faculty of Economics, Niigata Sangyo University and Center for Computational Social Science, Kobe University, JAPAN) |
| Abstract: | A substantial proportion of Chinese families comprises three generations living together. This study employed data extracted from the 2010 China Family Panel to examine the differences between grandparent- and parentheaded households in the allocation of family resources to children's education and investigate the causes of these differences. Additionally, we examined the role of children's educational stage in influencing the differences in educational expenditure when grandparents or parents served as family heads. Based on the Tobit regression, we found that parent-headed households spend more on education than grandparent-headed households. This difference may arise because parents' decision-making regarding educational expenditure is more altruistic than that of grandparents. We suggest that parents serving as both household heads and primary caregivers benefit children's education. This study fills an important literature gap because it highlights the family head's significance in three-generation households and also elucidates the differences between grandparents and parents in their motives for educational expenditures. |
| Keywords: | Three-generation; Grandparents; Education expenditure; Altruism; Exchange motive |
| JEL: | D64 D91 D13 J13 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:kob:dpaper:dp2025-21 |
| By: | Berger, Allen; Gao, Haoyu; Li, Xinming; Peng, Yuchao; Xie, Bingyuan |
| Abstract: | We explore the limits of organizational expansion in the financial sector, highlighting how branch network growth impacts bank performance. Employing data from small and medium banks in China, we reveal that branch expansion at breakneck speed results in poor performance. We identify agency problems arising from poor governance, hindered information collecting, and heightened moral hazard that can intensify the costs associated with rapid growth. Our findings emphasize the dangers of ambitious expansion, offering critical insights for policymakers and bankers in managing the intertwined challenges of agency costs and the pace of growth, suggesting more balanced future bank branching strategies. |
| Keywords: | Banking, Branching, Agency Problems, Governance, Performance, Risk |
| JEL: | G21 G30 L10 |
| Date: | 2025–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125305 |
| By: | Laurence Jacquet; Stéphane ROBIN (CY Cergy Paris Université, THEMA) |
| Abstract: | We re-examine the R&D - innovation - productivity nexus in 8 EU countries in the context of a possible EU-wide "super deduction" on R&D expenditures, using panels of industries with a long time dimension. We introduce dynamics in the innovation production function and extended production function models, taking the availability/unavailability of R&D tax credits (R&DTC) into account. Our benchmark estimates, obtained with panel ARDL models, yield positive longrun elasticities of innovation and productivity with respect to R&D intensity. R&D conducted under an R&DTC either reinforces an already-existing positive elasticity or makes it significantly positive if it was not before. Disentangling the respective effects of ’pure’ business R&D and of government-supported R&D reveals a wider diversity of situations, however. The effect of R&DTC is less often significant, sometimes superseded by other forms of public support to R&D. The main policy implication of these results is that a harmonized "super-deduction" on R&D at the EU level may be slightly premature. Complementary analyses suggest that targeting specific industries may make such a policy more effective and accurate. |
| Keywords: | Innovation, Productivity, Dynamic Panel Data Models, Public Support to R&D, European Science and Technology Policy |
| JEL: | O30 O38 H25 H54 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ema:worpap:2025-09 |
| By: | Chauvin, Jasmina; Choudhury, Prithwiraj; Fang, Tommy Pan |
| Abstract: | This paper examines the effects of temporal distance generated by time zone separation on communication in geographically distributed organizations. We build on prior research, which highlights time zone separation as a significant challenge, but argue that employees may time shift—move work-related communication to outside of regular business hours—to counteract temporal distance. We propose a theory in which employees’ tendency to time shift depends on the demands of their tasks and collaborative relationships and individuals’ ability to supply work outside of regular business hours. Analyzing communication-level data from 12, 038 employees of a large multinational firm and using cities’ shifts to/from daylight saving time for identification, we find that temporal distance leads to sizable but smaller than expected reductions in volumes of rich, synchronous communication between employees. Consistent with our arguments, increased temporal distance significantly increases time shifting of work-related communication, especially among workers whose jobs are nonroutine and interactions in strong collaborative relationships. We further document that female employees and employees based in countries with stricter legal work hour limits engage in significantly less time-shifted communication. Our study improves understanding of a ubiquitous source of collaboration friction. It also sheds light on a potential source of inequities in workplace outcomes stemming from differences in individuals’ ability to work outside of regular business hours. |
| Keywords: | collaboration; communication; geographic frictions; nonroutine work; routine; temporal distance; time shifting |
| JEL: | J50 R14 J01 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128758 |
| By: | Antonio Di Paolo; Ada Ferrer-i-Carbonell; Ramon Caminal |
| Abstract: | We present new evidence on the impact of a reform that introduced Catalan-Spanish bilingual education in Catalonia on identity formation. Specifically, we revisit the findings of Clots-Figueras and Masella (2013, The Economic Journal) by examining how exposure to Catalan as medium of instruction affects identity and political preferences. To do so, we use more recent data from repeated cross-sections and multiple alternative sources. Furthermore, we explore an overlooked dimension of identity: self-identification language. At the aggregate level, we find a small but negative effect of bilingual education on the likelihood of identifying as exclusively Catalan. Our results are robust to a battery of sensitivity checks and falsification tests. However, they differ significantly from those of Clots-Figueras and Masella. Our replication of their results reveals a lack of robustness, primarily due to their definitions of identity, as well as to other aspects of their model specification. Our analysis of heterogeneous effects shows that the small negative impact of the reform on identifying as "only Catalan" is entirely driven by individuals from non-Catalan backgrounds, whether in terms of native language or parental origins. For this group, exposure to bilingual education also reduces the likelihood of adopting Catalan as the language of self-identification and support for the independence of Catalonia. These findings suggest that the language-in-education reform might have triggered a backlash effect. |
| Keywords: | language, political preferences, identity |
| JEL: | I28 J15 Z13 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1495 |
| By: | Ferreira, Daniel; Kirchmaier, Tom; Metzger, Daniel; Ye, Shiwei |
| Abstract: | Bank board directors are highly independent but possess limited prior banking experience. Using a sample of banks from 90 countries between 2000 and 2020, we find that country-specific characteristics explain most of the cross-sectional variation in bank board independence. In contrast, country characteristics have little explanatory power for boards’ banking experience. While we document evidence of international convergence in bank board independence, U.S. banks lag behind their global counterparts in director banking experience. The data suggest that country-specific laws and regulations primarily shape bank board composition through requirements for director independence. |
| Keywords: | boards; directors; bank governance |
| JEL: | F3 G3 |
| Date: | 2025–07–15 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128809 |
| By: | Trevor J. Bakker; Stefanie DeLuca; Eric A. English; Jamie Fogel; Nathaniel Hendren; Daniel Herbst |
| Abstract: | We construct new population-level linked administrative data to study households' access to credit in the United States. These data reveal large differences in credit access by race, class, and hometown. By age 25, Black individuals, those who grew up in low-income families, and those who grew up in certain areas (including the Southeast and Appalachia) have significantly lower credit scores than other groups. Consistent with lower scores generating credit constraints, these individuals have smaller balances, more credit inquiries, higher credit card utilization rates, and greater use of alternative higher-cost forms of credit. Tests for alternative definitions of algorithmic bias in credit scores yield results in opposite directions. From a calibration perspective, group-level differences in credit scores understate differences in delinquency: conditional on a given credit score, Black individuals and those from low-income families fall delinquent at relatively higher rates. From a balance perspective, these groups receive lower credit scores even when comparing those with the same future repayment behavior. Addressing both of these biases and expanding credit access to groups with lower credit scores requires addressing group-level differences in delinquency rates. These delinquencies emerge soon after individuals access credit in their early twenties, often due to missed payments on credit cards, student loans, and other bills. Comprehensive measures of individuals' income profiles, income volatility, and observed wealth explain only a small portion of these repayment gaps. In contrast, we find that the large variation in repayment across hometowns mostly reflects the causal effect of childhood exposure to these places. Places that promote upward income mobility also promote repayment and expand credit access even conditional on income, suggesting that common place-level factors may drive behaviors in both credit and labor markets. We discuss suggestive evidence for several mechanisms that drive our results, including the role of social and cultural capital. We conclude that gaps in credit access by race, class, and hometown have roots in childhood environments. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-45 |
| By: | Nitsova, Silviya (University of Manchester) |
| Abstract: | State capture by extremely wealthy elites is a widespread phenomenon in developing democracies, yet the mechanisms through which it works and the impact it has on political and policy outcomes remain poorly understood. I develop a network-based approach to studying captured institutions. Focusing on the national legislature and using social network and regression analyses of unique quantitative data and original interview-based evidence on the case of Ukraine (2014-2022), I demonstrate that oligarchs seek to defend their wealth by promoting as members of parliament individuals who are linked to them via interpersonal ties. The connections between oligarchs and legislators take the form of a highly fragmented, weakly connected, and decentralized network with distinct clusters, in which oligarchs occupy central positions, and influence the adoption of policies related to oligarchs' economic interests. The study has important implications for the scholarship on money in politics, oligarchy, state capture, political connections, neopatrimonialism, legislative politics, political parties, and political representation. |
| Date: | 2025–06–23 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:k27ez_v1 |
| By: | Gibbs, Michael (University of Chicago); Mengel, Friederike (University of Essex); Siemroth, Christoph (University of Essex) |
| Abstract: | Using data from over 28, 000 innovators within a firm, we study how network position affects innovation, measured by the quality of ideas proposed in a formal suggestion system. Network degree is associated with higher quality ideas. Bridging across structural holes is negatively related to idea quality in the short run, conditional on degree, but has positive effects in the medium run. Bridging also has positive and persisting effects on the quality of colleagues’ ideas, suggesting a positive externality from ‘brokers.’ Network size is not related to idea quality, after controlling for degree and bridging. Compared to working from the office, remote work leads to lower average network degree and bridging. This weakening of networks may explain the reduced quality of innovation during remote work found in prior literature. |
| Keywords: | working from home, network centrality, structural holes, innovation, networks, hybrid work |
| JEL: | D7 D8 O3 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17966 |
| By: | Kohei Takahashi (Institute for Well-being and Productivity Studies, Waseda University) |
| Abstract: | This study examines the optimal organizational composition of specialists and generalists theoretically and empirically, using a model based on Dessein and Santos (2006). It assumes that specialists excel in adaptation given their deep knowledge in specific areas but face coordination challenges given limited knowledge of other areas. In contrast, generalists benefit from broad task experience, making them superior in coordination but less effective in adaptation than specialists. The model predicts the following monotonicity: the optimal organizational structure shifts from one with many specialists to one with many generalists as the importance of coordination (relative to adaptation) increases or as market uncertainty increases under the condition that the importance of coordination is sufficiently high. These predictions are tested using employee assignment history data from a large Japanese trading company. The dataset includes employees who joined the company in fiscal year 1984 or later and their records up to fiscal year 2023. As predicted, divisions in commodity trading, where adaptation to their market condition is relatively crucial, have more specialists than divisions in business investment, where coordination is key. Among the business investment divisions, the proportion of generalists is higher in those with higher market uncertainty. |
| Keywords: | Human capital development, Career, Specialists and generalists, Training, Job assignment |
| JEL: | J24 M50 M53 M54 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:wap:wpaper:2517 |
| By: | Königs, Sebastian (OECD); Terrero-Dávila, Javier (OECD) |
| Abstract: | Income shocks and limited upward mobility can undermine people’s well-being and economic prospects. Most cross-country studies on income mobility over people’s lives rely on survey data, but small samples limit detailed analysis by socio-demographic group or segment of the distribution. This paper presents first results of an OECD initiative collecting and harmonising administrative microdata to study income dynamics across countries. Applying rank-rank methods, it measures relative mobility in disposable incomes over five years for working-age people in Austria, Belgium, Canada and Estonia. The paper shows that: i) income persistence is strongest at the bottom and top of the distribution; ii) young people experience larger shifts in income ranks, though not always greater upward mobility; iii) women experience weaker upward mobility than men, particularly in the bottom half of the distribution; and iv) people with tertiary education move up the income ladder, at the expense of those with lower education. |
| Keywords: | administrative microdata, income mobility, income distribution |
| JEL: | D31 I31 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17996 |