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on Business Economics |
| By: | BRYSON, Alex; TANAKA, Mari |
| Abstract: | The effects of trade unions on firm performance are theoretically ambiguous. The sizable empirical literature on their effects is almost exclusively confined to developed countries, particularly those in North America and Europe. We contribute to the literature by estimating union effects on firm performance in about 40, 000 firms in 77 developing countries between 2002 and 2011. In doing so, we exploit standardized firm level data collected by the World Bank. We find positive partial correlations between unionization and firm labor productivity and wages, especially in lower-income countries. These positive effects persist when we instrument for union presence, consistent with recent evidence of union positive effects on productivity and wages in western industrialized countries. |
| Keywords: | trade unions, productivity, wages, developing countries, enterprise data, union formation |
| JEL: | J51 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hituec:774 |
| By: | Pikulina, Elena S.; Ferreira, Daniel |
| Abstract: | We introduce the concept of subtle discrimination—biased acts that cannot be objectively ascertained as discriminatory. When candidates compete for promotions by investing in skills, firms' subtle biases induce discriminated candidates to overinvest when promotions are low-stakes (to distinguish themselves from favored candidates) but underinvest in high-stakes settings (anticipating low promotion probabilities). This asymmetry implies that subtle discrimination raises profits in low-productivity firms but lowers them in high-productivity firms. Although subtle biases are small, they generate large gaps in skills and promotion outcomes. We derive further predictions in contexts such as equity analysis, lending, fund flows, banking careers, and entrepreneurial finance. |
| Keywords: | promotions; firm performance; bias; human capital |
| JEL: | M51 J71 J31 |
| Date: | 2025–10–06 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125960 |
| By: | Thomas Kohler; Jean-Paul L’Huillier; Gregory Phelan; Maximilian Weiß |
| Abstract: | Firms tend to justify price increases as necessary to cover rising costs. However, standard models imply that firms not only adjust prices to cost increases, but also to changes in spending. We present a model where, instead, there is differential adjustment depending on the type of shock. The model is disciplined using a firm survey, which shows that, towards the end of the pandemic, price increases were primarily a response to higher costs. In contrast, firms report not reacting to higher demand to avoid upsetting customers. Supply shocks are responsible for most of the upward adjustment of prices. |
| Keywords: | inflation bursts, optimal strategies, price gouging, monetary policy tradeoffs |
| JEL: | D82 E31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12212 |
| By: | Rieder, André; Schnabel, Claus |
| Abstract: | Representative establishment data reveal that over 60% of German plants covered by collective agreements pay wages above the level stipulated in the agree- ments, creating a wage cushion between actual and contractual wages. While collective bargaining coverage has fallen over time, the prevalence of wage cushions has increased, particularly in eastern Germany. Cross-sectional and fixed-effects analyses for 2008-2023 indicate that in western Germany the presence of a wage cushion is mainly related to plant profitability, unemployment, vacancies, and the business cycle. Plants which apply collective agreements at the firm rather than the sectoral level are less likely to have wage cushions since firm-level agreements make it easier to explicitly take firm-specific conditions into account. In eastern Germany, however, the explanatory power of these variables is much lower. Against the backdrop of falling bargaining coverage, the increasing prevalence of wage cushions suggests that the traditionally rigid German system of wage determination has become more flexible and differentiated. |
| Abstract: | Repräsentative Betriebsdaten zeigen, dass über 60% der tarif- gebundenen Betriebe in Deutschland Löhne zahlen, die über dem in Tarifverträgen fest- gelegten Niveau liegen, wodurch ein Lohnpuffer zwischen den tatsächlichen und den vertraglich vereinbarten Löhnen entsteht. Während die Tarifbindung im Laufe der Zeit zurückgegangen ist, hat die Verbreitung der übertariflichen Entlohnung zugenommen, besonders in Ostdeutschland. Querschnitts- und Fixed-Effects-Analysen für 2008-2023 zeigen, dass in Westdeutschland das Vorhandensein eines Lohnpuffers hauptsächlich mit der Rentabilität des Betriebs, der Arbeitslosigkeit, offenen Stellen und dem Konjunk- turzyklus zusammenhängt. Betriebe, die Tarifverträge auf Betriebs- statt Branchen- ebene anwenden, zahlen seltener über Tarif, da es bei Firmentarifverträgen einfacher ist, betriebsspezifische Bedingungen ausdrücklich zu berücksichtigen. In Ostdeutsch- land ist der Erklärungswert dieser Variablen jedoch erheblich geringer. Vor dem Hinter- grund der sinkenden Tarifbindung deutet die zunehmende Verbreitung von Lohnpuffern darauf hin, dass das traditionell starre deutsche System der Lohnfindung flexibler und differenzierter geworden ist. |
| Keywords: | wage determination, collective bargaining, wage cushion, Germany |
| JEL: | J30 J31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:faulre:330331 |
| By: | Fouarge, Didier (ROA, Maastricht University); Fregin, Marie-Christine (Maastricht University); Janssen, Simon (Institute for Employment Research (IAB), Nuremberg); Levels, Mark (Maastricht University); Montizaan, Raymond (ROA, Maastricht University); Özgül, Pelin (Maastricht University); Rounding, Nicholas (Maastricht University); Stops, Michael (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | We analyze the impact of AI-augmented training on worker productivity in a financial services company. The company introduced an AI tool that provides performance feedback on call center agents to guide their training. To estimate causal effects, we exploit the staggered roll out of the AI-tool. The AI-augmented training reduces call handling time by 10 percent. We find larger effects for short-tenured workers because they spend less time putting clients on hold. But the AI-augmented training also improves communication style with relatively stronger effects for long-tenured agents, and we find slightly positive effects on customer satisfaction. |
| Keywords: | performance feedback, training, artificial intelligence, employee productivity |
| JEL: | J24 O31 O33 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18224 |
| By: | Diogo G.C. Britto; Caio de Holanda; Alexandre Fonseca; Breno Sampaio |
| Abstract: | We investigate the effects of maternity and paternity leave on families and firms. Drawing on rich administrative data linking generations in Brazil and leveraging a policy reform that expanded parental leave, we evaluate the impacts on parents, their spouses, and children, as well as the broader consequences for firms. Our analysis spans labour market outcomes, fertility, health, and education, offering new evidence on the multifaceted effects of parental leave in a developing country context. We find that mothers eligible for extended leave experience a 6.33 p.p. |
| Keywords: | Gender inequality, Child wellbeing, Firms |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-71 |
| By: | Lukas Hack; Davud Rostam-Afschar |
| Abstract: | We examine how macroeconomic news affects firms’ extensive-margin price-setting plans in a survey that we rolled out with randomized daily invitations. These plans predict future realized inflation. Using a high-frequency event study framework, we find that inflation and employment surprises imply significant and sizable revisions in firms' pricing plans. There is a limited role for news about the trade balance, but no significant role for other commonly studied data releases, e.g., industrial production. We also study news coverage and agents' news search behavior, finding that the intensive-margin response of media coverage and news search may partly drive our main results. |
| Keywords: | daily data, firms, price-setting, macroeconomic data releases |
| JEL: | E30 E31 E32 C83 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12215 |
| By: | Tiago Cavalcanti; Kamiar Mohaddes; Hongyu Nian; Haitao Yin |
| Abstract: | This paper investigates the pass-through of environmental compliance costs along supply chains. We compile a firm-level dataset linking regulated firms in pollution-intensive industries with their top five clients and suppliers. We find that clients of regulated firms invest less in R&D, employ fewer skilled R&D staff, and produce fewer innovations than clients of less regulated firms, while no comparable effects are observed for suppliers. The pass-through is stronger with larger trade volumes, higher input prices faced by clients, and in markets where regulated firms hold greater market power or clients face intense competition. Policy simulations suggest that green technology incentives for regulated firms and R&D subsidies for their clients can mitigate these adverse effects and raise social welfare by enhancing both innovation and environmental quality. |
| Keywords: | environmental compliance, supply chain, pass-through, R&D, innovation |
| JEL: | O30 Q01 Q55 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-55 |
| By: | Matteo Bizzarri (University of Naples Federico II and CSEF); Marco Pangallo (CENTAI Institute); Francisco Queirós (ISEG - Lisbon School of Economics and Management) |
| Abstract: | We study how sector-specific shocks propagate in a production economy with input-output linkages and heterogeneous time to build. We show that, depending on the sector and network characteristics, one-time idiosyncratic shocks can induce a non-monotonic response of aggregate output as it converges back to steady state– a phenomenon we term ’endogenous oscillations’ – and get amplified over time. We study the conditions on the network structure that generate this behavior. We introduce a measure to quantify the magnitude of such endogenous oscillations generated by a single small productivity shock. We quantify the model on US input-output data, showing that for some sectors a single shock can generate aggregate fluctuations. In particular, the magnitude of oscillations is twice as large as it would be if convergence to the steady state were always monotonic. |
| Keywords: | Endogenous Oscillations, Business Cycles, Production Networks |
| JEL: | C67 D57 D85 E23 E32 |
| Date: | 2025–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:sef:csefwp:764 |
| By: | Grindaker, Morten (University of Chicago); Simmons, Michael (Department of Economics, Umeå University) |
| Abstract: | Does Unemployment Insurance affect how employed workers search for new jobs? We provide novel evidence by combining administrative data on the universe of Norwegian workers and firms with a regression kink design. A marginal increase in benefits lowers job-to-job transitions, increases unemployment incidence, and lowers future earnings. These effects are stronger for workers with higher predicted unemployment risk and align with job search models where workers systematically move towards safer jobs. In an equilibrium job search model calibrated to match these empirical effects, employed workers’ responses account for 45 percent of the net fiscal costs of a marginal benefit expansion. |
| Keywords: | On the job search; Unemployment Insurance; Regression kink design; Unemployment Risk |
| JEL: | G33 G52 H31 H55 J31 J65 |
| Date: | 2025–10–24 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:umnees:1039 |
| By: | Fadzayi Chingwere; Aimable Nsabimana; Kunal Sen |
| Abstract: | How does political alignment with the ruling party influence the audit outcomes of the firms? This paper investigates whether political alignment with the ruling party influences the intensity and outcomes of firm audits in South Africa. Using a regression discontinuity design based on close provincial election results from 2014, we examine how firms are treated in municipalities narrowly won versus narrowly lost by the African National Congress (ANC). |
| Keywords: | Elections, Audits, Firms, Tax evasion, South Africa |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-75 |
| By: | Ivan Yotzov; Boromeus Wanengkirtyo; Mishel Ghassibe |
| Abstract: | Forward-looking pricing is at the core of modern macroeconomics, yet a gap remains between its theoretical foundations and their empirical validation. To bridge this gap, we study intertemporal pass-through (iPT): the sensitivity of firms' desired prices to changes in their expected future marginal costs, a micro building block of foresight in aggregate inflation. On the empirical side, we obtain direct iPT estimates by combining UK firm-level survey data with idiosyncratic news shocks from a natural experiment: the March 2019 announcement of a future tariff schedule in the event of a "No-Deal" Brexit. We find iPT to be largest among firms with the lowest frequency of price adjustment and those expecting the cost shock to arrive earlier. In addition, iPT is smaller among firms with state-dependent pricing and for larger shocks. On the theory side, we derive iPT in a model with heterogeneous adjustment frequencies and perceived shock horizons, formally reconciling our empirical findings on the drivers of iPT differences. We also use our setup to assess the general equilibrium consequences of iPT heterogeneity. In particular, we show that the sensitivity of aggregate inflation to changes in future costs is convex in non-adjustment frequencies and perceived shock horizons. As a result, iPT heterogeneity amplifies the degree of forward-lookingness of macroeconomic aggregates. Thus, announcements of future policies have contemporaneous effects, and heterogeneity in pricing decisions increase their magnitude. |
| Keywords: | Brexit, expectations, price-setting, survey data, tariffs |
| JEL: | C83 D25 D84 E31 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1524 |
| By: | Johannes Gallé; Rodrigo Oliveira; Daniel Overbeck; Nadine Riedel; Edson R. Severnini |
| Abstract: | This paper provides the first comprehensive evidence on how firms in emerging economies respond to carbon taxation. Using detailed administrative data, we study the announcement and implementation of South Africa’s 2019 carbon tax—a potential trailblazer for other developing countries with limited state capacity amid the global expansion of carbon pricing. Contrary to concerns that carbon taxes might hinder growth or employment, we find no negative effects on firm performance or jobs. Firms facing higher effective tax rates increased activity following the tax’s announcement, four years before implementation, likely reflecting the resolution of regulatory uncertainty and efforts to mitigate stranded asset costs. While we find no measurable reduction in emissions—likely due to this anticipatory behavior—our results suggest that carbon taxation can be implemented without harming economic outcomes, even in the short term and in low- and middle-income settings. |
| JEL: | H23 O13 O55 Q52 Q58 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34406 |
| By: | KOIKE-MORI, Yasutaka; OKUMURA, Koki |
| Abstract: | This paper investigates how production networks shape firms’ R&D decisions and the resulting aggregate inefficiencies. We develop a dynamic model in which firms form supply chains through a persistent matching process and rely on those links to trade both existing products and newly developed products from R&D. The model features two sources of misallocation: market-power distortions and a network-formation externality. The second novel externality leads firms to fail to internalize that their R&D makes them more attractive to potential partners. We estimate the model using Japanese firm-to-firm transaction and patent data and show that the first-best allocation lies close to the decentralized outcome. Market-power corrections raise R&D incentives for older firms by relieving double marginalization along their long supply chains. Instead, internalizing the network-formation externality tilts R&D toward younger firms that expand their supply chains rapidly. These opposing forces largely offset each other, leaving the planner’s allocation near the decentralized one. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:hit:tdbcdp:e-2025-01 |
| By: | Kenneth T. Gillingham; Matthew Kotchen; James A. Levinsohn; Barry J. Nalebuff |
| Abstract: | We study how Elon Musk's polarizing and partisan actions have impacted Tesla vehicle sales in the United States. Using county-level, monthly data on new vehicle registrations, we leverage how changes in vehicle sales over time diverge across counties with differing shares of Democratic and Republican voters. Without the Musk partisan effect, Tesla sales between October 2022 and April 2025 would have been 67-83% higher, equivalent to 1-1.26 million more vehicles. Musk’s partisan activities also increased the sales of other automakers' electric and hybrid vehicles 17-22% because of substitution, and undermined California’s progress in meeting its zero-emissions vehicle target. |
| JEL: | G3 Q48 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34413 |
| By: | Nüß, Patrick |
| Abstract: | I estimate management opposition to unions in terms of hiring discrimination in the German labor market. By sending 13, 000 fictitious job applications, revealing union membership in the CV and pro-union sentiment via social media accounts, I provide evidence for hiring discrimination against union supporters. Callback rates are on average 15% lower for union members. Discrimination is strongest in the presence of a high sectoral share of union members and large firm size. I further explore variation in regional and sectoral strike intensity over time and find suggestive evidence that discrimination increases if a sector is exposed to an intense strike. Discrimination is positively associated with the sectoral share of firms that voluntarily orientate wages to collective agreements. These results indicate that hiring discrimination can be explained by union threat effects. |
| Keywords: | correspondence audit, field experiments, industrial relations, labor disputes, management opposition, trade unions, union threat |
| JEL: | C93 J51 J53 J71 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwhdps:330326 |
| By: | Philippe d’Astous; Vyacheslav Mikhed; Sahil Raina; Barry Scholnick |
| Abstract: | Using wealth windfalls from lottery winnings and matched employer-employee tax files, we compare the effect of additional wealth on the entrepreneurial activity of older and younger individuals. We find that additional wealth leads older winners (aged 55 to 64) to reduce business ownership and growth (as measured by sales, revenue, and employees). In contrast, extra wealth increases younger winners’ (aged 21 to 54) business ownership, but it has no effect on their business growth. The increase in business activity of a young winner does not offset the negative growth for an older winner, which may hurt economic growth. |
| Keywords: | Wealth; Age; Entrepreneurship; Retirement |
| JEL: | G5 G51 J22 L26 |
| Date: | 2025–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:101992 |
| By: | Okan Akarsu; Emrehan Aktuğ; Huzeyfe Torun |
| Abstract: | We conducted a survey of Turkish firms, using randomized treatments to provide varied information about inflation in a high-inflation environment. By matching the survey data with administrative firm-level data on employment, sales, credit, and foreign exchange transactions, we explore the impact of exogenous variations in inflation expectations on firms' behavior, borrowing decisions, and expectations. Our findings are summarized in seven facts: (i) information treatments are effective at generating exogenous variation in inflation expectations, even when inflation is high; (ii) the pass-through to firms' own price, wage, and cost expectations is strong, reaching up to 60%; (iii) firms adopt a supply-side interpretation of inflation—lower inflation expectations make them more optimistic; (iv) firms with lower inflation expectations decrease credit demand by approximately 3% for a 1 percentage point decline in expected inflation, shifting from long-term to short-term loans to avoid higher perceived costs; (v) they dollarize their liabilities by increasing their share of FX-denominated debt; (vi) they de-dollarize their assets by decreasing their net foreign currency holdings; and (vii) they increase their real activity, leading to higher employment and sales, and lower inventory. |
| Keywords: | expectations, firms, RCT, high inflation, macroeconomics |
| JEL: | E12 E24 E31 E52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12210 |
| By: | Colleen Cunnningham (University of Utah); Florian Ederer (Boston University); Charles Hodgson (Yale University); Zhichun Wang (Yale University) |
| Abstract: | Policies that mandate disclosure of innovative project outcomes aim to increase innovation by limiting wasteful duplicative innovation. Yet, such policies change not only the ex-post information environment but also firms' ex-ante innovation incentives. Firms may slow down their own innovation efforts in anticipation of increased disclosure by others. We examine the innovation-related impacts of the 2017 FDA Final Rule amendment, which mandates disclosure of clinical trial results for pharmaceutical firms. We show that the policy hastened and increased disclosure of results for clinical trials post-completion, but also increased the time to completion of clinical trials, the time between early phases of clinical trials, and delays in development-related investments. We provide evidence consistent with mandated disclosure leading firms to wait to learn from their competitors. Our results suggest that mandating disclosure may slow innovation when there is value to waiting. |
| Date: | 2025–10–08 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2465 |
| By: | Manyane Kpatoumbi Kankpe (Université Jean Monnet, Université Lyon 2, emlyon, GATE, CNRS, 42100, Saint Etienne) |
| Abstract: | Abstract: This study examines the impact of design activities on innovation and identifies the main determinants influencing firms’ investment in design. We use a cross-sectional database built from three sources: the French Community Innovation Survey (CIS) 2018, the Annual Declaration of Social Data (DADS), and the structural business statistics (FARE) for the period 2015–2017. By adopting an instrumental variable (IV) approach that accounts for the endogeneity of design, our results provide clear evidence that integrating design significantly increases the likelihood of innovation. A doubling of the number of designers within a firm more than doubles the probability of innovating in product or process. This impact of design is greater than that of R&D or marketing, indicating its central role in the innovation process. However, failing to consider the endogeneity of design leads to an underestimation of its true effect. Similarly, our results confirm the endogeneity of R&D, as demonstrated by Crépon et al. (1998), and ignoring this dimension also results in an underestimation of its impact on innovation. Regarding the determinants of design, we find that the concentration of designers within a sector and a region, public financial support, and export intensity foster its adoption. By introducing a time lag between innovation activities and their outcomes, certain limitations of cross-sectional studies—particularly simultaneity bias—are overcome, despite the use of the IV approach. |
| Keywords: | Design, Innovation, R&D, Marketing, Endogeneity |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gat:wpaper:2521 |
| By: | Roberto Corrao; Joel P. Flynn; Karthik Sastry |
| Abstract: | We introduce a model of incentive contracting in which the principal, in addition to writing contracts, must engage in contractibility design: creating an evidence structure that allows them to prove when the agent has breached the contract. Designing an evidence structure entails both (i) front-end costs borne ex ante, such as those of drafting contracts, and (ii) back-end costs borne ex post, such as those of generating evidence. We find that, under even small front-end costs, optimal contracts are coarse, specifying finitely many contingencies out of a continuum of possibilities. In contrast, under even large back-end costs, optimal contracts are complete. Applied to the design of procurement contracts, our results rationalize: (i) the discreteness of contracts, (ii) the presence of similarly vague contracts in low-stakes and high-stakes settings, and (iii) the discontinuous adjustment of contracts to changes in the economic environment. |
| JEL: | D82 D86 K0 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34379 |
| By: | Alex Haag |
| Abstract: | Global competition in artificial intelligence (AI) has intensified in recent years. Some assessments emphasize US exceptionalism, while others argue that China is eroding US dominance. By contrast, the progress of other advanced foreign economies (AFEs) receives far less attention. |
| Date: | 2025–10–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:2025-10-06 |
| By: | Seungwhan Chun; Marco Duarte; Cici McNamara; Jason M. Lindo |
| Abstract: | Are state-imposed behavioral remedies effective substitutes for federal antitrust enforcement? We evaluate state regulation of hospital mergers under Certificates of Public Advantage (COPAs). Using hospital data from 1996-2022, we compare COPA-regulated mergers to unregulated mergers with similar anticompetitive potential. In highly concentrated markets, COPA mergers result in 11.1 p.p. lower price growth but 0.5 p.p. greater increases in 30-day mortality rates. We find a negative correlation between price and mortality effects for COPA mergers, consistent with theoretical predictions that binding price caps exacerbate quality deterioration. Our findings suggest that COPA contracts are poor substitutes for traditional antitrust enforcement. |
| JEL: | G38 I11 K21 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34373 |
| By: | Kenta YAMANOUCHI; Hiroko OKUDAIRA; Miho TAKIZAWA; Kaoru HOSONO |
| Abstract: | Employers respond to minimum wage hikes by reducing employment, accepting lower profits, or passing costs on to consumers or suppliers. Identifying which margin dominates is key to understanding who bears the cost of the minimum wage. We examine this incidence in Japan’s manufacturing sector, where exporters faced international competition and non-exporters until recently contended with persistently stagnant domestic prices. Using establishment-level data, we find robust evidence of a contraction in factor inputs but no clear cost pass-through to product prices. These results imply that higher labor costs were largely borne by firms and workers, particularly in settings with limited scope for pass-through. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25100 |
| By: | Gareth Campbell (Queen’s University Belfast); Áine Gallagher (Queen’s University Belfast); Richard S.Grossman (Department of Economics, Wesleyan University) |
| Abstract: | Substantial amounts of British capital flowed to Latin America during the first era of globalisation. Companies financed by this capital were typically headquartered in the UK, but operated thousands of miles away. This paper asks how this geographic separation between governance and business activities affected the valuation of these firms. We find that the location of the headquarters played a more important role than the location of operations. Stock prices tended to fluctuate in line with other equities based in the UK, suggesting that they were still regarded as being, at least partially, British companies. |
| Keywords: | Latin America, equity markets, portfolio investing, emerging markets |
| JEL: | F21 F54 F65 G11 G12 G15 G51 N16 N26 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:wes:weswpa:2025-010 |
| By: | Patrick Bennett; Julian Vedeler Johnsen |
| Abstract: | We study how the labor market shocks of automation and immigration interact to shape workers’ outcomes. Using matched employer–employee data from Norwegian administrative registers, we combine an immigration shock triggered by the European Union’s 2004 enlargement with an automation shock based on the adoption of industrial robots across Europe. Although these shocks largely occur in separate industries, we show that automation reduces earnings not only in manufacturing but also in construction, where tasks overlap with robot-exposed sectors. Importantly, workers jointly exposed to automation and immigration suffer earnings losses greater than those facing either shock in isolation. These losses are driven by downward occupational mobility into low-wage services and re-sorting into lower-premium firms. Even within the Norwegian welfare system, the ability of social insurance to offset these long-run earnings declines is limited. Our findings underscore the importance of analyzing labor market shocks jointly, rather than in isolation, to fully understand their distributional consequences. |
| Keywords: | automation, immigration, labor market shocks |
| JEL: | J01 J61 J24 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12217 |
| By: | Axel Gautier; Jean-Christophe Poudou |
| Abstract: | In many industries, platforms compete with incumbents that are open to all consumers, whereas platforms require user affiliation. Consequently, platforms face two layers of competition: for the market, to attract users, and in the market, to compete with incumbents. We develop a dynamic model integrating these layers, showing that as platform affiliation grows, in the market competition intensifies, pushing incumbents toward more aggressive pricing. Conversely, for the market competition diminishes, reducing the platform's incentive to compete aggressively. This interplay generates dynamic pricing behavior that can be non-monotonic over time, capturing the shifting incentives driving platform-incumbent competition across both dimensions. |
| Keywords: | platform competition, Uber economy, competition for the market, market affiliation |
| JEL: | L11 L13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12218 |
| By: | Melita Van Steenberghe; Marten Ovaere (-) |
| Abstract: | Inefficient market responses to renewable support schemes can increase costs and undermine decarbonization efforts. We study two-way Contracts for Difference (CfDs), which stabilize generator revenues but may distort generation incentives. Exploiting variation across support schemes and CfD design rules for offshore wind farms in Great Britain, we apply difference-in-differences to hourly unit-level data to provide the first ex-post evidence on CfDinduced inefficiencies in day-ahead and balancing markets. Market-based wind farms reduced output by 69-83% during negative-price hours; CfD-backed units showed a similar reduction when payments were suspended after six or more consecutive negative-price hours. CfDs also distort the balancing market: generators curtail output by 28% less when they receive payments that cover the negative imbalance price; when they must repay, they curtail 19% more when the imbalance price drops below the payment. From 2019–2024, day-ahead market distortions resulted in 2.9 TWh excess generation, costing £176 million in support. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:25/1124 |