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on Business Economics |
| By: | Cruz, Ronize (University of Coimbra); Nobre, Francisco (Kingston University London); Pereira dos Santos, João (ISEG) |
| Abstract: | We analyze how the proliferation of short-term rentals (STRs) affects firm survival, performance, and entry in two European cities with high STR density. Using administrative firm-level accounting data, a shift-share instrument, and an event-study design, we find that STR growth increases exit rates among underperforming firms, while surviving firms experience relative gains in sales and profits, with minimal effects on employment or investment. Operational costs, particularly rents and liabilities, also rise. STR expansion stimulates entrepreneurship, though new entrants face higher costs and lower initial profitability. These findings underscore the nuanced impacts of tourism-driven demand shocks on urban economic ecosystems. |
| Keywords: | tourism, local businesses, short-term rentals, Portugal |
| JEL: | R12 L25 L83 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18295 |
| By: | Giorgio Fabbri; Davide Fiaschi; Cristiano Ricci |
| Abstract: | We develop a multi-sector competitive economy where firms reallocate across sectors under myopic profit-seeking behaviour and quadratic reallocation costs. The dynamic path, formalised as a gradient flow in Wasserstein space, yields two emergent properties:(i) short-run equilibria can be seen as solutions to sequential aggregate optimisation problems; and (ii) the long-run equilibrium is globally stable and efficient. These properties are robust to several extensions, though may fail under fixed reallocation costs. Drawing on EU firm-level data (2018-2023), we find convergence in sectoral profit rates but no labour productivity, with moderate substitutability, small intra-sectoral externalities, and no significant reallocation fixed costs. |
| Keywords: | Out-of-Equilibrium Dynamics, Positive General Equilibrium Theory, Multi-Sector Economy, Myopic Firms, Firm Heterogeneity, Intra-Industry Reallocation, Wasserstein Space, Gradient Flow. |
| JEL: | D50 D92 C62 D24 C61 |
| URL: | https://d.repec.org/n?u=RePEc:gbl:wpaper:2025-07 |
| By: | Lukas B. Freund |
| Abstract: | Production increasingly requires specialized expertise. To study the macroeconomic implications, I develop a tractable theory in which firms assemble teams of workers with heterogeneous task-specific skills. Deriving the firm’s production function from optimal task assignment shows that output is maximized when coworkers excel at different tasks yet possess similar overall talent. Crucially, greater skill specificity, while raising potential productivity, endogenously amplifies talent complementarities, i.e., the productivity loss from talent mismatch. This promotes talent concentration into select firms with “superstar teams, ” though search frictions prevent perfect sorting. Using German panel micro data, I document industry patterns consistent with this mechanism and calibrate the model. The quantified model shows that, first, growing skill specificity since the mid-1980s has amplified sorting, explaining a significant share of the widely documented “firming up of inequality”. Second, “Smithian” productivity gains from specialization are muted when labor market frictions impede the matching of coworkers with complementary expertise. |
| Keywords: | firms, inequality, productivity, specialization, teams |
| JEL: | D21 D24 E24 J31 J64 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12303 |
| By: | Ma, Shuang (Guangzhou University); Mu, Ren (Texas A&M University); Xiao, Han |
| Abstract: | Minimum wage increases are often accompanied by firms raising qualification requirements in job postings, but whether this skill upgrading reflects changes in who applies (composition effects) or changes in whom firms select from an unchanged applicant pool (selection effects) remains unclear. Using unique data from a large online job platform in China that links job postings, applications, and job offers, we compare firm hiring practices and applicant pools before versus after province-level minimum wage increases, treated versus control provinces, and minimum-wage versus higher-wage occupations. We find that firms raise educational requirements in postings by 3-4 percentage points and increase job offers to college-educated workers by 30\%, while offers to less-educated workers remain unchanged. At the same time, the application volumes and applicant characteristics remain unchanged. This pattern reveals that the shift in job offers occurs entirely through the selection effect, as the short-run labor supply response is limited even when firms actively attempt to reshape their applicant pools. Minimum wage increases thus redistribute employment opportunities among existing job seekers away from less educated workers. |
| Keywords: | job offers, part-time jobs, job postings, minimum wage, China |
| JEL: | J23 J63 O53 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18290 |
| By: | Bas Gorrens |
| Abstract: | Carbon pricing is a central policy instrument for reducing emissions, but governments face a trade-off: faster decarbonization can raise output losses and carbon leakage, while gradual implementa-tion slows emission reductions. This paper studies how EU carbon policies have shaped firms’ adoption of abatement technologies and identifies the optimal trajectory to reach the EU’s 2050 net zero target, particularly in a unilateral context. I develop a dynamic heterogeneous-firm model in which forward-looking manufacturing firms choose when to adopt discrete abatement technologies under a gradually tightening carbon price. I estimate it using panel data on EU ETS firms from 2005-2019. The model rationalizes the low carbon prices of the 2010s as a consequence of gradual policy and firm anticipation. Emission reduc-tions arise mainly from large, productive, and initially polluting firms. Anticipation of future tightening mitigates half of the short-run output losses in 2025 and two-thirds by 2050, keeping overall output losses below 2%. A moderately faster tightening could cut cumulative emissions by 15% at an additional cost of only 0.11% of output. Finally, because firms anticipate future policy changes, unilateral and global carbon pricing yield nearly identical effects on domestic output and carbon leakage. |
| Keywords: | trade and environment, technology adoption, firm decisions, climate policy, carbon leakage |
| Date: | 2025–11–26 |
| URL: | https://d.repec.org/n?u=RePEc:ete:vivwps:777266 |
| By: | Mattia Guerini (Università degli Studi di Brescia and Fondazione Eni Enrico Mattei); Giovanni Marin (Università degli Studi di Urbino Carlo Bo, Fondazione Eni Enrico Mattei and SEEDS, Sustainability Environmental Economics and Dynamics Studies); Francesco Vona (Università degli Studi di Milano, Fondazione Eni Enrico Mattei and OFCE Sciences-Po) |
| Abstract: | We study how monetary policy shapes firm level carbon emissions. Our identification strategy exploits the European Central Bank’s July 2012 move to the zero lower bound as a plausibly exogenous easing of credit supply, combined with rich administrative and survey data on French manufacturing firms from 2000–2019. Using a difference-in-differences design with debt-to-asset ratios as exposure, we find that financially constrained firms cut emissions by about 9.4% more than unconstrained ones. This effect primarily stems from improvements in energy efficiency, lower carbon intensity of energy, and general productivity improvements associated with capital deepening that outweighed modest scale effects. Small and medium firms drive these results, while large and EU ETS regulated firms show no significant response. On average, emissions fell by 3.3% per year, summing up to 5.3 million tonnes of CO2 saved. Despite the smaller marginal effects, total carbon savings due to the monetary easing are comparable to the savings from the EU ETS, highlighting the untargeted nature of the policy. |
| Keywords: | Financial constraints, credit supply, firm level carbon emissions, climate policies |
| JEL: | Q52 Q48 D22 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2025.31 |
| By: | Chunxiao Lu (University of Canterbury); Linxiang Ma; Yuyang Zhang |
| Abstract: | This paper investigates whether institutional investors incorporate firm-level environmental regulatory risk into their portfolio decisions. We document substantial heterogeneity across investor types in their responses to changes in firm-level environmental regulatory risk. Long-horizon investors, such as banks, insurance companies, and pension funds, tend to tilt their portfolios toward stocks with higher environmental regulatory risk. In contrast, short-horizon investors, including investment advisors and mutual funds, reduce their holdings of these firms. These opposing portfolio adjustments offset each other, attenuating the aggregate impact on stock returns. We further find that these risk-induced demand shifts vary systematically around federal elections. Following Democratic victories, the resolution of regulatory uncertainty induces long-horizon investors to decrease their exposure to environmentally risky firms, while short-horizon investors increase their holdings. By comparison, portfolio adjustments are substantially less pronounced after Republican victories. Overall, our findings highlight the role of investment horizons and heterogeneous environmental preferences in driving institutional portfolio allocation. |
| Keywords: | Environmental regulatory risk, Institutional investors, Asset demand, Investor horizon, Environmental commitment |
| JEL: | G11 G12 G20 G28 Q50 |
| Date: | 2025–12–01 |
| URL: | https://d.repec.org/n?u=RePEc:cbt:econwp:25/14 |
| By: | Ulrich Doraszelski; Lixiong Li |
| Abstract: | We develop a generalized control function approach to production function estimation. Our approach accommodates settings in which productivity evolves jointly with other unobservable factors such as latent demand shocks and the invertibility assumption underpinning the traditional proxy variable approach fails. We provide conditions under which the output elasticity of the variable input -- and hence the markup -- is nonparametrically point-identified. A Neyman orthogonal moment condition ensures oracle efficiency of our GMM estimator. A Monte Carlo exercise shows a large bias for the traditional approach that decreases rapidly and nearly vanishes for our generalized control function approach. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.21578 |
| By: | Paul Jung (Hong Kong Polytechnic University); Kijin Kim (Asian Development Bank); Ah-Hyun Jo (Korea Maritime Institute); Joseph Seong-Hyun Cho (Technical University of Denmark) |
| Abstract: | Global chokepoints such as the Panama Canal propagate drought shocks into supply chains, yet disruptions to shipments remain poorly investigated. We examine the impact of supply chain disruptions induced by the 2022–2023 Panama Canal drought on Asia–United States (US) trade flows. We fuse Automatic Identification System vessel trajectories with US Customs Bills-of-Lading, matching 95% of 29.6 million 2022–2023 filings to 48 million hourly vessel positions. Difference-in-differences and event study analysis results present that canal voyages of containerized shipments took 133.8 hours longer, spent 33.6 hours more stopped, and sailed 2.3 kilometers per hour slower, with route distance unchanged, and these disruptions more than reversed normal-time efficiency gains. Shipment times for metallic raw materials and light manufacturing shipments increased markedly, and there was no significant effect on food products. The results provide a robust foundation for valuing delay-induced opportunity costs and designing resilient trade-facilitation policies for export-oriented economies in Asia. |
| Keywords: | Panama Canal drought;maritime chokepoints;global supply-chain disruptions;Asia–US container trade;transaction-level trade data |
| JEL: | F14 R41 Q54 C23 |
| Date: | 2025–11–25 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:021789 |
| By: | Anna Ignatenko; Pierre Cariou; Haiying Jia; Francois-Charles Wolff |
| Abstract: | We separate the effects of market power and capacity constraints in transportation. A simple model shows imperfect competition—not capacity constraints—generates differential freight price changes across buyers following a demand shock. Consistent with this, difference-in-differences estimates reveal, after COVID-19 demand surge, freight forwarders faced a 30 pp larger increase in base freight rates than direct shippers despite identical contract terms. This reflects rising carrier markups that disproportionately burden smaller firms and explain at least 35% of freight price growth and 16% of U.S. import price inflation. Thus, competition in transportation is crucial for supplychain resilience and macroeconomic stability |
| Keywords: | market power, transportation, price discrimination, trade costs, inflation, intermediaries |
| JEL: | F1 L2 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12293 |
| By: | Pamina Koenig (Paris School of Economics); Jiancong Liu (Paris School of Economics); Sandra Poncet (Paris School of Economics); Dan Xie (University College Dublin) |
| Abstract: | We provide the first empirical evidence linking digital trade facilitation reforms to changes in port operations. Leveraging the staggered rollout of Single Window reforms in the People’s Republic of China (2014–2016), which streamlined customs clearance, we combine Automatic Identification System data on container ship movements with event study methods to identify causal effects. While effects on carried tonnage are positive but statistically insignificant, decomposition analysis reveals that the Single Window operates through a specific channel, without changing vessel loading conditions, ship size, and port processing times. To assess port responses, we analyze heterogeneity across vessel and terminal characteristics. Impacts are concentrated among smaller vessels and less congested terminals, with no effect on larger vessels and capacity-constrained facilities. These findings demonstrate that administrative efficiency improvements boost maritime activity through extensive rather than intensive margins, with ports accommodating increased trade demand primarily through higher vessel frequency. |
| Keywords: | trade facilitation;digital technology;container shipping;People’s Republic of China ports |
| JEL: | F10 F13 F14 R40 R58 |
| Date: | 2025–12–02 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:021808 |
| By: | Saavedra Caballero, Fabiola; Tribin Uribe, Ana Maria; Perrin, Caroline Sabine Marie |
| Abstract: | This paper presents a comprehensive review of the literature on how legal frameworks, regulations, and rights influence women’s economic opportunities. Drawing on the Women, Business and the Law 2024 framework as a reference point, the paper adopts a life cycle approach to examine how legal frameworks and policies shape women’s roles as economic actors across different stages of their working lives. It highlights strong evidence showing that the abolition or reform of gender-discriminatory laws can enhance women's economic empowerment by shifting both legal constraints and embedded social norms, although the magnitude and nature of these effects vary across contexts. Persistent gaps are identified in key areas such as pension systems, childcare legislation, and protection against gender-based violence. The review underscores that legal reform alone is insufficient: advancing women’s economic opportunities requires a combination of well-designed laws, their effective enforcement, and complementary policies that address informal institutional barriers. Nevertheless, legal reforms can serve as a meaningful first step toward ensuring better economic opportunities for women. |
| Date: | 2025–12–03 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11268 |