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on Business Economics |
| By: | Francis Dillon; Sari Pekkala Kerr; William R. Kerr; Andrew Wang |
| Abstract: | Immigrant students who attend U.S. colleges are disproportionately employed in either large firms—especially multinationals—or small firms and self-employment. Using linked Census and longitudinal employment data, we trace the jobs taken by college students in 2000 during the 2001-20 period and evaluate four mechanisms shaping sector and firm size placement: geographic clustering, degree specialization, firm capabilities/visas, and ethnic self-employment specialization. Degree fields predict large firm and MNE placement, while ethnic specialization explains small firm sorting. Immigrant students who remain in the U.S. earn more than their native peers, suggesting the segmentation reflects productive sorting rather than blocked opportunity. |
| Keywords: | Immigration, college, students, job placements, careers, multi-nationals, assimilation |
| JEL: | F22 F23 F66 I23 J61 L26 M13 M16 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-08 |
| By: | R. LAFROGNE-JOUSSIER (INSEE) |
| Abstract: | To reduce their exposure to supply-chain risk, firms commonly rely on two strategies: input stockpiling and diversification of supply sources. This paper presents new evidence on how French manufacturing firms used inventories and diversified their country-specific supply risks between 2012 and 2023. The use of these strategies varies widely: large firms are generally more diversified and maintain lower inventories relative to smaller firms. Overall, firms that diversify more tend to stockpile less, even conditional on firm size. Diversification is also linked to lower import volatility. Together, these patterns suggest that inventories act as a buffer when firms are unable to reduce risk through diversification. These insights matter for assessing trade vulnerabilities: products sourced from few countries may appear exposed to risk, yet in practice they are often imported by firms holding large stocks. Accounting for inventories can halve the number of products considered highly vulnerable. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:nse:doctra:2025-22 |
| By: | Bredtmann, Julia; Otten, Sebastian; Rammert, Timo |
| Abstract: | We examine how occupational licensing shapes entrepreneurship in Germany's crafts sector. We exploit two sequential reforms that shifted entry barriers across occupations: a 2004 deregulation that relaxed licensing requirements and a 2020 partial re-regulation that reinstated them for a subset of crafts. Using administrative universe data at the occupation-year level and event-study difference-in-differences designs, we find that the 2004 deregulation led to a large and persistent increase in firm entry, a lagged rise in firm exits, and an expansion in the stock of firms. At the same time, completed master examinations declined markedly. The 2020 re-regulation reverses these patterns: master examinations increase, while firm entry, firm exit, and the stock of firms fall relative to occupations that remained deregulated. Overall, stricter entry requirements raise investment in formal credentials, yet reduce entrepreneurial turnover and market dynamism. |
| Abstract: | Wir untersuchen, wie sich die berufliche Zulassung auf das Unternehmertum im deutschen Handwerkssektor auswirkt. Wir nutzen zwei aufeinanderfolgende Reformen, die die Zugangsbarrieren für verschiedene Berufe verändert haben: eine Deregulierung im Jahr 2004, durch die die Zulassungsvoraussetzungen gelockert wurden, und eine teilweise Re-Regulierung im Jahr 2020, durch die diese für einen Teilbereich des Handwerks wieder eingeführt wurden. Anhand von administrativen Daten auf Berufs- und Jahresebene und mithilfe von Event-Study-Differenz-in-Differenzen-Modellen zeigen unsee Ergebnisse, dass die Deregulierung von 2004 zu einem starken und anhaltenden Anstieg der Unternehmensgründungen, einem verzögerten Anstieg der Unternehmensschließungen und einem Ansteig des Unternehmensbestands geführt hat. Gleichzeitig ging die Zahl der abgeschlossenen Meisterprüfungen deutlich zurück. Die Re-Regulierung von 2020 kehrte diese Muster um: Die Meisterprüfungen nehmen zu, während die Zahl der Unternehmensgründungen, Unternehmensschließungen und der Unternehmensbestand im Vergleich zu den weiterhin deregulierten Berufen zurückgeht. Insgesamt führen strengere Zugangsvoraussetzungen zu höheren Investitionen in formale Qualifikationen, verringern jedoch die Unternehmensfluktuation und die Marktdynamik. |
| Keywords: | Entrepreneurship, business dynamism, firm entry and exit, regulatory barriers, occupational licensing |
| JEL: | J24 J44 L26 L51 M13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:335898 |
| By: | Lavinia Piemontese; Andrea Tulli |
| Abstract: | We study how variation in the allocation mechanism of public demand shapes firm performance and aggregate productivity. Exploiting the quasi-random implementation of an efficient or lottery-like auction format in the Italian construction sector, we find that when the same amount of public resources is allocated through the efficient mechanism, recipient firms experience about 8% higher revenue growth within three years. The effect is strongest where contracting authorities exhibit greater screening capacity and in less competitive markets. Efficient allocation targets more productive firms, which subsequently secure a larger amount of future public resources. Simulations suggest that replacing lottery-like mechanisms with efficient ones could raise sectoral productivity by about 4%. |
| JEL: | H57 D22 D61 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:bol:bodewp:wp1218 |
| By: | G. Jacob Blackwood |
| Abstract: | Combining confidential business-level microdata with housing and banking data, I document large and persistent effects of local house prices on employment at small businesses, and particularly young businesses, during the Great Recession. I show that the effect on entry is important for explaining the disproportionate effect on young businesses, while young firm exit is also disproportionately affected. I then explore the channels through which house prices affect business outcomes. I use survey data to show that reliance on either personal assets or home equity is associated with increased sensitivity to house prices. I then use local bank balance sheet information to show both young and old firms are sensitive to local credit shocks, with some evidence of a larger effect on young businesses. I develop a macroeconomic model that is consistent with these findings where house prices work through two channels: a bank credit supply channel and a housing collateral channel. |
| Keywords: | Firm Dynamics, House Prices, Credit Supply, Business Cycles |
| JEL: | E44 D22 D25 R31 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-03 |
| By: | Antonin Bergeaud; Julia Schmidt; Riccardo Zago |
| Abstract: | Technology standards are defined by national and international organizations to select and disseminate the best technologies and practices. Using a measure of patent quality and a novel measure of the semantic proximity between patents and standards documents, this paper exploits the standardization process to disentangle the respective contributions of innovation and diffusion to firm value. Producing a patent increases a firm’s book value by 0.8% over the first eight years following the patent grant. However, this value deteriorates when the patent is not incorporated into a standard and diffused. In contrast, only firms whose patent specifications are included in a standard experience an additional increase in firm value of about 0.4% thereafter. Similar results are obtained when examining firms’ market-value and net worth. Finally, by studying firm-level productivity and markups, we show that the value gains associated with innovation stem from productivity improvements, whereas those associated with diffusion arise from rent extraction. |
| Keywords: | Standardization, Patents, Innovation, Firm Value |
| JEL: | G30 O31 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:1031 |
| By: | Nocciola, Luca |
| Abstract: | We document empirically the money demand by European non-financial corporations by exploiting a unique and brand-new survey on their cash usage in a stress period. We also assess: (i) the relation between cash held and firm size; and (ii) estimate point values of cash holdings and carry out statistical comparisons along the sectoral and country dimensions. First, we find that cash holdings are inversely related to firm size, providing additional evidence that Small and Medium Enterprises (SMEs) tend to store more cash relative to their larger peers. Second, we find that cash-intensive sectors and” cash-friendly” countries display right-shifted distributions of cash holdings with statistically-significant larger average holdings. We argue that in a low interest rate and low inflation environment cash holdings serve as a store of value for European firms, in particular for SMEs which are more likely to be financially constrained, especially in crisis times. JEL Classification: D22, D25, E41, G01, G32 |
| Keywords: | cash demand, financial crisis, monetary economics, precautionary savings, store of value |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263182 |
| By: | Benner, Niklas; Heuer, Felix; Kamb, Rebecca; Storm, Eduard |
| Abstract: | How do economic crises reshape firms' skill demand through changes in the organization of work? Using the COVID-19 pandemic as a shock to workplace practices, this paper examines whether short-term disruptions prompt lasting shifts in job requirements. We draw on 11 million German online job vacancies from 2017-2024 and implement an event-study design that exploits pre-pandemic variation in workfrom-home feasibility across occupations. This approach identifies firms' differential exposure to remote-work constraints based on the occupational mix of their job postings. We find that crisis-induced shifts in skill demand were mainly short-lived, but one adjustment persisted: a lasting rise in interactive requirements, reflecting the emergence of hybrid collaboration. This form of organizational change contrasts with the technology-driven automation emphasized in prior crises and was shaped mainly by structural factors - digital infrastructure, firm size, and sectoral exposure - rather than by cyclical variation. Our results show that temporary shocks can trigger selective and enduring shifts in firms' skill demand through evolving workplace organization. |
| Abstract: | Wie verändern wirtschaftliche Krisen die Qualifikationsnachfrage von Unternehmen durch Veränderungen in der Arbeitsorganisation? Unter Nutzung der COVID-19-Pandemie als einschneidendes Ereignis für betriebliche Praktiken untersucht diese Studie, ob kurzfristige Störungen dauerhafte Verschiebungen der Arbeitsplatzanforderungen auslösen. Wir untersuchen dies auf der Basis von 11 Millionen Online-Stellenanzeigen aus den Jahren 2017-2024 und implementieren ein Event-Study-Design, das die vorpandemische Variation der Homeoffice-Fähigkeit über Berufe hinweg ausnutzt. Dieser Ansatz identifiziert die unterschiedliche Betroffenheit von Unternehmen durch Einschränkungen des mobilen Arbeitens auf Grundlage der beruflichen Zusammensetzung ihrer Stellenanzeigen. Wir finden, dass krisenbedingte Verschiebungen der Qualifikationsnachfrage überwiegend kurzlebig waren, jedoch eine Anpassung anhielt: ein dauerhafter Anstieg interaktiver Anforderungen, der das Entstehen hybrider Zusammenarbeit widerspiegelt. Diese Form organisatorischen Wandels steht im Gegensatz zu der in früheren Krisen betonten technologiegetriebenen Automatisierung und wurde hauptsächlich durch strukturelle Faktoren - digitale Infrastruktur, Unternehmensgröße und sektorale Exposition - und nicht durch zyklische Variation geprägt. Unsere Ergebnisse zeigen, dass temporäre Schocks selektive und dauerhafte Verschiebungen der Qualifikationsnachfrage von Unternehmen über eine sich wandelnde Arbeitsorganisation auslösen können. |
| Keywords: | Online Job Ads, Skill Demand, Work-from-Home Feasibility, COVID-19, Task Reallocation, Event Study |
| JEL: | J23 J24 J63 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:335905 |
| By: | Natalia Emanuel; Emma Harrington |
| Abstract: | What are the returns to firms of paying more? We study a Fortune 500 firm’s voluntary firm-wide $15/hour minimum wage, which affected some warehouses more than others. Using a continuous difference-in-differences design, we find that a $1/hour pay increase (5.5 percent) halves worker departures, reduces absenteeism by 18.6 percent, and increases productivity (boxes moved per hour) by 5.7 percent. These productivity gains fully defrayed increased labor costs, offsetting the firm’s incentive to mark down wages. We develop a simple model that connects efficiency-wage incentives and monopsony power, showing how these forces can counterbalance each other to keep wages closer to workers’ marginal revenues. |
| Keywords: | voluntary firm minimum wage; Efficiency wages; monopsony; labor market frictions |
| JEL: | M52 J31 J42 |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:102436 |
| By: | Fariha Kamal; Zachary Kroff |
| Abstract: | We document the augmenting role of services exports in U.S. multinationals' goods-export growth during the global financial crisis. Using newly linked data on U.S. firms' foreign sales of goods and services and a triple-difference identification strategy combined with propensity-score matching, we find that compared to multinationals that only export goods (mono-exporters), multinationals that also export services to the same destination (bi-exporters) experienced higher goods-export growth. This result is driven by sales of intellectual property rights related to industrial processes (e.g., patents, trademarks). We also find higher growth in bi-exporters' foreign affiliate services sales and domestic employment in services sectors. These results reveal a pivotal role of services exports in supporting foreign demand for U.S. goods during the crisis. |
| Keywords: | multinationals, financial crisis, services exports, goods exports |
| JEL: | F1 F13 F14 F23 H2 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-04 |
| By: | Martin Beraja; Francisco J. Buera |
| Abstract: | Are competition policies designed for static industries suitable for innovative industries where dynamic competition for the market is key? If not, how should policies differ? We develop a model of the life-cycle of an oligopolistic industry: a version of Jovanovic and MacDonald (1994) with a finite number of firms. The equilibrium features a period of intense entry, followed by a shakeout and eventual industry concentration as some firms scale through innovation while most exit. We analyze the second-best problem of a government subsidizing small firms to promote competition. Innovation and dynamic competition do not necessarily justify intervention, as the equilibrium can still be second best. In general, the optimal policy depends on the nature of competition. Firms primarily compete for the market when innovation leads to large differences in scale. The government can wait to intervene in this case; committing to do whatever it takes to promote competition if and when the industry concentrates excessively. Subsidies early in the life-cycle are unnecessary. These results contrast with calls for aggressive ex-ante regulation in highly innovative industries, suggesting a wait-and-see approach may be preferable. We apply these insights to digital and AI industries in the U.S. using data on venture-backed firms. |
| JEL: | E0 L0 O3 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34770 |
| By: | Ajay K. Agrawal; John McHale; Alexander Oettl |
| Abstract: | The task-based approach has become the dominant framework for studying the labor-market effects of artificial intelligence (AI), typically emphasizing the replacement of human workers by machines. Motivated by growing empirical evidence that contemporary AI is more often used as a tool that augments workers, this paper develops two related task-based models in which AI enhances worker productivity without automating tasks. Abstracting from capital, we develop a pair of related task-based models that examine how technological progress in AI that provides new tools to augment workers affects aggregate productivity and wage inequality. Both models emphasize the role of human capital in intermediating the effects of AI-related technological shocks. In the first model, AI use requires specialized expertise, and technological progress expands the set of tasks for which such expertise is effective. We show that a larger supply of AI expertise amplifies the productivity gains from improvements in AI technology while attenuating its adverse effects on wage inequality. The second model focuses on non-AI skills, allowing AI tools to alter the set of tasks that workers can perform given their skills. In equilibrium, workers allocate across tasks in response to wages, generating an endogenous distribution of skills across the task space. A central result is that aggregate productivity and wage inequality depend on different global properties of this equilibrium distribution: productivity is particularly sensitive to thinly staffed tasks that create bottlenecks, while wage inequality is driven by the concentration of workers in a narrow set of tasks. As a result, improvements in AI tools can induce non-monotonic co-movement between productivity and inequality. By linking these mechanisms to multidimensional human capital---including AI expertise and higher-order non-AI skills---the paper highlights the role of education and training policies in shaping the economic consequences of AI-driven technological change. |
| JEL: | J24 O33 O41 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34781 |
| By: | Virginia Minni; Kieu-Trang Nguyen; Heather Sarsons; Carla Srebot |
| Abstract: | This paper studies how managers’ gender attitudes shape workplace culture and gender inequality. Using data from a multinational firm operating in over 100 countries, we leverage cross-country manager rotations to identify the effects of male managers' gender attitudes on gender pay gaps within a team. Managers from countries with one standard deviation more progressive gender attitudes reduce the pay gap by 5 percentage points (18%), largely through higher promotion rates for women. These effects persist after managers rotate out and are strongest in more conservative countries. Managers with progressive attitudes also influence the local office culture, as local managers who interact with but are not under the purview of the foreign manager begin to have smaller pay gaps in their teams. Our evidence points to individual managers as critical in shaping corporate culture. |
| JEL: | F23 J16 M14 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34782 |
| By: | Simon Deakin; Kamelia Pourkermani |
| Abstract: | We report the results of an econometric analysis of the effects of labour laws in the UK and China. For data on labour laws we draw on the 2023 update of the CBR-LRI index, part of the Cambridge Leximetric Database, which codes for labour laws around the world between 1970 and 2022. The longitudinal coverage of the CBR-LRI enables us to use time-series techniques which model dynamic changes in an economy over time. We employ impulse response function analysis to estimate the effects of labour laws on indicators of efficiency (productivity, employment and unemployment) and distribution (labour’s share of national income). We find that stronger labour laws in the UK are associated with rising employment and falling unemployment, while those in China are associated with rising productivity. We also observe positive impacts of labour laws on the labour share in both countries. Breaking down our results according to particular types of labour law, the positive employment effect we see in the UK is associated with stronger working time protections, while the positive productivity effect in China is associated with more protective laws regulating flexible forms of employment and with stronger dismissal laws. Assessing our results, we suggest that they speak to the importance of labour laws for avoiding regression, in the British case, to a low-cost, low productivity economy, and, in China’s case, for helping bridge the ‘middle income gap’ to sustainable development. More generally, our findings imply the need for adjustment to standard models of the role of labour laws in the economy and to the policy advice which they generate, to the following effect: labour laws, by disciplining capital, contribute to its more productive use. |
| Keywords: | Labour law, employment, unemployment, productivity, labour share, leximetrics, UK, China |
| JEL: | K31 J83 O57 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cbr:cbrwps:wp547 |
| By: | Bastianin, Andrea; Castelnovo, Paolo; Frattini, Federico Fabio; Vona, Francesco |
| Abstract: | This paper develops a novel text-based approach to identify CRM-saving innovation using patent data and studies how mineral price signals shape the direction of technological change. Using patent data from 1978–2020, we distinguish technologies that rely on CRMs from those that explicitly aim to reduce their use through efficiency improvements, substitution, or recycling. We provide evidence consistent with the induced-innovation hypothesis: higher mineral prices reallocate inventive effort toward CRM-saving technologies, while having little effect on CRM-reliant innovation. The response strengthens over time and is especially pronounced for battery minerals and rare earth elements. These findings are robust to alternative specifications and are reinforced by complementary identification strategies, including a falsification test and the use of plausibly exogenous supply-side price variation. |
| Keywords: | Climate Change, Environmental Economics and Policy, Resource/Energy Economics and Policy, Sustainability |
| Date: | 2026–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:391378 |