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on Business Economics |
| By: | Gonzalez, Felipe; Prem, Mounu |
| Abstract: | We study the economic effects of a large nationalization program using newly assembled firm-level data from Chile under Salvador Allende (1970–73). Using a difference-in-differences design, we show that nationalization substantially reduced firm performance and international business activity relative to comparable private firms. Return on assets fell sharply and importing activity declined, with negative effects concentrated in manufacturing, while firms in strategic and natural resource sectors were largely unaffected. We also document lower electoral support for the incumbent coalition in more exposed municipalities. Overall, nationalization generated sizable and uneven economic costs with significant political consequences. |
| Keywords: | Nationalization; State-owned enterprises; Firm performance |
| JEL: | L33 N36 D72 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21353 |
| By: | Fort, Teresa; Goldschlag, Nathan; Liang, Jack; Schott, Peter; Zolas, Nikolas |
| Abstract: | Relatively flat US productivity growth versus rising R&D expenditures is often interpreted as evidence that ideas are getting harder to find. We build a new 45-year panel tracking the universe of US firms' patenting to investigate the micro underpinnings of this conclusion, separately examining the relationships between research inputs and ideas (patents) versus ideas and growth. We find that average patents per R&D input are increasing, the elasticity of patents to R\&D inputs is flat or rising, and there is not systematic evidence of a secular decline in patenting after controlling for research inputs. We then document a positive, significant, and fairly steady relationship between firms' patent and labor productivity growth rates. Average firm growth after controlling for patent growth, however, declines. Together, these results suggest that firms' innovative efforts play a key role in sustaining growth that has not diminished over the last four decades. |
| Keywords: | Innovation; Productivity; Patents |
| JEL: | O31 O32 O33 O47 D24 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21555 |
| By: | Nikolaj Broberg; Luca Marcolin; Elettra Sartori |
| Abstract: | Business investment has weakened across OECD economies in recent decades. Using firm-level data for 17 OECD countries over 2003–2022, this paper documents a marked decline in the responsiveness of tangible investment to firm productivity following the Global Financial Crisis, with only a partial recovery thereafter, pointing to a weakening of capital reallocation toward more productive firms. The decline is broad-based across countries and sectors, holds after accounting for intangible investment, and is confirmed under an instrumental-variables strategy. Both frontier and non-frontier firms experienced a reduction in responsiveness, though the decline is larger and more persistent among non-frontier firms, while frontier firms proved more resilient. Partial-equilibrium counterfactuals suggest that maintaining pre-crisis responsiveness would translate into substantially higher aggregate investment and measurable productivity gains. Policy and market conditions shape how strongly investment responds to productivity. Responsiveness is weaker in sectors where firms depend more on external finance and in countries with less efficient insolvency regimes, the latter most apparent at the frontier. More concentrated markets are associated with lower responsiveness, particularly among non-frontier firms, whereas greater trade openness is associated with stronger responsiveness across the productivity distribution. |
| Keywords: | Business dynamism, Cross-country firm-level data, Frontier firm divergence, Investment responsiveness, Multifactor productivity, Tangible investment |
| JEL: | C23 C55 D22 D24 E22 O47 |
| Date: | 2026–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ecoaac:40-en |
| By: | Bilgin, Nuriye Melisa; Ottaviano, Gianmarco |
| Abstract: | Do the determinants of technology adoption depend on technological architecture? Using administrative data on Turkish firms from 2021 to 2024, we compare the adoption of traditional and generative artificial intelligence (GenAI). We show that GenAI adoption is driven by workforce skill intensity and is not positively associated with firm size, whereas traditional AI depends on both scale and skills. Firms that adopt both technologies are distinct and represent the most persistent adoption mode. Conditional on adoption, the skill-to-size ratio governs technology choice, and transition dynamics indicate a sequential process in which firms adopt GenAI before expanding to hybrid use. Exploiting the release of ChatGPT as a quasi-experimental reduction in access costs, we find that high-skill firms differentially increased GenAI adoption, while firm size played a limited role. These results suggest that the canonical size-based diffusion pattern is not universal but depends on the cost structure of technologies, with implications for innovation policy and productivity dispersion. |
| Keywords: | Artificial intelligence |
| JEL: | O33 L25 D22 O14 J3 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21506 |
| By: | Lenza, Michele (European Central Bank); Pagano Giorgianni, Giuseppe (Sapienza University of Rome); Rossi, Lorenza (Lancaster University); Savoia, Ettore (Research Department, Central Bank of Sweden) |
| Abstract: | We study whether firm-level heterogeneity helps explain U.S. macroeconomic fluctuations in response to aggregate shocks. Using quarterly Compustat and CRSP data from 1986 to 2025, we construct two revenue-based statistics inspired by the Melitz (2003) model: the average firm and the marginal near-default firm. These statistics summarize key features of the firm distribution. We augment a Bayesian VAR with these measures and compare its performance to a standard aggregate VAR and to a functional VAR that incorporates the full cross-sectional distribution of firm revenues. We find that firm-level heterogeneity contains information not captured by aggregate variables. Including the two statistics allows the VAR to closely replicate the impulse responses obtained using the functional VAR and improves out-of-sample forecast accuracy. These findings are robust to a replication using UK data. |
| Keywords: | Firm heterogeneity; Entry and exit; Business cycles; Bayesian VAR; Functional VAR; Selection and default; Sufficient statistics; Aggregate shocks. |
| JEL: | C32 D22 E32 E37 G33 |
| Date: | 2026–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:rbnkwp:0465 |
| By: | Conteduca, Francesco Paolo; Errico, Marco; Leone, Fabrizio; Panon, Ludovic; Romanini, Giacomo |
| Abstract: | Bilateral trade shocks affect firms in third countries by redirecting demand and reallocating competition across markets, creating winners and losers. We propose a tractable trade model with heterogeneous firms to decompose firm-level export responses as a function of destination-specific changes in demand, own-price and cross-price elasticities, and external economies of scale. Using the 2018–2019 US-China trade war as a source of exogenous variation and data on the universe of Italian firms, we show how bilateral trade shocks occurring elsewhere identify these primitives for third countries. On average, the US-China trade war created a 2.5% export gain, albeit with substantial heterogeneity across firms. The external economies of scale channel accounts for three-quarters of changes in export performance. |
| Keywords: | Firm heterogeneity |
| JEL: | D21 D22 E65 F13 F14 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21421 |
| By: | Görg, Holger; Mao, Haiou; Driffield, Nigel |
| Abstract: | Divestments by foreign multinationals are an important phenomenon that is largely neglected in the literature. We use firm‐level panel data from China to estimate the impact of such divestments on the performance of domestic firms in the local economy. To the best of our knowledge, there is no empirical study that has looked at these effects. Our results suggest that, overall, domestic firms may be able to benefit from divestments by foreign firms through spillovers. We find evidence suggesting that the positive overall effect for private firms is driven by the movement of workers from the divested firm to the local firm, as well as by a reduction in competition reducing crowding out. By contrast, local firms are negatively affected by the loss of technology transfer and customer–supplier relationships with foreign firms. While most effects are short‐lived, the negative impact on technology transfer persists over time. |
| Keywords: | foreign divestment, multinational enterprises, spillovers |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:335592 |
| By: | Peter, Alessandra; Ruane, Cian |
| Abstract: | We provide the first direct estimates of distribution expenses incurred by manufacturing plants and quantify their importance for aggregate consumption and measured misallocation. Using a novel measure from the Indian Annual Survey of Industries, we document three facts: distribution expenses amount to over half of labor costs, are over three times larger as a share of sales for plants in the largest decile relative to the smallest, and declined by one third from 2000 to 2010. We develop a model of heterogeneous manufacturing firms that rely on distribution services to sell across space. The improvements in distribution over that time period raised manufacturing consumption by 24.5%. The gains materialize quickly, but unevenly: large firms expand while many small local firms shrink or exit. Distribution costs also matter for measured misallocation: standard TFPR measures generate spurious dispersion and a positive relationship with size. In the ASI, accounting for distribution costs lowers measured TFPR dispersion by 5.1% and the elasticity of TFPR with respect to plant size by 7.0%. |
| Keywords: | Macro-development; Heterogeneous firms |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21515 |
| By: | Gülümser, Dogan (Rockwool foundation Berlin) |
| Abstract: | This paper studies hiring and wage setting in new jobs. Using Swedish matched employer-employee data covering 1.7 million new hires, I show that entrants into occupations new to the firm have more labor market experience and are more likely to be hired from other employers. Conditional on entrant characteristics, new jobs have a 3 percent entry-wage premium and exhibit lower turnover than old jobs. The premium declines as firms accumulate occupation-specific employment experience, consistent with hiring uncertainty that resolves as the firm gains experience in the occupation. The new job wage premium is a previously undocumented source of wage dispersion among similar workers. |
| Keywords: | Hiring uncertainty; information frictions; wage setting; match quality |
| JEL: | D83 J23 J31 J63 |
| Date: | 2026–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:ifauwp:2026_014 |
| By: | José L. Fillat; Stefania Garetto |
| Abstract: | We study the relationship between management, multinational expansion, and risk premia. We document two facts: firms run by better managers are more likely to become multinationals (MNEs), and risk premia are higher for current and future MNEs than for firms that remain exclusively domestic. We develop a model in which endogenous matching between heterogeneous firms and managers jointly determines selection into foreign direct investment (FDI) and risk premia. Quantitatively, we use the model to examine how corporate taxation and distortions in the market for managerial talent affect multinational activity, firm risk exposure, and financial market outcomes. |
| JEL: | F12 F23 F36 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35361 |
| By: | Chung, Wanyu; Elliott, Robert; Han, Yangjun |
| Abstract: | More than 85% of UK non-EU export value is facilitated by customs agents, yet little is known about how firms organize and adjust these relationships. This paper provides novel evidence on trader-agent relationships using transaction-level UK customs data from 2009 to 2019. We document a highly concentrated and skewed network structure: while most trader-agent links are short-lived and low value, a small number of persistent relationships account for the majority of agent-mediated trade. We show that agent use reflects two distinct strategic motives. Firms are more likely to rely on agents when entering new markets or introducing new products (exploration), but these relationships are shallow and short-lived. In contrast, when firms trade in markets aligned with their agent’s established expertise (exploitation), relationships are deeper and more persistent. Finally, exploiting the 2016 Brexit referendum as a major policy uncertainty shock, we show that firms more exposed to EU markets reorganize and deepen their reliance on customs agents. Our findings identify customs intermediation as an important organizational margin through which firms manage border frictions and trade policy uncertainty. |
| Keywords: | Customs agents; Firm-to-firm networks; Intermediaries; Export dynamics |
| JEL: | F13 F14 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21444 |
| By: | Ara Kharazian (Ramp); Lisa Simon (Revelio Labs); Ryan Stevens (Ramp) |
| Abstract: | We study how employment changes when firms adopt generative AI using observed AI spending from Ramp card and bill pay data linked to Revelio Labs workforce records for 21, 559 firms in the United States. We find that companies that adopt AI tend to grow faster following adoption, but the relationship is driven almost entirely by high-intensity adopters. Firms making the largest AI investments grow employment by roughly 10% following adoption, while low-intensity adopters see no statistically significant change. Entry-level headcount rises 12% for high-intensity adopters. Gains emerge gradually and are broad across roles, including engineering, sales, administration, and customer service. They are also uneven: adopters are already larger, more technical, faster-growing firms, and sector-level gains are concentrated in Information. The results counter predictions that AI adoption will lead to broad job loss. |
| Keywords: | artificial intelligence, generative AI, employment, labor markets, firm-level adoption, workforce adjustment |
| Date: | 2026–06–30 |
| URL: | https://d.repec.org/n?u=RePEc:epv:wpaper:ramp-ai-jobs-2026 |
| By: | Estrin, Saul; Nachum, Lilac; Hu, Yuan |
| Abstract: | Extant research offers inconclusive evidence on how firms’ export modes affect learning and innovation. Drawing on a Penrosian perspective, we argue that simultaneously pursuing direct and indirect exporting generates complementarities, as excess resources and experiential knowledge developed in one mode can be redeployed in the other. As a result, the combined export strategy yields stronger learning and innovation outcomes than either strategy pursued alone. We further theorize that these benefits depend on firm‑level resources and the characteristics of the learning environment. Using data on more than 4, 000 African exporters from the World Bank Enterprise Surveys, we find robust evidence that firms combining direct and indirect exporting modes innovate more than single‑mode exporters across multiple specifications and estimation techniques. The African context allows us to highlight how institutional and resource constraints shape learning through exporting. |
| Keywords: | direct and indirect exporting simultaneously; learning; innovation; theory of the growth of the firm; African firms; emerging market firms |
| JEL: | J50 |
| Date: | 2026–05–12 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138306 |
| By: | Kecht, Valentin; Lizzeri, Alessandro; Saidi, Farzad |
| Abstract: | This paper documents that the age at which CEOs are appointed has risen sharply over the past several decades. Using newly assembled data covering a wide set of firms, we show that this increase is concentrated outside the largest listed firms and driven primarily by longer and more diverse external career paths prior to CEO appointment. These patterns are difficult to reconcile with explanations based on demographics, schooling, or tenure, and are instead consistent with a matching framework in which rising demand for generalist human capital leads firms to trade off peak ability for accumulated experience. We investigate the forces behind this shift. Using variation in consulting networks, we establish that firms place greater weight on diversified managerial experience as operating environments have become increasingly uncertain and complex. We also provide evidence for a supply-side response in which prospective CEOs broaden their skill portfolio as demand for generalist skills rises. |
| Keywords: | Ceos; Aging; Uncertainty |
| JEL: | D22 J21 J24 M12 M51 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21397 |
| By: | Graziano, Alejandro; Sztajerowska, Monika; Volpe Martincus, Christian |
| Abstract: | This paper provides new evidence on tariff-induced reorganization of multinational production. Exploiting the 2018–2019 U.S. tariffs on Chinese goods, we show that Chinese MNEs expanded foreign affiliates disproportionately in third countries with high revealed production suitability for serving the U.S. market, especially in tariff-exposed sectors. Trade agreements with the U.S. amplified this reallocation. We also document that firms anticipated these trade policy changes as tariff increases began to be proposed in 2016-2017. Back-of-the-envelope calculations suggest tariff-induced Chinese FDI in third countries accounts for 43–52% of Chinese cross-border investment projects. |
| Keywords: | Tariffs |
| JEL: | F13 F21 F23 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21547 |
| By: | Benjamin Rosa |
| Abstract: | Using restricted Census business records, I explore how banning affirmative action in state contracting affects minority- and women-owned business enterprises (MWBEs). I find that ending affirmative action led MWBE contractors to gradually downsize, with the most pronounced reductions in force experienced by Black-owned businesses and larger MWBEs. Despite these workforce changes, existing MWBEs were no more likely to shut down than other businesses. New MWBEs were relatively less common after a state's ban, highlighting how bans can shift the demographic composition of new contractors. A calibrated model suggests bans are equivalent to considerable reductions in MWBE productivity and scrap values. |
| JEL: | H57 J15 J16 L25 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35362 |
| By: | Costas Arkolakis (Yale University and NBER); Sun Kyoung Lee (University of Michigan); Michael Peters (Yale University and NBER) |
| Abstract: | Between 1880 and 1920, more than 20 million immigrants settled in the United States. We study how this migration wave affected innovation and growth. Using a newly constructed dataset linking individual census records to historical immigration records and the universe of US patents, we highlight a new channel through which immigrants contributed to growth: they disproportionately settled in urban innovation hubs. To quantify the aggregate and regional effects of this mass migration episode, we develop a new spatial growth model in which skilled workers have a comparative advantage in innovation and sort endogenously across space. We find that international arrivals after 1880 raised US income per capita by 8.2% by 1940. Removing the subsequent immigration restrictions of the 1920s would have raised income per capita by a further 1.7% by 2000. Immigrants' skill composition and their concentration in urban hubs are key drivers of these effects. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2538 |
| By: | Cruces, Guillermo; Fernandez Meijide, Diego; Galiani, Sebastian; Galvez, Ramiro; Lombardi, María |
| Abstract: | Does generative artificial intelligence (AI) reinforce or reduce productivity differences across workers? Existing evidence largely studies AI within firms and occupations, where organizational selection compresses educational heterogeneity, leaving unclear whether AI narrows productivity gaps across individuals with substantially different levels of formal education. We address this question using a randomized online experiment conducted outside firms, in which 1, 174 adults ages 25–45 with heterogeneous educational backgrounds complete an incentivized, workplace-style business problem-solving task. The task is a general (not domain specific) exercise, and participants perform it either with or without access to a generative-AI assistant. Unlike prior work that studies heterogeneity within relatively homogeneous worker samples, our design targets the between–education-group productivity gap as the primary estimand. We find that AI increases productivity for all participants, with substantially larger gains for lower-education individuals. In the absence of AI access, higher-education participants outperform lower-education participants by 0.548 standard deviations; with AI access, this gap falls to 0.139 standard deviations, implying that generative AI closes about three quarters of the initial productivity gap. We interpret this pattern as evidence that generative AI narrows effective productivity differences in task execution by relaxing cognitive constraints that are more binding for lower-education individuals, even though underlying skill differences remain, as reflected in persistent education gaps in task performance and in a follow-up exercise without AI assistance. |
| Keywords: | Productivity; Inequality |
| JEL: | J24 O33 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21299 |
| By: | Amin, Mohammad; Rodriguez Cuniolo, Eugenia Aurora |
| Abstract: | This paper investigates the impact of informal competition—defined as competition faced by formal firms from informal enterprises—on the firm-provided worker training among formal manufacturing small and medium-sized enterprises. Using a representative dataset of small and medium-sized manufacturing firms in 23 Sub-Saharan African countries, a sizable negative impact is found. A one-standard-deviation increase in informal competition reduces the probability that a firm offers training to its workers by 8.7 to 12.9 percentage points, relative to the sample mean of firms that offer training of approximately 25 percent. Comparable declines are observed in the share of workers receiving training. To address potential endogeneity, the paper employs several complementary strategies. First, an instrumental-variables strategy leverages variation in the number of children aged 0–4 and 5–9 years per working-age woman to generate exogenous shifts in informal competition. Second, heterogeneity is examined through tests derived from the “legalist” view of informality, which predicts bigger adverse effects of informal competition in environments characterized by a weaker rule of law and more stringent business regulations. Third, information about firms in other world regions is used to construct out-of-sample predictions of informal competition at the sector level. The findings sugge st that informal competition is a substantial constraint on the training investments of formal firms, underscoring the need for policy responses that mitigate its adverse consequences. |
| Date: | 2026–06–29 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11420 |
| By: | Reka Juhasz (UBC, NBER, CEPR); David Krisztian Nagy (CREI, CEPR); Claudia Steinwender (LMU Munich, CEPR); Woan Foong Wong (University of Oregon, NBER, CEPR) |
| Abstract: | Maritime transport remains the backbone of global trade, yet the port and shipping network that carries it has been transformed by containerization and related technological advances. Drawing on newly available granular data—digitized historical shipping records, georeferenced ship movements, and shipment-level routing information—we present five stylized facts on the structure and evolution of the maritime network. Global shipping activity is highly concentrated among a changing lineup of dominant top ports even as lower-ranked ports disperse, while state-owned Chinese port terminal operators increasingly account for these global volumes, boosting overall port operations while delivering efficiency gains mostly to Chinese vessels. We use these facts to organize a synthesis of a fast-growing literature: containerization reshaped which port cities could expand, reinforced hub-and-spoke concentration that yields large but localized welfare gains, embedded ports in multimodal networks that amplify the returns to infrastructure, and generated market power, congestion, and environmental costs. Together, this evidence shows how evolving maritime technologies simultaneously deepen global integration and heighten the economic and geopolitical importance of critical nodes in the transport network—and of who controls them. |
| Keywords: | transport networks; ports; international trade; trade costs; containerization; geoeconomics; |
| JEL: | F13 F14 R41 R42 |
| Date: | 2026–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:579 |
| By: | Masayuki Morikawa |
| Abstract: | This study documents the adoption of AI in the workplace and its impact on productivity among workers in the Japanese machinery industry. At the end of 2025, 34% of workers use AI in their jobs, with R&D accounting for the largest proportion of AI-utilized jobs. Among AI users, the mean share of tasks using AI, efficiency gains, and resulting productivity effects are 12%, 20%, and 4%, respectively. Most workers use AI for only a small fraction of their overall job tasks. The productivity effect is larger for continuous AI users than for new AI users, suggesting selection and learning effects of AI adoption. The use of AI at work is projected to increase labor productivity in the industry by 0.3-0.4 percentage points annually over the next several years. If the use of AI in R&D activities improves the efficiency of R&D investment, it is likely to generate productivity gains that extend beyond simple labor-saving effects. Finally, more than 80% of workers hold positive views toward expanding the use of AI in the workplace, with stronger support among those already using AI and those facing severe labor shortages. |
| Keywords: | artificial intelligence, machinery industry, productivity |
| JEL: | J24 L60 O33 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2026-49 |