|
on Business Economics |
| By: | Guillermo Arenas Díaz (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italy); Mariacristina Piva (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Piacenza, Italy); Marco Vivarelli (Dipartimento di Politica Economica, DISCE, Università Cattolica del Sacro Cuore, Milano, Italy – UNU-MERIT, Maastricht, The Netherlands – IZA, Bonn, Germany - Global Labor Organization (GLO), Essen, Germany) |
| Abstract: | This study investigates the relationship between Artificial Intelligence (AI) and innovation inputs in Spanish manufacturing firms. While AI is increasingly recognized as a driver of productivity and economic growth, its role in shaping firms’ innovation strategies remains underexplored. Using firm-level data, our analysis focuses on whether AI complements innovation inputs - specifically R&D and Embodied Technological Change (ETC) - and whether AI can be considered as a Method of Invention, able to trigger subsequent innovation investments. Results show a positive association between AI adoption and both internal R&D and ETC, in a static and a dynamic framework. Furtheremore, empirical evidence also highlights heterogeneity, with important peculiarities affecting large vs small firms and high-tech vs low-tech companies. These findings suggest that AI may act as both a complement and a catalyst, depending on firm characteristics. |
| Keywords: | Artificial Intelligence, Method of Invention, R&D, Innovation Inputs, Innovative Complementarities |
| JEL: | O31 O32 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ctc:serie5:dipe0052 |
| By: | Diego Restuccia |
| Abstract: | I examine the empirical properties of firm-level productivity and distortions across countries using the newly released World Bank Enterprise Surveys (WBES). Using a standard framework of production heterogeneity, I show that the gap in productivity and distortions between high and low productivity firms is larger in developing countries, generating large aggregate productivity losses from misallocation. A key empirical property of distortions in developing countries is that they systematically weaken the relationship between firm size and firm productivity. I exploit a unique feature of the WBES data to document which specific aspects of the economic environment faced by firms, such as financial constraints, regulation, corruption, and weak infrastructure, are consistent with the empirical pattern of distortions across countries. |
| Keywords: | Firms, productivity, size, distortions, misallocation, manufacturing, services, regulation. |
| JEL: | O11 O14 O4 |
| Date: | 2025–12–08 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-810 |
| By: | Robert A. Buckle (Victoria University of Wellington); Michael Ryan (University of Waikato); Zhongchen Song (Bangko Sentral ng Pilipinas) |
| Abstract: | The frequency with which firms change prices crucially influences inflation dynamics. Using a unique firm-level dataset spanning more than six decades, this paper examines how firm price-setting behaviour has evolved across episodes of high inflation, including the recent COVID-19 inflation episode. Time-series analysis and probit modelling reveal that pricing behaviour has changed markedly since the high inflation episodes of the 1970s and 1980s. In the aggregate, the proportion of firms changing prices has become more highly correlated with inflation. At a firm level, the probability of price increases, conditional on inflation and cost increases, has risen. At the same time, the probability of price decreases when costs fall has fallen, making price adjustment increasingly asymmetric. This asymmetry is particularly pronounced among service-sector firms and at higher inflation levels. Reasons for these changes are evaluated including technological and societal changes, as well as the changing industrial structure of firms. Collectively, the findings imply that the Phillips Curve has become more nonlinear at higher levels of inflation and that the inflation accelerator operates more strongly than in the past. |
| Keywords: | Price change frequency; Inflation and price asymmetry; micro firm data; probit modelling |
| JEL: | E31 E52 D4 |
| Date: | 2025–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:wai:econwp:25/06 |
| By: | Xinyue Li (Harvard University); Armando Miano (University of Naples Federico II, CSEF, and CEPR); Sophia Mo (Harvard University) |
| Abstract: | We investigate how coworkers shape job mobility decisions by influencing workersÕ perceptions of their outside options. Using novel survey data from a representative sample of U.S. wage and salaried workers, we identify two distinct channels through which current and former coworkers affect mobility. First, having more current coworkers with prior experience in an industry enhances both the accuracy of workersÕ wage beliefs and their perceived probability of receiving a job offer from that industry. Second, having more past coworkers currently employed in a sector raises the perceived likelihood of receiving an offer from that sector. At the firm level, personal connections increase the perceived probability of receiving an offer from that specific firm, as shown in a survey experiment eliciting subjective job-offer probabilities. We incorporate these findings into a job choice model featuring coworker-based learning and referral effects. Relative to standard models that assume perfect information about wages and job opportunities, our framework demonstrates that coworker networks facilitate labor reallocation and mitigate the welfare losses associated with information frictions. |
| Keywords: | Job Mobility, Job Search, Coworker Networks, Industries, Survey, Subjective Expectations. |
| JEL: | J01 J62 D91 D83 E71 |
| Date: | 2025–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:sef:csefwp:768 |
| By: | Godøy, Anna; Isaksen, Elisabeth |
| Abstract: | Many governments have set ambitious climate goals that require a shift away from fossil fuel-intensive industries toward climate-neutral jobs. We use rich administrative register data to estimate green wage premiums in the presence of nonrandom sorting of workers across firms. On average, green firms pay statistically significant and economically meaningful wage premiums, consistent with a pattern of rent-sharing in high-revenue, highly innovative green firms. The premium is larger for non-college workers and those in low-skilled occupations. However, the average estimated wage premium for high-carbon firms is roughly twice as large as the green wage premium. This finding suggests that while the expansion of high-wage green firms may help mitigate the earnings losses associated with decarbonization, it is unlikely to fully offset them. |
| Keywords: | green jobs; wage premium; polluting jobs; employment; technology |
| JEL: | J31 J21 Q52 Q55 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130458 |
| By: | Wenyin CHENG; Tao LIANG; Bo MENG; Hongyong ZHANG |
| Abstract: | China is now the world’s largest exporter, with average export prices ranging from only 40% to 60% of those in other countries. This paper examines whether industrial subsidies can explain China’s export performance and global competitiveness. Using firm-level subsidy data and inter-provincial input-output tables with firm ownership information, we measure both direct subsidies and indirect subsidies from upstream industries. Our analysis yields several key findings: (1) Direct subsidies significantly increase both Chinese firms’ probability of exporting (extensive margin) and their export volume (intensive margin), with a larger effect on the intensive margin. (2) Notably, indirect subsidies (especially those from first-tier upstream industries) also play an important role in boosting exports. (3) Both domestic and foreign-invested firms benefit from direct subsidies, though the effects of upstream subsidies vary by firm ownership. (4) Contrary to expectations, subsidies do not lead to lower export prices. Instead, both direct and indirect subsidies are positively associated with product quality, thereby reducing quality-adjusted prices. The mechanism analysis suggests that export growth and quality upgrading are driven by (i) direct subsidies through increased R&D and imported inputs, and (ii) indirect subsidies through domestic intermediate inputs. Overall, the findings indicate that government support may promote quality upgrading and strengthen the global competitiveness of Chinese exporters. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25119 |