|
on Business Economics |
| By: | Viet Nguyen-Tien |
| Abstract: | We study the effect of input uncertainty about critical minerals on firm performance, separating the second-moment risk channel from first-moment mineral sentiment and from general firm-level uncertainty. Using earnings-call transcripts matched to financial data for more than 14, 000 publicly listed firms in 92 countries (2010-2022), we construct text-based measures of perceived critical-mineral risk. Higher perceived risk is robustly associated with lower revenue growth among downstream non-mining firms, consistent with risk-averse firms contracting output under input uncertainty. A one-standard-deviation increase in mineral risk is associated with 0.71 percentage points lower revenue growth for the average non-mining firm, rising to roughly 1.9 percentage points for smaller firms, and is concentrated in thinly traded minerals (lithium, cobalt, rare earths) rather than deeply traded ones (copper, nickel). Firms discuss hedging an stockpiling in response to price volatility rather than price levels, revealing the risk aversion that underlies the output contraction. These findings highlight a new uncertainty channel in the green transition relevant to strategic stockpiling and price transparency. |
| Keywords: | critical minerals, green transition, risk, exposure, sentiment, stockpiling, hedging |
| Date: | 2026–07–02 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2197 |
| By: | Dan Andrews; Andrea Garnero; Sara Holttinen |
| Abstract: | Restraint clauses that prevent workers from joining or starting a competing firm – commonly known as non-compete clauses – are traditionally justified to protect legitimate business interests. Yet, such clauses may suppress job mobility, business dynamism and competition, with adverse consequences for productivity growth. This paper presents the first harmonised cross-country evidence on the link between non-compete clauses and productivity performance. Merging novel data on industry-country-level prevalence of non-compete clauses with firm-level data from Orbis, we find that a higher non-compete prevalence is associated with weaker productivity enhancing labour-reallocation and slower knowledge diffusion. The estimates translate into meaningful aggregate productivity losses (1.9% for a 10 percentage point increase in non-compete incidence). While the economic “bite” of non-competes on productivity seems larger in countries where firms have greater freedom to deploy them, it remains negative in countries where non-competes are more tightly regulated. This underscores the idea that non-compete clause can exert “chilling effects” even when they are unlikely to be upheld by courts, raising questions about whether current regulatory frameworks are fit for purpose. |
| Keywords: | Job mobility, Misallocation, Non-compete clauses, Productivity growth |
| JEL: | J24 J41 J62 |
| Date: | 2026–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ecoaaa:1873-en |
| By: | Nicoletta Berardi; Paul Vertier; Chloé Zapha; Elie Malhaire; Jules Tapin |
| Abstract: | This paper investigates the effects of floods on firms, combining their financial information and exact location with administrative data on floods at the municipality level between 2004 and 2024 in France. For firms located in municipalities hit by a flood, both survival rates and sales deteriorate: their chances of survival drop by 2%, and their sales by 8%, for up to five years after the event. Moreover, these firms are more likely to relocate to safer areas in other municipalities. These effects are driven by intense floods, lasting at least one week. We find evidence of both direct and indirect effects: firms in 1-in-100 years floodplain are more affected than others, but even floods occurring in neighboring municipalities decrease firms’ economic performance, with magnitudes attenuating as distance increases. |
| Keywords: | Firm Performance, Floods, Natural Disasters, Location Decision |
| JEL: | L20 Q54 G30 D22 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:1047 |
| By: | Nicola Borri; Aleh Tsyvinski; Yukun Liu |
| Abstract: | Using 380 trillion tokens of realized AI consumption across more than four hundred large language models from the licensed proprietary OpenRouter dataset covering approximately 2 percent of current global monthly AI token consumption, we analyze how AI affects firms, markets, and workers. Leveraging the unprecedented size, scope and granularity of this data, we construct the AI Factor from growth in tokens, dollars, and users, estimate firm-level AI Betas from stock return comovement, and characterize the AI Premium. First, we build a high-frequency AI factor and decompose it into salient components. Second, we show that firms whose returns covary more positively with the AI factor—high AI beta firms—earn higher subsequent returns, and the AI premium is large and heterogeneous. A value-weighted longshort strategy earns 64.1 basis points per week, and the premium is large for loadings on the intensive, frontier-oriented margin of AI consumption—closed-source models, paying and seasoned users, and long prompts—but not on casual or open-weight use. Third, the premium reaches beyond technology firms into consumer-facing and capital-heavy parts of the economy, but is absent in emerging markets, including China. Fourth, the AI exposure is more positive in nonroutine interactive work and more negative in analytical, scientific, and operations-control skills—an occupation one standard deviation higher in interaction-and-communication content has 0.36-standard-deviation higher market-implied AI exposure. Additionally, we provide early evidence of the rise of the agentic economy. |
| JEL: | E0 G0 J0 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35451 |
| By: | Igor Fedotenkov; Anneleen Vandeplas |
| Abstract: | Populations across the European Union are ageing. While concerns have been raised that ageing may reduce business dynamism, and, consequently, economic growth, this hypothesis has not yet been tested empirically in an EU context. To address this gap, this paper investigates the relationship between demographic structure and firm entry rates in the European Union. The results suggest that the size of the 30-44 age group has the strongest positive effect on firm entry. Alternative estimation methods and the inclusion of control variables do not change this conclusion. It is in line with the notion that age has a hump-shaped effect on the propensity to engage in entrepreneurship. In addition, younger age cohorts are found to exert a more negative impact on firm entry than older age cohorts. Rising educational attainment may partially offset the adverse effects of demographic ageing on business dynamism in the years ahead |
| JEL: | D22 J11 J15 L29 M13 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:251 |
| By: | Yang Yu; Martin Fleming; Lucy Hampton; Christophe Combemale; Neil Thompson |
| Abstract: | The adoption of artificial intelligence (AI) by large enterprises is an important potential source of aggregate productivity improvement and labor market impact. We study AI adoption of S&P 500 firms over the period 2016 to 2025, estimating adoption at the enterprise level. While generative AI tools are useful for personal and professional applications, our focus is on the deep integration of AI in the business processes of large enterprises which are bellwethers for firm adoption more broadly. We develop a novel measure to assess deep AI adoption (and distinguish it from AI hype) that is based on SEC 10-K filings, where laws and regulations ``prohibit companies from making materially false or misleading statements." In 2025, 11% of S&P 500 enterprises had AI deeply integrated into their business processes, and a further 10% were using AI in the production of goods and delivery of services. AI adoption has more than quadrupled from 5% in 2022 with slowly accelerating adoption among non-technology firms but very aggressive adoption in the technology sector which accounts for two-thirds of deeply integrated enterprise adoption. Firm profitability shows a "J-curve" as firms move from no adoption to deep adoption, but we observe no differences in capex or productivity. Among technology firms, but not others, AI adoption is higher for firms with more employees and higher values of Tobin's q. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.08920 |
| By: | Brandyn F. Churchill; Georgina Cisneros; Kelli R. Marquardt |
| Abstract: | Health care reforms are often enacted before implementation, creating uncertainty that can shape firms’ decisions. We examine how Medicare Part D affected the retail pharmacy industry using 2000-2009 establishment-level data, leveraging the fact that Part D disproportionately affected counties with larger elderly populations. Consistent with predictions from a conceptual model in which pre-implementation uncertainty discourages entry and lower post-implementation margins prevent full recovery, we find that Part D was associated with a 5-percent reduction in pharmacies, driven by fewer openings rather than more closures. We also find suggestive evidence that reduced pharmacy access dampened Part D’s mortality benefits. |
| JEL: | D22 D81 I13 I18 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35380 |
| By: | Rebecca Diamond |
| Abstract: | GLP-1 medications generate large weight loss and may also alter social and economic outcomes. Using the Understanding America Study, I compare women starting GLP-1s for weight loss with matched women who would like to start a GLP-1 but have not. Single women’s marriage/cohabitation rates rise by 29 percentage points and employment among baseline non-employed women rises 27 percentage points after six or more quarters. Existing partnerships do not dissolve, and already-employed women show no upward job mobility. The pattern suggests that part of the female obesity penalty operates at new-match formation rather than only through health or incumbent productivity. |
| JEL: | I10 J01 J12 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35387 |
| By: | OECD |
| Abstract: | Artificial intelligence (AI) can reshape markets, yet its implications for competition remain underexplored. This paper develops a conceptual framework distinguishing AI users from developers, and generative (GenAI) from non-generative AI, showing how competitive mechanisms differ across these dimensions. Using multiple microdata sources, the analysis documents several findings. Adoption of non-GenAI is not associated with significant increases in market power. Descriptive evidence on firms’ exposure to GenAI suggests opportunities for smaller firms alongside advantages for firms with stronger existing capabilities. Concentration in AI innovation is correlated with higher sales concentration. AI-related patenting is associated with faster markup growth, particularly in the ICT sector, where AI is an output. The AI start-up ecosystem is dynamic and attracts substantial venture capital, but start-ups are frequently acquired by large incumbents. Overall, the evidence points to a dynamic yet uneven landscape, underscoring the need for continued monitoring as AI diffusion progresses. |
| Keywords: | AI, Artificial Intelligence, Competition |
| Date: | 2026–07–30 |
| URL: | https://d.repec.org/n?u=RePEc:oec:comaaa:64-en |
| By: | Stefano Carattini; Hanwei Huang; Tejendra P. Singh; Frank Pisch |
| Abstract: | Although the environmental impact of trade has been a long-standing concern, there is still scant evidence on the channels through which international market access affects pollution. We exploit the unique episode of China's world market integration in the early 2000s to provide direct empirical evidence on three such mechanisms, corresponding to each pollution scope: direct pollution at firms' locations (scope-1), indirect pollution from energy generation (scope-2), and indirect pollution from the supply chain (scope-3). We combine granular satellite data on air pollution with detailed information on manufacturing firms and coal power plants, and leverage exogenous foreign demand shocks for identification. Three main findings emerge: exporting firms reduce local pollution; pollution levels around coal power plants rise due to regional export shocks; and upstream suppliers reduce pollution in the face of export demand shocks to downstream firms. Our findings point to China's reliance on coal power plants to fuel its export-driven growth as one of the main drivers of the rise in pollution. |
| Keywords: | trade, pollution, satellite, supply chain, coal power plants, electricity |
| Date: | 2026–07–08 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2198 |