nep-eur New Economics Papers
on Microeconomic European Issues
Issue of 2020‒02‒17
25 papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Trends in Commuting Time of European Workers: A Cross-Country Analysis By Gimenez-Nadal, J. Ignacio; Molina, José Alberto; Velilla, Jorge
  2. Child Penalties and Financial Incentives: Exploiting Variation along the Wage Distribution By P. PORA; L. WILNER
  3. The Life-cycle Profile of Worker Flows in Lithuania By Etienne Lalé; Linas Tarasonis
  4. Pension Reform and the Efficiency-Equity Trade-Off: Impacts of Removing an Early Retirement Subsidy By Andersen, Asbjørn Goul; Markussen, Simen; Røed, Knut
  5. Immigration and Offshoring: Two Forces of Globalisation and Their Impact on Employment and the Bargaining Power of Occupational Groups By Michael Landesmann; Sandra M. Leitner
  6. Paid parental leave and maternal reemployment: Do part-time subsidies help or harm? By Zimmert, Franziska; Zimmert, Michael
  7. Language skills and homophilous hiring discrimination: Evidence from gender and racially differentiated applications By Anthony Edo; Nicolas Jacquemet; Constantine Yannelis
  8. Investment behavior and firms' financial performance: A comparative analysis using firm-level data from the wine industry By Claudiu Albulescu
  9. Tax-induced earnings management and book-tax conformity: International evidence from unconsolidated accounts By Eichfelder, Sebastian; Jacob, Martin; Kalbitz, Nadine; Wentland, Kelly
  10. Law enforcement, social control and organized crime. Evidence from local government dismissals in Italy By Cingano, Federico; Tonello, Marco
  11. Public Charging Infrastructure and the Market Diffusion of Electric Vehicles By Illmann, Ulrike; Kluge, Jan
  12. Does inter-municipal cooperation help improve local economic performance? – Evidence from Poland By Monika Banaszewska; Ivo Bischoff; Aneta Kaczynska; Eva Wolfschuetz
  13. Priority to unemployed immigrants? A causal machine learning evaluation of training in Belgium By Cockx, Bart; Lechner, Michael; Bollens, Joost
  14. Excellence for all? Heterogeneity in high-schools’ value-added By P. GIVORD; M. SUAREZ CASTILLO
  15. Uncovering Individualised Treatment Effect: Evidence from Educational Trials By Xiao, ZhiMin; Hauser, Oliver P; Kirkwood, Charlie; Jones, Benjamin; Li, Daniel Z.; Mo, Jingyuan; Higgins, Steve
  16. The Effect of Unfair Chances and Gender Discrimination on Labor Supply By Gagnon, Nickolas; Bosmans, Kristof; Riedl, Arno
  17. THE ROLE OF FIRMS IN THE GENDER WAGE GAP By Jaan Masso; Jaanika Meriküll; Priit Vahter
  18. Who Benefits from General Knowledge? By Cristina Bellés-Obrero; Emma Duchini
  19. Firm productivity, wages, and sorting By Lochner, Benjamin; Schulz, Bastian
  20. The Impact of a Minimum Wage Change on the Distribution of Wages and Household Income By Redmond, Paul; Doorley, Karina; McGuinness, Seamus
  21. Intangible capital and productivity: Firm-level evidence from German manufacturing By Kaus, Wolfhard; Slavtchev, Viktor; Zimmermann, Markus
  22. Robots and the origin of their labour-saving impact By Fabio Montobbio; Jacopo Staccioli; Maria Enrica Virgillito; Marco Vivarelli
  23. The business angel portfolio under the European Angels Fund: An empirical analysis By Gvetadze, Salome; Pal, Kristian; Torfs, Wouter
  24. Do Temporary Demand Shocks have Long-Term Effects for Startups? By Hvide, Hans K.; Meling, Tom G.
  25. All on board? New evidence on board gender diversity from a large panel of European firms By Joanna Tyrowicz; Siri Terjesen; Jakub Mazurek

  1. By: Gimenez-Nadal, J. Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza); Velilla, Jorge (University of Zaragoza)
    Abstract: This paper examines the time spent commuting to/from work by workers in fifteen European countries, during the last three decades, with the aim of analyzing recent trends in commuting and the factors affecting commuting behavior in those countries. Using data from several waves of the European Working Conditions Survey, results show a significant gender gap in commuting time in Austria, Belgium, France, Germany, Italy, Ireland, Luxembourg, the Netherlands, and the UK, with male workers devoting more time to commuting than their female counterparts. We further explore the factors related to commuting time, documenting a level of heterogeneity in commuting behavior as certain determinants of commuting time differ across countries. By analyzing the evolution of commuting time in Europe in recent decades, and the factors associated with commuting time, our analysis may serve to guide future planning programs.
    Keywords: commuting time, european working conditions survey, trends, gender, socio-demographic factors
    JEL: R40 O57
    Date: 2020–01
  2. By: P. PORA (Insee - Crest); L. WILNER (Insee - Crest)
    Abstract: We relate women's labor earnings losses due to motherhood to their pre-childbirth rank in the distribution of hourly wages. Using French administrative data from 2005 to 2015, we show these "child penalties" to decrease steeply along the distribution; by contrast, related hourly wage losses are pretty homogeneous. Low-wage mothers opt out or decrease their working hours more frequently; the magnitude of such responses is completely monotone along the distribution. This empirical evidence highlights the relevance of financial incentives and suggests that child penalties arise from decisions based on the gains of specialization, rather than on gender differences in preferences or on gender norms.
    Keywords: Gender pay gap; child penalties; labor supply; difference-in-difference; wage distribution.
    JEL: J13 J16 J22 J31
    Date: 2019
  3. By: Etienne Lalé (Université du Québec à Montréal, CIRANO and IZA); Linas Tarasonis (Vilnius University and Bank of Lithuania)
    Abstract: We use survey micro-data for 31 European countries, and estimate the life-cycle profiles of worker transition probabilities across employment, unemployment and nonparticipation. The estimated transition probabilities are then used to explain aggregate difference in employment rates between Lithuania and Europe. We show that the separations from employment is a key in understanding differences in labor market outcomes of both genders, and that demographics play a large negative role for Lithuanian employment rates. The results have important implications for economic policies that are discussed at the end of the analysis.
    Keywords: Employment, Unemployment, Labor Force Participation, Life cycle, Worker Flows, Labor Market Institutions
    JEL: E02 E24 J21 J64 J82
    Date: 2020–02–07
  4. By: Andersen, Asbjørn Goul (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: We provide empirical evidence that the removal of work disincentives embedded in retirement earnings tests can increase old-age labor supply considerably, but it does so at the cost of more income inequality. Causal effects are identified based on a reform of the Norwegian early retirement program, which entailed that adjacent birth cohorts were exposed to completely different work incentives from age 62. The reform removed a strict retirement earnings test such that pension wealth was redistributed from early to late retirees. Given the pre-existing employment and earnings patterns, this implied a considerable rise in old-age income inequality. In principle, this could have been offset by changes in the labor supply. We estimate that the reform triggered a 42% increase in hours worked during the ages covered by early retirement options. However, as the labor supply responses were of similar magnitudes across the earnings distribution, they did little to offset the rise in inequality. As measured by the Gini coefficient, inequality in overall old-age income rose by approximately 0.03 (17%).
    Keywords: pension reform, inequality, labor supply
    JEL: H55 D31 J22 J26
    Date: 2020–01
  5. By: Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper estimates conditional demand models and, using a joint approach for the period 2008-2017, examines the impact of immigration and different measures of offshoring on the labour demand and demand elasticities of native workers in four different types of occupational groups managers/professionals, clerical workers, craft (skilled) workers and manual workers. The analysis is conducted using data for four EU economies Austria, Belgium, France and Spain. Our results point to important and occupation-specific direct and indirect effects of immigration and offshoring. Both offshoring – particularly services offshoring – and immigration have negative direct employment effects on all occupations, but native clerks and manual workers are affected the most, and native managers/professionals the least. Generally, offshoring exerts a stronger direct negative employment effect than does immigration. Our results also identify an important (labour demand) elasticity-channel of immigration and offshoring and show that some groups of native workers can also actually gain from globalisation through an improvement in their wage-bargaining position. Overall, our results indicate a deterioration in the bargaining power of native manual workers arising from both immigration and offshoring; an improvement in the bargaining position of native craft workers in the case of both immigration and offshoring; and an improvement in the bargaining position of native clerical workers and managers/professionals in the case of offshoring only. Finally, our analysis of the cross-effects of immigration highlights the important role of migrant managers/professionals for the labour demand and demand elasticities (bargaining power) of native clerical workers, craft and manual workers. Disclaimer Funding from the Austrian Federal Ministry of Labour, Social Affairs, Health and Consumer Protection is gratefully acknowledged.
    Keywords: Offshoring, immigration, labour demand elasticity, bargaining power, occupations
    JEL: F16 F22 F66
    Date: 2020–01
  6. By: Zimmert, Franziska; Zimmert, Michael
    Abstract: Employment subsidies can incentivize mothers to shorten employment interruptions after childbirth. We examine a German parental leave reform promoting an early return to work in part-time. Exploiting the exogenous variation in the benefit entitlement length defined by the child’s birthday, we apply machine-learning augmented semi-parametric difference-indifference estimation using administrative data. The reform yields positive average employment effects mainly driven by part-time employment as our dynamic optimization model for mothers on parental leave suggests. Conditional effects show that the policy creates heterogenous incentives depending on the opportunity costs of working part-time.
    Keywords: Causal machine learning, effect heterogeneity, maternal labor supply, parental leave, Germany
    JEL: J21 J22 C14
    Date: 2020–01
  7. By: Anthony Edo (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Constantine Yannelis (Stanford University - Department of Economics - Stanford University [Stanford])
    Abstract: This paper investigates the importance of ethnic homophily in the hiring discrimination process. Our evidence comes from a correspondence test performed in France in which we use three different kinds of ethnic identification: French sounding names, North African sounding names, and "foreign" sounding names with no clear ethnic association. Within the groups of men and women, we show that all non-French applicants are equally discriminated against when compared to French applicants. Moreover, we find direct evidence of ethnic homophily: recruiters with European names are more likely to call back French named applicants. These results show the importance of favoritism for in-group members. To test for the effect of information about applicant's skills, we also add a signal related to language ability in all resumes sent to half the job offers. The design allows to uniquely identify the effect of the language signal by gender. Although the signal inclusion significantly reduces the discrimination against non-French females, it is much weaker for male minorities.
    Keywords: J71,J64,Correspondence testing,Gender discrimination,Racial discrimination,Ethnic homophily,Language skills JEL Classification: J15
    Date: 2019–03
  8. By: Claudiu Albulescu (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers)
    Abstract: This paper assesses the role of financial performance in explaining firms' investment dynamics in the wine industry from the three European Union (EU) largest producers. The wine sector deserves special attention to investigate firms' investment behavior given the high competition imposed by the latecomers. More precisely, we investigate how the capitalization, liquidity and profitability influence the investment dynamics using firm-level data from the wine industry from France (331 firms), Italy (335) firms and Spain (442) firms. We use data from 2007 to 2014, drawing a comparison between these countries, and relying on difference-and system-GMM estimators. Specifically, the impact of profitability is positive and significant, while the capitalization has a significant and negative impact on the investment dynamics only in France and Spain. The influence of the liquidity ratio is negative and significant only in the case of Spain. Therefore, we notice different investment strategies for wine companies located in the largest producer countries. It appears that these findings are in general robust to different specifications of liquidity and profitability ratios, and to the different estimators we use.
    Keywords: firm investment,financial performance,wine industry,comparative analysis
    Date: 2020–01–27
  9. By: Eichfelder, Sebastian; Jacob, Martin; Kalbitz, Nadine; Wentland, Kelly
    Abstract: We quantify the degree of tax-induced earnings management associated with statutory tax rates and examine whether greater book-tax conformity alters this particular type of earnings management. We first validate a new empirical approach for examining tax-induced earnings management using European unconsolidated financial and ownership information over 2005-2013. We provide robust evidence of significant tax-induced earnings management in both domestic and multinational firms. In particular, the results suggest that a 10 percentage point increase in the corporate tax rate relates to an 8.2 percent decrease in pre-tax book income. We then document that firms in countries with greater book-tax conformity engage in additional tax-induced earnings management. This is important given that it contrasts with prior literature, which does not find an effect for book-tax conforming transactions with a change in conformity.
    Keywords: tax-induced earnings management,book-tax conformity,conforming tax avoidance
    JEL: H25 H26 M41
    Date: 2020
  10. By: Cingano, Federico; Tonello, Marco
    Abstract: Local governments suspected of Mafia infiltration can be dismissed in Italy through an administrative act not increasing formal deterrence but potentially signaling improved law enforcement among local communities. This paper finds that dismissals are associated to a persistent fall of petty crimes (e.g. thefts) but have no consequences on offenses more closely related to the activity of organized crime, as homicide, extortion, drug-trafficking or usury. Petty crimes are estimated to fall by around 10%, on average, a result that seems driven by the perception of enhanced deterrence (through media pressure, the signaling role of the policy, and other forms of social control) rather than induced by organized crime itself.
    Keywords: crime,law enforcement,organized crime,social control
    JEL: K14 K42 D73
    Date: 2020
  11. By: Illmann, Ulrike (TU Dresden, Germany); Kluge, Jan (Institute for Advanced Studies (IHS), Vienna, Austria,)
    Abstract: A comprehensive roll-out of public charging infrastructure will be costly. However, its impact on the diffusion of electric vehicles (EVs) is not clear at all. Our study aims at estimating the extent to which an increasing availability of public charging infrastructure promotes consumers’ decisions to switch to EVs. We make use of a German data set including monthly registrations of new cars at the ZIP-code level between 2012 and 2017 and match it with the official registry of charging stations. We measure charging infrastructure by its visibility, capacity and abundance in order to estimate its impact on EV adoption. A CS-ARDL approach is deployed in order to identify the structural long-run relationship between charging infrastructure and monthly EV registrations. There is evidence of a positive long-run relationship but on a rather low scale. We conclude that consumers do not necessarily react to the mere number of chargers but attach more importance to charging speed.
    Keywords: Electric vehicles, charging infrastructure, CS-ARDL
    JEL: L90 O18 O33 R42
    Date: 2019–11
  12. By: Monika Banaszewska (Poznan University of Economics and Business); Ivo Bischoff (University of Kassel); Aneta Kaczynska (Poznan University of Economics and Business); Eva Wolfschuetz (University of Kassel)
    Abstract: This paper aims at testing whether inter-municipal cooperation (IMC) in policies to promote local business development has a positive impact on local economic performance. We apply two-way fixed effects as well as marginal structural models to a panel data set covering 1,849 Polish municipalities between 2007 and 2014. We use the unemployment rate and the rate of population growth as a proxy for local economic performance. Our results show a systematic effect of IMC on local economic performance. However, the results are contradictory. While IMC causes higher rates of population growth, they also cause higher rates of unemployment.
    Keywords: Inter-municipal cooperation, local business development, population decline, marginal structural models, Poland
    JEL: D72 H77 H80 O10
    Date: 2020
  13. By: Cockx, Bart; Lechner, Michael; Bollens, Joost
    Abstract: We investigate heterogenous employment effects of Flemish training programmes. Based on administrative individual data, we analyse programme effects at various aggregation levels using Modified Causal Forests (MCF), a causal machine learning estimator for multiple programmes. While all programmes have positive effects after the lock-in period, we find substantial heterogeneity across programmes and types of unemployed. Simulations show that assigning unemployed to programmes that maximise individual gains as identified in our estimation can considerably improve effectiveness. Simplified rules, such as one giving priority to unemployed with low employability, mostly recent migrants, lead to about half of the gains obtained by more sophisticated rules.
    Keywords: Policy evaluation, active labour market policy, causal machine learning, modified causal forest, conditional average treatment effects
    JEL: J68
    Date: 2020–01
  14. By: P. GIVORD (Insee - Crest - Liepp); M. SUAREZ CASTILLO (Insee - Crest)
    Abstract: This paper presents a new method that goes beyond the measurement of average value-added of schools by measuring whether schools mitigate or intensify grades dispersion among initially similar students. In practice, school value-added is estimated at different levels of final achievements’ distribution by quantile regressionswith school specific fixed effects. This method is applied using exhaustive data of the 2015 French high-school diploma and controlling for initial achievements and socio-economic background. Results suggest that almostone-sixth of the high schools significantly reduce, or on the contrary increase, the dispersion in final grades which were expected given the initial characteristics of their intake.
    Keywords: Value added; quantile regression; Student Growth Percentiles
    JEL: I20 C21 C50
    Date: 2019
  15. By: Xiao, ZhiMin (University of Exeter); Hauser, Oliver P (University of Exeter); Kirkwood, Charlie; Jones, Benjamin; Li, Daniel Z.; Mo, Jingyuan; Higgins, Steve
    Abstract: The use of large-scale Randomised Controlled Trials (RCTs) are fast becoming "the gold standard" of testing the causal effects of policy, social, and educational interventions. RCTs are typically evaluated — and ultimately judged — by the economic, educational, and statistical significance of the Average Treatment Effect (ATE) in the study sample. However, many interventions have heterogeneous treatment effects (HTEs) across different individuals, not captured by the ATE. One option to identify HTEs is to conduct subgroup analyses, such as focusing on low-income Free School Meal pupils as required for projects funded by the Education Endowment Foundation (EEF) in England. These subgroup analyses, as we demonstrate in 48 EEF-funded RCTs involving over 200,000 students, are usually not standardised across studies and offer flexible degrees of freedom to researchers, potentially leading to mixed results. Here, we develop and deploy a machine-learning and regression-based framework for systematic estimation of Individualised Treatment Effects, which can show where a seemingly ineffective and uninformative intervention worked, for whom, and by how much. Our findings have implications for policy-makers in education, public health, and other government services.
    Date: 2020–01–21
  16. By: Gagnon, Nickolas (Maastricht University); Bosmans, Kristof (Maastricht University); Riedl, Arno (Maastricht University)
    Abstract: Labor market opportunities and wages may be unfair for various reasons, and how workers respond to different types of unfairness can have major economic consequences. Using an online labor platform, where workers engage in an individual task for a piece-rate wage, we investigate the causal effect of neutral and gender-discriminatory unfair chances on labor supply. We randomize workers into treatments where we control relative pay and chances to receive a low or a high wage. Chances can be fair, unfair based on an unspecified source, or unfair based on gender discrimination. Unequal pay reduces labor supply of low-wage workers, irrespective of whether the low wage is the result of fair or unfair chances. Importantly, the source of unfair chances matters. When a low wage is the result of gender-discriminatory chances, workers matched with a high-wage worker substantially reduce their labor supply compared to the case of equal low wages (–22%). This decrease is twice as large as those induced by low wages due to fair chances or unfair chances coming from an unspecified source. In addition, exploratory analysis suggests that in response to unequal pay, low-wage male workers reduce labor supply irrespective of the source of inequality, whereas low-wage female workers reduce labor supply only if unequal pay is due to gender-discriminatory chances. Our results concerning gender discrimination indicate a new reason for the lower labor supply of women, which is a prominent explanation for the gender gap in earnings.
    Keywords: labor supply, wage inequality, procedural fairness, gender discrimination
    JEL: D90 E24 J22 J31 J71 M5
    Date: 2020–01
  17. By: Jaan Masso; Jaanika Meriküll; Priit Vahter
    Abstract: Recent research suggests that firm-level factors play a significant role in the gender wage gap. This paper adds to this literature by analysing the role of sorting between firms and bargaining within firms using the methodology of Card et al. (2016). We employ linked employer-employee data for the whole population of firms and employees from Estonia for 2006–2017. Estonia is a country with the highest gender wage gap in the EU with about two-thirds of that unexplained by conventional factors. The results show that firm-level factors are important determinants of the gender wage gap, explaining as much as 35% of the gap. We find that within-firm bargaining plays a larger role in the gender wage gap than similar prior papers. This could be related to lenient labour market institutions, as reflected in low minimum wages and union power, and to lower bargaining skills of women. Further, the role of firm-level factors in the gender wage gap have increased over time, and these are especially important at the top of the wage distribution and among workers that are more skilled. There is a heavy penalty for motherhood in wages, 4–9 log points, but this is not related to firm-specific time-invariant productivity premiums.
    Keywords: Gender wage gap, firm-level productivity premiums, sorting and bargaining, distribution of wages, skills, motherhood penalty
    Date: 2020
  18. By: Cristina Bellés-Obrero; Emma Duchini
    Abstract: While vocational education is meant to provide occupational-specific skills that are directly employable, their returns may be limited in fast-changing economies. Conversely, general education should provide learning skills, but these may have little value at low levels of education. This paper sheds light on this debate by exploiting a recent Spanish reform that postpones students’ choice between these two educational pathways from age 14 to 16. To identify exogenous changes in its staggered implementation, we instrument this with the pre-reform across-province variation in the share of students in general education. Results indicate that, by shifting educational investment from vocational to general education after age 16, the reform improves occupational outcomes, and results in a significant rise in monthly wages. The effects are larger after the financial crisis, but are concentrated among middle to high-skilled individuals. In contrast, those who acquire only basic general education have worse long-term employment prospects than vocationally-trained individuals.
    Keywords: general versus vocational education; heterogeneous returns; financial crisis
    JEL: I26 I28 J24
    Date: 2020–02
  19. By: Lochner, Benjamin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schulz, Bastian
    Abstract: "Increasing wage inequality is associated with changes in the degree of labor market sorting, i.e. the allocation of workers to firms. To measure sorting, we propose a new method which disentangles the respective contributions of worker and firm heterogeneity to wage inequality. Inspired by sorting theory, we infer firm productivity from estimating firm-level production functions, taking into account that worker ability and firm productivity may interact at the match level. Using German data, we find that highly productive firms display low labor shares, dominate concentrated markets, and pay lower wages than less productive firms. Sorting is positive, but lower than what wage-based measures suggest. It increases over time, driven by new matches between low-productivity firms and low-ability workers. At the top, sorting decreases, reflected in worker transitions away from high-productivity firms that pay relatively low wages. We discuss implications of our findings for the interpretation of increasing wage inequality." (Author's abstract, IAB-Doku) ((en))
    JEL: J24 J31 J40 J62 J64 L25
  20. By: Redmond, Paul (ESRI, Dublin); Doorley, Karina (Economic and Social Research Institute, Dublin); McGuinness, Seamus (Economic and Social Research Institute, Dublin)
    Abstract: We use distributional regression analysis to study the impact of a six percent increase in the Irish minimum wage on the distribution of hourly wages and household income. Wage inequality, measured by the ratio of wages in the 90th and 10th percentiles and the 75th and 25th percentiles, decreased by approximately eight percent and four percent respectively. For young workers, aged under 25, the effects were far greater, with a 24 percent reduction in the ratio of wages in the 90th and 10th percentiles. The results point towards wage spillover effects up to the 30th percentile of the wage distribution. We show that minimum wage workers are spread throughout the household income distribution and are often located in high-income households. Therefore, while we observe strong effects on the wage distribution, the impact of a minimum wage increase on the household income distribution is quite limited.
    Keywords: minimum wage, inequality, wage spillovers, distributional regression
    JEL: J31 J38 K31
    Date: 2020–01
  21. By: Kaus, Wolfhard; Slavtchev, Viktor; Zimmermann, Markus
    Abstract: We study the importance of intangible capital (R&D, software, patents) for the measurement of productivity using firm-level panel data from German manufacturing. We first document a number of facts on the evolution of intangible investment over time, and its distribution across firms. Aggregate intangible investment increased over time. However, the distribution of intangible investment, even more so than that of physical investment, is heavily right-skewed, with many firms investing nothing or little, and a few firms having very large intensities. Intangible investment is also lumpy. Firms that invest more intensively in intangibles (per capita or as sales share) also tend to be more productive. In a second step, we estimate production functions with and without intangible capital using recent control function approaches to account for the simultaneity of input choice and unobserved productivity shocks. We find a positive output elasticity for research and development (R&D) and, to a lesser extent, software and patent investment. Moreover, the production function estimates show substantial heterogeneity in the output elasticities across industries and firms. While intangible capital has small effects for firms with low intangible intensity, there are strong positive effects for high-intensity firms. Finally, including intangibles in a gross output production function reduces productivity dispersion (measured by the 90-10 decile range) on average by 3%, in some industries as much as nearly 9%.
    Keywords: intangible capital,productivity,production functions
    JEL: D24 L60 O30
    Date: 2020
  22. By: Fabio Montobbio; Jacopo Staccioli; Maria Enrica Virgillito; Marco Vivarelli
    Abstract: This paper investigates the presence of explicit labour-saving heuristics within robotic patents. It analyses innovative actors engaged in robotic technology and their economic environment (identity, location, industry), and identifies the technological fields particularly exposed to labour-saving innovations. It exploits advanced natural language processing and probabilistic topic modelling techniques on the universe of patent applications at the USPTO between 2009 and 2018, matched with ORBIS (Bureau van Dijk) firm-level dataset. The results show that labour-saving patent holders comprise not only robots producers, but also adopters. Consequently, labour-saving robotic patents appear along the entire supply chain. The paper shows that labour-saving innovations challenge manual activities (e.g. in the logistics sector), activities entailing social intelligence (e.g. in the healthcare sector) and cognitive skills (e.g. learning and predicting).
    Keywords: Robotic Patents; Labour-Saving Technology; Search Heuristics; Probabilistic Topic Models.
    Date: 2020–02–05
  23. By: Gvetadze, Salome; Pal, Kristian; Torfs, Wouter
    Abstract: This paper analyses the Business Angel (BA) portfolio of the European Angels Fund (EAF), an initiative of the European Investment Fund, which engages in co-investment relationships with experienced business angels across Europe. It uses EIF's proprietary database to shed light on a specific subset of the European BA sector. The first section covers the basic characteristics of EAF's BAs and draws comparisons with existing studies wherever possible. In addition, it provides a basic description of EAF's investment portfolio, outlining the geographical distribution of its portfolio companies and the sector in which they are active. The next section focusses on BAs' investment practices. For example, we take a closer look at the geographical and sectoral investment strategies, and investigate aspects related to investment timing. We also examine the innovative capacity of the investees, by analysing patenting activity during the first years of the EAF program. Finally, a brief descriptive analysis provides an overview of the post-investment growth patterns experienced by EAF's investee companies.
    Keywords: EIF,business angels,venture capital,equity financing
    JEL: G24 G38 L25
    Date: 2020
  24. By: Hvide, Hans K. (University of Bergen, Department of Economics); Meling, Tom G. (University of Bergen, Department of Economics)
    Abstract: Using detailed procurement auctions and register data from Norway, we find that temporary demand shocks have long-term effects on startup outcomes. Startups that win a procurement auction are more than 20% larger in terms of sales and employment than startups that narrowly lose an auction, even several years after the contract work ends. For mature firms, we do not find long-term effects of auction wins. The persistent effects of temporary demand shocks for startups appear driven by learning-by-doing effects and by winning startups undertaking irreversible investments. The results point to the importance of path dependence in shaping the long-term outcomes of startups.
    Keywords: Entrepreneurship; Path-dependency; Productivity; Startups
    JEL: D21 D24 G39 J23 L11 L25
    Date: 2019–12–24
  25. By: Joanna Tyrowicz (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University); Siri Terjesen (Florida Atlantic University); Jakub Mazurek (FAME|GRAPE)
    Abstract: Using a unique database of over 20 million firms over two decades, we examine industry sector and national institution drivers of the prevalence of women directors on supervisory and management boards in both public and private firms across 41 advanced and emerging European economies. We demonstrate that gender board diversity has generally increased, yet women remain rare in both boards of firms in Europe: approximately 70% have no women directors on their supervisory boards, and 60% have no women directors on management boards. We leverage institutional and resource dependency theoretical frameworks to demonstrate that few systematic factors are associated with greater gender diversity for both supervisory and management boards among both private and public firms: the same factor may exhibit a positive correlation to a management board, and a negative correlation to a supervisory board, or vice versa. We interpret these findings as evidence that country-level gender equality and cultural institutions exhibit differentiated correlations with the presence of women directors in management and supervisory boards. We also find little evidence that sector-level competition and innovativeness are systematically associated with the presence of women on either board in either group of firms.
    Keywords: : female directors, glass ceiling, gender board diversity, institutional theory, resource dependency theory
    JEL: J7 P5
    Date: 2019–04

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