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on Technology and Industrial Dynamics |
| By: | Aghion, Philippe; Bergeaud, Antonin; Cette, Gilbert; Lecat, Rémy; Maghin, Helene |
| Abstract: | In this paper we identify two counteracting effects of credit access on productivity growth: on the one hand, better access to credit makes it easier for entrepreneurs to innovate; on the other hand, better credit access allows less efficient incumbent firms to remain longer on the market, thereby discouraging entry of new and potentially more efficient innovators. We first develop a simple model of firm dynamics and innovation-base growth with credit constraints, where the above two counteracting effects generate an inverted-U relationship between credit access and productivity growth. Then we test our theory on a comprehensive French manufacturing firm-level dataset. We first show evidence of an inverted-U relationship between credit constraints and productivity growth when we aggregate our data at sectoral level.. We then move to firm-level analysis, and show that incumbent firms with easier access to credit experience higher productivity growth, but that they also experienced lower exit rates, particularly the least productive firms among them. To confirm our results, we exploit the 2012 Eurosystem's Additional Credit Claims (ACC) program as a quasi-experiment that generated exogenous extra supply of credits for a subset of incumbent firms. |
| Keywords: | credit constraint; firms; growth; interest rate; productivity |
| JEL: | G21 G32 O40 O47 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13212&r=tid |
| By: | Akcigit, Ufuk; Grigsby, John; Nicholas, Tom; Stantcheva, Stefanie |
| Abstract: | This paper studies the effect of corporate and personal taxes on innovation in the United States over the twentieth century. We use three new datasets: a panel of the universe of inventors who patent since 1920; a dataset of the employment, location and patents of firms active in R&D since 1921; and a historical state-level corporate tax database since 1900, which we link to an existing database on state-level personal income taxes. Our analysis focuses on the impact of taxes on individual inventors and firms (the micro level) and on states over time (the macro level). We propose several identification strategies, all of which yield consistent results: i) OLS with fixed effects, including inventor and state-times-year fixed effects, which make use of differences between tax brackets within a state-year cell and which absorb heterogeneity and contemporaneous changes in economic conditions; ii) an instrumental variable approach, which predicts changes in an individual or firm's total tax rate with changes in the federal tax rate only; iii) event studies, synthetic cohort case studies, and a border county strategy, which exploits tax variation across neighboring counties in different states. We find that taxes matter for innovation: higher personal and corporate income taxes negatively affect the quantity and quality of inventive activity and shift its location at the macro and micro levels. At the macro level, cross-state spillovers or business-stealing from one state to another are important, but do not account for all of the effect. Agglomeration effects from local innovation clusters tend to weaken responsiveness to taxation. Corporate inventors respond more strongly to taxes than their non-corporate counterparts. |
| Keywords: | business taxation; Corporate taxation; firms; Income taxes; Innovation; inventors; R&D tax credits; state taxation |
| JEL: | H24 H25 H31 J61 O31 O32 O33 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13167&r=tid |
| By: | Ana Martins (GEE - Gabinete de Estratégia e Estudos do Ministério da Economia); Tiago Domingues (GEE - Gabinete de Estratégia e Estudos do Ministério da Economia); Catarina Branco (Nova School of Business and Economics) |
| Abstract: | As services today are of great complexity and usually a bundle of different individual inputs, it is sometimes hard to identify characteristics for the overall service sector. As such, empirical research on productivity is less common in this sector. Given the connection between Total Factor Productivity (TFP) and economic growth, and the importance of services for overall economic activity, it is crucial to study, at the firm level, which factors may drive TFP growth in this particular sector. Our empirical assessment is based on a firm-level panel dataset covering Portuguese service firms, between 2010 and 2016. We first estimate TFP through the Levinsohn-Petrin (LP) algorithm and compare results amongst different traditional estimating methods. Secondly, we conclude our econometric framework with a fixed-effects estimation, hence, trying to shed further light on the determinants of TFP growth in the Portuguese service sector. We found evidence for a positive correlation between financial health, innovation, wage premium, and TFP growth, whereas capital intensity, training, and age show a non-linear relationship with TFP growth. |
| Keywords: | Total Factor Productivity; LEVPET; Fixed e ects; Service Sector |
| JEL: | C33 D22 D24 O47 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0114&r=tid |
| By: | Anelí Bongers (Department of Economics, University of Málaga); Carmen Díaz-Roldán (Department of Economics, University of Castilla-La Mancha); José L. Torres (Department of Economics, University of Málaga) |
| Abstract: | This paper studies the implications of highly skilled labor international migration in a two-country Dynamic Stochastic General Equilibrium model. The model considers three types of workers: STEM workers, non-STEM college educated workers, and non-college educated workers. Only high skilled workers can move internationally from the relative low productivity (sending) country to the high productivity (host) country. Aggregate productivity in each economy is a function of innovations, which can be produced only by STEM workers. The model predicts i) the existence of a wage premium of STEM workers relative to non-STEM college educated workers, ii) this wage premium is higher in the destination country and increases with positive technological shocks, iii) a reduction in migration costs increases output, wages and total labor in the destination country, with opposite e¤ects in the country of origin, and iv) high skilled immigrants reduce skilled native labor and do not a¤ect unskilled labor. |
| Keywords: | STEM workers; Migration; Dynamic Stochastic General Equilibrium models; Innovation |
| JEL: | F43 J61 O31 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:mal:wpaper:2018-8&r=tid |
| By: | Giang Ho; Rima Turk-Ariss |
| Abstract: | This paper presents novel empirical evidence on the labor market integration of migrants across Europe. It investigates how successfully migrants integrate in 13 European countries by applying a unified framework to analyze a rich micro dataset with over ten million individuals surveyed between 1998 and 2016. Focusing on employment outcomes, we document substantial heterogeneity in the patterns of labor market integration across host countries and by migrant gender and origin. Our results also point to the importance of cohorts and network effects, initial labor market conditions, and the differential impact of education acquired domestically and abroad in determining migrants’ subsequent employment prospects. The analysis has implications for the design of effective integration policies. |
| Date: | 2018–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:18/232&r=tid |
| By: | Tomoyuki Iida (Bank of Japan); Kanako Shoji (Bank of Japan); Shunichi Yoneyama (Bank of Japan) |
| Abstract: | This paper discusses the sustainability of China fs rapid growth mainly based on the estimation of the corporate-level total factor productivity of Chinese listed firms. Since the 1980s, both capital accumulation and rapid technological progress -- measured as total factor productivity (TFP) -- have contributed to the high growth of the Chinese aggregate output. Should the prediction of the standard growth theory be correct, however, economic growth led by capital accumulation is not likely to be long lasting, hence we mainly focus on firm level TFP growth. As a result, we identify four channels that would continue to promote the TFP growth of the Chinese corporate sector at an aggregate level: (i) declining proportion of low-productivity state-owned enterprises, (ii) continuous influx of highly competent new start-ups, (iii) broad catching up trend among the laggards in the firm distribution, and (iv) innovation spawning R&D activities. These four channels would underpin the medium-term economic growth of the Chinese economy. |
| Keywords: | China; Total Factor Productivity; Catching up; R&D |
| JEL: | N15 O30 O47 |
| Date: | 2018–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:boj:bojwps:wp18e19&r=tid |
| By: | Bisztray, Marta; Koren, Miklós; Szeidl, Adam |
| Abstract: | We use firm-level data from Hungary to estimate knowledge spillovers in importing through fine spatial and managerial networks. By identifying from variation in peers' import experience across source countries, by comparing the spillover from neighboring buildings with a cross-street placebo, and by exploiting plausibly exogenous firm moves, we obtain credible estimates and establish three results. (1) There are significant knowledge spillovers in both spatial and managerial networks. Having a peer which has imported from a particular country more than doubles the probability of starting to import from that country, but the effect quickly decays with distance. (2) Spillovers are heterogeneous: they are stronger when firms or peers are larger or more productive, and exhibit complementarities in firm and peer productivity. (3) The model-implied social multiplier is highly skewed, implying that targeting an import-encouragement policy to firms with many and productive neighbors can make it 26% more effective. These results highlight the benefit of firm clusters in facilitating the diffusion of business practices. |
| Keywords: | Imports; manager networks; peer effects; social multiplier; spatial spillovers |
| JEL: | D22 F14 R32 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13200&r=tid |