Author: Henri Luomaranta
Publisher:
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Category :
Languages : en
Pages : 0
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Administrative registers maintained by statistical offices on vastly heterogeneous firms have much untapped potential to reveal details on sources of productivity of firms and economies alike. It has been proposed that firm-level shocks can go a long way in explaining aggregate fluctuations. Based on novel monthly frequency data, idiosyncratic shocks are able to explain a sizable share of the Finnish economic fluctuations, providing support to the granular hypothesis. The global financial crisis of 2007-2008 has challenged the field of economic forecasting, and nowcasting has become an active field. This thesis shows that the information content of firm-level sales and truck traffic can be used for nowcasting GDP figures, by using a specific mixture of machine learning algorithms. The agency problem lies at the heart of much of economic theory. Based on a unique dataset linking owners, CEOs and firms, and exploiting plausibly exogenous variations in the separation of ownership and control, agency costs seem to be an important determinant of firm productivity. Furthermore, the effect appear strongest in medium-sized firms. Enterprise group structures might have important implications on the voluminous literature on firm size, as large share of SME employment can be attributed to affiliates of large business groups. Within firm variation suggests that enterprise group affiliation has heterogeneous impacts depending on size, having strong positive impact on productivity of small firms, and negative impact on their growth. In terms of aggregate job creation, it is found that the independent small firms have contributed the most. The results in this thesis underline the benefits of paying attention to samples encompassing the total population of firms. Researchers should continue to explore the potential of rich administrative data sources at statistical offices and strive to strengthen the ties with data producers.
Author: Dongchen Zhao
Publisher:
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Category :
Languages : en
Pages : 0
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This dissertation consists of three chapters. The first chapter concerns the secular changes in the U.S. firm size distribution and firm dynamics. This chapter sets up a quantitative model of firm dynamics with debt heterogeneity to study the implications of changes in real interest rates for the firm size distribution and firm dynamics. It shows that the decline in long-term real interest rates since the early 1980s can account for a significant fraction of the shift in employment shares to large firms as well as the decline in firms per capita and firm entry rates experienced in the U.S. over the same period. In the model, firms endogenously choose financial intermediaries issuing debt with either earnings-based (EBC) or asset-based (ABC) borrowing constraints. The two types of constraints arise naturally from the imperfect enforceability of debt contracts and are in line with recent empirical findings. A decline in real interest rates benefits firms with EBC more because they are not constrained by their assets and can expand more due to increased earnings. Since firms with higher earnings optimally choose earnings-based lending, the decline in real interest rates shifts employment shares to larger firms. Moreover, the growth of large firms crowds out smaller firms and firm entry through general equilibrium effects. The paper tests the mechanism in cross-country data from the OECD and finds a stronger association between the decline in real interest rates and changes in firm dynamics, especially in countries with deeper credit markets. In the second chapter, I study the effects of government regulations on firm dynamism. The impact of government regulations on the economy is a central topic in policy debates. However, due to the endogeneity of regulations and challenges in measuring them, these debates remain contentious. This paper establishes the causal effects of government regulations on firm dynamism by employing a novel shift-share (Bartik) instrument in conjunction with the RegData dataset, which quantifies regulations based on the text of federal regulatory documents. The primary assumption for identification is that, for each sector, the exposure to regulations from different government agencies at the beginning of the period is exogenous to any confounding factors. The findings reveal that government regulatory restrictions significantly increase firm exit rates and discourage the formation of establishments, while having no substantial impact on firm entry. Furthermore, these restrictions contribute to reduced job creation, elevated job destruction, and diminished overall employment. These effects are consistently observed across various age groups. The results lend support to the idea that government regulations can raise production costs for firms and/or enhance the monopolistic power of certain companies. Both mechanisms can diminish the profits of affected firms, leading to increased firm exit rates and reduced labor demand. Additionally, the findings refute the interpretation of regulations as solely serving as entry barriers. The final chapter of the dissertation investigates the labor market outcomes for involuntary part-time workers and their subsequent effects on welfare levels. Through an analysis of survey data, I demonstrate that involuntary part-time workers exhibit reservation wages comparable to those of unemployed workers. This similarity largely stems from parallel wage offers and offer arrival rates. Contrary to previous research, this finding indicates that involuntary part-time workers experience welfare levels akin to unemployed workers. One possible explanation for this discrepancy lies in the methodology of prior studies. Conclusions drawn from earlier research, which primarily focused on the faster transition of involuntary part-time workers into full-time positions compared to other workers, may be flawed. This is because these workers also tend to revert to their previous job types at a faster rate. To further explore the implications of these discoveries, I employ a quantitative search model. The calibrated model supports the assertion that involuntary part-time workers experience welfare levels similar to those of unemployed workers. Furthermore, the model suggests that neither extending unemployment insurance to part-time workers nor enhancing the likelihood that unemployed workers transition to part-time positions would effectively increase the prevalence of full-time employment
Author: Abdul Rashid
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Despite ample research on corporate financing decisions, there is a growing interest in deepening our understanding of how firms structure their financing needs. In this dissertation, we build upon previous work on capital structure by examining the impact of firm-specific and macroeconomic risks on the capital structure of UK manufacturing firms. In particular, the dissertation consists of three separate, yet related essays. Each essay intends to serve a specific objective. The essays, in the order in which they appear, are entitled as follows: Essay I: The Response of Firms' Leverage to Risks: Evidence from UK Public versus Non-Public Firms Essay II: Capital Structure Adjustments: Do Macroeconomic and Business Risks Matter? Essay III: Macroeconomic Dynamics, Idiosyncratic Risk, and Firms' Security Issuance Decisions: An Empirical Investigation of UK Manufacturing Firms In the first essay, we empirically investigate whether the sensitivity of leverage to firm-specific (idiosyncratic) and macroeconomic risk differs across publicly listed and privately owned firms. We also study the implications of cash reserves-risk interactions for firms' leverage decisions. Using data from the Financial Analysis Made Easy (FAME) database, the analysis is carried out for a large panel of UK manufacturing firms over the period 1999-2008. The results provide significant evidence that UK manufacturing firms use less short-term debt in their capital structure during periods of high risk. This finding holds for both types of risk. The results on the differential effects of risk across public and non-public firms indicate that while the leverage of non-public firms is more sensitive to firm-specific risk in comparison to their public counterparts, the effects of macroeconomic risk on leverage are similar for both types of firms. The results of the indirect effects of risk show that firms with high levels of cash holdings are more (less) likely to reduce their leverage in periods when firm-specific (macroeconomic) is risk. On the whole, the results that we document in this essay provide strong evidence of the heterogenous sensitivities of leverage to risk across both types of firms and across different levels of firms' cash holdings. Essay II examines how risk affects firms' leverage adjustment decisions. Specifically, in this essay, we study the impact of risk about firms' own business activity and macroeconomic conditions on the speed with which firms adjust their capital structure toward their specific leverage targets. In doing this, we use an annual panel data obtained from the WorldScope file via DataStream for a fairly large sample of quoted UK manufacturing, covering the period 1981-2009. The results suggest that the adjustment is asymmetric and it depends on the magnitude of risk, the type of risk, and whether firms' actual leverage is above or below the target. Further, we find that firms with financial surpluses and above-target leverage adjust their leverage faster when firm-specific risk is low and when macroeconomic risk is high. In contrast, firms with financial deficits and below-target leverage are more likely to align their leverage toward their target in periods when both types of risk are low. Taken as a whole, our results suggest that firms adjust their leverage toward the target very asymmetrically across different levels and types of risk. This finding holds true even when we take into account several firm characteristics known to affect firms' adjustment speeds. The third essay analyzes how risk about firms' own business activity and macroeconomic conditions influences the security issuance decisions of listed UK manufacturing firms appeared on the WorldScope database during the period from 1981-2009. Estimating dynamic panel models using the system GMM estimator, we show that the issuance of new debt is significantly negatively related to idiosyncratic risk while both the issuance of new equity and the use of internally generated funds (retained earnings) are positively related to the risk. In contrast, we find that all these three sources of financing are significantly negatively associated with macroeconomic risk. Nevertheless, our results suggest that the aggregate dynamics of firms' target leverage are significantly negatively linked with these two types of risk. The results, from the debt-equity choice regression, indicate that the effect of both firm-specific and macroeconomic risk is significant and negative, implying that firms are likely to have low debt-equity ratio in periods when either type of risk is high.
Author: Christian Weiß
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Ou Liu
Publisher:
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Category :
Languages : en
Pages : 0
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In chapter 2, I study what do changes in top sales shares signal about changes in large firm dynamics. I use an accounting decomposition to identify two sources of top sales shares growth: (i) incumbent top firms grow bigger; (ii) new top firms replace old top firms. I then build a continuous-time random growth model to infer the growth dynamics of firms at the upper tail of firm size distribution. In Chapter 3, in collaboration with Tam Mai, Istudy the implications of occupational and regional inequality on the labor market after the breakout of the COVID-19 pandemic.
Author: Anna M. Ferragina
Publisher: Routledge
ISBN: 1317810228
Category : Business & Economics
Languages : en
Pages : 445
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This book is about the relationship between firm dynamics, innovation and globalization, the processes that are essential for long term economic growth and welfare creation. This volume deals with these three issues in three sections titled respectively: entrepreneurship, new firm formation and growth; productivity-innovation-growthnexus; globalization, multinational firms and producers’ dynamics. The book presents new studies written by distinguished researchers in the field, who use state-of-the-art methodologies and extensive sources of firm- and plant-level longitudinal data to analyze and understand these major economic issues facing modern economies. In the first section, the book proposes two comprehensive introductory surveys which explore in detail the underpinnings of entrepreneurship, new firm formation and growth in advanced and developing countries. The second fundamental issue, productivity-innovation and firm dynamics, is approached by examining key drivers of selection mechanisms such as size, scale elasticity, innovative efforts, financial fragility of the firms, barriers to entry and exit, capital and financial market distortions, institutional inefficiencies and other market imperfections which affect the ability of firms to expand or enter. The third section examines differences, linkages and intertwined evolution of foreign and domestic firms in their dynamics of survival and growth in different institutional contexts and periods. Each chapter includes a detailed discussion of the implications of the respective analyses for enterprise policy. In a concluding chapter the overall implications for enterprise policy of the analyses presented in the different chapters are drawn by the Editors. This approach ensures that the book is integrated around a coherent central theme in comprehensive framework. The book responds to a growing concern among scholars, professionals, and policy makers over the recent decades about firm ability to survive and compete in a context of increasing globalization and international competition. The approach adopted is both theoretical and empirical with consideration of paradigmatic case studies in Europe, Africa and Asia, providing new evidence on developed, developing and transition economies in a comparative perspective. The cases selected represent different levels of development, different firms strategies and paths, with distinct outcomes. The book is an essential reading for scholars and students concerned with industry development, public policy and globalization, as well as to all those involved professionally in such issues.
Author: Rory Mullen
Publisher:
ISBN:
Category :
Languages : en
Pages : 121
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In chapter one I study pairwise covariances of firm-level productivity, sales, and profit growth rates for public firms in the United States. The data suggest that pairwise covariances of firm growth rates drive the variance of aggregate growth rates in all three variables. High-productivity firms contribute most to aggregate variance in absolute terms, but least per dollar of market value-which may explain why investors demand lower returns from high-productivity firms. A tractable DSGE model helps explain the evidence on firm-level covariance endogenously. In the model, a firm's expected excess stock returns increase as the firm's productivity covaries more with aggregate productivity, relative to the firm's market value. In chapter two, coauthored with Daisoon Kim, we ask where fluctuations in aggregate productivity come from, and what role markups and scale economies play in transmitting fluctuations in firm productivity to aggregate productivity. We develop an empirical framework that decomposes TFP into industry, peer, firm, and entry-exit components. We aggregate these components using a new approximate expression for aggregate TFP that lets us investigate explicitly the role of markups and scale economies in transmitting firm TFP innovations to aggregate TFP. In an application using data on public firms, we find that innovations to the firm-specific component of firm TFP drive most fluctuations in firm TFP, while innovations to the industry component drive most fluctuations in aggregate TFP. Innovations to the peer component appear to play a modest role.
Author: Lan Dinh
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 91
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Author: Mulu Gebreeyesus
Publisher: Goteborg University
ISBN:
Category : Manufacturing industries
Languages : en
Pages : 150
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Author: Thomas Lorenz Steiner
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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