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Author: Xiaomei Sui
Publisher:
ISBN:
Category : Economic development
Languages : en
Pages : 0
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Book Description
"This dissertation consists of essays studying how macroeconomic outcomes, particularly aggregate productivity growth, are affected by the change in market environment or market frictions in the presence of heterogeneous firms from an international perspective. Each chapter employs both empirical and quantitative macroeconomic methods. The first chapter studies how globalization contributes to uneven firm growth and its implications for industrial concentration and productivity growth in OECD countries. I document new facts showing that industry leaders grow faster in sales and patenting than followers, particularly in industries with increasing export intensities; sales divergence is mainly driven by exports rather than domestic sales. To rationalize these facts, I develop a two-country endogenous growth model with strategic domestic and international competition and an 'innovation disadvantage of backwardness' that captures how firms innovate less when left behind. Globalization, modelled as decreasing trade iceberg costs and increasing international knowledge spillovers, triggers a stronger innovation response among leaders than followers via the market size effect, inducing an increase in domestic concentration that depresses firm innovation via weaker domestic competition: followers and leaders reduce innovation due to the innovation dis-advantage of backwardness and decreasing returns to innovation, respectively. The globalization-induced harsher foreign competition also reduces innovation via lower profits. In the calibrated model, globalization explains 80% of the rise in industrial concentration and 50% of the productivity growth slowdown in the data, mainly due to weaker domestic competition. The increasing international knowledge spillover force of globalization dominates. The second chapter studies how the less-developed financial market in Southern European countries contributes to their slower aggregate productivity growth than developed European countries since the information and communications technology revolution. I document that Southern European firms have lower productivity growth, lower intangible capital growth, and lower leverage than developed European firms. The disparity is larger among smaller firms. To rationalize these findings, I build a model featuring endogenous firm productivity growth through innovation investment and size-dependent financial frictions. Financial frictions lower productivity growth via two channels: innovation investment and misallocation. The model finds that financial frictions account for at least 11% of the aggregate productivity growth difference in the data, mainly via the innovation investment channel. The model also highlights that fast capital and output growth may coexist with slow productivity growth due to firms' tradeoffs in allocating a constrained amount of investment between capital and productivity."--Pages viii-ix.
Author: Xiaomei Sui
Publisher:
ISBN:
Category : Economic development
Languages : en
Pages : 0
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Book Description
"This dissertation consists of essays studying how macroeconomic outcomes, particularly aggregate productivity growth, are affected by the change in market environment or market frictions in the presence of heterogeneous firms from an international perspective. Each chapter employs both empirical and quantitative macroeconomic methods. The first chapter studies how globalization contributes to uneven firm growth and its implications for industrial concentration and productivity growth in OECD countries. I document new facts showing that industry leaders grow faster in sales and patenting than followers, particularly in industries with increasing export intensities; sales divergence is mainly driven by exports rather than domestic sales. To rationalize these facts, I develop a two-country endogenous growth model with strategic domestic and international competition and an 'innovation disadvantage of backwardness' that captures how firms innovate less when left behind. Globalization, modelled as decreasing trade iceberg costs and increasing international knowledge spillovers, triggers a stronger innovation response among leaders than followers via the market size effect, inducing an increase in domestic concentration that depresses firm innovation via weaker domestic competition: followers and leaders reduce innovation due to the innovation dis-advantage of backwardness and decreasing returns to innovation, respectively. The globalization-induced harsher foreign competition also reduces innovation via lower profits. In the calibrated model, globalization explains 80% of the rise in industrial concentration and 50% of the productivity growth slowdown in the data, mainly due to weaker domestic competition. The increasing international knowledge spillover force of globalization dominates. The second chapter studies how the less-developed financial market in Southern European countries contributes to their slower aggregate productivity growth than developed European countries since the information and communications technology revolution. I document that Southern European firms have lower productivity growth, lower intangible capital growth, and lower leverage than developed European firms. The disparity is larger among smaller firms. To rationalize these findings, I build a model featuring endogenous firm productivity growth through innovation investment and size-dependent financial frictions. Financial frictions lower productivity growth via two channels: innovation investment and misallocation. The model finds that financial frictions account for at least 11% of the aggregate productivity growth difference in the data, mainly via the innovation investment channel. The model also highlights that fast capital and output growth may coexist with slow productivity growth due to firms' tradeoffs in allocating a constrained amount of investment between capital and productivity."--Pages viii-ix.
Author: Deb Kusum Das
Publisher: Taylor & Francis
ISBN: 1351002538
Category : Social Science
Languages : en
Pages : 660
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Book Description
The world, of late, has seen a productivity slowdown. Many countries continue to recover from various shocks in the macro business environment, along with structural changes and inward looking policies. In contemporary times of growth slumps, various exits and protectionist regimes, this book engages with the study of productivity dynamics in the emerging and industrialized economies. The essays address the crucial aspects, such as the roles of human capital, investment accounting and datasets, that help understanding of productivity performance of global economy and its several regions. This book will be of interest to academics, practitioners and professionals in the field of economic growth, productivity and development studies. This will also be an important reference on empirical industrial economics in both India and the world.
Author: Liyan Shi
Publisher:
ISBN:
Category :
Languages : en
Pages : 136
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Book Description
This dissertation contributes towards the understanding of the macroeconomic effects of micro-level firm dynamics, in particular firm entry, exit, and innovation activities in driving aggregate economic dynamism and growth. It focuses on the frictions affecting firms in these activities when contracting with their managers and workers, as well as peers, and the corrective role policies can play. The dissertation consists of two chapters. The first chapter, "Restrictions on Executive Mobility and Reallocation: The Aggregate Effect of Non-Competition Contracts", assesses the aggregate effect of non-competition employment contracts, agreements that exclude employees from joining competing firms for a duration of time, in the managerial labor market. These contracts encourage firm investment but restrict manager mobility. To explore this tradeoff, I develop a dynamic contracting model in which firms use non-competition to enforce buyout payment when their managers are poached, ultimately extracting rent from outside firms. Such rent extraction encourages initial employing firms to undertake more investment, as they partially capture the external payoff, but distorts manager allocation. I show that the privately-optimal contract over-extracts rent by setting an excessively long non-competition duration. Therefore, restrictions on non-competition can improve efficiency. To quantitatively evaluate the theory, I assemble a new dataset on non-competition contracts for executives in U.S. public firms. Using the contract data, I find that executives under non-competition are associated with a lower separation rate and higher firm investment. I also provide new empirical evidence consistent with non-competition reducing wage-backloading in the model. The calibrated model suggests that the optimal restriction on non-competition duration is close to banning non-competition. The second chapter, "Knowledge Creation and Diffusion with Limited Appropriation" (joint with Hugo Hopenhayn), studies the interaction of innovation and imitation in driving economic growth. In relation to a series of recent papers in the macro literature have emphasized the interaction between the two forces, we introduce two key elements in considering the incentives to innovate versus imitate. First, we consider frictions in matching innovators and imitators in the process of knowledge diffusion. Second, while most of the recent literature assume that imitators capture the entire surplus from knowledge diffusion, we consider a general bargaining problem between the innovators and imitators in dividing surplus. In a simple one period model, we derive a Hosios condition for the optimal surplus division when firms are ex-ante homogeneous. But we also find that as the degree of firm heterogeneity increases, innovators' share of surplus must decrease to maximize growth, approaching zero for sufficiently large heterogeneity. Our calibrated dynamic model suggests that the optimal share of surplus innovators appropriate should be at the lower end, consistent with weak intellectual property rights.
Author: Felicien Jesugo Goudou
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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This thesis contributes to understanding labor market frictions and how these frictions impact macroeconomic aggregates such as unemployment and productivity. It also critically examines environmental policies such as carbon taxes and green financing. The first chapter examines how non-compete contracts signed between employers and employees affect unemployment, productivity, and welfare in the economy. These contracts stipulate that the employee, while under contract, cannot work for a competing employer for a specified period, typically ranging from one to two years after separation from their initial employer. This type of contract is widespread in the United States and affects at least one in five employees in the country. Results show that a high enforceable incidence of these contracts can compress wages and generate unemployment. This is primarily due to the fact that some individuals who have signed such contracts face difficulties in finding new employment after separating from their initial job. The article proposes reducing the duration of the post-employment restrictions of these contracts to mitigate their effects on workers. However, it is worth noting that these contracts partially benefit employers by incentivizing them to invest in employee training, thereby increasing overall productivity. Speaking of employment contracts, the second chapter evaluates the implications of the coexistence of temporary contracts (fixed-term contracts) and permanent contracts (indefinite-term contracts) on worker flows between unemployment, employment, and labor force non-participation over the life-cycle. This analysis is particularly important due to the effects of these flows on aggregate employment and wages over the life-cycle. It is found that transitions of individuals from permanent employment to unemployment are the most significant factor explaining aggregate employment over the life-cycle. Any policy aimed at increasing employment should target this flow of workers. Moreover, the transition of individuals from temporary employment to unemployment is significant in explaining the low employment of young individuals in European countries like France, especially for those with higher levels of education. The article goes further by constructing a model that explains the observed transition profiles during agents' life-cycle and analyzes how the effects linked to employment protection reforms in European countries are distributed among workers based on their level of education and age. Finally, the third chapter provides a critical assessment of environmental policies such as emissions taxes on production units and green financing. The article shows that despite their effectiveness in reducing emissions, these policies can negatively impact resource allocation, such as capital, among firms, thus reducing aggregate productivity. This is because some highly productive but seriously financially constrained firms may struggle to invest in emission reduction technology, while less productive but wealthy entrepreneurs invest more easily. The burden of emissions-related fiscal measures forces the former to exit the market, thereby reducing productivity. This suggests that other policies, such as green subsidies, are important to mitigate these potential distortions.
Author: Congyan Tan
Publisher:
ISBN:
Category :
Languages : en
Pages : 129
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Book Description
For the past two decades, economists have focused intensive effort on building Macroeconomics on a firm Microeconomic foundation. As Macroeconomic research are more integrated with Microeconomics, more and better micro evidence has been examined to verify Macroeconomic theories. One recent development in this line of research uses detailed firm-level evidence to modify current Macroeconomic theories. In this dissertation extensive firm-level evidence are studied to shed light on important macro issues such as investment dynamics, financial frictions, regulations and productivity growth. In this study firm behaviors are studied and modeled by utilizing theories from a variety of fields in Corporate Finance, Public Finance, International Economics, Macroeconomic Dynamics etc. Implications of these evidence on the economic theory are carefully examined and subsequent extension of existing models are proposed. This dissertation consists of three chapters. All chapters study firm behaviors and their implications on macroeconomics, however, the focus of each is different. The first chapter studies issues of credit conditions, uncertainty and investment; the second chapter (co- authored with Zhiyong An) engages the issues of taxation and international corporate finance; the third chapter show how regulations are likely impact foreign investment. The first chapter explores the heterogeneity in firms' response to high economic uncertainty. I show that the effect of high economic uncertainty on firms' investment varies significantly with the degree of financial constraints. Firm decisions are studied in a model of non-convex adjustment costs and time-varying second moment shocks, with financial constraints. In my model, uncertainty makes financially-constrained firms cautious in capital spending and creates long periods of under-investment for these firms. Estimates from firm-level data show that publicly-traded companies' investment-to-capital ratio falls by an average of around 15% in response to a one standard deviation increase in uncertainty. Firms with easier access to credit are found to be much less responsive to uncertainty, consistent with the model's predictions. This implies that the effectiveness of stimulus policy may largely depend on firms' accessibility to credit in episodes of high uncertainty. The second chapter (co-authored with Zhiyong An) studies how firms respond to a quasi-experiment in China. China's new Corporate income Tax Law was passed in March 2007 and took effect on January 1, 2008. It increases the effective corporate income tax rate from about 15% to 25% for foreign investment enterprises (FIEs), while keeps that unchanged at 25% for domestic enterprises (DEs). This study uses a difference-in-differences approach to investigate FIEs' response to the law. Employing the Chinese Industrial Enterprises Database (2002-2008) to implement the analysis, we find evidence that FIEs are responding to the law by shifting their income out of China. Second, the magnitude of the estimated response is larger for enterprises larger in size, which suggests the greater capability of shifting income across countries for larger enterprises. In addition, the response is more acute for investment enterprises from Hong Kong, Macau, or Taiwan (HMT) than that for other FIEs, which is consistent with the tax haven status of Hong Kong and Macau. The third chapter studies productivity spillovers to domestic firms from foreign direct investment (FDI). Such productivity gain from FDI is considered to be the basis of policies that promote FDI in many countries. In this chapter, firm-level panel data from six European countries are examined to test a number of hypotheses regarding the impact of FDI on the productivity of domestic firms. I find evidence for the backward linkage channel of the FDI spillovers. Using a new dataset, Investing Across Borders 2010 that documents and scores regulations for FDI in 87 countries, this study goes further to explore how FDI-specific policies and institutions impact the spillovers from FDI inflows. Empirical evidence shows that good investment climate is associated with productivity gains, either by direct productivity contribution or by productivity increase in upstream industries. Higher ownership limit is shown to be significantly and positively correlated with productivity. However, productivity impact varies greatly across different investment climate measures.
Author: Michael Peters
Publisher:
ISBN:
Category :
Languages : en
Pages : 164
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Chapter 1 contains a theory of misallocation. In contrast to a recent literature where misallocation stems from imperfect input markets, I study an economy with non-competitive output markets. This change of focus has two implications. In the cross-section of firms, static misallocation, i.e. the dispersion of marginal products, is not driven by constraints limiting expansion possibilities, but reflects the distribution of mark-ups. Dynamically, the distribution of mark-ups and the economy-wide rate of productivity growth are jointly determined by firms' innovation and entry incentives. The observed cross-country variation in the degree of misallocation might therefore be a symptom of more fundamental differences in the innovation environment. Using firm-level data from Indonesia, I present both reduced form evidence for this mechanism and estimate the models' structural parameters. In chapter 2, I study the interaction between migration and firms' technology choices. If firms can adapt their production technology, changes in labor supply will induce biased technological adoption. I test this hypothesis using data from one of the largest population transfer programs of the 20th century. After WW2, Germany lost part of its Eastern Territories. Within 2 years, more than 8m people were expelled and transferred to Western Germany. Using individual-level data of the 1960s and 70s I show that refugees experienced substantial reallocation into unskilled occupations, that refugee-rich counties have higher employment shares in occupations which require little formal human capital and that wages in those occupations are especially high in refugee-rich counties. In chapter 3, which is joint work with Joaquin Blaum and Claire Lelarge, we use a comprehensive dataset of French manufacturing firms to study firms' import behavior. We first document a new fact on the extensive margin of international trade: most firms source only few differentiated varieties of a given product internationally. We then build a simple model based on productivity differences across firms and show that in contrast to the literature on exports, more productive firms do not necessarily source their products from more countries. On the intensive margin, the theory has one robust implication: expenditure shares across varieties should be equalized in the cross-section of firms. While the data is supportive of this prediction across foreign varieties, more productive firms are subject to "home-bias" in that they spend too much on domestic inputs.
Author: Takashi Negishi
Publisher: Springer Science & Business Media
ISBN: 9780792373063
Category : Business & Economics
Languages : en
Pages : 614
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Book Description
Economic Theory, Dynamics, and Markets. The collection of essays in honor of Ryuzo Sato, written by his colleagues and students, covers the many fields of economic theory and policy to which he has contributed. The first section pays tribute to his contributions to mathematical economics and economic theory. Ryuzo Sato is known for his work in growth theory and technical progress, and the second section has a number of papers on macroeconomics and dynamics. The third section has a number of papers on financial markets and their functioning in Japan and the United States. The next section examines various aspects of the economics of firms and industry. Ryuzo Sato has been very involved in analyzing the economic and business relations between Japan and the United States, and the last section is devoted to comparative analysis of economic systems.
Author: Thomas Walsh
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Mu-Jeung Yang
Publisher:
ISBN:
Category :
Languages : en
Pages : 125
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Book Description
This dissertation analyzes the interaction of firm level heterogeneity and selection. This selection can encompass either the survival of firms in the market, or their participation in international trade. In the first part I concentrate on the question of how large the aggregate productivity losses from the misallocation of resources across firms are. If firm exit is endogenous, micro-frictions can induce extensive margin misallocation: inefficient firms continue to survive (Zombies) and efficient firms are forced to exit (Shadows). I develop and estimate a fully specified model with plant-level micro-data to quantify extensive margin misallocation. This method allows me to identify Zombie firms, estimate the efficiency distribution of Shadow firms and calculate aggregate Total Factor Productivity (TFP) gains when Zombies are replaced by Shadows. Estimates for Indonesia show that extensive margin misallocation can increase aggregate TFP losses from micro-distortions by over 40%. Compared to existing estimates aggregate TFP losses from micro-distortions are 50-100% higher. In the second part of the dissertation I trace out the implications of a simplified version of the framework I developed in the first part to questions of international trade. The cross-country comparisions in measured micro-distortions suggest that differences in firm heterogeneity could be potentially important to explain aggregate TFP and therefore also trade patterns. I consequently develop a tractable multi-country general equilibrium model of such differences in firm level heterogeneity across countries. I show how the model naturally links measured trade frictions to national firm-efficiency distributions and endogenously generates asymmetries in trade flows in the absence of asymmetric trade frictions. The model is able to generate key stylized facts, specifically the absence of a strong negative relationsship of firm-size dispersions and internal trade shares as predicted by the standard heterogeneous firm trade model with identical efficiency dispersions across countries.
Author: Emircan Yurdagul
Publisher:
ISBN:
Category : Electronic dissertations
Languages : en
Pages : 170
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Chapter 1: Production Complementarities and Flexibility in a Model of Entrepreneurship The choice between salaried work and entrepreneurship has often been studied through the lenses of ability and wealth-related explanations. Nevertheless, recent literature documents that entrepreneurs earn less income than comparable workers, and points to non-pecuniary motives' role in entrepreneurial decisions. In this paper, I focus on the flexibility of hours as a motive for engaging in entrepreneurial activity. Defining flexibility as the ability to modify hours of work without sacrificing hourly income, I develop a model that gives inflexibility for salaried workers. Importantly, this arises as a general equilibrium effect due to complementarities between workers' hours. In a setting featuring volatile value of leisure, such inflexibility can be crucial to individuals' self-selection into entrepreneurship. I show that the flexible hours motive, disciplined with the observed occupation-specific patterns in hours (level, persistence, dispersion) and income (persistence, dispersion), can account for the observed differentials in income levels. Together with this contribution, the proposed setting provides a rich environment to evaluate public policies involving restrictions on working hours. I show that imposing maximum hours in the US can make the salaried work a better option for those who otherwise find it hard to keep up with the working hours in the economy. In particular, individuals that are entrepreneurs before the reform only to avoid undesirable hours can find it optimal to become workers. In turn, such a policy can increase the number of workers and their total hours, as well as the average productivity of entrepreneurs. Chapter 2: Who Quits Next? Firm Growth in Growing Economies (with Julieta Caunedo) This paper provides a theory linking characteristics of the industry dynamics to aggregate growth. We analyze firms' life cycle productivity, employment-age profiles, and firm selection across countries. Using a large cross-country dataset we document (i) more frequent labor productivity growth for firms operating in fast growing economies, (ii) lack of systematic relationship between the tail of the employment size distribution and growth and (iii) steeper employment-age profiles in slow growing economies. Our working thesis is that firms' likelihood of turning their investments into actual productivity growth, and uncertainty on their returns if successful, impacts firms investment in productivity, selection and aggregate growth. We think of firm uncertainty broadly, to include for example political instability, changes in tax regimes, lack of social capital or firm demand fluctuations. We argue that in slow growing rich productive economies, steep-employment age profiles are related to high return uncertainty and strong firm selection. We are able to accommodate poor and rich slow growing economies by decoupling firm's probability of success from return uncertainty. We build a tractable general equilibrium model that displays endogenous long run growth compatible with a stationary size distribution and the documented empirical facts. We contribute to the literature by analyzing how variations in the probability of firm success and return uncertainty account for differences in observed industry structure and its relationship with aggregate growth. Chapter 3: Sovereign Default and the Choice of Maturity (with Juan M. Sanchez and Horacio Sapriza) This paper presents a new quantitative model of endogenous sovereign default, maturity choice and the term structure of bond yield spreads. Sovereigns usually borrow from international markets at positive term spreads and a duration that exceeds one year. Debt duration and term spreads vary with the business cycle, decreasing during periods of higher credit market stress. However, in models of long term sovereign debt and default along the lines of Chatterjee and Eyigungor (2012) and Hatchondo and Martinez (2009), countries would prefer one period bonds if given the choice, largely due to debt dilution. We develop a model with debt dilution that can capture the debt maturity and the term structure of yield spreads found in the data. We identify the financial market features that help explain the observed maturity choice and the associated non-linear pricing of the term structure of bond yield spreads, and we provide a quantitative analysis of the effect of each feature. We find that sudden stop episodes and sovereign debt crisis resolution policies, which generally involve debt reschedulings where the maturity of old instruments is extended, largely account for the sovereigns' maturity choice and the term structure of sovereign bond yields, including the non-monotonic yield curve observed during some debt restructurings, such as the Greek hump-shaped curve in 2011.
