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on Business Economics |
| By: | Zubanov, Nick (University of Konstanz); Shakina, Elena (University of Vigo) |
| Abstract: | Building on job matching theory, we model the effect of collective turnover on workplace performance as the total of its costs from operational disruptions and benefits from better job-worker match quality, each component varying with turnover level. The resulting theoretical turnover-performance relationship is generally curvilinear, nesting all the hitherto known patterns – linear, "U-shape" and "inverted U-shape" – as special cases, and lends itself to an empirically estimable regression model from which one can derive the implied costs and benefits of turnover. Applications to data from two retail firms reveal some benefits from turnover in one firm, and none in the other. Turnover costs exceed benefits in both firms. |
| Keywords: | employee turnover, performance |
| JEL: | J63 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16413&r=bec |
| By: | Kozo Ueda (Waseda University); Kota Watanabe (Canon Institute for Global Studies and University of Tokyo) |
| Abstract: | This study investigates how strategic and heterogeneous price setting influences the real effect of monetary policy. Japanese data show that firms with larger market shares exhibit more frequent and larger price changes than those with smaller market shares. We then construct an oligopolistic competition model with sticky prices and asymmetry in terms of competitiveness and price stickiness, which shows that a positive cross superelasticity of demand generates dynamic strategic complementarity, resulting in decreased price adjustments and an amplified real effect of monetary policy. Whether a highly competitive firm sets its price more sluggishly and strategically than a less competitive firm depends on the shape of the demand system, and the empirical results derived from the Japanese data support Hotelling’s model rather than the constant elasticity of substitution preferences model. Dynamic strategic complementarity and asymmetry in price stickiness can substantially enhance the real effect of monetary policy. |
| Keywords: | strategic complementarity; price stickiness; real rigidity; competition |
| JEL: | D43 E31 E52 L11 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:upd:utmpwp:047&r=bec |
| By: | Burdett, Ashley; Etheridge, Ben; Wang, Yikai; Tang, Li |
| Abstract: | We examine reported productivity changes of workers over the course of the Covid-19 pandemic, which we validate against external metrics. On average, workers report being at least as productive as before the pandemic’s onset. However, this average masks substantial heterogeneity, which is linked to job quality, gender, the presence of children, and ease of working from home. As the pandemic progressed, those who previously performed well at home were more likely to remain there. Building on these findings, we estimate factors affecting productivity outcomes across locations controlling for endogenous selection. We find that those in ‘good’ jobs (with managerial duties and working for large firms) were advantaged specifically in the home environment. More generally we find an effect of key personality traits – agreeableness and conscientiousness – on productivity outcomes across locations. |
| Date: | 2023–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2023-04&r=bec |
| By: | David Card; Jesse Rothstein; Moises Yi |
| Abstract: | We revisit the estimation of industry wage differentials using linked employer-employee data from the U.S. LEHD program. Building on recent advances in the measurement of employer wage premiums, we define the industry wage effect as the employment-weighted average workplace premium in that industry. We show that cross-sectional estimates of industry differentials overstate the pay premiums due to unmeasured worker heterogeneity. Conversely, estimates based on industry movers understate the true premiums, due to unmeasured heterogeneity in pay premiums within industries. Industry movers who switch to higher-premium industries tend to leave firms in the origin sector that pay above-average premiums and move to firms in the destination sector with below-average premiums (and vice versa), attenuating the measured industry effects. Our preferred estimates reveal substantial heterogeneity in narrowly-defined industry premiums, with a standard deviation of 12%. On average, workers in higher-paying industries have higher observed and unobserved skills, widening between-industry wage inequality. There are also small but systematic differences in industry premiums across cities, with a wider distribution of pay premiums and more worker sorting in cities with more highpremium firms and high-skilled workers. |
| Keywords: | Industry wage differentials; AKM models; mover design |
| JEL: | J31 J62 |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:23-40&r=bec |
| By: | Xu Han; Zengqing Wu; Chuan Xiao |
| Abstract: | Firm competition and collusion involve complex dynamics, particularly when considering communication among firms. Such issues can be modeled as problems of complex systems, traditionally approached through experiments involving human subjects or agent-based modeling methods. We propose an innovative framework called Smart Agent-Based Modeling (SABM), wherein smart agents, supported by GPT-4 technologies, represent firms, and interact with one another. We conducted a controlled experiment to study firm price competition and collusion behaviors under various conditions. SABM is more cost-effective and flexible compared to conducting experiments with human subjects. Smart agents possess an extensive knowledge base for decision-making and exhibit human-like strategic abilities, surpassing traditional ABM agents. Furthermore, smart agents can simulate human conversation and be personalized, making them ideal for studying complex situations involving communication. Our results demonstrate that, in the absence of communication, smart agents consistently reach tacit collusion, leading to prices converging at levels higher than the Bertrand equilibrium price but lower than monopoly or cartel prices. When communication is allowed, smart agents achieve a higher-level collusion with prices close to cartel prices. Collusion forms more quickly with communication, while price convergence is smoother without it. These results indicate that communication enhances trust between firms, encouraging frequent small price deviations to explore opportunities for a higher-level win-win situation and reducing the likelihood of triggering a price war. We also assigned different personas to firms to analyze behavioral differences and tested variant models under diverse market structures. The findings showcase the effectiveness and robustness of SABM and provide intriguing insights into competition and collusion. |
| Date: | 2023–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2308.10974&r=bec |
| By: | Pedro Bento (Texas A&M University, Department of Economics); Lin Shao (Bank of Canada); Faisal Sohail (University of Melbourne, Department of Economics) |
| Abstract: | The prevalence of entrepreneurs, particularly low-productivity non-employers, declines as economies develop. This decline is more pronounced for women. Relative to men, they are more likely to be entrepreneurs in poor economies but less likely in rich economies. We investigate whether gender gaps in time dedicated to non-market activities, which narrow with development, can account for this pattern. We develop a quantitative framework in which selection into occupations depends on one's ability and time, and features gender-specific distortions and social norms around market work. When calibrated to match cross-country data, we find that differences in social norms are almost entirely responsible for the patterns of gender gaps in both time use and entrepreneurship. Through these channels, social norms account for a substantial part of cross-country differences in output per worker and firm size, and have significant welfare implications for women. |
| Keywords: | entrepreneurship, time use, gender, development, firm size. |
| JEL: | J2 L2 O1 |
| Date: | 2023–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:txm:wpaper:20230901-001&r=bec |
| By: | Alex Coad (Waseda Business School, Japan); Clemens Domnick (European Commission - JRC); Pietro Santoleri (European Commission - JRC); Stjepan Srhoj (University of Split, Croatia) |
| Abstract: | Policy-makers and scholars often assume that a higher incidence of high-growth firms (HGFs) is synonymous with vibrant regional economic dynamics. We test whether more developed regions, which presumably feature superior entrepreneurial ecosystems (EE), have a higher incidence of HGFs. Empirical evidence suggests that the highest shares of HGFs in Europe are found in peripheral regions, which goes against common assumptions and popular theories. The results call for i) a more nuanced interpretation of regional HGF shares, including a better understanding of their nature and drivers as well as ii) a refinement of the theoretical EE framework. |
| Keywords: | high-growth firms, regional policy, regional economic development |
| JEL: | R11 L26 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc134577&r=bec |