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on Business Economics |
| By: | Jeremy Pearce; Liangjie Wu |
| Abstract: | We study the interaction of customer capital and productivity through brand reallocation across firms. We develop a firm dynamics model with brands as transferable customer capital, heterogeneous firm productivity, and variable markups. We study the matching process between transferable brand capital and core productivity, which can be inefficient with significant welfare implications. We link USPTO trademark data with Nielsen sales data to study the prevalence of brand reallocation and the response of sales and prices to reallocation. Quantitatively, brand reallocation reduces welfare. Optimal policies deviate substantially from the literature due to the complementarity between brand capital and productivity. |
| Keywords: | firm dynamics; productivity; market concentration; product innovation; reallocation; Mergers & acquisitions; brands; Trademarks; intangible assets |
| JEL: | O31 O32 O34 O41 D22 D43 L11 L13 L22 |
| Date: | 2024–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:98772 |
| By: | Görg, Holger; Mulyukova, Alina |
| Abstract: | This paper exploits time and geographic variation in the adoption of Special Economic Zones in India to assess the direct effects of the program on firm performance. We combine geocoded firm-level data and geocoded SEZs. Our analysis yields that conditional on controlling for initial selection based on observables, the establishment of new SEZs did not induce any discernible positive effect on the productivity growth of firms in the SEZs. To explain this, we focus on the possibility of distortions through non-profitable activities on the part of managers. We find that firms especially in publicly-owned SEZs decreased their productivity growth, while firms located in privately-owned SEZs experience productivity increases. We also show that directors of firms located inside the publicly-owned zones experienced a significant increase in their salary growth, which is not the case in privately-owned SEZs. Our findings are in line with the idea that the possibility of rent-seeking by managers leads to distortions in program implementation. |
| Keywords: | Special Economic Zones, Firm performance, India |
| JEL: | O18 O25 P25 R10 F21 F60 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:302102 |
| By: | Gagliardi, Nicola (Free University of Brussels); Grinza, Elena (University of Turin); Rycx, François (Free University of Brussels) |
| Abstract: | We investigate the impact of rising temperatures on firm productivity using longitudinal firm-level balance-sheet data from private sector firms in 14 European countries, combined with detailed weather data. Our findings, based on control-function techniques and fixed-effects regressions, reveal that global warming significantly and negatively impacts firms' TFP. Labor productivity declines markedly as temperatures rise, while capital productivity remains unaffected – indicating that TFP is primarily affected through the labor input channel. Sensitivity tests show that firms involved in outdoor activities, such as agriculture and construction, are more adversely impacted. Manufacturing, capital-intensive, and blue-collar-intensive firms also experience significant productivity declines. Geographically, the negative impact is most pronounced in temperate and mediterranean climate areas. |
| Keywords: | climate change, global warming, firm productivity, Total Factor Productivity (TFP), semiparametric methods to estimate production functions, longitudinal firm-level data |
| JEL: | D24 J24 Q54 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17241 |
| By: | Jackie M. L. Chan (Aarhus University); Han (Steffan) Qi (Shenzhen University) |
| Abstract: | Online appendix for the Review of Economic Dynamics article |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:red:append:23-27 |
| By: | Bianchi, Francesco (Johns Hopkins, CEPR and NBER); Callegari, Giovanni (European Stability Mechanism); Hitaj, Ermal (European Stability Mechanism); Theodoridis, Konstantinos (European Stability Mechanism and Cardiff Business School) |
| Abstract: | We develop a data-rich measure of expected macroeconomic skewness in the US economy. Expected macroeconomic skewness is strongly procyclical, mainly reflects the cyclicality in the skewness of real variables, is highly correlated with the cross-sectional skewness of firm-level employment growth, and is distinct from financial market skewness. Revisions in expected skewness, and the associated macroeconomic response to those, are nearly indistinguishable from the main business cycle shock of Angeletos et al. (2020). This result is robust to controlling for macroeconomic volatility and uncertainty, and alternative macroeconomic shocks. Our findings highlight the importance of higherorder dynamics for business cycle theories. |
| Keywords: | Asymmetry, principal component analysis, quantile regression, VAR |
| JEL: | C22 C38 E32 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:cdf:wpaper:2024/13 |
| By: | Braunschweig, Luisa (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Bamberg); Dauth, Wolfgang (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Bamberg); Roth, Duncan (Institute for Employment Research (IAB), Nuremberg, Germany ; Institute of Labor Economics) |
| Abstract: | "We examine the development of worker-firm matching over the career due to job mobility. Using administrative employer-employee data covering the universe of German employees, we measure the degree of assortative matching as the correlation of worker and firm quality measures obtained from a wage decomposition in the style of Abowd/Kramarz/Margolis (1999). We also introduce a novel measure based on the distance between the estimates of worker and firm quality. Both measures indicate that the degree of assortative matching, on average, increases with each job move. For high-quality workers, this can be explained by job ladder models as these workers move to higher-quality firms. Low-quality workers are matched less assortatively at the beginning of their careers, but also manage to climb the job ladder at first. For this group, the increase in assortative matching increases after the third job, when they fall down the job ladder. Changes in worker-firm matching are also relevant for the extent of life cycle inequality. We estimate that the increase in assortative matching accounts for around 25 percent of the increase in wage inequality over the life cycle." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Open-Access-Publikation ; Integrierte Erwerbsbiografien |
| JEL: | J23 J24 J31 J62 |
| Date: | 2024–09–02 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202411 |
| By: | Alejandro Fernández Cerezo (BANCO DE ESPAÑA); Borja Fernández-Rosillo San Isidro (BANCO DE ESPAÑA); Natividad Pérez Martín (BANCO DE ESPAÑA) |
| Abstract: | The availability of a firm-level database that is representative of the productive sector of an economy on an aggregate scale is increasingly important to analyse the heterogeneity of different economic variables at different levels of aggregation (for instance, by region, firm size or sector). This paper seeks, first, to evaluate the representativeness of the Banco de España’s Integrated Central Balance Sheet Database (Integrated CBSO database or CBI by its Spanish initials) for conducting regional analysis with firm-level data and, second, to analyse the differences in firm size distribution between the Spanish regions. |
| Keywords: | firm data, firm size distribution, financial reporting |
| JEL: | C81 D21 L11 R11 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:bde:opaper:2429e |
| By: | Ernest Liu (Princeton University); Vladimir Smirnyagin (University of Virginia); Aleh Tsyvinski (Yale University) |
| Abstract: | We empirically and quantitatively study the impact of supply chain disruptions on U.S. businesses. Leveraging granular shipment- level data on the universe of U.S. seaborne imports with nearly 200 million observations, we construct a measure of disruptions at the individual firm level for the time period 2013-2023. We document a significant heterogeneity in disruption rates among U.S. public firms, with a notable increase observed in recent years. We introduce a notion of supplier capital and investigate the effect of supply disruptions on firms’ investment decisions. In the data, firms tend to increase investment in supplier capital following the shock, however, financially distressed firms exhibit a much weaker response. We develop a general equilibrium model with heterogeneous firms and with investment in supplier capital. We show that firms’ ability to accumulate supplier capital by making costly investment is an important margin of adjustment in the aftermath of such crises. Financial constraints help account for the heterogeneous treatment effect observed in the data. Two supply chain initiatives proposed by the U.S. government to mitigate disruptions are evaluated. Finally, we document a significant rise in supply disruptions in sectors critical to the U.S. economy and build an index of critical supply disruptions. We show quantitatively that firms relying heavily on imports of critical products experience a much larger decline in output following a disruption shock relative to firms which are not engaged in critical supply chains. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2402 |
| By: | Lauren Cohen; Umit Gurun; Katie Moon; Paula Suh |
| Abstract: | Analyzing millions of patents granted by the USPTO between 1976 and 2020, we find a pattern where specific patents only rise to prominence after considerable time has passed. Amongst these late-blooming influential patents, we show that there are key players (patent hunters) who consistently identify and develop them. Although initially overlooked, these late-blooming patents have significantly more influence on average than early-recognized patents and are associated with significantly more new product launches. Patent hunters, as early detectors and adopters of these late-blooming patents, are also associated with significant positive rents. Their adoption of these overlooked patents is associated with a 6.4% rise in sales growth (t = 3.02), a 2.2% increase in Tobin’s Q (t = 3.91), and a 2.2% increase in new product offerings (t = 2.97). We instrument for patent hunting, and find strong evidence that these benefits are causally due to patent hunting. The rents associated with patent hunting on average exceed those of the original patent creators themselves. Patents hunted are closer to the core technology of patent hunters, more peripheral to writers, and in less competitive spaces. Lastly, patent hunting appears to be a persistent firm characteristic and to have an inventor-level component. |
| JEL: | L1 O31 O33 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32965 |