Changing Business Dynamism and Productivity: Shocks versus Responsiveness

2020 ◽  
Vol 110 (12) ◽  
pp. 3952-3990
Author(s):  
Ryan A. Decker ◽  
John Haltiwanger ◽  
Ron S. Jarmin ◽  
Javier Miranda
Keyword(s):  
United States ◽  
The United States ◽  
Significant Fraction ◽  
Aggregate Productivity ◽  
Productivity Shocks ◽  
Canonical Models ◽  
Suggestive Evidence ◽  
Idiosyncratic Shocks ◽  
Business Dynamics ◽  
Job Reallocation

The pace of job reallocation has declined in the United States in recent decades. We draw insight from canonical models of business dynamics in which reallocation can decline due to (i ) lower dis persion of idiosyncratic shocks faced by businesses, or (ii ) weaker marginal responsiveness of businesses to shocks. We show that shock dispersion has actually risen, while the responsiveness of business-level employment to productivity has weakened. Moreover, declining responsiveness can account for a significant fraction of the decline in the pace of job reallocation, and we find suggestive evidence this has been a drag on aggregate productivity. (JEL D24, E24, E32, J21, J23, J24, L60)

Capital Reallocation

2018 ◽  
Vol 10 (1) ◽  
pp. 361-386 ◽  
Author(s):  
Andrea L. Eisfeldt ◽  
Yu Shi
Keyword(s):  
United States ◽  
Business Cycles ◽  
Financial Frictions ◽  
The United States ◽  
Future Research ◽  
Aggregate Productivity ◽  
Stylized Facts ◽  
Resource Misallocation ◽  
Capital Reallocation

Capital reallocation is procyclical, despite measured productive reallocative opportunities being acyclical or even countercyclical. This article reviews the advances in the literature studying the causes and consequences of capital reallocation (or lack thereof). We provide a comprehensive set of stylized facts about capital reallocation for the United States and an illustrative model of capital reallocation in equilibrium. We relate capital reallocation to the broader literatures on business cycles with financial frictions and on resource misallocation and aggregate productivity. Throughout, we provide directions for future research.

From the Counting House to the Modern Office: Explaining Anglo-American Productivity Differences in Services, 1870–1990

2002 ◽  
Vol 62 (4) ◽  
pp. 967-998 ◽  
Author(s):  
Stephen Broadberry ◽  
Sayantan Ghosal
Keyword(s):  
United States ◽  
Information Processing ◽  
Labor Force ◽  
High Volume ◽  
The United States ◽  
Aggregate Productivity ◽  
Low Volume ◽  
Anglo American ◽  
Hierarchical Management

The United States overtook Britain in comparative aggregate productivity levels primarily as a result of trends in services rather than trends in industry. This occurred during the transition from customized, low-volume, high-margin business organized on the basis of networks to standardized, high-volume, low-margin business with hierarchical management from the 1870s. This transformation from the counting house to the modern office was dependent on technologies that improved communications and information processing. The technologies were slower to diffuse in Britain as a result of lower levels of education and stronger labor-force resistance to intensification.

Zipf's Law, Pareto's Law, and the Evolution of Top Incomes in the United States

2017 ◽  
Vol 9 (3) ◽  
pp. 36-71 ◽  
Author(s):  
Shuhei Aoki ◽  
Makoto Nirei
Keyword(s):  
United States ◽  
Income Distribution ◽  
The United States ◽  
Zipf’S Law ◽  
Tax Rates ◽  
Firm Level ◽  
Productivity Shocks ◽  
Zipf's Law ◽  
Top Incomes ◽  
Pareto’S Law

We construct a tractable neoclassical growth model that generates Pareto's law of income distribution and Zipf's law of the firm size distribution from idiosyncratic, firm-level productivity shocks. Executives and entrepreneurs invest in risk-free assets, as well as their own firms' risky stocks, through which their wealth and income depend on firm-level shocks. By using the model, we evaluate how changes in tax rates can account for the evolution of top incomes in the United States. The model matches the decline in the Pareto exponent of the income distribution and the trend of the top 1 percent income share in recent decades. (JEL D31, H24, L11)

scholarly journals Information, Misallocation, and Aggregate Productivity *

2016 ◽  
Vol 131 (2) ◽  
pp. 943-1005 ◽  
Author(s):  
Joel M. David ◽  
Hugo A. Hopenhayn ◽  
Venky Venkateswaran
Keyword(s):  
United States ◽  
Information Structure ◽  
Imperfect Information ◽  
The United States ◽  
Aggregate Productivity ◽  
Firm Level ◽  
Resource Misallocation ◽  
China And India ◽  
Noisy Information ◽  
Internal Sources

Abstract We propose a theory linking imperfect information to resource misallocation and hence to aggregate productivity and output. In our setup, firms look to a variety of noisy information sources when making input decisions. We devise a novel empirical strategy that uses a combination of firm-level production and stock market data to pin down the information structure in the economy. Even when only capital is chosen under imperfect information, applying this methodology to data from the United States, China, and India reveals substantial losses in productivity and output due to the informational friction. Our estimates for these losses range from 7% to 10% for productivity and 10% to 14% for output in China and India, and are smaller, though still significant, in the United States. Losses are substantially higher when labor decisions are also made under imperfect information. We find that firms turn primarily to internal sources for information; learning from financial markets contributes little, even in the United States.

scholarly journals Management Practices and Productivity in Germany

2019 ◽  
Vol 20 (4) ◽  
pp. e657-e705 ◽  
Author(s):  
Sandra Broszeit ◽  
Marie-Christine Laible ◽  
Holger Görg ◽  
Ursula Fritsch
Keyword(s):  
United States ◽  
Management Practices ◽  
The United States ◽  
Organizational Practices ◽  
Aggregate Productivity ◽  
Establishment Size ◽  
Management Quality ◽  
Similar Survey ◽  
Substantial Heterogeneity ◽  
Specific Management

AbstractBased on a novel dataset, the ‘German Management and Organizational Practices’ (GMOP) Survey, we calculate establishment-specific management scores following Bloom and van Reenen as indicators of management quality. We find substantial heterogeneity in management practices across establishments in Germany, with small establishments having lower scores than large establishments on average. We show a robust positive and economically important association between the management score and establishment level productivity in Germany. This association increases with establishment size. Comparison to a similar survey in the United States indicates that the average management score is lower in Germany than in the United States. Overall, our results point toward lower management quality being at least in part to blame for the differences in aggregate productivity between Germany and the United States.

scholarly journals The Granular Nature of Large Institutional Investors

2021 ◽  
Author(s):  
Itzhak Ben-David ◽  
Francesco Franzoni ◽  
Rabih Moussawi ◽  
John Sedunov
Keyword(s):  
United States ◽  
Financial Markets ◽  
Empirical Evidence ◽  
Institutional Investors ◽  
Stock Prices ◽  
Equity Markets ◽  
The United States ◽  
Price Impact ◽  
Idiosyncratic Shocks

Large institutional investors own an increasing share of the equity markets in the United States. The implications of this development for financial markets are still unclear. The paper presents novel empirical evidence that ownership by large institutions predicts higher volatility and greater noise in stock prices as well as greater fragility in times of crisis. When studying the channel, we find that large institutional investors exhibit traits of granularity (i.e., subunits within a firm display correlated behavior), which reduces diversification of idiosyncratic shocks. Thus, large institutions trade larger volumes and induce greater price impact. This paper was accepted by David Simchi-Levi, finance.

LÉVY-STABLE PRODUCTIVITY SHOCKS

2008 ◽  
Vol 12 (3) ◽  
pp. 425-443 ◽  
Author(s):  
EDOARDO GAFFEO
Keyword(s):  
United States ◽  
Business Cycles ◽  
Growth Rates ◽  
Stable Distribution ◽  
The United States ◽  
Productivity Shocks ◽  
Usual Assumption ◽  
Tfp Growth ◽  
Normally Distributed

In this paper, we analyze the distribution of TFP growth rates at the four-digit sectoral level for the United States. We find that, contrary to the usual assumption employed in the literature on business cycles theory, technological shocks are not normally distributed. Instead, a Lévy-stable distribution with a divergent variance returns a better fit to the data.

scholarly journals No, Face Masks Aren’t Dehumanizing

2021 ◽  
pp. 147892992199376
Author(s):  
Stephen M Utych
Keyword(s):  
United States ◽  
Experimental Study ◽  
The United States ◽  
Suggestive Evidence ◽  
Black Person ◽  
Nationally Diverse

Wearing facial coverings has become a key element in the fight against COVID-19. However, deep partisan divisions have arisen over the adoption of face masks, with Democrats more supportive than Republicans in the United States. Among opponents, a common argument is that facial coverings serve to dehumanize the wearer. Using an experimental study, I find no evidence, using a nationally diverse US sample, that face masks are dehumanizing, whether worn by a White or Black person. In addition, I test for moderation by partisanship, which shows a lack of dehumanizing effects and provides some suggestive evidence that face masks can humanize the wearer, for Democrats, though these effects are small. Under no circumstances do I find evidence that face masks dehumanize the wearer, even among Republican respondents.

scholarly journals The Organization of Firms Across Countries*

2012 ◽  
Vol 127 (4) ◽  
pp. 1663-1705 ◽  
Author(s):  
Nicholas Bloom ◽  
Raffaella Sadun ◽  
John Van Reenen
Keyword(s):  
United States ◽  
Social Capital ◽  
Multinational Firms ◽  
The United States ◽  
Causal Effects ◽  
Aggregate Productivity ◽  
Trust Regions ◽  
Corporate Headquarters ◽  
Show Evidence ◽  
Local Plant

Abstract We argue that social capital as proxied by trust increases aggregate productivity by affecting the organization of firms. To do this we collect new data on the decentralization of investment, hiring, production, and sales decisions from corporate headquarters to local plant managers in almost 4,000 firms in the United States, Europe, and Asia. We find that firms headquartered in high-trust regions are significantly more likely to decentralize. To help identify causal effects, we look within multinational firms and show that higher levels of bilateral trust between the multinational’s country of origin and subsidiary’s country of location increases decentralization, even after instrumenting trust using religious similarities between the countries. Finally, we show evidence suggesting that trust raises aggregate productivity by facilitating reallocation between firms and allowing more efficient firms to grow, as CEOs can decentralize more decisions.

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