Annex Figure 3.B.1. Higher firm-level productivity pass-through and lower rent sharing typically go together

2021 ◽  
Keyword(s):  
Firm Level ◽  
Rent Sharing ◽  
Pass Through

scholarly journals Vehicle Currency Pricing and Exchange Rate Pass-Through

2021 ◽  
Author(s):  
Natalie Chen ◽  
Wanyu Chung ◽  
Dennis Novy
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Great Recession ◽  
Firm Level ◽  
Bilateral Exchange ◽  
The Great Recession ◽  
Pass Through ◽  
Exchange Rate Changes ◽  
Exchange Rate Pass Through ◽  
The Relationship

Abstract Using detailed firm-level transactions data for UK imports, we find that invoicing in a vehicle currency is pervasive, with more than half of the transactions in our sample invoiced in neither sterling nor the exporter’s currency. We then study the relationship between invoicing currencies and the response of import unit values to exchange rate changes. We find that for transactions invoiced in a vehicle currency, import unit values are much more sensitive to changes in the vehicle currency than in the bilateral exchange rate. Pass-through therefore substantially increases once we account for vehicle currencies. This result helps to explain why UK inflation turned out higher than expected when sterling depreciated during the Great Recession and after the Brexit referendum. Finally, within a conceptual framework we show why bilateral exchange rates are not suitable for capturing exchange rate pass-through under vehicle currency pricing. Overall, our results help to clarify why the literature often finds a disconnect between exchange rates and prices when vehicle currencies are not accounted for.

scholarly journals Union Density Effects on Productivity and Wages

2020 ◽  
Vol 130 (631) ◽  
pp. 1898-1936
Author(s):  
Erling Barth ◽  
Alex Bryson ◽  
Harald Dale-Olsen
Keyword(s):  
Union Membership ◽  
Union Density ◽  
Selection Effects ◽  
Firm Level ◽  
Taxable Income ◽  
Wage Effect ◽  
Density Effects ◽  
Tax Subsidies ◽  
Rent Sharing ◽  
Over Time

Abstract We exploit changes in tax subsidies for union members in Norway to identify the effects of changes in firm-level union density on productivity and wages. Increased deductions in taxable income for union members led to higher membership rates and contributed to a lower decline in union membership rates over time in Norway. Accounting for selection effects and the potential endogeneity of unionisation, the results show that increasing union density at the firm level leads to a substantial increase in both productivity and wages. The wage effect is larger in more productive firms, consistent with rent-sharing models.

scholarly journals Demand, Supply, and Markup Fluctuations

2021 ◽  
Author(s):  
Carlos D Santos ◽  
Luís F Costa ◽  
Paulo B Brito
Keyword(s):  
Structural Model ◽  
Supply And Demand ◽  
Aggregate Demand ◽  
Cost Curve ◽  
Firm Level ◽  
Demand Shocks ◽  
Marginal Costs ◽  
Price Adjustments ◽  
Marginal Cost Curve ◽  
Pass Through

Abstract Markup cyclicality has been central for debating policy effectiveness and understanding business-cycle fluctuations. However, measuring the cyclicality of markups is as important as understanding the microeconomic mechanisms underlying that cyclicality. The latter requires measurement of firm-level markups and separating supply from demand shocks. We construct a novel dataset with detailed (multi-)product-level prices for individual firms. By estimating a structural model of supply and demand, we evaluate how companies adjust prices and marginal costs as a response to shocks. We find that price markups respond positively to supply shocks and negatively to demand shocks. The mechanism explaining the observed markup behaviour is the same for both shocks: incomplete pass-through of changes along the marginal-cost curve to price adjustments. These observed price and output responses are consistent with dynamic demand considerations. Finally, we use our estimated shocks to show how aggregate markup fluctuations in the sample period are mostly explained by aggregate demand shocks.

scholarly journals Tariff Pass-through in Wholesaling: Evidence from Firm-level Data in Japan

2021 ◽  
pp. 101164
Author(s):  
Youngmin BAEK ◽  
Kazunobu HAYAKAWA ◽  
Kenmei TSUBOTA ◽  
Shujiro URATA ◽  
Kenta YAMANOUCHI
Keyword(s):  
Firm Level ◽  
Level Data ◽  
Firm Level Data ◽  
Pass Through

Establishment heterogeneity, rent sharing and the rise of wage inequality in Germany

2016 ◽  
Vol 37 (2) ◽  
pp. 210-228 ◽  
Author(s):  
Clemens Ohlert
Keyword(s):  
Wage Inequality ◽  
Firm Level ◽  
Content Type ◽  
Individual Level ◽  
Establishment Size ◽  
Institutional Settings ◽  
Rent Sharing ◽  
The Individual ◽  
Firm Structures ◽  
Total Inequality

Purpose – The purpose of this paper is to examine the role wage dispersion across establishments has played in recent increases in total wage inequality in Germany and compares it to inequality changes at the individual level. It is queried whether the contribution of establishment heterogeneity to the rise of wage inequality stems from changes of institutional settings or from structures such as establishment size and the composition of the workforce. Design/methodology/approach – Applying regression-based decompositions of variance to German linked employer-employee panel data for the years 2000-2010 it is analysed to what extent changes associated to firm structures contribute to the rise of total wage inequality. Findings – Results show that the rise in wage inequality in Germany to a great extent is associated to rising wage variance across establishments, implying that establishment specific wage premiums have grown. By further decomposing across firm components of wage inequality, it is found that changes in across establishment wage inequality related to collective bargaining, worker co-determination and internal labour markets together account for about 3 per cent of the rise in total inequality. Inequality changes related to establishments’ skill and occupational composition account for about 11 per cent and establishment size alone accounts for about 18 per cent of the rise in total inequality. Originality/value – The main contribution is to quantify the relation of specific establishment characteristics to the rise in total wage inequality over time. Conclusions are drawn about the importance of mechanisms of rent sharing at the firm level in comparison to the determination of wages by individual qualification.

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