scholarly journals Reallocation and Productivity during Commodity Cycles

2021 ◽  
Author(s):  
Rodrigo Heresi
Keyword(s):  
Dynamic Response ◽  
Commodity Prices ◽  
Heterogeneous Firms ◽  
Aggregate Productivity ◽  
Firm Level ◽  
Copper Producer ◽  
Productivity Decline ◽  
Global Cycles ◽  
Capital Intensive ◽  
Do So

I study the firm-level dynamic response of a commodity-exporting economy to global cycles in commodity prices. To do so, I develop a heterogeneous-firms model that endogenizes declines in aggregate productivity through reallocation towards less productive firms. Within a given sector, commodity booms reallocate market share away from exporters because of currency appreciation and away from capital-intensive firms because of the increase in capital cost. I provide empirical evidence for these channels using microdata for Chile, the worlds largest copper producer. When fed with the commodity super-cycle of 2003-2012, the calibrated model generates about 50% of the observed productivity decline.

scholarly journals Informality and Aggregate Productivity

2019 ◽  
Vol 2019 (257) ◽  
Author(s):  
Jorge Alvarez ◽  
Cian Ruane
Keyword(s):  
Heterogeneous Firms ◽  
Informal Employment ◽  
Aggregate Productivity ◽  
Policy Reforms ◽  
Firm Level ◽  
Labor Regulations ◽  
Economic Census

We assess the aggregate productivity impact of distortions arising from labor regulations in Mexico and how they interact with informality. Using employment surveys and a firm-level economic census, we document a number of novel features about informal firms in Mexico. We then construct and estimate a model of heterogeneous firms and endogenous informality to study the micro and macro impacts from various policy reforms. Some reforms may have large impacts on informal employment but small impacts on aggregate productivity.

scholarly journals Productivity of the Russian firms: Seven stylized facts

2020 ◽  
Vol 48 (4) ◽  
pp. 217-227
Author(s):  
H. Blöchliger ◽  
◽  
L. Wildnerova ◽  
Keyword(s):  
Capital Mobility ◽  
Regulatory Reform ◽  
Aggregate Productivity ◽  
Stylized Facts ◽  
Firm Level ◽  
Working Paper ◽  
Level Data ◽  
Productivity Decline ◽  
Economics Department ◽  
Start Ups

Productivity in Russia has been falling steadily over the past 15 years. This paper explores firm-level data to understand the contribution of individual firms to aggregate productivity and summarizes findings in the form of seven stylized facts. Policies to address the productivity decline should focus on regulatory reform to strengthen market forces; create a climate that is supportive to innovative start-ups; help unproductive firms to leave the market earlier; foster labour and capital mobility and knowledge transfer between firms and across regional borders; and embrace foreign ownership. These policies should be complemented by targeted support to households and firms severely affected by the covid-19 crisis. This note is built on the findings of an OECD Economics Department Working Paper published in early 2020.

The Micro and Macro of Managerial Beliefs

2020 ◽  
Author(s):  
Jose Maria Barrero
Keyword(s):  
Rational Expectations ◽  
Asset Price ◽  
Heterogeneous Firms ◽  
Adjustment Costs ◽  
Consumer Welfare ◽  
Sales Growth ◽  
Firm Level ◽  
Managerial Decisions ◽  
Managerial Beliefs ◽  
Growth Volatility

This paper studies how biases in managerial beliefs affect managerial decisions, firm performance, and the macroeconomy. Using a new survey of US managers I establish three facts. (1) Managers are not over-optimistic: sales growth forecasts on average do not exceed realizations. (2) Managers are overprecise (overconfident): they underestimate future sales growth volatility. (3) Managers overextrapolate: their forecasts are too optimistic after positive shocks and too pessimistic after negative shocks. To quantify the implications of these facts, I estimate a dynamic general equilibrium model in which managers of heterogeneous firms use a subjective beliefs process to make forward-looking hiring decisions. Overprecision and overextrapolation lead managers to overreact to firm-level shocks and overspend on adjustment costs, destroying 2.1 percent of the typical firm’s value. Pervasive overreaction leads to excess volatility and reallocation, lowering consumer welfare by 0.5 to 2.3 percent relative to the rational expectations equilibrium. These findings suggest overreaction may amplify asset-price and business cycle fluctuations.

scholarly journals Trade credit, trade income elasticity and the international transmission of shocks

2021 ◽  
Author(s):  
Anna Watson
Keyword(s):  
International Trade ◽  
Open Economy ◽  
Trade Credit ◽  
Income Elasticity ◽  
Heterogeneous Firms ◽  
Firm Level ◽  
Macroeconomic Shocks ◽  
Cyclical Fluctuations ◽  
Irish Data ◽  
The Impact

AbstractThe paper examines the impact of trade credit on cyclical fluctuations in international trade. It provides new empirical evidence based on firm-level UK and Irish data showing that exporters use trade credit more actively and intensively than non-exporters. The study introduces inter-firm lending into an open economy general equilibrium model with heterogeneous firms and endogenous entry into the exports market. It demonstrates that trade credit amplifies the impact of macroeconomic shocks on international trade both along the intensive and extensive margins and that it significantly contributes to the high trade income elasticity observed in the data.

scholarly journals Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815–2015

2016 ◽  
Vol 106 (5) ◽  
pp. 574-580 ◽  
Author(s):  
Carmen M. Reinhart ◽  
Vincent Reinhart ◽  
Christoph Trebesch
Keyword(s):  
Capital Flows ◽  
Historical Data ◽  
Commodity Prices ◽  
Commodity Price ◽  
Capital Inflows ◽  
Data Sources ◽  
Financial Capital ◽  
Global Capital ◽  
Sovereign Defaults ◽  
Global Cycles

Capital flow and commodity cycles have long been connected with economic crises. Sparse historical data, however, has made it difficult to connect their timing. We date turning points in global capital flows and commodity prices across two centuries and provide estimates from alternative data sources. We then document a strong overlap between the ebb and flow of financial capital, the commodity price super-cycle, and sovereign defaults since 1815. The results have implications for today, as many emerging markets are facing a double bust in capital inflows and commodity prices, making them vulnerable to crises.

Creating Productive Jobs in East European Transition Economies: a Synthesis of Firm-Level Studies

2008 ◽  
Vol 204 ◽  
pp. 108-125 ◽  
Author(s):  
J. David Brown ◽  
John S. Earle
Keyword(s):  
Labour Market ◽  
Transition Economies ◽  
Market Reform ◽  
Aggregate Productivity ◽  
Firm Level ◽  
East European ◽  
Job Reallocation ◽  
Firm Turnover ◽  
Market Liberalisation ◽  
Productivity Gains

The challenge for labour market policy in the new member states and other transition economies of Eastern Europe has been to redress the sharp drops in employment and rises in unemployment in a way that fosters the creation of productive jobs. This paper first documents the magnitude and productivity of job and worker reallocation. It then investigates the effects of privatisation, product and labour market liberalisation, and obstacles to growth in the new private sector on reallocation and its productivity in Hungary, Romania, Russia, and Ukraine. We find that market reform has resulted in a large increase in the pace of job reallocation, particularly that occurring between sectors and via firm turnover. Unlike under central planning, the job reallocation during the transition has contributed significantly to aggregate productivity growth. Privatisation has not only stimulated intrasectoral job reallocation, but the reallocation is more productive than that among remaining state firms. The estimated effect of privatisation on firm productivity is usually positive, but it varies considerably across countries. The productivity gains from privatisation have generally not come at the expense of workers, but are associated rather with increased wages and employment.

scholarly journals Beyond Computation: Information Technology, Organizational Transformation and Business Performance

2000 ◽  
Vol 14 (4) ◽  
pp. 23-48 ◽  
Author(s):  
Erik Brynjolfsson ◽  
Lorin M Hitt
Keyword(s):  
Business Performance ◽  
Organizational Transformation ◽  
Economic Value ◽  
Intangible Capital ◽  
Aggregate Productivity ◽  
Firm Level ◽  
The Past ◽  
Econometric Evidence ◽  
Definition Of ◽  
Value Of It

To understand the economic value of computers, one must broaden the traditional definition of both the technology and its effects. Case studies and firm-level econometric evidence suggest that: 1) organizational “investments” have a large influence on the value of IT investments; and 2) the benefits of IT investment are often intangible and disproportionately difficult to measure. Our analysis suggests that the link between IT and increased productivity emerged well before the recent surge in the aggregate productivity statistics and that the current macroeconomic productivity revival may in part reflect the contributions of intangible capital accumulated in the past.

scholarly journals The Financing of Ideas and the Great Deviation

2017 ◽  
Vol 17 (176) ◽  
Author(s):  
Daniel Garcia-Macia
Keyword(s):  
Great Recession ◽  
Heterogeneous Firms ◽  
Intangible Capital ◽  
Model Matching ◽  
Slow Recovery ◽  
Firm Level ◽  
The Great Recession ◽  
Financing Costs ◽  
Speed Up ◽  
Intangible Investment

Why did the Great Recession lead to such a slow recovery? I build a model where heterogeneous firms invest in physical and intangible capital, and can default on their debt. In case of default, intangible assets are harder to seize by creditors. Hence, intangible capital faces higher financing costs. This differential is exacerbated in a financial crisis, when default is more likely and aggregate risk bears a higher premium. The resulting fall in intangible investment amplifies the crisis, and gradual intangible spillovers to other firms contribute to its persistence. Using panel data on Spanish manufacturing firms, I estimate the model matching firm-level moments regarding intangibles and financing. The model captures the extent and components of the Great Recession in Spanish manufacturing, whereas a standard model without endogenous intangible investment would miss more than half of the GDP fall. A policy of transfers conditional on firm age could speed up the recovery, as young firms tend to be more financially constrained, particularly regarding intangible investment. Conditioning transfers on firm size or subsidizing credit (as in current E.U. policy) appears to be less effective.

Sign in / Sign up

Export Citation Format

Share Document