scholarly journals Using Payroll Tax Variation to Unpack the Black Box of Firm-Level Production

2020 ◽  
Author(s):  
Youssef Benzarti ◽  
Jarkko Harju
Keyword(s):  
Black Box ◽  
Firm Level ◽  
Payroll Tax ◽  
Level Production

scholarly journals Using Payroll Tax Variation to Unpack the Black Box of Firm-Level Production

2021 ◽  
Author(s):  
Youssef Benzarti ◽  
Jarkko Harju
Keyword(s):  
Black Box ◽  
Total Output ◽  
Tax Rates ◽  
Firm Level ◽  
Payroll Tax ◽  
Payroll Taxes ◽  
Input Factor ◽  
Experimental Variation ◽  
Quasi Experimental ◽  
Level Production

Abstract This paper uses quasi-experimental variation in payroll tax rates in Finland to investigate how firms use their input factors. We find that higher payroll tax rates lead to large employment responses and have no effects on employee-level earnings. As payroll taxes increase, firms substitute away from low-skilled, routine and manual workers. Higher firm-level payroll tax rates also slightly decrease the total output of firms. Our results imply that firm-level production and input factor choices are clearly affected by payroll taxes.

scholarly journals Firm-Level Shocks and Labour Flows*

2020 ◽  
Author(s):  
Mikael Carlsson ◽  
Julián Messina ◽  
Oskar Nordström Skans
Keyword(s):  
Production Functions ◽  
Micro Data ◽  
Employment Decisions ◽  
Firm Level ◽  
Demand Shocks ◽  
Demand Curves ◽  
Level Production ◽  
Physical Productivity

Abstract We analyse how labour flows respond to permanent idiosyncratic shifts in firm-level production functions and demand curves using very detailed Swedish micro data. Shocks to firms’ physical productivity have only modest effects on firm-level employment decisions. In contrast, we document rapid and substantial employment adjustments through hires and separations in response to firm-level demand shocks. The choice of adjustment margin depends on the sign of the shock: firms adjust through increased hires if these shocks are positive and through increased separations if the shocks are negative.

COMPLEMENTARITY BETWEEN TANGIBLE AND INTANGIBLE CAPITAL: EVIDENCE FROM JAPANESE FIRM-LEVEL DATA

2020 ◽  
Vol 65 (05) ◽  
pp. 1293-1321
Author(s):  
KAORU HOSONO ◽  
DAISUKE MIYAKAWA ◽  
MIHO TAKIZAWA ◽  
KENTA YAMANOUCHI
Keyword(s):  
Panel Data ◽  
Japanese Firm ◽  
Production Functions ◽  
Intangible Capital ◽  
Capital Investments ◽  
Firm Level ◽  
Level Data ◽  
Intangible Investments ◽  
Firm Level Data ◽  
Level Production

Using Japanese firm-level panel data spanning from 2000 to 2013, we estimate industry-level production functions that explicitly take into account the complementarity and substitutability between tangible and intangible capital. The estimation results show that tangible and intangible capitals are complementary in most industries although the degree of complementarity substantially varies across industries. We further find that the relation between tangible and intangible capital in the production function accounts for the relation between firm-level tangible capital and intangible capital investments. Namely, firms’ tangible investments are more strongly positively associated with intangible investments as the degree of the complementarity between the tangible and intangible assets becomes larger. These findings show the necessity to take into account the relation between the dynamics of tangible and intangible capital in terms of their complementarity for precisely understanding the mechanisms governing a firm’s growth.

scholarly journals Markups and Firm-Level Export Status

2012 ◽  
Vol 102 (6) ◽  
pp. 2437-2471 ◽  
Author(s):  
Jan De Loecker ◽  
Frederic Warzynski
Keyword(s):  
Production Function ◽  
Product Market ◽  
Production Data ◽  
Firm Level ◽  
Export Behavior ◽  
Plant Level ◽  
The Relationship ◽  
Level Production ◽  
Empirical Framework

In this paper, we develop a method to estimate markups using plant-level production data. Our approach relies on cost-minimizing producers and the existence of at least one variable input of production. The suggested empirical framework relies on the estimation of a production function and provides estimates of plant-level mark-ups without specifying how firms compete in the product market. We rely on our method to explore the relationship between markups and export behavior. We find that markups are estimated significantly higher when controlling for unobserved productivity; that exporters charge, on average, higher markups and that markups increase upon export entry. (JEL D22, D24, F14, L11, L60)

Investigating Differentiated Production Systems: The U.S. Machine Tool Industry

1998 ◽  
Vol 3 (1-2) ◽  
pp. 41-67 ◽  
Author(s):  
Richard Gordon ◽  
Joel Krieger
Keyword(s):  
Machine Tool ◽  
Spatial Organization ◽  
Organizational Innovation ◽  
Production Systems ◽  
Potential Significance ◽  
Firm Level ◽  
The Social ◽  
Key Variables ◽  
Level Production ◽  
The U.S

This article is intended to conceptually tighten an understanding of firm-level production systems. It should be read as part of a broader effort to conceptualize and analyze the social and spatial organization of innovation and production in a way that integrates the local, regional, national, and global dimensions within and across sectors of production. In the first section, we introduce models for analyzing (1) product and production strategies and (2) the social and technical organization of the enterprise. Taken together, they conceptually ground a typology of Differentiated Production Systems, which we present as a way of conceptualizing and analyzing the social organization of innovation and production at the level of the firm. The second section of the article introduces the machine-tool study and analyzes key variables associated with technological and organizational innovation in the respondent firms. In the third section, we present a set of case studies to demonstrate the applicability of the models we have introduced. We conclude with a brief interpretation of the U.S. machine tool sector drawn from our framework and a preliminary appraisal of the potential significance of our conceptualization.

scholarly journals In the Eye of the Storm Firms and Capital Destruction in India

2020 ◽  
Vol 20 (203) ◽  
Author(s):  
Martino Pelli ◽  
Jeanne Tschopp ◽  
Natalia Bezmaternykh ◽  
Kodjovi Eklou
Keyword(s):  
Manufacturing Firms ◽  
Tropical Storms ◽  
Active Set ◽  
Firm Level ◽  
Exogenous Shock ◽  
Industry Performance ◽  
Fixed Assets ◽  
New Industry ◽  
Level Production ◽  
Firm Exposure

This paper examines the response of firms to capital destruction, using a new measure of firm exposure to tropical storms as a negative exogenous shock on firms’ capital stock. Drawing on a panel of Indian manufacturing firms between 1995 and 2006, we establish that, depending on their strength, storms destroy up to 75.3% of the fixed assets of the median firm (in terms of its productivity and industry performance). We quantify the response of firm sales within and across industries and find effects akin to Schumpeterian creative destruction, where surviving firms build back better. Within an industry, the sales of less productive firms decrease disproportionately more, while across industries capital destruction leads to a shift in sales towards more performing industries. This build-back better effect is driven by firms active in multiple industries and, to a large extent, by shifts in the firm-level production mix within a firm’s active set of industries. Finally, while there is no evidence that firms adjust by investing in new industry lines, firms tend to abandon production in industries that exhibit lower comparative advantage.

scholarly journals Firm-Level Shocks and Labor Flows

2021 ◽  
Author(s):  
Mikael Carlsson ◽  
Julián Messina ◽  
Oskar Nordström Skans
Keyword(s):  
Production Functions ◽  
Micro Data ◽  
Employment Decisions ◽  
Firm Level ◽  
Demand Shocks ◽  
Demand Curves ◽  
Labor Flows ◽  
Level Production ◽  
Physical Productivity

This paper analyzes how labor ows respond to permanent idiosyncratic shifts in rm-level production functions and demand curves using very detailed Swedish micro data. Shocks to rms physical productivity have only modest eects on rm-level employment decisions. In contrast, the paper documents rapid and substantial employment adjustments through hires and separations in response to rm-level demand shocks. The choice of adjustment margin depends on the sign of the shock: rms adjust through increased hires if these shocks are positive and through increased separations if the shocks are negative.

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