Empirical Essays In Macroeconomics Heterogeneous Firms Workers And Industries
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Empirical Essays In Macroeconomics Heterogeneous Firms Workers And Industries
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Author : Gabriel Züllig
language : en
Publisher:
Release Date : 2020
Empirical Essays In Macroeconomics Heterogeneous Firms Workers And Industries written by Gabriel Züllig and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
This thesis consists of three self-contained chapters in the area of Macroeconomics. The common thread throughout the studies is the role of heterogeneous and interconnected firms in the economy. The first two chapters use granular data on firms from Denmark to study the adjustment to shocks: In chapter 1, I identify credit constrained firms during the Great Recession and explore the adjustment margin along many dimensions, in particular their workers' wages. The results I find are in line with large swings in employment after financial shocks, and the following low wage growth. In chapter 2, I study how firms adjust prices to changes in cost. For the final analysis, the last chapter assesses whether the presence of interlinkages between firms at the sector level can be used to improve a policymaker's forecast of the aggregate economy.
Empirical Essays In Macroeconomics Yield Curve Dynamics
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Author : Gabriel Züllig
language : en
Publisher:
Release Date : 2020
Empirical Essays In Macroeconomics Yield Curve Dynamics written by Gabriel Züllig and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
Essays In Macroeconomics
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Author : Myung Kyu Shim
language : en
Publisher:
Release Date : 2014
Essays In Macroeconomics written by Myung Kyu Shim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with Job vacancies categories.
This dissertation consists of two papers in the field of Macro Labor and one paper in the field of global games. In particular, the first two chapters focus on studying why the progress of job polarization has been different across industries between 1980 and 2010 and the last chapter analyzes the interaction between the precision of exogenous and market generated information in coordination economies. The first chapter empirically explores the relationship between job polarization and interindustry wage differentials. By using the U.S. Census and EU KLEMS data, we find that the progress of job polarization between 1980 and 2009 was more evident in industries that initially paid a high wage premium to workers than in industries that did not. We argue that this phenomenon can be explained as a dynamic response of firms to interindustry wage differentials: firms with a high wage premium seek alternative ways to cut production costs by replacing workers who perform routine tasks with Information, Communication, and Technology (ICT) capital. The replacement of routine workers with ICT capital has become more pronounced as the price of ICT capital has fallen over the past 30 years. As a result, firms that are constrained to pay a relatively high wage premium have experienced slower growth of employment of routine workers than firms in low-wage industries, which led to heterogeneity in job polarization across industries. Then the second chapter proposes a theory that unveils the mechanism underlying the close relationship between job polarization and interindustry wage differentials, which is studied empirically in the first chapter. In particular, we develop a two-sector neoclassical growth model with three key features. First, industries differ in the wage rates they pay to workers. Second, routine workers are relative substitutes for capital while non-routine workers are relative complement to capital. Last, there is an exogenous investment-specific technology change. Main predictions of the model are that (1) job polarization is more evident and (2) capital-routine worker ratio increases more in the industry that pays higher wages to workers when there is an investment-specific technology change, which are consistent with the empirical findings in the first chapter. In the last chapter, we study the interaction between the precision of exogenous and market-generated information in a class of economies where firms display coordination motives in presence of dispersed information and where the outcome of the coordination is traded in a competitive asset market á-la Grossman and Stiglitz (1980). We show that when more private information is injected in the coordination economy the equilibrium asset price becomes less informative. To showcase the relevance of our result we present an application to a problem of endogenous information choice where the "Knowing What Others Know" property of information acquisition derived by Hellwig and Veldkamp (2009) breaks down in presence of market-generated information.
Essays On Macroeconomics
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Author : Byungjae Kim
language : en
Publisher:
Release Date : 2020
Essays On Macroeconomics written by Byungjae Kim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
This dissertation studies firm behavior in the context of macroeconomics. Although firms are a key building block of macroeconomics, their behavior has not been fully understood in the literature of economics. This dissertation is intended to build a deeper knowledge of firms. In particular, I extensively study firm-level markup and the firm's response to financial market disturbances. There are three research questions: how does firm-level markup evolve over the firm life cycle? what are the properties of firm-level markup? and do all firms respond to financial market disturbances similarly? The first chapter examines the evolution of firm-level markup over the firm life cycle. By using longitudinal microdata on Korea manufacturing industries, I document two empirical findings. First, firm-level markup increases over the life cycle. The estimated cumulative increase in markup over 30 years is 18% and most increases take place during the first 10 years of the life cycle. Second, the growth profile differs depending on the number of customers firms target. Firms that target a large number of customers more rapidly increase markup during the early stage of the life cycle, whereas firms that target a small number of customers increase markup more gradually for a longer period. To explain these findings, I develop a firm life cycle model with customer capital as the form of deep-habit formation. I find that by allowing type-specific deep-habit parameters the model can match the empirical findings. The second chapter studies the properties of firm-level markup. By using the same data in the first chapter, I document six findings on firm-level markup. First, firm-level markup is unconditionally countercyclical. Second, countercyclicality differs depending on the types of goods industries produce. Third, industries in which the number of firms is more procyclical exhibit stronger countercyclicality. Fourth, firms that trade more with affiliated firms set lower markup. Fifth, innovative firms set higher markup. Sixth, firms that more rely on regular workers exhibit stronger countercyclicality than firms that rely on non-regular workers. These findings indicate that firm and industry characteristics affect firm-level markup in various ways. The third chapter analyzes the response of small and large manufacturing firms to two financial market disturbances. By using the standard VAR approach, I find that there is heterogeneity in responses between small and large firms and depending on types of shocks. Specifically, the shocks to credit markets mainly tighten large firms' financial constraints through commercial paper markets. The cumulative decrease in large firms' short-term debts is 2.5 times larger. On the other hand, financial uncertainty shocks only tighten small firms' financial constraints through short-term bank borrowings. Besides, I find evidence that large firms use cash holdings to finance inventories after the shocks to credit markets
Empirical Essays On Heterogeneous Firms And International Trade
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Author : Kaleb Girma Abreha
language : en
Publisher:
Release Date : 2015
Empirical Essays On Heterogeneous Firms And International Trade written by Kaleb Girma Abreha and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Essays In International And Macroeconomics
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Author : Junhyong Kim
language : en
Publisher:
Release Date : 2021
Essays In International And Macroeconomics written by Junhyong Kim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
This dissertation analyzes micro-level data and employs a general equilibrium model to study heterogeneous firm-level responses to aggregate shocks, underlying sources of the observed difference in firm's decisions, and industry and country-level implications. The first chapter investigates how cross-sectional micro-uncertainty influences the investment of small and large firms and discusses the aggregate implications of the heterogeneity in their investment decisions. Empirically, we find that large firms show less investment decline in times of heightened uncertainty. We provide empirical evidence for the underlying driver of the observed size effect: the heterogeneous responses across firms are in fact the consequence of large firms operating in multiple markets rather than their size per se. To interpret these findings, we build a heterogeneous firm model with single- and multi-unit firms subject to (i) unit-level real frictions, i.e., fixed and convex investment adjustment costs and (ii) firm-level financial frictions, i.e., costly equity issuance. In the model with unit-level frictions, an increase in uncertainty lowers the investment of both single and multi-unit firms through a `wait-and-see' effect. For a multi-unit firm, on the other hand, firm-level financial frictions generate the interdependence of investment across units within a firm, i.e., a fall in investment in one unit enlarges internal funds and so relaxes the constraint on the amount a firm can invest in the other unit. Therefore, upon uncertainty shocks, multi-unit firms lower their investment by less than single-unit firms. This is because the `wait-and-see' effect is partially offset by the relaxation of financial constraints due to the availability of larger internal funds when investment in one unit decreases. To examine the aggregate implications due to the heterogeneity in firms' responses, we compare the benchmark economy to a counterfactual economy with only single-unit firms. The result shows that the contribution of multi-unit firms is sizable in alleviating the impact of uncertainty shocks on aggregate investment. In the second chapter, with Korean firm-level and aggregated industry-level data, we uncover a balance sheet channel through which the exchange rate shock translates into domestic prices. Exploiting the quasi-natural experiment environment during the Asian Financial Crisis, we investigate how exposure to foreign currency debt prior to the crisis leads to different price dynamics. Our empirical finding suggests that when a sector had a higher level of short-term foreign currency debt ratio prior to the crisis, the price increase is more pronounced. Based on this empirical result, we build a heterogeneous firm model to study the transition path upon an unexpected real exchange rate shock, calibrated to match the real exchange rate changes in the 1996-98 period in Korea. In our model, a currency depreciation inflates the domestic value of foreign currency debt. As a consequence, firms, with a high share of their debt in foreign currency, face tighter working capital constraint and reduce their investment more, leading to higher costs of production and higher prices. The model is able to generate qualitatively consistent and quantitatively sizeable price increase upon a large depreciation of the currency, and furthermore, explain the cross-sectional variation in the sectoral price changes across industries. We also find that the interaction of strategic complementarity in firms' price settings and heterogeneity in foreign currency debt holdings across firms within an industry play an important role in amplifying the negative balance sheet effect on industry-level price dynamics.
Essays In Macroeconomics
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Author : Yicheng Wang
language : en
Publisher:
Release Date : 2015
Essays In Macroeconomics written by Yicheng Wang and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with Business enterprises categories.
"This thesis contains three chapters. The first chapter investigates whether wage dynamics in long-term employment relationships can help financially constrained firms and mitigate their financial shocks. The second chapter is related to the first chapter, and investigates whether workers' wealth and liquidity conditions have any impacts on the wage dynamics when their employers face financial constraints. The third chapter studies accumulation of firm-specific human capital in the presence of debt market frictions. In chapter 1, I am motivated by the evidence which suggests financially constrained firms may offer lower wages, coupled with faster wage growth. If these constrained firms can tilt wages, cutting current wages in exchange for later increases, this potentially mitigates the impact of financial frictions or shocks. This chapter studies the aggregate implications of this mitigating effect with an application to the 2008 financial crisis. I provide a new, tractable equilibrium model of wage dynamics for heterogeneous firms--some are financially constrained, some not. Risk-neutral firms post optimal long-term wage contracts to attract risk-averse workers through competitive search. When applied to the 2008 financial crisis, the model predicts that small firms, being more likely to be constrained, tend to temporarily cut workers' wages, while for large firms wages are quite smooth and stable. Counterfactual experiments in the model show that the mitigating effect can be important. For instance, if the wages within a contract were more rigid (e.g., by raising workers' risk aversion parameter from 2 to 10), the aggregate output would have been even lower in the crisis by about 2% and the unemployment rate higher by about a third of a percentage point. Lastly, I find that the model has empirical support along several dimensions. The model is consistent with cyclical behavior in wage data (including new hires and job stayers' wage behavior). Its prediction that small firms cut wages much more than large firms is also consistent with micro-level data during the Great Recession. In chapter 2, I investigate whether workers' wealth and liquidity conditions matter for the wage dynamics in long-term employment relationships. The theoretical model in this chapter implies that wealthy workers, or workers with more liquid assets, are able to and willing to take wage adjustments when firms face financial constraints. Empirically, I find mixed evidence for this implication. For instance, among those workers who work at small firms, homeowners, compared to renters, are more likely to have wages cuts and work more hours around 2008-2009. For other measures of workers' assets and liquidity, the evidence is not significant. It is possible to explore this issue further by using richer and more detailed data, and my analysis in this chapter provides a first step toward this direction. Chapter 3 studies research and development (R&D) investment and accumulation of firm-specific knowledge capital (i.e., human capital) in the presence of debt market frictions, highlighting the macroeconomic implications. Empirically, R&D investment and knowledge capital are negatively correlated with debt at the firm level, which is in contrast with the positive relationship between physical investment and firm debt. I propose a new model to account for those facts: Firms accumulate firm-specific knowledge capital through R&D investment. However, knowledge capital-different from physical capital-cannot be used as banking collateral. Firms with high R&D investment opportunities rely more on internal finance and less on external debt. The model is quantitatively consistent with empirical facts along a variety of dimensions. Based on the model, I then study the implications of two industrial policies. A policy that encourages using intellectual property as collateral for bank loans has a small effect. I recommend a policy of tax credits for R&D investment. In fact, the tax credit policy can increase output by more than 3% in the long run."--Pages iv-vi.
Essays On Macroeconomics And Labor Markets
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Author : Miren Azkarate-Askasua
language : en
Publisher:
Release Date : 2020
Essays On Macroeconomics And Labor Markets written by Miren Azkarate-Askasua and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
This thesis contains three essays on the macroeconomic effects of labor markets with a special emphasis on market power and the determination of wages. In the first chapter, Miguel Zerecero and I study the efficiency and welfare effects of employer and union labor market power. We use data of French manufacturing firms to first document a negative relationship between employment concentration and wages and labor shares. At the micro-level, we identify the effects of employment concentration thanks to mass layoff shocks to competitors. Second, we develop a bargaining model in general equilibrium that incorporates employer and union labor market power. The model features structural labor wedges that are heterogeneous across firms and potentially generate misallocation of resources. We propose an estimation strategy that separately identifies the structural parameters determining both sources of labor market power. Furthermore, we allow different parameters across industries which contributes to the heterogeneity of the wedges. We show that observing wage and employment data is enough to compute counterfactuals relative to the baseline. Third, we evaluate the efficiency and welfare losses from labor market distortions. Eliminating employer and union labor market power increases output by 1.6% and the labor share by 21 percentage points translating into significant welfare gains for workers. Workers' geographic mobility is key to realize the output gains from competition. In the second chapter, Miguel Zerecero and I propose a bias correction method for estimations of quadratic forms in the parameters of linear models. It is known that those quadratic forms exhibit small-sample bias that appears when one wants to perform a variance decomposition such as decomposing the sources of wage inequality. When the number of covariates is large, the direct computation for a bias correction is not feasible and we propose a bootstrap method to estimate the correction. Our method accommodates different assumptions on the structure of the error term including general heteroscedasticity and serial correlation. Our approach has the benefit of correcting the bias of multiple quadratic forms of the same linear model without increasing the computational cost and being very flexible. We show with Monte Carlo simulations that our bootstrap procedure is effective in correcting the bias and we compare it to other methods in the literature. Using administrative data for France, we apply our method by doing a variance decomposition of a linear model of log wages with person and firm fixed effects. We find that the person and firm effects are less important in explaining the variance of log wages after correcting for the bias. In the third chapter, I study peer effects at the workplace. I focus on how potential peers determine a worker's location and her future wage profile. I empirically disentangle if workplace peers affect each other through learning or network effects. Similarly to the literature, I document the importance of learning which is more pronounced for the youngest cohorts arguably with no networks. I propose a structural model to understand the mechanism behind learning. The final goal of the model is to quantify the impact of peer learning the firm geographical allocation of workers, and on the rising between firm wage inequality.
Essays On Labor Market Dynamics
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Author : Christina Hyde Patterson
language : en
Publisher:
Release Date : 2019
Essays On Labor Market Dynamics written by Christina Hyde Patterson and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
This thesis consists of three chapters on labor market dynamics. In the first chapter, I show empirically that the unequal incidence of recessions is a core channel through which aggregate shocks are amplified. I show that the aggregate marginal propensity to consume (MPC) is larger when income shocks disproportionately hit high-MPC individuals, and I define the Matching Multiplier as the increase in the output multiplier originating from the matching of workers to jobs with different income elasticities - a greater matching multiplier translates into more powerful amplification in a range of business cycle models. Using administrative data from the United States, I document that the earnings of individuals with a higher marginal propensity to consume are more exposed to recessions. I show that this covariance between worker MPCs and the elasticity of their earnings to GDP is large enough to increase shock amplification by 40 percent over a benchmark in which all workers are equally exposed. Using local labor market variation, I validate this amplification mechanism by showing that areas with higher matching multipliers experience larger employment fluctuations over the business cycle. Lastly, I derive a generalization of the matching multiplier in an incomplete markets model and show numerically that this mechanism is quantitatively similar within this structural framework. In the second chapter, joint with David Autor, David Dorn, Lawrence Katz, and John Van Reenen, we explore the well-documented fall of labor's share of GDP in the United States and many other countries. Existing empirical assessments typically rely on industry or macro data, obscuring heterogeneity among firms. In this paper, we analyze micro panel data from the U.S. Economic Census since 1982 and document empirical patterns to assess a new interpretation of the fall in the labor share based on the rise of "superstar firms." If globalization or technological changes advantage the most productive firms in each industry, product market concentration will rise as industries become increasingly dominated by superstar firms. Since these firms have high markups and a low labor share of firm value-added and sales, this depresses the aggregate labor share. We empirically assess seven predictions of this hypothesis: (i) industry sales will increasingly concentrate in a small number of firms; (ii) industries where concentration rises most will have the largest declines in the labor share; (iii) the fall in the labor share will be driven largely by reallocation rather than a fall in the unweighted mean labor share across all firms; (iv) the between-firm reallocation component of the fall in the labor share will be greatest in the sectors with the largest increases in market concentration; (v) the industries that are becoming more concentrated will exhibit faster growth of productivity and innovation; (vi) the aggregate markup will rise more than the unweighted firm markup; and (vii) these patterns should be observed not only in U.S. firms, but also internationally. We find support for all of these predictions. In the third chapter, I explore how the distribution of tasks across industries affects labor market responses to shocks. I present a model in which task-level wages connect industries employing the same tasks, meaning that the distribution of tasks across industries insures some workers against shocks and alters their labor market experiences. Workers trained in more dispersed tasks (e.g. accountants) face less unemployment risk from industry-specific shocks than workers who do tasks that are concentrated in few industries (e.g. petroleum engineers). Using industry and regional data, I show empirical evidence that supports the model's predictions - industries that employ more specialized labor contract less in response to demand shocks than industries with less specialized labor. JEL Classifications: E21, J23, D33
Essays In Empirical Macroeconomics
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Author : Sebastian Stumpner
language : en
Publisher:
Release Date : 2014
Essays In Empirical Macroeconomics written by Sebastian Stumpner and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
This dissertation consists of two chapters which study questions at the intersection of macroeconomics, trade, and finance. The first chapter investigates the role of trade for the geographic spread of the 2007-09 recession within the U.S. The second chapter, co-authored with Mauricio Larrain, studies the role of financial market reforms for changes in aggregate productivity, using the example of Eastern European countries in the late 1990s and early 2000s. In the first chapter, I use the large spatial variation in consumer demand shocks at the onset of the Great Recession to study the mechanisms behind the ensuing geographic spread of the crisis. While the initial increase in unemployment was concentrated in areas with housing busts, subsequently unemployment slowly spread across space. By 2009, it was above pre-crisis levels in almost all U.S. counties. I show that trade was an important driver of this geographic spread of the crisis. To identify the trade channel empirically, I make use of heterogeneity in the direction of trade flows across industries in the same state: Industries that sold relatively more to states with housing boom-bust cycles grew by more before the crisis and declined faster from 2007-09. These results cannot be explained by a collapse in credit supply. I then link the reduced form empirical evidence to a formal model of contagion through trade. In a quantitative exercise, the model delivers a cross-sectional effect of similar magnitude as the one found empirically and reveals that the trade channel can explain roughly a third of the overall spread. The second chapter analyzes the microeconomic channels by which financial sector reforms affect aggregate productivity. We use a large firm-level dataset to study the episode of financial market liberalization in 10 Eastern European countries starting in the late 1990s. We exploit cross-sectoral differences in external financial dependence and find that financial reform increases productivity disproportionately in industries heavily dependent on external finance. We show that this productivity increase is driven entirely by improvements in the within-industry allocation of resources across firms, as opposed to within-firm productivity improvements. According to our results, reform allows financially-constrained firms to take on new debt, increase market share, and produce closer to optimal level. A back-of-the-envelope calculation suggests that financial reform increases aggregate manufacturing productivity by 17%. Our results highlight financial markets' key role in improving the within-industry allocation of capital.