Download or read book Firm level and Local Labor Market Effects of a Large Credit Shock written by Carlos Henrique Corseuil and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: A common explanation for the poor performance of entrepreneurs in developing economies is their inability to obtain credit to expand their scale of operation. This paper assesses the aggregate impacts of the Cartão BNDES, a credit line targeted at small and medium enterprises (SMEs) in Brazil, to investigate the role of credit constraints on SMEs performance. We use a major expansion of credit supply within the line to estimate causal effects of credit supply on firm size distribution, entry and exit, and employment. By exploiting the fact that firms can only use the available credit with suppliers that are registered in the credit line's system, we construct a variable that capture a credit supply expansion that varies exogenously across regions. We use an instrumental variable estimator that exploits differential access to the line and the expansion of suppliers to recover these causal effects. Our main result points that a 1% increase in the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social - BNDES) card loans has a positive effect on average local formal employment between 6.7% and 10.3%. This increase in employment is driven by the increase in the average size of firms, specially by the average size of new entrant firms. These are relevant results as they suggest that the type of credit provided by BNDES card foster the dynamics of local labor markets, increasing the entrance of new firms, which are pointed as the group most affected by credit constrains.
Download or read book The Dynamic Effects of Local Labor Market Shocks on Small Firms in The United States written by Mr. Philip Barrett and published by International Monetary Fund. This book was released on 2024-03-22 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: We use payroll data on over 1 million workers at 80,000 small firms to construct county-month measures of employment, hours, and wages that correct for dynamic changes in sample composition in response to business cycle fluctuations. We use this to estimate the response of small firms' employment, hours and wages following tighter local labor market conditions. We find that employment and hours per worker fall and wages rise. This is consistent with the predictions of the response to a demand shock in the well-known “jobs ladder” model of labor markets. To check this interpretation, we show our results hold when instrumenting for local demand using county-level Department of Defense contract spending. Correction for dynamic sample bias is important -- without it, the hours fall by only one third as much and wages increase by double.
Download or read book The Future of Europe written by Alberto Alesina and published by MIT Press. This book was released on 2008-09-26 with total page 197 pages. Available in PDF, EPUB and Kindle. Book excerpt: A provocative argument that unless Europe takes serious action soon, its economic and political decline is unavoidable, and a clear statement of the steps Europe must take before it's too late. Unless Europe takes action soon, its further economic and political decline is almost inevitable, economists Alberto Alesina and Francesco Giavazzi write in this provocative book. Without comprehensive reform, continental Western Europe's overprotected, overregulated economies will continue to slow—and its political influence will become negligible. This doesn't mean that Italy, Germany, France, and other now-prosperous countries will become poor; their standard of living will remain comfortable. But they will become largely irrelevant on the world scene. In The Future of Europe, Alesina and Giavazzi (themselves Europeans) outline the steps that Europe must take to prevent its economic and political eclipse. Europe, the authors say, has much to learn from the market liberalism of America. Europeans work less and vacation more than Americans; they value job stability and security above all. Americans, Alesina and Giavazzi argue, work harder and longer and are more willing to endure the ups and downs of a market economy. Europeans prize their welfare states; Americans abhor government spending. America is a melting pot; European countries—witness the November 2005 unrest in France—have trouble absorbing their immigrant populations. If Europe is to arrest its decline, Alesina and Giavazzi warn, it needs to adopt something closer to the American free-market model for dealing with these issues. Alesina and Giavazzi's prescriptions for how Europe should handle worker productivity, labor market regulation, globalization, support for higher education and technology research, fiscal policy, and its multiethnic societies are sure to stir controversy, as will their eye-opening view of the European Union and the euro. But their wake-up call will ring loud and clear for anyone concerned about the future of Europe and the global economy.
Download or read book Credit Supply and Productivity Growth written by Francesco Manaresi and published by International Monetary Fund. This book was released on 2019-05-17 with total page 75 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the impact of bank credit on firm productivity. We exploit a matched firm-bank database covering all the credit relationships of Italian corporations, together with a natural experiment, to measure idiosyncratic supply-side shocks to credit availability and to estimate a production model augmented with financial frictions. We find that a contraction in credit supply causes a reduction of firm TFP growth and also harms IT-adoption, innovation, exporting, and adoption of superior management practices, while a credit expansion has limited impact. Quantitatively, the credit contraction between 2007 and 2009 accounts for about a quarter of observed the decline in TFP.
Download or read book Redistribution of Local Labor Market Shocks Through Firms Internal Networks written by Xavier Giroud and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Local labor market shocks are difficult to insure against. Using confidential micro data from the U.S. Census Bureau's Longitudinal Business Database, we document that firms redistribute the employment impacts of local demand shocks across regions through their internal networks of establishments. During the Great Recession, the massive decline in house prices caused a sharp drop in consumer demand, leading to large employment losses in the non-tradable sector. Consistent with firms smoothing out the impacts of these shocks across regions, we find large elasticities of non-tradable establishment-level employment with respect to house prices in other counties in which the firm has establishments. At the same time, establishments of firms with larger regional networks exhibit lower employment elasticities with respect to local house prices in the establishment's own county. To account for general equilibrium adjustments, we aggregate non-tradable employment at the county level. Similar to what we found at the establishment level, we find that non-tradable county-level employment responds strongly to local demand shocks in other counties linked through firms' internal networks. These results are not driven by direct demand spillovers from nearby counties, common shocks to house prices, or local demand shocks affecting non-tradable employment in distant counties indirectly via the trade channel. Our results suggest that firms play an important role in the extent to which local labor market risks are shared across regions.
Download or read book The Long Run Earnings Effects of a Credit Market Disruption written by Effrosyni Adamopoulou and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the long term consequences on workers' labour earnings of the credit crunch induced by the 2007-2008 financial crisis. We study the evolution of both employment and wages in a large sample of Italian workers followed for nine years after the start of the crisis. We rely on a unique matched bank-employer-employee administrative dataset to construct a firm-specific shock to credit supply, which identifies firms that, because of the collapse of the interbank market during the financial crisis, were unexpectedly aected by credit restrictions. We find that workers who were employed before the crisis in firms more exposed to the credit crunch experience persistent and sizable earnings losses, mainly due to a permanent drop in days worked. These effects are heterogeneous across workers, with high-type workers being more affected in the long run. Moreover, firms operating in areas with favorable labor market conditions react to the credit shock by hoarding high-type workers and displacing low-type ones. Under unfavorable labor market conditions instead, firms select to displace also high-type (and therefore more expensive) workers, even though wages do react to the slack. All in all, our results document persistent eects on the earnings distribution.
Download or read book Internal Capital Markets in Business Groups and the Propagation of Credit Supply Shocks written by Ms.Yu Shi and published by International Monetary Fund. This book was released on 2019-05-21 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using business registry data from China, we show that internal capital markets in business groups can propagate corporate shareholders’ credit supply shocks to their subsidiaries. An average of 16.7% local bank credit growth where corporate shareholders are located would increase subsidiaries investment by 1% of their tangible fixed asset value, which accounts for 71% (7%) of the median (average) investment rate among these firms. We argue that equity exchanges is one channel through which corporate shareholders transmit bank credit supply shocks to the subsidiaries and provide empirical evidence to support the channel.
Download or read book Handbook of Labor Economics written by Orley Ashenfelter and published by Elsevier. This book was released on 1999-11-18 with total page 800 pages. Available in PDF, EPUB and Kindle. Book excerpt: A guide to the continually evolving field of labour economics.
Download or read book Essays on the Local Labor Market Effects of Globalization written by Oscar Alejandro Mendez Medina and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of a series of papers studying the effect that globalization in its multiple forms has had on Mexican local labor markets. In Chapter 1, 'Trade Shocks and Mexican Local Labor Markets in the Great Recession', I study the role that international trade played in the transmission of the U.S. credit crisis to Mexican local labor markets. The economic opening process that Mexico started by opening up to international trade in the mid-1980s when it became a member of the GATT, and then reinforced in 1994 when NAFTA was enacted, has created a strong link between the business cycles of Mexico and the United States (Robertson, 2000). This trade-driven phenomenon has had significant consequences for Mexico's economic geography (Hanson, 1996). In particular, easier access to the U.S. market increased the level of dependence on exports to the U.S. for some Mexican municipalities. This increase in dependence was not homogenous throughout the country, mostly due to differences by municipality in transportation costs and industry specialization. This heterogeneity, plus the evolution of U.S. trade during the Great Recession (2007-2009), which involved a $40 billion drop in U.S. imports from Mexico, allows me to identify the role that these trade linkages played in the transmission of the crisis to Mexican local labor markets. I show that differences in manufacturing industry structure caused by Mexico's opening process have made a subset of Mexican municipalities especially vulnerable to economic events in the U.S. I find that Mexican regions that exported relatively more to the U.S. experienced large and significant differential effects when compared to municipalities more focused on the domestic market. Mexican regions with significant ties to the U.S. market experienced, during the crisis, a significantly larger decrease in employment and wages, and greater within local labor market adjustments than their less open counterparts, mainly characterized by large drops in manufacturing employment and significant increases in employment in the service and agricultural industries. Pursuing the same line of research, the second chapter of my dissertation explores 'The Effect of Chinese Import Competition on Mexican Local Labor Markets'. Recent estimates of the effect of globalization on labor markets have found that trade is having an increasingly larger impact on wage inequality. Particularly relevant is the "China Syndrome" study by Autor, Dorn, and Hanson (2013a), which presents evidence on the disruptive effects that import competition can have on a developed economy by estimating the impact that Chinese import competition had on U.S. local labor markets. One would expect to find that Chinese exports also had a large and significant effect on developing economies, particularly on those specialized in the production of labor-intensive goods. My paper contributes to the study of this relationship by analyzing the Mexican case. Following the methodology introduced in Autor et al. (2013a), I exploit variation across Mexican regions in import exposure stemming from initial differences in industry specialization in order to estimate the effect Chinese competition had on local Mexican labor markets. Also, by taking advantage of the Mexican exports' high dependence on the U.S. market, I estimate the effect that China-caused trade diversion had on Mexican labor markets. I find that the increase in competition decreased the employment share in manufacturing for the average Mexican local labor market. This effect was found to be larger for regions with high exposure to Chinese competition in the U.S. market, showing that there was a significant, negative indirect effect from China's trade growth. Workers' mobility also increased due to this negative shock. I name the third chapter 'Mexican Migrants' Response to a Trade Shock'. This study exploits the variation created by Chinese import competition across Mexican states and combines it with variation across U.S. states in their likelihood of receiving Mexican migrants in order to yield a causal estimate of the variation in the Mexican share of the labor force across U.S. states. The purpose of this study is both to determine whether international migration can be affected by external trade shocks, a topic very scantily studied in the economic literature of both trade and migration, and to open the doors to a study of migration effects on the receiving economy by using a plausibly exogenous shock to migration, as is the increase in import competition by China. I find that the increase in Mexican imports from China had a significant effect on Mexican workers' mobility towards the U.S. labor markets.
Download or read book Banks Firms and Jobs written by Fabio Berton and published by International Monetary Fund. This book was released on 2017-02-14 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the employment effects of financial shocks using a rich data set of job contracts, matched with the universe of firms and their lending banks in one Italian region. To isolate the effect of the financial shock we construct a firm-specific time-varying measure of credit supply. The contraction in credit supply explains one fourth of the reduction in employment. This result is concentrated in more levered and less productive firms. Also, the relatively less educated and less skilled workers with temporary contracts are the most affected. Our results are consistent with the cleansing role of financial shocks.
Download or read book Hysteresis and Business Cycles written by Ms.Valerie Cerra and published by International Monetary Fund. This book was released on 2020-05-29 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Traditionally, economic growth and business cycles have been treated independently. However, the dependence of GDP levels on its history of shocks, what economists refer to as “hysteresis,” argues for unifying the analysis of growth and cycles. In this paper, we review the recent empirical and theoretical literature that motivate this paradigm shift. The renewed interest in hysteresis has been sparked by the persistence of the Global Financial Crisis and fears of a slow recovery from the Covid-19 crisis. The findings of the recent literature have far-reaching conceptual and policy implications. In recessions, monetary and fiscal policies need to be more active to avoid the permanent scars of a downturn. And in good times, running a high-pressure economy could have permanent positive effects.
Download or read book From Firm Level Imports to Aggregate Productivity written by Mr.JaeBin Ahn and published by International Monetary Fund. This book was released on 2016-09-06 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using the Korean manufacturing firm-level data, this paper confirms that three stylized facts on importing hold in Korea: the ratio of imported inputs in total inputs tends to be procyclical; the use of imported inputs increases productivity; and larger firms are more likely to use imported inputs. As a result, we find that firm-level import decisions explain a non-trivial fraction of aggregate productivity fluctuations in Korea over the period between 2006 and 2012. Main findings of this paper suggest a possible link between the recent global productivity slowdown and the global trade slowdown.
Download or read book What is the Impact of Increased Business Competition written by Sónia Félix and published by International Monetary Fund. This book was released on 2019-12-13 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the macroeconomic effect and underlying firm-level transmission channels of a reduction in business entry costs. We provide novel evidence on the response of firms' entry, exit, and employment decisions. To do so, we use as a natural experiment a reform in Portugal that reduced entry time and costs. Using the staggered implementation of the policy across the Portuguese municipalities, we find that the reform increased local entry and employment by, respectively, 25% and 4.8% per year in its first four years of implementation. Moreover, around 60% of the increase in employment came from incumbent firms expanding their size, with most of the rise occurring among the most productive firms. Standard models of firm dynamics, which assume a constant elasticity of substitution, are inconsistent with the expansionary and heterogeneous response across incumbent firms. We show that in a model with heterogeneous firms and variable markups the most productive firms face a lower demand elasticity and expand their employment in response to increased entry.
Download or read book Labor Market Imperfections and Thick Market Externalities from Innovation written by Daron Acemoglu and published by . This book was released on 1994 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Once and Future Worker written by Oren Cass and published by Encounter Books. This book was released on 2018-11-13 with total page 247 pages. Available in PDF, EPUB and Kindle. Book excerpt: “[Cass’s] core principle—a culture of respect for work of all kinds—can help close the gap dividing the two Americas....” – William A. Galston, The Brookings Institution The American worker is in crisis. Wages have stagnated for more than a generation. Reliance on welfare programs has surged. Life expectancy is falling as substance abuse and obesity rates climb. These woes are not the inevitable result of irresistible global and technological forces. They are the direct consequence of a decades-long economic consensus that prioritized increasing consumption—regardless of the costs to American workers, their families, and their communities. Donald Trump’s rise to the presidency focused attention on the depth of the nation’s challenges, yet while everyone agrees something must change, the Left’s insistence on still more government spending and the Right’s faith in still more economic growth are recipes for repeating the mistakes of the past. In this groundbreaking re-evaluation of American society, economics, and public policy, Oren Cass challenges our basic assumptions about what prosperity means and where it comes from to reveal how we lost our way. The good news is that we can still turn things around—if the nation’s proverbial elites are willing to put the American worker’s interests first. Which is more important, pristine air quality, or well-paying jobs that support families? Unfettered access to the cheapest labor in the world, or renewed investment in the employment of Americans? Smoothing the path through college for the best students, or ensuring that every student acquires the skills to succeed in the modern economy? Cutting taxes, expanding the safety net, or adding money to low-wage paychecks? The renewal of work in America demands new answers to these questions. If we reinforce their vital role, workers supporting strong families and communities can provide the foundation for a thriving, self-sufficient society that offers opportunity to all.
Download or read book Financial Markets and the Macroeconomy written by Carl Chiarella and published by Routledge. This book was released on 2009-06-02 with total page 513 pages. Available in PDF, EPUB and Kindle. Book excerpt: This important new book from a group of Keynesian, but nonetheless technically-oriented economists explores one of the dominant paradigms in financial economics: the ‘intertemporal general equilibrium approach’.
Download or read book Making It Big written by Andrea Ciani and published by World Bank Publications. This book was released on 2020-10-08 with total page 178 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economic and social progress requires a diverse ecosystem of firms that play complementary roles. Making It Big: Why Developing Countries Need More Large Firms constitutes one of the most up-to-date assessments of how large firms are created in low- and middle-income countries and their role in development. It argues that large firms advance a range of development objectives in ways that other firms do not: large firms are more likely to innovate, export, and offer training and are more likely to adopt international standards of quality, among other contributions. Their particularities are closely associated with productivity advantages and translate into improved outcomes not only for their owners but also for their workers and for smaller enterprises in their value chains. The challenge for economic development, however, is that production does not reach economic scale in low- and middle-income countries. Why are large firms scarcer in developing countries? Drawing on a rare set of data from public and private sources, as well as proprietary data from the International Finance Corporation and case studies, this book shows that large firms are often born large—or with the attributes of largeness. In other words, what is distinct about them is often in place from day one of their operations. To fill the “missing top†? of the firm-size distribution with additional large firms, governments should support the creation of such firms by opening markets to greater competition. In low-income countries, this objective can be achieved through simple policy reorientation, such as breaking oligopolies, removing unnecessary restrictions to international trade and investment, and establishing strong rules to prevent the abuse of market power. Governments should also strive to ensure that private actors have the skills, technology, intelligence, infrastructure, and finance they need to create large ventures. Additionally, they should actively work to spread the benefits from production at scale across the largest possible number of market participants. This book seeks to bring frontier thinking and evidence on the role and origins of large firms to a wide range of readers, including academics, development practitioners and policy makers.
