Who Creates New Firms When Local Opportunities Arise?
Shai B. Bernstein, Emanuele Colonnelli, Davide Malacrino, Timothy McQuade
Journal of Financial Economics,
No. 1,
2022
Abstract
We examine the characteristics of the individuals who become entrepreneurs when local opportunities arise. We identify local demand shocks by linking fluctuations in global commodity prices to municipality-level agricultural endowments in Brazil. We find that the firm creation response is mostly driven by young and skilled individuals. The characteristics of these responsive entrepreneurs are significantly different from those of average entrepreneurs in the economy. By structurally estimating a novel two-sector model of a local economy, we highlight how the demographic composition of the local population can significantly affect the entrepreneurial responsiveness of the economy.
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Kommentar: Weniger Krisenmodus und wieder mehr Wettbewerb, bitte!
Steffen Müller
Wirtschaft im Wandel,
No. 4,
2021
Abstract
Ende November kam die frohe Kunde aus Nürnberg: Die Arbeitslosenzahlen sind weiter gesunken, sogar den zehnten Monat in Folge. Was auf der einen Seite erfreulich ist, zeigt auf der anderen Seite, dass Arbeitskräftemangel eines der größten Probleme der deutschen Wirtschaft ist.
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Individualism, Human Capital Formation, and Labor Market Success
Katharina Hartinger, Sven Resnjanskij, Jens Ruhose, Simon Wiederhold
CESifo Working Paper,
No. 9391,
2021
Abstract
There is an ongoing debate about the economic effects of individualism. We establish that individualism leads to better educational and labor market outcomes. Using data from the largest international adult skill assessment, we identify the effects of individualism by exploiting variation between migrants at the origin country, origin language, and person level. Migrants from more individualistic cultures have higher cognitive skills and larger skill gains over time. They also invest more in their skills over the life-cycle, as they acquire more years of schooling and are more likely to participate in adult education activities. In fact, individualism is more important in explaining adult skill formation than any other cultural trait that has been emphasized in previous literature. In the labor market, more individualistic migrants earn higher wages and are less often unemployed. We show that our results cannot be explained by selective migration or omitted origin-country variables.
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Access to Public Capital Markets and Employment Growth
Alexander Borisov, Andrew Ellul, Merih Sevilir
Journal of Financial Economics,
No. 3,
2021
Abstract
This paper examines the effect of going public on firm-level employment. To establish a causal effect, we employ a novel data set of private firms to investigate employment growth in IPO firms relative to a group of firms that file for an IPO but subsequently withdraw their offering. We find that employment increases significantly after going public, and the increase is more pronounced in industries with requirements for highly skilled labor and greater dependence on external finance. Improved ability to undertake acquisitions and a strategic shift toward commercialization, rather than agency problems, explain employment growth. Overall, these results highlight the importance of going public for firms' employment policies.
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Returns to ICT Skills
Oliver Falck, Alexandra Heimisch-Roecker, Simon Wiederhold
Research Policy,
No. 7,
2021
Abstract
How important is mastering information and communication technology (ICT) on modern labor markets? We answer this question with unique data on ICT skills tested in 19 countries. Our two instrumental-variable models exploit technologically induced variation in broadband Internet availability that gives rise to variation in ICT skills across countries and German municipalities. We find statistically and economically significant returns to ICT skills. For instance, an increase in ICT skills similar to the gap between an average-performing and a top-performing country raises earnings by about 8 percent. One mechanism driving positive returns is selection into occupations with high abstract task content.
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29.07.2021 • 20/2021
Communication instead of conflict – why are female CEOs so interesting for hedge funds
The value of female-led firms is enhanced more by the intervention of activist investors than that of firms with male CEOs. This is the result of a recent paper by Iftekhar Hasan (Fordham University and IWH) and Qiang Wu (Rensselaer Polytechnic Institute, RPI) at the Halle Institute for Economic Research (IWH). "The results show that female CEOs particularly benefit from the intervention of hedge fund activists due to their strong communication and interpersonal skills," explains Iftekhar Hasan. This is because, on average, the intervention of an activist hedge fund increases the value of the firm ex post. To achieve this, activist hedge funds such as Carl Icahn, Trian Fundmanagement or Elliott prefer to rely on communication and cooperation with the management.
Reint E. Gropp
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Productivity and Employment in APAC Economies: A Comparison With the EU Using Firm-Level Information
Hoang Minh Duy, Filippo di Mauro, Peter Morgan
ADBI Working Paper,
No. 1264,
2021
Abstract
We provide an overview of productivity development and other related indicators in Asia and Pacific (APAC) countries, with comparisons with the Europe region. We use the seventh vintage firm-level data from the Productivity Research Network in the APAC region and CompNet in Europe for our study. The overall results show that the productivity growth in developed APAC countries (Australia, New Zealand, and the Republic of Korea) is significantly ahead of the growth in developing APAC countries (India and the People’s Republic of China) and on par with the EU’s growth. There is an ongoing process of bottom firms catching up with top firms in the Republic of Korea and the richest EU countries. Regarding employment and labor skills, employment growth has generally been quite stagnant in all regions. Labor skills, for which we use the wage premium as a proxy, are quite similar across most regions, with the richest EU countries showing a higher premium than the rest. Our test of the productivity–employment link indicates that the size of employment tends to have a greater impact on productivity in APAC countries, while labor skills have greater emphasis in the EU.
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International Emigrant Selection on Occupational Skills
Miguel Flores, Alexander Patt, Jens Ruhose, Simon Wiederhold
Journal of the European Economic Association,
No. 2,
2021
Abstract
We present the first evidence on the role of occupational choices and acquired skills for migrant selection. Combining novel data from a representative Mexican task survey with rich individual-level worker data, we find that Mexican migrants to the United States have higher manual skills and lower cognitive skills than nonmigrants. Results hold within narrowly defined region–industry–occupation cells and for all education levels. Consistent with a Roy/Borjas-type selection model, differential returns to occupational skills between the United States and Mexico explain the selection pattern. Occupational skills are more important to capture the economic motives for migration than previously used worker characteristics.
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Can Mentoring Alleviate Family Disadvantage in Adolescence? A Field Experiment to Improve Labor-Market Prospects
Sven Resnjanskij, Jens Ruhose, Simon Wiederhold, Ludger Woessmann
Abstract
We study a mentoring program that aims to improve the labor-market prospects of school-attending adolescents from disadvantaged families by offering them a university-student mentor. Our RCT investigates program effectiveness on three outcome dimensions that are highly predictive of adolescents later labor-market success: math grades, patience-social skills, and labor-market orientation. For low-SES adolescents, the one-to-one mentoring increases a combined index of the outcomes by half a standard deviation after one year, with significant increases in each dimension. Part of the treatment effect is mediated by establishing mentors as attachment figures who provide guidance for the future. The mentoring is not effective for higher-SES adolescents. The results show that substituting lacking family support by other adults can help disadvantaged children at adolescent age.
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Competition, Cost Structure, and Labour Leverage: Evidence from the U.S. Airline Industry
Konstantin Wagner
IWH Discussion Papers,
No. 21,
2020
Abstract
I study the effect of increasing competition on financial performance through labour leverage. To capture competition, I exploit variation in product market contestability in the U.S. airline industry. First, I find that increasing competitive pressure leads to increasing labour leverage, proxied by labour share. This explains the decrease in operating profitability through labour rigidities. Second, by exploiting variation in human capital specificity, I show that contestability of product markets induces labour market contestability. Whereas affected firms might experience more stress through higher wages or loss of skilled human capital, more mobile employee groups benefit from competitions through higher labour shares.
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