Declining Business Dynamism in Europe: The Role of Shocks, Market Power, and Technology
Filippo Biondi, Sergio Inferrera, Matthias Mertens, Javier Miranda
IWH-CompNet Discussion Papers,
Nr. 2,
2023
Abstract
We study changes in business dynamism in Europe after 2000 using novel micro-aggregated data that we collected for 19 European countries. In all countries, we document a broad-based decline in job reallocation rates that concerns most economic sectors and size classes. This decline is mainly driven by dynamics within sectors, size, and age classes rather than by compositional changes. Large and mature firms experience the strongest decline in job reallocation rates. Simultaneously, the employment shares of young firms decline. Consistent with US evidence, firms’ employment has become less responsive to productivity shocks. However, the dispersion of firms’ productivity shocks has decreased too. To enhance our understanding of these patterns, we derive and apply a novel firm-level framework that relates changes in firms’ sales, market power, wages, and production technology to firms’ responsiveness and job reallocation.
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Declining Business Dynamism in Europe: The Role of Shocks, Market Power, and Technology
Filippo Biondi, Sergio Inferrera, Matthias Mertens, Javier Miranda
IWH Discussion Papers,
Nr. 19,
2023
Abstract
We study changes in business dynamism in Europe after 2000 using novel micro-aggregated data that we collected for 19 European countries. In all countries, we document a broad-based decline in job reallocation rates that concerns most economic sectors and size classes. This decline is mainly driven by dynamics within sectors, size, and age classes rather than by compositional changes. Large and mature firms experience the strongest decline in job reallocation rates. Simultaneously, the employment shares of young firms decline. Consistent with US evidence, firms’ employment has become less responsive to productivity shocks. However, the dispersion of firms’ productivity shocks has decreased too. To enhance our understanding of these patterns, we derive and apply a novel firm-level framework that relates changes in firms’ sales, market power, wages, and production technology to firms’ responsiveness and job reallocation.
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Out of Sight, out of Mind: Divestments and the Global Reallocation of Pollutive Assets
Tobias Berg, Lin Ma, Daniel Streitz
SSRN Working Papers,
2023
Abstract
Large emitters reduced their carbon emissions by around 11-15% after the 2015 Paris Agreement (“the Agreement”) relative to public firms that are less in the limelight. We show that this effect is predominantly driven by divestments. Large emitters are 9 p.p. more likely to divest pollutive assets in the post-Agreement period, an increase of over 75%. This divestment effect comes from asset sales and not from closures of pollutive facilities. There is no evidence for increased engagements in other emission reduction activities. Our results indicate significant global asset reallocation effects after the Agreement, shifting emissions out of the limelight.
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Department Profiles
Research Profiles of the IWH Departments All doctoral students are allocated to one of the four research departments (Financial Markets – Laws, Regulations and Factor Markets –…
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LRF Research Profile
Research Profile of the Department of Laws, Regulations and Factor Markets The Department of Laws, Regulations and Factor Markets conducts research on the interaction of labour…
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Das IWH auf der ASSA-Jahrestagung 2020 in San Diego
Das IWH auf der ASSA-Jahrestagung 2020 in San Diego Die American Economic Association (AEA) organisiert vom 3. bis 5. Januar 2020 die jährlich stattfindende ASSA-Tagung in San…
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Speed Projects
Speed Projects Hier finden Sie die IWH EXplore Speed Projects chronologisch absteigend sortiert. 2022 2021 2020 2019 2018 2017 2016 2015 2014 2022 SPEED 2022/02 Competetiveness in…
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Projekte
Unsere Projekte 07.2022 ‐ 12.2026 Evaluierung des InvKG und des Bundesprogrammes STARK Bundesministerium für Wirtschaft und Klimaschutz (BMWK) Im Auftrag des Bundesministeriums…
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Department Profiles
Research Profiles of the IWH Departments All doctoral students are allocated to one of the four research departments (Financial Markets – Laws, Regulations and Factor Markets –…
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Minimum Wages, Productivity, and Reallocation
Mirja Hälbig, Matthias Mertens, Steffen Müller
IZA Discussion Paper,
Nr. 16160,
2023
Abstract
We study the productivity effect of the German national minimum wage by applying administrative firm data. At the firm level, we confirm positive effects on wages and negative employment effects and document higher productivity even net of output price increases. We find higher wages but no employment effects at the level of aggregate industry × region cells. The minimum wage increased aggregate productivity in manufacturing. We do not find that employment reallocation across firms contributed to these aggregate productivity gains, nor do we find improvements in allocative efficiency. Instead, the productivity gains from the minimum wage result from within-firm productivity improvements only.
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