From Shares to Machines: How Common Ownership Drives Automation
Joseph Emmens, Dennis Hutschenreiter, Stefano Manfredonia, Felix Noth, Tommaso Santini
IWH Discussion Papers,
Nr. 23,
2024
Abstract
Does increasing common ownership influence firms’ automation strategies? We develop and empirically test a theory indicating that institutional investors’ common ownership drives firms that employ workers in the same local labor markets to boost automation-related innovation. First, we present a model integrating task-based production and common ownership, demonstrating that greater ownership overlap drives firms to internalize the impact of their automation decisions on the wage bills of local labor market competitors, leading to more automation and reduced employment. Second, we empirically validate the model’s predictions. Based on patent texts, the geographic distribution of firms’ labor forces at the establishment level, and exogenous increases in common ownership due to institutional investor mergers, we analyze the effects of rising common ownership on automation innovation within and across labor markets. Our findings reveal that firms experiencing a positive shock to common ownership with labor market rivals exhibit increased automation and decreased employment growth. Conversely, similar ownership shocks do not affect automation innovation if firms do not share local labor markets.
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IWH-Flash-Indikator III. und IV. Quartal 2024
Katja Heinisch, Oliver Holtemöller, Axel Lindner, Birgit Schultz
IWH-Flash-Indikator,
Nr. 3,
2024
Abstract
Die deutsche Wirtschaft ist noch immer im Abschwung. Seit nunmehr zwei Jahren folgen abwechselnd minimale Zu- und Abnahmen von einem Quartal auf das nächste. Zuletzt nahm das Bruttoinlandsprodukt (BIP) im zweiten Quartal 2024 um 0,1% ab. Zuvor war es zwar um 0,2% gestiegen (vgl. Abbildung 1), aber auch dies reicht nicht aus, um die negative Produktionslücke zu verringern. Die Produktion in der Industrie und vor allem am Bau ist im zweiten Quartal spürbar gesunken. Auch im laufenden dritten Quartal ist die Stimmung der Unternehmen schlecht. Neben einer schwachen Nachfrage für Exportgüter gibt es eine Reihe von Gründen, warum ein Aufschwung noch nicht in Gang kommt: So wirken neben hohen Zinsen und Energiepreisen auch eine richtungslose Politik sowie eine Vielzahl geopolitischer Krisenherde investitionshemmend. Auch der nach wie vor hohe Krankenstand belastet die Wirtschaft. Alles in allem dürfte das Bruttoinlandsprodukt (BIP) laut IWH-Flash-Indikator im dritten Quartal 2024 um lediglich 0,2% steigen, was erneut keine konjunkturelle Trendwende bedeutet. Eine kräftigere Belebung könnte sich aufgrund steigender Realeinkommen am Jahresende einstellen.
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Medienecho
Medienecho Dezember 2024 Oliver Holtemöller: So teuer sind die Wahlversprechen der Parteien in: Handelsblatt, 19.12.2024 IWH: Experten: Deutsche Wirtschaft schrumpft 2024 doch…
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Alumni
IWH-Alumni Das IWH pflegt den Kontakt zu seinen ehemaligen Mitarbeiterinnen und Mitarbeitern weltweit. Wir beziehen unsere Alumni in unsere Arbeit ein und unterrichten diese…
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Management Capability and Innovation
Bill Francis, Iftekhar Hasan, Gokhan Yilmaz
Stephen P. Ferris, Kose John, Anil K. Makhija (eds): Empirical Research in Banking and Corporate Finance. Advances in Financial Economics 21, Emerald,
2022
Abstract
This chapter investigates whether core competence of managers and their expansive (vs. specialized) managerial style affects firms' innovative ability, capacity, and efficiency. Using exogenous CEO departures as a natural experiment, it establishes a causal link between managerial capability and innovation. Importantly, it reveals that firms with talented managers receive significantly more nonself citations; make significantly lower self-citations and lesser citations to the others, indicating novel and explorative innovation achievements. Also, managers with higher general (specialized) ability are cited more (less) by patents from a wider range of fields. Lastly, career concern is identified as a mechanism linking higher ability and innovation.
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Financing Choice and Local Economic Growth: Evidence from Brazil
Iftekhar Hasan, Thiago Christiano Silva, Benjamin Miranda Tabak
Journal of Economic Growth,
Nr. 3,
2021
Abstract
We study how financing non-traditional local activities, conceived here as a proxy for activity diversification, is associated with economic growth. We use municipality-level data from Brazil, a country with large geographical, social, and economic disparities observed across its more than 5500 municipalities. We find that finance to non-traditional local activities associates with higher municipal economic growth, suggesting a positive externality between the non-traditional and traditional sectors. Using large natural disasters in Brazil as sources of unexpected negative events, we find that this association between financing non-traditional local activities and economic growth becomes negative in times of distress. We find that traditional local sectors are more affected than non-traditional sectors following a natural disaster. Precisely because of the non-traditional sector’s dependence on the traditional sector, our results suggest that municipalities should restrengthen their traditional activities during adverse conditions.
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Total Factor Productivity and the Terms of Trade
Jan Teresinski
IWH-CompNet Discussion Papers,
Nr. 6,
2019
Abstract
In this paper we analyse how the terms of trade (TOT) – the ratio of export prices to import prices – affect total factor productivity (TFP). We provide empirical macroeconomic evidence for the European Union countries based on the times series SVAR analysis and microeconomic evidence based on industry level data from the Competitiveness Research Network (CompNet) database which shows that the terms of trade improvements are associated with a slowdown in the total factor productivity growth. Next, we build a theoretical model which combines open economy framework with the endogenous growth theory. In the model the terms of trade improvements increase demand for labour employed in exportable goods production at the expense of technology production (research and development – R&D) which leads to a shift of resources from knowledge development towards physical exportable goods. This reallocation has a negative impact on the TFP growth. Under a plausible calibration the model is able to replicate the observed empirical pattern.
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For How Long Do IMF Forecasts of World Economic Growth Stay Up-to-date?
Katja Heinisch, Axel Lindner
Applied Economics Letters,
Nr. 3,
2019
Abstract
This study analyses the performance of the International Monetary Fund (IMF) World Economic Outlook output forecasts for the world and for both the advanced economies and the emerging and developing economies. With a focus on the forecast for the current year and the next year, we examine the durability of IMF forecasts, looking at how much time has to pass so that IMF forecasts can be improved by using leading indicators with monthly updates. Using a real-time data set for GDP and for indicators, we find that some simple single-indicator forecasts on the basis of data that are available at higher frequency can significantly outperform the IMF forecasts as soon as the publication of the IMF’s Outlook is only a few months old. In particular, there is an obvious gain using leading indicators from January to March for the forecast of the current year.
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Channeling the Iron Ore Super-cycle: The Role of Regional Bank Branch Networks in Emerging Markets
Helge Littke
IWH Discussion Papers,
Nr. 11,
2018
Abstract
The role of the financial system to absorb and to intermediate commodity boom induced windfall gains efficiently presents one of the most pressing issues for developing economies. Using an exogenous increase in iron ore prices in March 2005, I analyse the role of regional bank branch networks in Brazil in reallocating capital from affected to non-affected regions. For the period from March 2004 to March 2006, I find that branches directly exposed to this shock by their geographical location experience an increase in deposit growth in the post-shock period relative to non-affected branches. Given that these deposits are not reinvested locally, I further show that branches located in the non-affected region increase lending growth depending on their indirect exposure to the booming regions via their branch network. Even tough, these results provide evidence against a Dutch Disease type crowding out of the non-iron ore sector, further evidence suggests that this capital reallocation is far from being optimal.
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On the Returns to Invention within Firms: Evidence from Finland
Philippe Aghion, Ufuk Akcigit, Ari Hyytinen, Otto Toivanen
American Economic Association Papers and Proceedings,
2018
Abstract
In this paper we merge individual income data, firm-level data, patenting data, and IQ data in Finland over the period 1988–2012 to analyze the returns to invention for inventors and their coworkers or stakeholders within the same firm. We find that: (i) inventors collect only 8 percent of the total private return from invention; (ii) entrepreneurs get over 44 percent of the total gains; (iii) bluecollar workers get about 26 percent of the gains and the rest goes to white-collar workers. Moreover, entrepreneurs start with significant negative returns prior to the patent application, but their returns subsequently become highly positive.
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