Labor Market Power and the Distorting Effects of International Trade
Matthias Mertens
International Journal of Industrial Organization,
January
2020
Abstract
This article examines how final product trade with China shapes and interacts with labor market imperfections that create market power in labor markets and prevent an efficient market outcome. I develop a framework for measuring such labor market power distortions in monetary terms and document large degrees of these distortions in Germany's manufacturing sector. Import competition only exerts labor market disciplining effects if firms, rather than employees, possess labor market power. Otherwise, increasing export demand and import competition both fortify existing distortions, which decreases labor market efficiency. This widens the gap between potential and realized output and thus diminishes classical gains from trade.
Artikel Lesen
Global Banking: Endogenous Competition and Risk Taking
Ester Faia, Sébastien Laffitte, Maximilian Mayer, Gianmarco Ottaviano
European Economic Review,
April
2021
Abstract
When banks expand abroad, their riskiness decreases if foreign expansion happens in destination countries that are more competitive than their origin countries. We reach this conclusion in three steps. First, we develop a flexible dynamic model of global banking with endogenous competition and endogenous risk-taking. Second, we calibrate and simulate the model to generate empirically relevant predictions. Third, we validate these predictions by testing them on an original dataset covering the activities of the 15 European global systemically important banks (G-SIBs). Our results hold across alternative measures of individual and systemic bank risk.
Artikel Lesen
Climate Change Concerns and Information Spillovers from Socially-connected Friends
Maximilian Mayer
IWH Discussion Papers,
Nr. 2,
2023
Abstract
This paper studies the role of social connections in shaping individuals’ concerns about climate change. I combine granular climate data, region-level social network data and survey responses for 24 European countries in order to document large information spillovers. Individuals become more concerned about climate change when their geographically distant friends living in sociallyconnected regions have experienced large increases in temperatures since 1990. Exploring the heterogeneity of the spillover effects, I uncover that the learning via social networks plays a central role. Further, results illustrate the important role of social values and economic preferences for understanding how information spillovers affect individual concerns.
Artikel Lesen
Selbständigkeit nach der Wiedervereinigung
Matthias Brachert
In: Dossier "Lange Wege der Deutschen Einheit", Bundeszentrale für politische Bildung,
2021
Abstract
Die Zahl der Selbstständigen in Ostdeutschland (ohne Berlin) beläuft sich derzeit auf rund 600 000 und ist das Ergebnis eines über die Jahre zunehmenden Trends. Selbständigkeit wurde in der DDR kaum ein Platz eingeräumt. Zum Zeitpunkt der Wiedervereinigung besaß Ostdeutschland eine Selbständigenquote von nur rund 2,2 Prozent. Dieser Anteil hat sich 2018 auf 9,2 Prozent erhöht. Damit übersteigt die Selbständigenquote Ostdeutschlands diejenige Westdeutschlands seit dem Jahr 2013. Es gilt hierbei jedoch zu beachten, dass das Wachstum der Selbständigenanzahl insbesondere in Ostdeutschland von den Solo-Selbstständigen getragen war. Zudem bestehen im Hinblick auf die sektorale Zusammensetzung mit einem geringeren Anteil an wissensintensiven Wirtschaftszweigen als in Westdeutschland noch Unterschiede zwischen Ost- und Westdeutschland.
Artikel Lesen
The (Heterogenous) Economic Effects of Private Equity Buyouts
Steven J. Davis, John Haltiwanger, Kyle Handley, Josh Lerner, Ben Lipsius, Javier Miranda
IWH Discussion Papers,
Nr. 10,
2022
Abstract
The effects of private equity buyouts on employment, productivity, and job reallocation vary tremendously with macroeconomic and credit conditions, across private equity groups, and by type of buyout. We reach this conclusion by examining the most extensive database of U.S. buyouts ever compiled, encompassing thousands of buyout targets from 1980 to 2013 and millions of control firms. Employment shrinks 13% over two years after buyouts of publicly listed firms – on average, and relative to control firms – but expands 13% after buyouts of privately held firms. Post-buyout productivity gains at target firms are large on average and much larger yet for deals executed amidst tight credit conditions. A post-buyout tightening of credit conditions or slowing of GDP growth curtails employment growth and intra-firm job reallocation at target firms. We also show that buyout effects differ across the private equity groups that sponsor buyouts, and these differences persist over time at the group level. Rapid upscaling in deal flow at the group level brings lower employment growth at target firms.
Artikel Lesen
Konjunktur aktuell: Deutschland weiter im Abschwung
Konjunktur aktuell,
Nr. 3,
2023
Abstract
Die Weltwirtschaft verliert im Herbst 2023 weiter an Schwung. Die Produktion im Verarbeitenden Gewerbe und der globale Warenhandel stagnieren, gestiegene Leitzinsen verschlechtern das Investitionsklima. Die restriktive Wirtschaftspolitik drückt vor allem die europäische Konjunktur, welche zusätzlich von der Unsicherheit durch den russischen Angriffskrieg belastet wird. In Deutschland belasten die hohe Inflation, gestiegene Zinsen, eine schwache Auslandsnachfrage und Verunsicherung unter privaten Haushalten und Unternehmen die Wirtschaft. Die konjunkturellen Risiken sind für die Bauwirtschaft besonders hoch. Alles in allem dürfte das Bruttoinlandsprodukt 2023 um 0,5% zurückgehen, für das kommende Jahr wird ein Zuwachs von 0,9% prognostiziert.
Artikel Lesen
Loan Securitisation during the Transition to a Low-carbon Economy
Isabella Müller, Huyen Nguyen, Trang Nguyen
VoxEU CEPR,
May
2023
Abstract
Banks play a crucial role in the transition to a low-carbon economy, but they also expose themselves to climate transition risk. This column shows that banks use corporate loan securitisation to shift climate transition risk to less-regulated shadow banking entities. This behaviour affects carbon premia in loan contracts. When banks can use securitisation to manage transition risk, their climate policies that target only activities reflected in their books may not be as effective as bank regulators hope for.
Artikel Lesen
Why Is there Resistance to Works Councils In Germany? An Economic Perspective
Steffen Müller, Jens Stegmaier
Economic and Industrial Democracy,
Nr. 3,
2020
Abstract
Recent empirical research generally finds evidence of positive economic effects for works councils, for example with regard to productivity and – with some limitations – to profits. This makes it necessary to explain why employers’ associations have reservations about works councils. On the basis of an in-depth literature analysis, this article shows that beyond the generally positive findings, there are important heterogeneities in the impact of works councils. The authors argue that those groups of employers that tend to benefit little from employee participation in terms of productivity and profits may well be important enough to shape the agenda of their employers’ organization and have even gained in importance within their organizations in recent years. The authors also discuss the role of deviations from profit-maximizing behavior like risk aversion, short-term profit-maximization and other non-pecuniary motives, as possible reasons for employer resistance.
Artikel Lesen
Where to Go? High-skilled Individuals’ Regional Preferences
Sabrina Jeworrek, Matthias Brachert
IWH Discussion Papers,
Nr. 27,
2022
Abstract
We conduct a discrete choice experiment to investigate how the location of a firm in a rural or urban region affects job attractiveness and contributes to the spatial sorting of university students and graduates. We characterize the attractiveness of a location based on several dimensions (social life, public infrastructure, connectivity) and combine this information with an urban or rural attribution. We also vary job design as well as contractual characteristics of the job. We find that job offers from companies in rural areas are generally considered less attractive. This is true regardless of the attractiveness of the region. The negative perception is particularly pronounced among persons with urban origin and singles. These persons rate job offers from rural regions significantly worse. In contrast, high-skilled individuals who originate from rural areas as well as individuals with partners and kids have no specific preference for jobs in urban or rural areas.
Artikel Lesen
Alone at Home: The Impact of Social Distancing on Norm-consistent Behavior
Sabrina Jeworrek, Joschka Waibel
IWH Discussion Papers,
Nr. 8,
2021
Abstract
Around the globe, the COVID-19 pandemic has turned daily live upside down since social distancing is probably the most effective means of containing the virus until herd immunity is reached. Social norms have been shown to be an important determinant of social distancing behaviors. By conducting two experiments and using the priming method to manipulate social isolation recollections, we study whether social distancing has in turn affected norms of prosociality and norm compliance. The normative expectations of what behaviors others would approve or disapprove in our experimental setting did not change. Looking at actual behavior, however, we find that persistent social distancing indeed caused a decline in prosociality – even after the relaxation of social distancing rules and in times of optimism. At the same time, our results contain some good news since subjects seem still to care for norms and become more prosocial once again after we draw their attention to the empirical norm of how others have previously behaved in a similar situation.
Artikel Lesen
