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Ten Facts on Declining Business Dynamism and Lessons from Endogenous Growth Theory

Ufuk Akcigit, Sina T. Ates
American Economic Journal: Macroeconomics, forthcoming
Abstract
In this paper, we review the literature on declining business dynamism and its implications in the United States and propose a unifying theory to analyze the symptoms and the potential causes of this decline. We first highlight 10 pronounced stylized facts related to declining business dynamism documented in the literature and discuss some of the existing attempts to explain them. We then describe a theoretical framework of endogenous markups, innovation, and competition that can potentially speak to all of these facts jointly. We next explore some theoretical predictions of this framework, which are shaped by two interacting forces: a composition effect that determines the market concentration and an incentive effect that determines how firms respond to a given concentration in the economy. The results highlight that a decline in knowledge diffusion between frontier and laggard firms could be a significant driver of empirical trends observed in the data. This study emphasizes the potential of growth theory for the analysis of factors behind declining business dynamism and the need for further investigation in this direction.
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Nowcasting East German GDP Growth: a MIDAS Approach

João Carlos Claudio, Katja Heinisch, Oliver Holtemöller
Empirical Economics, forthcoming
Abstract
Economic forecasts are an important element of rational economic policy both on the federal and on the local or regional level. Solid budgetary plans for government expenditures and revenues rely on efficient macroeconomic projections. However, official data on quarterly regional GDP in Germany are not available, and hence, regional GDP forecasts do not play an important role in public budget planning. We provide a new quarterly time series for East German GDP and develop a forecasting approach for East German GDP that takes data availability in real time and regional economic indicators into account. Overall, we find that mixed-data sampling model forecasts for East German GDP in combination with model averaging outperform regional forecast models that only rely on aggregate national information.
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Who Buffers Income Losses after Job Displacement? The Role of Alternative Income Sources, the Family, and the State

Daniel Fackler, Eva Weigt
LABOUR, forthcoming
Abstract
Using survey data from the German Socio‐Economic Panel (SOEP), this paper analyses the extent to which alternative income sources, reactions within the household context, and redistribution by the state attenuate earnings losses after job displacement. Applying propensity score matching and fixed effects estimations, we find that income from self‐employment reduces the earnings gap only slightly and severance payments buffer losses in the short run. On the household level, we find little evidence for an added worker effect whereas redistribution by the state within the tax and transfer system mitigates income losses substantially.
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Birds, Birds, Birds: Co-Worker Similarity, Workplace Diversity and Job Switches

Boris Hirsch, Elke J. Jahn, Thomas Zwick
British Journal of Industrial Relations, forthcoming
Abstract
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The Appropriateness of the Macroeconomic Imbalance Procedure for Central and Eastern European Countries

Martina Kämpfe, Tobias Knedlik
Empirica, forthcoming
Abstract
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Executive Compensation and Labor Expenses

Stefano Colonnello
B.E. Journal of Economic Analysis & Policy, forthcoming
Abstract
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Employment Effects of Introducing a Minimum Wage: The Case of Germany

Oliver Holtemöller, Felix Pohle
Economic Modelling, forthcoming
Abstract
Income inequality has been a major concern of economic policy makers for several years. Can minimum wages help to mitigate inequality? In 2015, the German government introduced a nationwide statutory minimum wage to reduce income inequality by improving the labour income of low-wage employees. However, the employment effects of wage increases depend on time and region specific conditions and, hence, they cannot be known in advance. Because negative employment effects may offset the income gains for low-wage employees, it is important to evaluate minimum-wage policies empirically. We estimate the employment effects of the German minimum-wage introduction using panel regressions on the state-industry-level. We find a robust negative effect of the minimum wage on marginal and a robust positive effect on regular employment. In terms of the number of jobs, our results imply a negative overall effect. Hence, low-wage employees who are still employed are better off at the expense of those who have lost their jobs due to the minimum wage.
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Does Machine Learning Help us Predict Banking Crises?

Johannes Beutel, Gregor von Schweinitz
Journal of Financial Stability, forthcoming
Abstract
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Foreign Bank Ownership and Income Inequality: Empirical Evidence

Manthos D. Delis, Iftekhar Hasan, Nikolaos Mylonidis
Applied Economics, forthcoming
Abstract
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Investor Relations and IPO Performance

Salim Chahine, Gonul Colak, Iftekhar Hasan, Mohamad Mazboudi
Review of Accounting Studies, forthcoming
Abstract
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