Growth through Heterogeneous Innovations
Ufuk Akcigit, William R. Kerr
Journal of Political Economy,
No. 4,
2018
Abstract
We build a tractable growth model in which multiproduct incumbents invest in internal innovations to improve their existing products, while new entrants and incumbents invest in external innovations to acquire new product lines. External and internal innovations generate heterogeneous innovation qualities, and firm size affects innovation incentives. We analyze how different types of innovation contribute to economic growth and the role of the firm size distribution. Our model aligns with many observed empirical regularities, and we quantify our framework with Census Bureau and patent data for US firms. Internal innovation scales moderately faster with firm size than external innovation.
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The Exchange Rate, Asymmetric Shocks and Asymmetric Distributions
Calin-Vlad Demian, Filippo di Mauro
International Economics,
August
2018
Abstract
The elasticity of exports to exchange rate fluctuations has been the subject of a large body of literature without a clear consensus emerging. Using a novel sector-level dataset based on firm level information, we show that exchange rate elasticities double in size when country and sector specific firm productivity distributions are considered in the empirical estimations. In addition, exports appear to be sensitive to appreciation episodes, but rather unaffected by depreciations. Finally, only rather large changes in the exchange rate appear to matter. The paper intends to contribute to the debate on the effectiveness and impacts of exchange rate movements, which features highly in the policy agenda.
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31.07.2018 • 16/2018
Fairness pays off
When companies arbitrarily cut their wages, the motivation and productivity of the employees decrease – this is clear. Less obvious, however: employees also become less productive even if it is their colleagues who are treated unfairly and not them. This was confirmed by a research group led by Sabrina Jeworrek at the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association.
Sabrina Jeworrek
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Indirekte Effekte von als unfair wahrgenommenem Arbeitgeberverhalten auf die Produktivität von Beschäftigten
Sabrina Jeworrek
Wirtschaft im Wandel,
No. 3,
2018
Abstract
Jede Organisation, die darüber nachdenkt zu restrukturieren, Löhne zu kürzen oder Angestellte zu entlassen, sollte auch über mögliche Reaktionen der persönlich nicht betroffenen Arbeitnehmer nachdenken. Dieser Beitrag präsentiert Ergebnisse eines Feldexperiments. Es offenbart, dass die als unfair wahrgenommene Handlung des Arbeitgebers – in diesem Fall die Entlassung von Arbeitskollegen – die anschließende Produktivität der nicht direkt betroffenen Arbeitskräfte mindert. Als Teil des Experiments antizipierten erfahrene Personalmanager zwar im Durchschnitt erfolgreich die Konsequenzen unfairen Arbeitgeberverhaltens auf nicht betroffene Arbeitnehmer, einzeln lagen sie jedoch oft daneben.
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14.06.2018 • 14/2018
Current economic outlook: German upswing is slowing down
In summer 2018, the world economy is still rather strong. Dynamics in the euro area, however, have declined markedly, and the cyclical upswing in Germany has almost stalled, due to weaker exports. “Gross domestic product will, according to this forecast, expand by 1.7% in 2018 and by 1.6% in 2019. Growth in East Germany will be about as strong as in Germany as a whole”, says Oliver Holtemöller, head of the Department Macroeconomics and vice president at IWH.
Oliver Holtemöller
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Selection Versus Incentives in Incentive Pay: Evidence from a Matching Model
Shuo Xia
SSRN Working Papers,
2018
Abstract
Higher incentive pay is associated with better firm performance. I introduce a model of CEO-firm matching to disentangle the two confounding effects that drive this result. On one hand, higher incentive pay directly induces more effort; on the other hand, higher incentive pay indirectly attracts more talented CEOs. I find both effects are essential to explain the result, with the selection effect accounting for 12.7% of the total effect. The relative importance of the selection effect is the largest in industries with high talent mobility and in more recent years.
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The Efficiency of Local Public-service Production: The Effect of Political Institutions
Peter Bönisch, Peter Haug
FinanzArchiv,
No. 2,
2018
Abstract
Reforms replacing municipal cooperations by centralized municipalities often aim at increasing municipal efficiency. Empirical evidence supporting this aim, however, is ambiguous. Our paper analyzes the effect of institutions on municipal efficiency. In particular, we distinguish two archetypal institutional settings, a centralized and a confederal one, and argue that bureaucrats in a centralized setting are able to increase the fiscal residual. Our empirical test case is the German federal state of Saxony-Anhalt. We test the effect of the institutional setup using the bootstrap approach suggested by Simar and Wilson (2007), concluding that a decentralized institutional setting improves the efficiency of municipal production.
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25.05.2018 • 12/2018
The resistance of employers against works councils
Germany votes. However, this time it’s not about the politicians – instead it’s about the works councils. It’s certainly worthwhile: Many studies have shown that works councils all in all have a positive impact on productivity, wages and profits. Despite this, employers are sometimes very resistant to the idea of staff involvement in company decision-making. A common argument is that such participation limits managerial freedom and that employers are willing to sacrifice the benefits of staff participation in return for greater room for manoeuvre. Steffen Müller from the Halle Institute for Economic Research Halle (IWH) – Member of the Leibniz Association now provides an alternative economic justification for employer resistance: Employer associations are dominated by small and medium-sized enterprises, and in these works councils – in contrast to large firms – often produce no positive economic benefits.
Steffen Müller
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