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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Medienecho
Medienecho Mai 2025 Steffen Müller: Höchster Stand bei Pleiten seit 20 Jahren in: Bremer Nachrichten, 09.05.2025 Steffen Müller: Wirtschaftsinstitut meldet so viele Insolvenzen…
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Archiv
Medienecho-Archiv 2021 2020 2019 2018 2017 2016 Dezember 2021 IWH: Ausblick auf Wirtschaftsjahr 2022 in Sachsen mit Bezug auf IWH-Prognose zu Ostdeutschland: "Warum Sachsens…
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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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Involuntary Unemployment and the Business Cycle
Lawrence J. Christiano, Mathias Trabandt, Karl Walentin
Review of Economic Dynamics,
January
2021
Abstract
Can a model with limited labor market insurance explain standard macro and labor market data jointly? We construct a monetary model in which: i) the unemployed are worse off than the employed, i.e. unemployment is involuntary and ii) the labor force participation rate varies with the business cycle. To illustrate key features of our model, we start with the simplest possible framework. We then integrate the model into a medium-sized DSGE model and show that the resulting model does as well as existing models at accounting for the response of standard macroeconomic variables to monetary policy shocks and two technology shocks. In addition, the model does well at accounting for the response of the labor force and unemployment rate to these three shocks.
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Integrated Assessment of Epidemic and Economic Dynamics
Oliver Holtemöller
IWH Discussion Papers,
Nr. 4,
2020
Abstract
In this paper, a simple integrated model for the joint assessment of epidemic and economic dynamics is developed. The model can be used to discuss mitigation policies like shutdown and testing. Since epidemics cause output losses due to a reduced labor force, temporarily reducing economic activity in order to prevent future losses can be welfare enhancing. Mitigation policies help to keep the number of people requiring intensive medical care below the capacity of the health system. The optimal policy is a mixture of temporary partial shutdown and intensive testing and isolation of infectious persons for an extended period of time.
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Do Start-ups Provide Employment Opportunities for Disadvantaged Workers?
Daniel Fackler, Michaela Fuchs, Lisa Hölscher, Claus Schnabel
ILR Review,
Nr. 5,
2019
Abstract
This article compares the hiring patterns of start-ups and incumbent firms to analyze whether start-ups offer relatively more job opportunities to disadvantaged workers. Using administrative linked employer–employee data for Germany that provide the complete employment biographies of newly hired workers, the authors show that young firms are more likely than incumbents to hire applicants who are older, foreign, or unemployed, or who have unstable employment histories, arrive from outside the labor force, or were affected by a plant closure. Analysis of entry wages shows that penalties for these disadvantaged workers, however, are higher in start-ups than in incumbent firms. Therefore, even if start-ups provide employment opportunities for certain groups of disadvantaged workers, the quality of these jobs in terms of initial remuneration appears to be low.
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Innovation, Reallocation, and Growth
Daron Acemoglu, Ufuk Akcigit, Harun Alp, Nicholas Bloom, William R. Kerr
American Economic Review,
Nr. 11,
2018
Abstract
We build a model of firm-level innovation, productivity growth, and reallocation featuring endogenous entry and exit. A new and central economic force is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using US Census microdata on firm-level output, R&D, and patenting. The model provides a good fit to the dynamics of firm entry and exit, output, and R&D. Taxing the continued operation of incumbents can lead to sizable gains (of the order of 1.4 percent improvement in welfare) by encouraging exit of less productive firms and freeing up skilled labor to be used for R&D by high-type incumbents. Subsidies to the R&D of incumbents do not achieve this objective because they encourage the survival and expansion of low-type firms.
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Do Startups Provide Employment Opportunities for Disadvantaged Workers?
Daniel Fackler, Michaela Fuchs, Lisa Hölscher, Claus Schnabel
IZA Discussion Paper Series,
im Erscheinen
Abstract
This paper analyzes whether startups offer job opportunities to workers potentially facing labor market problems. It compares the hiring patterns of startups and incumbents in the period 2003 to 2014 using administrative linked employer-employee data for Germany that allow to take the complete employment biographies of newly hired workers into account. The results indicate that young plants are more likely than incumbents to hire older and foreign applicants as well as workers who have instable employment biographies, come from unemployment or outside the labor force, or were affected by a plant closure. However, an analysis of entry wages reveals that disadvantageous worker characteristics come along with higher wage penalties in startups than in incumbents. Therefore, even if startups provide employment opportunities for certain groups of disadvantaged workers, the quality of these jobs in terms of initial remuneration seems to be low.
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