Firm Social Networks, Trust, and Security Issuances
European Journal of Finance,
We observe that public firms are more likely to issue seasoned stocks rather than bonds when theirs boards are more socially-connected. These connected issuers experience better announcement-period stock returns and attract more institutional investors. This social-connection effect is stronger for firms with severe information asymmetry, higher risk of being undersubscribed, and more visible to investors. Our conjecture is this social-network effect is driven by trust in issuing firms. Given stocks are more sensitive to trust, these trusted firms are more likely to issue stocks than bonds. Trustworthiness plays an important role in firms’ security issuances in capital markets.
IWH-Alumni Das IWH möchte den Kontakt zu seinen ehemaligen Mitarbeiterinnen und...
Finanzsysteme: Die Anatomie der Marktwirtschaft Wie ist das Finanzsystem aufgebaut, wie funktioniert es, wie...
Labor Market Power and the Distorting Effects of International Trade
International Journal of Industrial Organization,
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.
IWH-FDI-Mikrodatenbank Die IWH-FDI-Mikrodatenbank (FDI = Foreign Direct Investment)...
Micro-mechanisms Behind Declining Labour Shares: Market Power, Production Processes, and Global Competition
IWH-CompNet Discussion Papers,
This article investigates how changing production processes and increasing market power at the firm level relate to a fall in Germany’s manufacturing sector labour share. Coinciding with the fall of the labour share, I document a rise in firms’ product and labour market power. Notably, labour market power is a more relevant source of firms’ market power than product market power. Increasing product and labour market power, however, only account for 30% of the fall in the labour share. The remaining 70% are explained by a transition of firms towards less labour-intensive production activities. I study the role of final product trade in causing those secular movements. I find that rising foreign export demand contributes to a decline in the labour share by increasing labour market power within firms and by inducing a reallocation of economic activity from nonexporting- high-labour-share to exporting-low-labour-share firms
Einkommen und Sparen
Einkommen und Sparen Primäreinkommen der privaten Haushalte Das Primäreinkommen der privaten Haushalte (einschließlich privater Organisationen ohne Erwerbszweck) enthält...
Within Gain, Structural Pain: Capital Account Liberalization and Economic Growth
New Structural Economics Working Paper No. E2018010,
This paper is the first to study the effects of capital account liberalization on structural transformation and compare the contribution of within term and structural term to economic growth. We use a 10-sector-level productivity dataset to decomposes the effects of opening capital account on within-sector productivity growth and cross-sector structural transformation. We find that opening capital account is associated with labor productivity and employment share increment in sectors with higher human capital intensity and external financial dependence, as well as non-tradable sectors. But it results in a growth-reducing structural transformation by directing labor into sectors with lower productivity. Moreover, in the ten years after capital account liberalization, the contribution share of structural transformation decreases while that of within productivity growth increases. We conclude that the relationship between capital account liberalization and economic growth is within gain and structural pain.