Private Equity, Jobs, and Productivity
Steven J. Davis, John Haltiwanger, Kyle Handley, Ron S. Jarmin, Josh Lerner, Javier Miranda
American Economic Review,
Nr. 12,
2014
Abstract
Private equity critics claim that leveraged buyouts bring huge job losses and few gains in operating performance. To evaluate these claims, we construct and analyze a new dataset that covers US buyouts from 1980 to 2005. We track 3,200 target firms and their 150,000 establishments before and after acquisition, comparing to controls defined by industry, size, age, and prior growth. Buyouts lead to modest net job losses but large increases in gross job creation and destruction. Buyouts also bring TFP gains at target firms, mainly through accelerated exit of less productive establishments and greater entry of highly productive ones.
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Plant-based Bioeconomy in Central Germany - Mapping of Actors, Industries and Places
Wilfried Ehrenfeld, Frieder Kropfhäußer
Abstract
The challenges facing the 21st century, presented by a growing global population, range from food security to sustainable energy supplies to the diminishing availability of fossil raw materials. An attempt to solve these problems is made by using the concept of bioeconomy. Plants, in particular, possess an important function in this context - they can be used either as a source of food or, in the form of biomass, for industrial or energy purposes. Linking industrial and agricultural research and production, bioeconomy provides growth potential, in particular in rural areas.
The aim of this article is therefore to outline the status of plant-based bioeconomy
in three states of Central Germany - Saxony, Saxony-Anhalt and Thuringia - and to compare this to German plant-based bioeconomy. We take an in-depth look at the different sectors and outline the industries involved, the location and age of the enterprises as well as the distribution of important NACE codes. In conclusion, we highlight the significant number of new or small enterprises and the high research and innovation rate of Central Germany. We also stress the future potential of Central German plant-based bioeconomy as well as the importance of a more plant-focusedview of the technology sector.
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Establishment Exits in Germany: The Role of Size and Age
Daniel Fackler, Claus Schnabel, J. Wagner
Small Business Economics,
Nr. 3,
2013
Abstract
Using comprehensive data for West Germany, this paper investigates the determinants of establishment exit. We find that between 1975 and 2006 the average exit rate has risen considerably. In order to test various “liabilities” of establishment survival identified in the literature, we analyzed the impact of establishment size and put a special focus on differences between young and mature establishments. Our empirical analysis shows that the mortality risk falls with establishment size, which confirms the liability of smallness. The probability of exit is substantially higher for young establishments which are not more than 5 years old, thus confirming the liability of newness. There also exists a liability of aging since exit rates first decline over time, reaching a minimum at ages 15–18, and then rise again somewhat. The determinants of exit differ substantially between young and mature establishments, suggesting that young establishments are more vulnerable in a number of ways.
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How Firms Respond to Business Cycles: The Role of Firm Age and Firm Size
Teresa C. Fort, John Haltiwanger, Ron S. Jarmin, Javier Miranda
IMF Economic Review,
Nr. 3,
2013
Abstract
There remains considerable debate in the theoretical and empirical literature about the differences in the cyclical dynamics of firms by firm size. This paper contributes to the debate in two ways. First, the key distinction between firm size and firm age is introduced. The evidence presented in this paper shows that young businesses (that are typically small) exhibit very different cyclical dynamics than small/older businesses. The second contribution is to present evidence and explore explanations for the finding that young/small businesses were hit especially hard in the Great Recession. The collapse in housing prices accounts for a significant part of the large decline of young/small businesses in the Great Recession.
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Does It Pay to Have Friends? Social Ties and Executive Appointments in Banking
Allen N. Berger, Thomas Kick, Michael Koetter, Klaus Schaeck
Journal of Banking and Finance,
Nr. 6,
2013
Abstract
We exploit a unique sample to analyze how homophily (affinity for similar others) and social ties affect career outcomes in banking. We test if these factors increase the probability that the appointee to an executive board is an outsider without previous employment at the bank compared to being an insider. Homophily based on age and gender increase the chances of the outsider appointments. Similar educational backgrounds, in contrast, reduce the chance that the appointee is an outsider. Greater social ties also increase the probability of an outside appointment. Results from a duration model show that larger age differences shorten tenure significantly, whereas gender similarities barely affect tenure. Differences in educational backgrounds affect tenure differently across the banking sectors. Maintaining more contacts to the executive board reduces tenure. We also find weak evidence that social ties are associated with reduced profitability, consistent with cronyism in banking.
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Who Creates Jobs? Small versus Large versus Young
John Haltiwanger, Ron S. Jarmin, Javier Miranda
Review of Economics and Statistics,
Nr. 2,
2013
Abstract
The view that small businesses create the most jobs remains appealing to policymakers and small business advocates. Using data from the Census Bureau's Business Dynamics Statistics and Longitudinal Business Database, we explore the many issues at the core of this ongoing debate. We find that the relationship between firm size and employment growth is sensitive to these issues. However, our main finding is that once we control for firm age, there is no systematic relationship between firm size and growth. Our findings highlight the important role of business start-ups and young businesses in U.S. job creation.
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Can Korea Learn from German Unification?
Ulrich Blum
IWH Discussion Papers,
Nr. 3,
2011
Abstract
We first analyze pre-unification similarities and differences between the two Germanys and the two Koreas in terms of demographic, social, political and economic status. An important issue is the degree of international openness. “Stone-age” type communism of North Korea and the seclusion of the population prevented inner-Korean contacts and contacts with rest of the world. This may create enormous adjustment costs if institutions, especially informal institutions, change. We go on by showing how transition and integration interact in a potential unification process based on the World Bank Revised Minimum Standard Model (RMSM) and on the Salter-Swan-Meade model. In doing so, we relate the macro and external impacts on an open economy to its macro-sectoral structural dynamics. The findings suggest that it is of utmost importance to relate microeconomic policies to the macroeconomic ties and side conditions for both parts of the country. Evidence from Germany suggests that the biggest general error in unification was neglecting these limits, especially limitations to policy instruments. Econometric analysis supports these findings. In the empirical part, we consider unification as an “investment” and track down the (by-and-large immediate to medium-term) costs and the (by-and-large long-term) benefits of retooling a retarded communist economy. We conclude that, from a South-Korean
perspective, the Korean unification will become relatively much more expensive than the German unification and, thus, not only economic, but to a much larger degree political considerations must include the tying of neighboring countries into the convergence process. We finally provide, 62 years after Germany’s division and 20 years after unification, an outlook on the strength of economic inertia in order to show that it may take much more than a generation to compensate the damage inflicted by the communist system.
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Incubation Time, Incubator Age, and Firm Survival after Graduation
Michael Schwartz
International Journal of Entrepreneurship and Innovation Management,
2012
Abstract
On the basis of a sample of 149 graduate firms from five German business incubators, this article contributes to incubator/incubation literature by investigating the effects of the age of the incubators and the firms´ incubation time in securing long-term survival of the firms after leaving the incubator facilities. The empirical findings from Cox proportional hazards regression and parametric accelerated failure time models reveal a statistically significant negative impact for both variables incubator age and incubation time on post-graduation firm survival. One important implication that follows from the empirical results for policy makers and managers of those initiatives is that, when incubator managers become increasingly involved in various regional development activities, this may reduce the effectiveness of incubator support. Also, our finding speaks in favour of a strict limitation of incubation times and reinforces arguments of the supporters of maximum tenancy.
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Incubator Age and Incubation Time: Determinants of Firm Survival after Graduation?
Michael Schwartz
IWH Discussion Papers,
Nr. 14,
2008
Abstract
On the basis of a sample of 149 graduate firms from five German technology oriented business incubators, this article contributes to incubator/incubation literature by investigating the effects of the age of the business incubators and the firms’ incubation time in securing long-term survival of the firms after leaving the incubator facilities. The empirical findings from Cox-proportional hazards regression and parametric accelerated failure time models reveal a statistically negative impact for both variables incubator age and incubation time on post-graduation firm survival. One possible explanation for these results is that, when incubator managers become increasingly involved in various regional development activities (e.g. coaching of regional network initiatives), this may reduce the effectiveness of incubator support and therefore the survival chances of firms.
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Shrinking due to corpulence? BMI in childhood predicts subsequent linear growth among US children and youth, 1963-1970
Marco Sunder
Annals of Human Biology,
2008
Abstract
While the USA is one of the most opulent countries, its population is not among the tallest but is among the most corpulent. This short report investigates the association between body mass index in childhood and subsequent change in height-for-age at the individual level, based on data from the National Health Examination Study (1963-1970). A sub-sample of participants in this survey was measured twice at intervals between 2.3 and 4.4 years, and assessed bone age can be used to account for differences in maturation at baseline. Regression results indicate that a BMI-for-age above the 85th percentile is associated with a reduction in growth by 0.03-0.06 height-for-age standard deviations per year, or roughly 1 cm within 4 years. An inefficiently high nutritional status in childhood may thus jeopardize subsequent linear growth. However, the trans-Atlantic height gap is considerably larger than what this empirical relationship could predict.
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