Financial Frictions, Firm Dynamics and the Aggregate Economy: Insights from Richer Productivity Processes

How do financial frictions affect firm dynamics, allocation of resources across firms, and aggregate productivity and output? Is the nature of productivity shocks that firms face primary for the effects of financial frictions? I first use a comprehensive dataset of Spanish firms from 1999 to 2014 to estimate non-parametrically the firm productivity dynamics. I find that the productivity process is non-linear, as persistence and shock variability depend on past productivity, and productivity shocks are non-Gaussian. These dynamics differ from the ones implied by a standard AR(1) process, commonly used in the firm dynamics literature. I then build a model of firm dynamics with financial frictions in which productivity shocks are non-linear and non-Gaussian. The model is consistent with a host of evidence on firm dynamics, financial frictions, and firms’ financial behaviour. In the model economy, financial frictions affect the firm life cycle. Without financial frictions, the size of an entrant firm will be three times larger. Furthermore, profit accumulation, which allows firms to overcome financial frictions, is slow, and it only speeds up when firms are mature. As a consequence, the average exiting firm is smaller than it would be without financial frictions. The aggregate consequences of financial frictions are significant. They result in misallocation of capital and reduce aggregate productivity by 16%. This figure is only 8% if productivity dynamics evolve according to a standard AR(1) process

Introduction to nonlinearities, business cycles, and forecasting

Publicad

Introduction to nonlinearities, business cycles, and forecasting.

Forecasting; Business cycles;

Description of a new species of Epicauta Dejean, 1834 from Mexico with a review of the Epicauta cupraeola species group (Coleoptera, Meloidae)

[EN] We describe a morphologically remarkable new species of the Epicauta cupraeola species group from the highlands of the State of Nayarit, Mexico. The external appearance of Epicauta cora sp. nov., is similar to that of Epicauta rufipennis and Epicauta diana, but it is distinct from both species based on male antennae structure, shape and pilosity of the head and pronotum, color of pronotal pilosity, and male fore-tarsal structure. The nine species integrating now the E. cupraeola species group have been revised. This study of 323 specimens, including diverse type material, confirms the synonymy of Cantharis rufescens with Epicauta basimacula first proposed by Pinto (1991), and reports new geographic records for Mexican taxa. The species of the E. cupraeola group are included in a key and illustrated photographically, including type specimens of five taxa. A phylogenetic re-analysis of the E. cupraeola species group results in the placement of the new species as sister to E. rufipennis, which together form a sister clade to the remaining species of the E. cupraeola group.[ES] Se describe una especie nueva, morfológicamente singular, del grupo de especies de Epicauta cupraeola de las zonas altas del Estado de Nayarit, México. La apariencia externa de Epicauta cora sp. nov., es similar a la de Epicauta rufipennis y Epicauta diana, pero difiere de ambas en la estructura de las antenas del macho, forma y pilosidad de la cabeza y pronoto, y estructura de las tibias anteriores del macho. Se revisan las nueve especies incluidas ahora en el grupo de especies de E. cupraeola. Este estudio que incluye 323 especímenes, entre ellos material tipo diverso, confirma la sinonimia de Cantharis rufescens con Epicauta basimacula propuesta por Pinto (1991), y aporta nuevos registros geográficos para las especies de México. Se presenta una clave para las especies del grupo de E. cupraeola y se ilustran fotográficamente, incluyendo ejemplares tipo de cinco taxones. Un nuevo análisis filogenético del grupo de E. cupraeola indica que la especie nueva se sitúa como grupo hermano de E. rufipennis, de forma que juntas constituyen el clado hermano de las demás especies del grupo.This work was supported by grant CGL2010-15786 from the Ministerio de Economia y Competitividad (Spain).Peer reviewe