Optimal unemployment benefit policy and the firm productivity distribution

This paper provides a novel justification for a declining time profile of unemployment benefits that does not rely on moral hazard or consumption-smoothing considerations. We consider a simple search environment with homogeneous workers and low- and high-productivity firms. By introducing a declining time profile of benefits, the government can affect the equilibrium wage profile in a manner that enhances the sorting of workers across low- and high-productivity firms. We demonstrate that optimal government policy depends on the dispersion and skewness of the firms’ productivity distribution

‘Better late than never’: the interplay between green technology and age for firm growth

This paper investigates the relationship between green/non-green technologies and firm growth. By combining the literature on eco-innovations, industrial organisation and entrepreneurial studies, we examine the dependence of this relationship on the pace at which firms grow and the age of the firm. From a dataset of 5498 manufacturing firms in Italy for the period of 2000–2008, longitudinal fixed effects quantile models are estimated, in which the firm’s age is set to moderate the effects of green and non-green patents on employment growth. We find that the positive effect of green technologies on growth is greater than that of non-green technologies. However, this result does not apply to struggling and rapidly growing firms. With fast-growing (above the median) firms, age moderates the growth effect of green technologies. Inconsistent with the extant literature, this moderation effect is positive: firm experience appears important for the growth benefits of green technologies, possibly relative to the complexity of their management

Revisiting the causal effects of exporting on productivity: Does price heterogeneity matter?

In most empirical studies that establish the export-productivity relationships, output is measured in values rather than in quantities. This makes it difficult to distinguish between productivity and within-firm changes in price that could occur following exposure to international markets. Using detailed data on quantity and prices from Ethiopian manufacturing firms in the period 1996-2005, this paper distinguishes efficiency from revenue based productivity and examines what this means for the estimated relationship between exporting and productivity. The main results show that exporters are more productive than non-exporters in terms of revenue based productivity and this is explained by both self-selection and learning effects. However, when correcting for price heterogeneity, exporters appear to be similar to non-exporters both before and after export entry. Overall, the results suggest that the increase in firm-level productivity following entry into foreign markets is associated with changes in prices as opposed to productive efficiency

Business owners, employees, and firm performance

The novel Finnish Longitudinal OWNer-Employer-Employee (FLOWN) database was used to analyze how the characteristics of owners and employees relate to firm performance as determined by labor productivity, survival, and employment growth. Focusing on the role of the employment history, the results show that previous experience in a high-productivity firm strongly predicts high productivity and probability of survival for the entrepreneur’s new firm. This can be interpreted as evidence of knowledge spillovers through labor mobility of both the owners and the employees. The results also show that the owner’s high education in a technical field is positively related to firm performance. Different findings for owner-entrepreneurs and pure owners suggest that the definition of entrepreneurship matters.peerReviewe