value line rank and firm size this paper studies the relation between value line s successful record in predicting relative stock price movements and the firm size effect the data suggest little direct relation between the two phen omena value line tends not to rank small firm stocks and small firm stocks that are ranked are more likely to receive a low rank than la rge firm stocks within each size sorted quintile of the market the mean payoffs on costless positions constructed according to value lin e s recommendations are positive copyright 1987 by the university of chicago

labor market flows in the cross section and over time many theoretical models of labor market search imply a tight link between worker flows hires and separations and job gains and losses at the employer level we use rich establishment level data to assess several theoretical models and to study the relationship between worker flows and jobs flows hires quits and layoffs exhibit strong highly nonlinear relationships to employer growth rates in the cross section simple statistical models of these relationships greatly improve our ability to account for fluctuations in aggregate worker flows and enable us to construct synthetic measures of hires separations quits and layoffs back to 1990

the canadian productivity stagnation 2002 2014 total factor productivity tfp growth in canada between 2002 and 2014 has been only 0 16 per year although many developed countries have experienced a productivity slowdown since the beginning of the century this figure is still substantially smaller than that of the u s we perform multiple counterfactual exercises to show that this difference in tfp growth cannot be accounted for by several compositional effects and or mismeasurements of factors of production we identify two key sectors mining and manufacturing that drive all of the tfp growth difference with the u s despite the lack of tfp growth canada has experienced sustained income growth due to a prolonged period of appreciation of the terms of trade while terms of trade in the u s have deteriorated making real income in the two countries grow at similar rates

hiring churn and the business cycle hires occur for two reasons to grow a business and to replace those who have left churn churn is an important part of employment dynamics allowing workers to move to their most productive use we present evidence on churn from the job openings and labor turnover survey jolts churn is procyclical during the 2007 09 recession four fifths of hiring reductions are associated with reduced churn not with reductions in job creation we estimate that the cost of reduced churn is about two fifths of a percentage point of gdp annually throughout the three and one half year period since the beginning of the recession

where has all the skewness gone the decline in high growth young firms in the u s abstract the pace of business dynamism and entrepreneurship in the u s has declined over recent decades we show that the character of that decline changed around 2000 since 2000 the decline in dynamism and entrepreneurship has been accompanied by a decline in high growth young firms prior research has shown that the sustained contribution of business startups to job creation stems from a relatively small fraction of high growth young firms the presence of these high growth young firms contributes to a highly positively skewed firm growth rate distribution in 1999 a firm at the 90th percentile of the employment growth rate distribution grew about 31 percent faster than the median firm moreover the 90 50 differential was 16 percent larger than the 50 10 differential reflecting the positive skewness of the employment growth rate distribution we show that the shape of the firm employment growth distribution changes substantially in the post 2000 period by 2007 the 90 50 differential was only 4 percent larger than the 50 10 and it continued to exhibit a trend decline through 2011 the overall decline reflects a sharp drop in the 90th percentile of the growth rate distribution accounted for by the declining share of young firms and the declining propensity for young firms to be high growth firms

on the interaction of real and financial decisions of the firm under uncertainty this study analyzes the interaction between the optimal level of investment and debt financing for this purpose a model is structured in which a firm facing an uncertain price has to decide on its optimal level of investment and debt the amount of investment sets a limit on output whose optimal level is determined after price is realized the debt involved is risky there exists a possibility of bankruptcy the analysis proves that investment and its optimal financing have to be simultaneously determined and that a negative relationship exists between operating and financial leverage we also demonstrate that as the tax rate increases optimal capacity decreases and optimal leverage increases an analysis of the impact of changes in the expected price shows that under some conditions an increase in expected price would lead to an increase in optimal investment firm size and a decrease in optimal debt

grown up business cycles the entry rate of u s employer businesses has declined for more than 30 years we use a novel dynamic decomposition framework to show that regardless of its causes the direct effects of the continued decline in the entry rate and its delayed effects on the firm age distribution together play a major role in the slowing of trend employment growth and the emergence of jobless recoveries we identify changing demographic structure of the population and increased import competition as leading factors behind the decline in startup activity received september 1 2015 editorial decision april 5 2018 by editor francesca cornelli authors have furnished an internet appendix which is available on the oxford university press web site next to the link to the final published paper online

older and slower the startup deficit s lasting effects on aggregate productivity growth abstract declining firm entry and the aging incumbent firms have meaningful implications for sluggish u s aggregate productivity growth we provide a framework to characterize the contributions to industry productivity growth across the firm age distribution then apply it to firm level census data several findings emerge the relationship between firm age and productivity growth is downward sloping and convex the magnitudes are substantial but fade quickly selection and reallocation predominantly drive higher productivity growth of young firms our results suggest a cumulative drag on aggregate productivity of 3 1 since 1980 and are expanded upon with an iv strategy and standard model of firm dynamics

the start up gap and jobs the present paper uses quarterly data from the social security registry covering the full population of belgian firms to analyze how the secular decline in the firm entry rate affects aggregate employment to this end we disentangle the entry margin into two channels the overall employment of new firms the start up employment and the share of start up employment by sector the sectoral composition of start ups we find that the decline in start up employment slowed down the growth rate of aggregate employment by 26 over the 2009q2 2017q1 period by shifting the age distribution of firms toward older firms the sectoral composition of start ups accelerated the decline in the manufacturing sector and prevented the distribution sector from a potential decline while leaving the aggregate employment unchanged

the measurement of profitability and the diagnosis of market power this paper develops a model which yields the specification of an empirical test for the difference between price and marginal revenue which will be significantly positive if a firm exercises market power the test can be carried out with any of a number of commonly used measures of accounting profitability and embodies a specific functional form for the consideration of nonconstant returns to scale the model is estimated for four firms in the medical surgical supply industry and four firms in the motor vehicle industry the results are consistent with the hypothesis that product differentiation is an important basis for firm specific market power import quotas are shown to increase market power in the motor vehicle industry claims that accounting data cannot be used to analyze market power are rejected

monopoly capital and entrepreneurship whither small business there has been a growing literature over the last several years on a possible decline in us entrepreneurship and the reasons for it us small business formation and the jobs created by small businesses are supposed to be key elements in us economic growth many claim that without growth in small businesses and the jobs they provide that the us economy will either not grow at all or only very slowly therefore small business formation is a possible key to understanding capitalism in the 21st century since under monopoly capital there is claimed to be a tendency toward economic stagnation some of the general causes mentioned for less us entrepreneurism include high levels of personal debt mortgages student loans credit cards etc among the us populace and the increasing challenges that small businesses face against larger ones another concern is the amount of increasing business regulation and government presence in the us economy with which small businesses struggle more than larger ones if entrepreneurism requires risk taking then high levels of household debt and large well financed potential competitors may be hindering prospective entrepreneurs this exploratory paper finds that high levels of household debt the increasing size of existing businesses and government size are highly correlated with the slowdown in the entry rates of new firms into the us economy since the late 1970s as well as with a slowdown in the job creation rate of these firms

the role of entrepreneurship in us job creation and economic dynamism the united states has long been viewed as having among the world s most entrepreneurial dynamic and flexible economies it is often argued that this dynamism and flexibility has enabled the us economy to adapt to changing economic circumstances and recover from recessions in a robust manner while the evidence provides broad support for this view the outcomes of entrepreneurship are more heterogeneous than commonly appreciated and appear to be evolving in ways that could raise concern evidence along a number of dimensions and a variety of sources points to a us economy that is becoming less dynamic of particular interest are declining business startup rates and the resulting diminished role for dynamic young businesses in the economy we begin by describing how the concept of entrepreneurship is reflected in existing data on firm age and size the recent addition of firm age to official statistics represents a dramatic improvement in the information available to entrepreneurship researchers we then turn to a discussion of the role of startup firms in job creation business startups account for about 20 percent of us gross total job creation while high growth businesses which are disproportionately young

facts on business dynamism in turkey abstract in this paper we investigate various trends on competition and business dynamism in the turkish manufacturing sector more specifically using micro level administrative data sets of firm balance sheets credit registry and social security records we focus on moments such as firm entry profitability worker reallocation labor share labor productivity and credit distributions among several others our results indicate that business dynamism in the turkish manufacturing sector was relatively stable and even improving until 2012 but has been declining since then we find that market concentration rates have started to rise yet new business creation and economic activities of young firms have declined we find suggestive evidence that the decline was due to the decline in access to global liquidity next we use a model with endogenous market competition to identify the mechanisms and to perform a policy exercise our analysis suggests that providing support e g r d subsidy to immediate followers who can credibly challenge industry leaders can foster competition and lead to faster sustainable growth

international comparison of bank production characteristics and technological change in this paper we conduct an international comparison of bank production and technological characteristics the comparison is performed using novel evidence on changes in labour demand over the period 1980 89 for banks headquartered in canada france west germany italy japan and the united states the results suggest that there is relatively low substitutability of labour for capital in the production process of these banking organizations significant scale economies were found with regards to the expansion of output and the concomitant increase in labour in addition technological change operated to lower the quantity of inputs needed to produce a given level of outputs and increased the minimum efficient size bank over the sample period many of the production characteristics and technology effects varied significantly across countries these findings imply that intercountry differences in production characteristics and technological change should be explicitly recognized in bank strategic planning

the validity of profits structure studies with particular reference to the ftc s line of business data the simple proposition that consumerdamaging collusion is more likely to occur when there are fewer competitors has given rise not only to legal restrictions of economic activity thought to restrict output but also to an enormous amount of empirical work attempting to relate market concentration to the exercise of monopoly power most such studies measured market structure by an index of concentration for example four firm concentration or herfindahl and performance by accounting profit for example net profit divided by assets or price cost margins sales less direct costs divided by sales from the positive statistically significant correlations often found between greater concentration and profit with other factors presumably accounted for some researchers conclude that increases in concentration are anticompetitive and that concentration therefore is bad the concentration profits studies have been criticized essentially on two grounds one is that the positive relationship is not indicative of collusive behavior in particular oliver williamson 1968 john mcgee 1971 harold demsetz 1973 1974 and sam peltzman 1977 point out that higher profits could result from efficiencies experienced by large firms which resulted both in greater market shares and high levels of concentration analytical arguments show that higher profits logically follow as much from lower costs that are associated with higher levels of concentration as from collusion determined higher prices some empirical evidence that supports this belief is presented by demsetz peltzman and bradley gale and ben branch 1982 however their findings have been contested on the grounds that the data used are biased or inadequate or that the researchers have not demonstrated that the observed higher profits greater concentration relationship was caused by lower costs 2 the second criticism is that available data provide an inadequate basis for such conclusions the concentration numbers are based usually on industries defined by the commerce department s standard industrial classifications sic the sic definitions tend to be supply production rather than demand determined include nonhomogeneous products and exclude sales of similar products that are included in different sic groups or are imported the profit data are taken from accounting reports that provide poor measures of economic values weiss 1974 describes many of these problems however he does not believe that these shortcomings invalidate the studies as weiss 1979 concludes

short and long run time of use price elasticities in swiss residential electricity demand abstract this paper presents an empirical analysis on the residential demand for electricity by time of day this analysis has been performed using aggregate data at the city level for 22 swiss cities for the period 2000 2006 for this purpose we estimated two log log demand equations for peak and off peak electricity consumption using static and dynamic partial adjustment approaches these demand functions were estimated using several econometric approaches for panel data for example lsdv and re for static models and lsdv and corrected lsdv estimators for dynamic models the attempt of this empirical analysis has been to highlight some of the characteristics of the swiss residential electricity demand the estimated short run own price elasticities are lower than 1 whereas in the long run these values are higher than 1 the estimated short run and long run cross price elasticities are positive this result shows that peak and off peak electricity are substitutes in this context time differentiated prices should provide an economic incentive to customers so that they can modify consumption patterns by reducing peak demand and shifting electricity consumption from peak to off peak periods

capital intensity and the firm s cost of capital recent reports of negative capital intensity coefficients in struct ure performance equations support allegations of gross measurement error in accounting based measures of economic profitability this paper explores whether specification errors rather than measurement errors alone may explain this anomalous empirical result within a simultaneous equations model of capital intensity cost of capital and price cost margins the author employs hausman specification tests to demonstrate a negative bias on capital intensity and a positive bias on concentration when one omits firm specific cost of capital from price cost margin equations the roles of cost of capital and capital intensity are derived from formal structure performance theory copyright 1988 by mit press

self employment over the business cycle in the usa a decomposition entry rates into self employment increase during recessions and decrease during economic upswings i show that this is mostly explained by the higher unemployment rate during a recession together with the fact that at all times unemployed persons have a relatively high propensity to become self employed out of necessity i use econometric decomposition techniques to quantify these effects based on the monthly matched us current population survey before during and after the great recession i also document that the entry rate into self employment with unincorporated businesses strongly increased during the recession but not into self employment with incorporated businesses this highlights the association of unincorporated and incorporated self employment with necessity and opportunity entrepreneurship respectively the results are useful for policymakers and practitioners to understand forecast and act on the different types of self employment that can be expected over the business cycle there are also important implications for theories of the cyclicality of unemployment and entrepreneurship plain english summary self employment will increase during recessions when unemployment is high but it may not boost innovation during recessions increased unemployment underlies the higher entry rate into self employment our evidence is from representative survey data from the usa covering the great recession the upside is that self employment enables workers who lose their jobs to continue to work which can speed up the subsequent economic recovery thus public policy should enable people to start businesses however as during recessions the unemployed mostly start unincorporated businesses one cannot expect them to boost innovation as much as start ups during better economic times these insights also speak to the 2020 recession triggered by covid 19 if unemployment remains high after the relaxation of the lockdowns a rise can be expected especially in non innovative self employment thus the principal policy implication of this study is that policymakers should ensure that their expectations for new businesses started during deep recessions are realistic for the circumstances

cooperation v rivalry price cost margins by line of business fl c bureau of economics working papers are preliminary materials circulated to stimulate discussion and critical comment all data contained in them are in the public domain this includes information obtained by the commission which has become part of public record the analyses and conclusions set forth are those of the authors and do not n essarily ref1 t the views of other members of the bureau of economics other commission staff or the commission itself upon request single copies of the paper will be provided references in publications to fit bureau of economics working papers by ffc economists other than acknowledgement by a writer tnat ne has access to such unpublished materials should be cleared with the author to prot t the tentative character of these papers

incentive payments in time of day electricity pricing experiments the arizona experience time of day tod demonstration projects have produced some of the most relevant evidence on the cost and benefit of tod in the residential sector the authors clarify an earlier analysis of arizona s incentive scheme and find that homeowners treated the payments differently from regular income but did not make significant shifts in total consumption as a result of tod 11 references 6 tables dck