Results

Blog

LSE Business Review:

How the Trump tariffs affect UK firms

How should UK exporters react to the tariffs imposed by President Trump? Some manufacturers may decide to increase production in the US, but those with loyal US consumers who are relatively insensitive to price changes m...Read more...

Blog

Bank Underground:

Forbearance lending as a crisis management tool

The Bank of England Agenda for Research (BEAR) sets the key areas for new research at the Bank over the coming years. This post is an example of issues considered under the Prudential Architecture Theme which focuses on ...Read more...

CEP discussion paper

Multinational firms and global innovation

This paper provides an integrated analysis of multinational companies' global production and innovation. We establish novel stylized facts using rich data on the network of production affiliates and patent activity of Ge...Read more...

CentrePiece article

Revving up wages: How rising productivity has benefited car industry workers

Fast productivity growth in the UK car industry led to staff in the sector earning about 37% more than the average manufacturing employee by the 2010s. But Andreas Teichgraeber and Tim Obermeier show that while wages wen...Read more...

Journal article

The Economic Journal:

Lobbying for Globalisation

Using detailed information from lobbying reports filed under the Lobbying Disclosure Act, we construct a unique dataset that allows us to identify which firms lobby on Free Trade Agreements (FTAs) negotiated by the Unite...Read more...

CEP discussion paper

Deep integration and trade: UK firms in the wake of Brexit

How does dismantling deep integration affect international trade? This paper provides new evidence on the consequences of disintegration by estimating the impact of Brexit on goods trade by UK firms. The UK's exit from t...Read more...

Blog

Vox EU:

High moments for superstar exporters

Aggregate exports are highly concentrated in a small group of firms, which are generally more productive than other firms. This column shows that productivity shocks generate different responses of aggregate exports depe...Read more...

Chapter

New technologies and evolving market structures

in Handbook on Labour Markets in Transition

This Chapter investigates the relationship between technological changes, labour market frictions, and firms' labour market power. We provide guidance through the main trends that characterised labour markets during the ...Read more...

Journal article

International Economic Review:

Last but not least: Laggard Firms, Technology Diffusion, and its Structural and Policy Determinants

Using a unique microaggregated data set on firm-level productivity in 13 countries from 1995 to 2014, this article provides new evidence on technology- and knowledge-diffusion barriers for laggard firms. We show that, al...Read more...

Journal article

The Economic Journal:

Globalization and Conflicts: the Good, the Bad, and the Ugly of Corporations in Africa

Using a novel georeferenced datataset on the affiliates and headquarters of multinational enterprises between 2007 and 2018 together with georeferenced conflict data for the African continent, this work establishes a cau...Read more...

Journal article

International Review of Financial Analysis :

Does it matter who owns firms? Evidence on the impact of supermajority control on private firms in Europe

We explore how the type of owner affects private enterprise investment decisions in Europe. In contrast to the literature, we analyze firms with concentrated (>95%) ownership stakes to reduce the potential that agency pr...Read more...

CEP discussion paper

Can firm subsidies spread growth?

How do firms diffuse resources and do they spillover outside headquarter intensive areas? We show R&D subsidies induce French firms to hire new workers, often in new establishments and commuting zones. Using subsidy indu...Read more...

Blog

Vox EU:

Good management practices are great for productivity ... as well as profit shifting

Following the release of the Panama Papers and the Paradise Papers, there has been renewed research into profit shifting by multinational firms. This column utilises a novel dataset to show that well-managed subsidiaries...Read more...

Journal article

Oxford Open Economics:

Firms and inequality

We review the existing literature on falling business dynamism and present a new analysis using comprehensive UK firm-level panel data. Since the mid-1990s, there has been a large increase in UK firm-level inequality (es...Read more...

CEP discussion paper

An engine of (pay) growth? Productivity and wages in the UK auto industry

When labour market competition is imperfect, positive industry (and firm) productivity shocks can be passed through to workers in the form of higher wages. We document how the UK auto industry, following a period of decl...Read more...

Journal article

American Economic Journal: Microeconomics:

Technology Transfer in Global Value Chains

Global value chains create opportunities for North-South technology diffusion. This paper studies technology transfer in value chains when contracts are incomplete and input production technologies are imperfectly exclud...Read more...

Blog

Vox EU:

The impact of higher interest rates on UK firms

Firms across many advanced economies have faced a significant increase in the interest rates paid on borrowing and received on deposits since 2021. Krishan Shah, Nick Bloom, Philip Bunn, Paul Mizen, Gregory Thwaites and ...Read more...

Blog

INSEAD Knowledge:

Consumers' green conscience fosters clean innovation

Alexandra Roulet and Philippe Aghion explain how consumers' green conscience can foster clean innovation and provide tips for how companies can reach green goals in a highly competitive market....Read more...

Journal article

The Journal of Finance:

Tracing the International Transmission of a Crisis through Multinational Firms

We show that multinational firms transmit shocks across countries through their internal capital markets. We study a credit supply shock to parent firms in Germany. International affiliates outside Germany supported thei...Read more...

Blog

Vox EU:

Employment dynamics across firms during COVID-19: The role of job retention schemes

Governments around the world implemented widespread business support during the COVID-19 pandemic. The measures may have affected employment dynamics and reallocation, with potential consequences for aggregate productivi...Read more...

CEP discussion paper

Firms in product space: Adoption, growth and competition

Which products are potentially produced together? When demand for a product increases, which firms will supply it? Using multi-product production patterns within and across firms, we recover a continuous cost based dista...Read more...

CEP discussion paper

Immigration, monopsony and the distribution of firm pay

We argue that the arrival of immigrants with low reservation wages can strengthen the monopsony power of firms. Firms can exploit "cheap" migrant labor by offering lower wages, though at the cost of forgoing potential na...Read more...

CEP discussion paper

Rethinking revealed comparative advantage with micro and macro data

The Balassa's index of revealed comparative advantage does not necessarily reveal Ricardian comparative advantage. We propose an alternative sufficient statistics approach based on a quantitative standard trade model inc...Read more...

Blog

LSE Business Review:

Joining multinationals' supply chains can benefit domestic firms' performance

Developing countries compete to attract multinationals to induce development. Becoming suppliers to multinationals could improve domestic firms' technology and managerial practices, and the host country's economy could b...Read more...

CEP discussion paper

Understanding multi-layered sanctions: A firm-level analysis

This paper examines which types of firms are hit by multi-layered sanctions, quantifies the extent of the economic impact on the affected firms, and identifies the channels through which these effects are propagated. To ...Read more...

Journal article

American Economic Review :

The Impact of Regulation on Innovation

We present a framework that can be used to assess the equilibrium impact of regulation on endogenous innovation with heterogeneous firms. We implement this model using French firm-level panel data, where there is a sharp...Read more...

Blog

Vox EU:

Large firms generate positive productivity spillovers

The rising dominance of large firms in many industrialised countries over the last few decades has received much attention, largely focusing on the potential negative effects of this increased market concentration. Using...Read more...

CentrePiece article

Low investment Britain: policies to promote foundations for growth

The UK investment ecosystem needs rewiring across the board to increase firms' desire to invest in productive and sustainable assets, and to enhance their ability to do so. Paul Brandily, Mimosa Distefano, Krishan Shah, ...Read more...

Blog

Liberty Street Economics:

Do Large Firms Generate Positive Productivity Spillovers?

Mary Amiti, Cedric Duprez, Jozef Konings and John Van Reenen investigate whether large firms also generate positive effects. Using firm-to-firm transaction data for an industrialised country, Belgium, they find that larg...Read more...

Blog

IFS Zooms In:

Are differences between companies driving inequality and holding back growth? (podcast)

What do we mean when we talk about inequality between firms? Are inequalities between firms limiting UK business dynamism? And do governments need to step in and enforce competition rules? In this podcast episode, John V...Read more...

Journal article

The Economic Journal:

Unraveling firms: demand, productivity and markups heterogeneity

We develop a novel framework that simultaneously allows recovering heterogeneity in demand, quantity TFP and markups across firms while leaving the correlation between the three dimensions unrestricted. We accomplish thi...Read more...

Blog

Economics Observatory:

How has the Russian invasion of Ukraine affected global financial markets?

As Russia's war against Ukraine continues to unfold, its global economic impact remains uncertain. Evidence from the stock market indicates that firms with strong trade or ownership ties to Russia are more likely to face...Read more...

Journal article

AEA Papers and Proceedings:

The Local Labor Market Effects of Modern Manufacturing Capital: Evidence from France

Using an event study methodology and comprehensive micro data from the French manufacturing sector, we analyze the local labor market effects of investments in modern manufacturing capital, including modern automation te...Read more...

Journal article

Journal of International Economics:

Sequentially exporting products across countries

Exploiting disaggregated data on French exporters, we show that firms expand their product scope and geographical presence sequentially. This process of internationalization is uneven over time, exhibiting more volatilit...Read more...

Blog

CATO Institute:

The Impact of Regulation on Innovation

Many scholars have been concerned that slower growth in countries with heavy labour regulations could be due to firms' reluctance to innovate given the burden of red tape. Philippe Aghion, Antonin Bergeaud and John Van R...Read more...

Blog

Inter Press Service:

Asia: the Power of Connections and their Consequences

In our recent book, "The Connections World: The Future of Asia", published by Cambridge University Press in October 2022, we argue that mutually beneficial links between dynastic business houses and political elites have...Read more...

Blog

Vox EU:

How US sanctions increased the economic activity of sanctioned Russian firms

Dzhamilya Nigmatulina assesses the impact of sanctions following the 2014 annexation of Crimea on Russian sanctioned firms. The capital, materials inputs, and revenue of sanctioned firms actually increased relative to no...Read more...

Journal article

Journal of Political Economy: Forthcoming

The comparative advantage of firms

Resource-based theories propose that firms grow by diversifying into products that use common capabilities. We provide evidence for common-input capabilities, using a policy that removed entry barriers in input markets t...Read more...

Blog

Vox EU:

Structural change within versus across firms: evidence from the US

One feature of the US economy over the last five decades has been the transition away from manufacturing towards services. This column takes a firm-level view of structural change from 1977-2019 to study these sectoral d...Read more...

Journal article

The Quarterly Journal of Economics:

The effects of joining multinational supply chains: new evidence from firm-to-firm linkages

We study the effects of becoming a supplier to multinational corporations (MNCs) using tax data tracking firm-to-firm transactions in Costa Rica. Event study estimates reveal that domestic firms experience strong and per...Read more...

Chapter

Industrial policy and competition

in Globalization, Firms, and Workers

Using a comprehensive dataset of all medium and large enterprises in China between 1998 and 2007, we show that industrial policies allocated to competitive sectors or that foster competition in a sector increase producti...Read more...

Journal article

Economic Modelling:

Credit constraints, selection and productivity growth

This paper presents a tractable model of innovation and growth with firm heterogeneity and financial frictions. The model is used to uncover new mechanisms linking access to credit and productivity growth, highlighting t...Read more...

CEP discussion paper

Firms and inequality

In the last few decades, dramatic changes have been documented in the US business landscape. These include rising productivity and pay dispersion between firms, higher aggregate markups (of price over variable costs), gr...Read more...

External publication

Firms and inequalities

There have been some dramatic changes in the business landscape in American firms over the last four decades that have been extensively documented by researchers and are the subject of much public debate (e.g. Van Reenen...Read more...

CEP Insights

Productivity

Economics is the study of how to share out scarce resources. But it is also about how to make those resources less scarce by creating a bigger economic pie to share. The key to economic growth is increased productivity -...Read more...

Journal article

Journal of International Economics:

Technology, market structure and the gains from trade

We study the gains from trade in a model with oligopolistic competition, heterogeneous firms and innovation. Our key finding is that a trade-induced increase in market concentration can be an important source of the gain...Read more...

Blog

VoxEU:

Inflation, market power, and price controls: views of leading economists

With sharply rising US inflation prompting debate about the potential role of powerful firms in driving up prices and whether antitrust interventions and/or price controls may be an effective policy response, the IGM For...Read more...

Blog

VoxEU:

Tracking business dynamism during the Covid-19 pandemic: new cross-country evidence and visualisation tool

Stefano Agresti, Flavio Calvino, Chiara Criscuolo, Francesco Manaresi and Rudy Verlhac employ a new data visualisation tool to reveal the impact on business dynamism of the Covid-19 crisis in 2020 and in recovery. Findin...Read more...

Blog

VoxEU:

Covid-19 uncertainty: a tale of two tails

The onset of the COVID-19 pandemic triggered a massive spike in uncertainty. This column uses data from panel surveys of US and UK business executives to document how uncertainty over own-firm sales growth rates over the...Read more...

Journal article

Journal of International Economics:

Import competition, heterogeneous preferences of managers, and productivity

When managers have objectives beyond maximizing monetary profits, inefficiencies may arise. An increase in competition may then force managers to improve the productivity of the firm in order to ensure survival. While th...Read more...

Blog

VoxEU:

Covid-19 and structural change

Covid-19 has had a sizeable impact on where people work and how they shop. This column uses data from the Decision Maker Panel business survey of 3,000 UK firms to assess the longer-run impact. The pandemic is expected t...Read more...

CEP discussion paper

The diffusion of disruptive technologies

We identify novel technologies using textual analysis of patents, job postings, and earnings calls. Our approach enables us to identify and document the diffusion of 29 disruptive technologies across firms and labor mark...Read more...

Journal article

Journal of Political Economy:

Discrimination, managers, and firm performance: evidence from “Aryanizations” in Nazi Germany

Large-scale increases in discrimination can lead to dismissals of highly qualified managers. We investigate how expulsions of senior Jewish managers, due to rising discrimination in Nazi Germany, affected large corporati...Read more...

CEP discussion paper

The impact of Covid-19 on US firms

We use survey data on an opt-in panel of around 2,500 US small businesses to assess the impact of Covid-19. We find a significant negative sales impact that peaked in Quarter 2 of 2020, with an average loss of 29% in sal...Read more...

CEP discussion paper

Opposing firm-level responses to the China shock: horizontal competition versus vertical relationships

We decompose the "China shock" into two components that induce different adjustments for firms exposed to Chinese exports: a horizontal shock affecting firms selling goods that compete with similar imported Chinese goods...Read more...

CEP discussion paper

Firm export responses to tariff hikes

We study how firms react to unexpected increases in import tariffs. We identify our results from a sudden removal of American preferential tariffs applied on Argentine imports under the Generalized System of Preferences,...Read more...

CEP discussion paper

Sequential exporting across countries and products

How do exporters expand their product scope and geographical presence? We argue that new exporters are uncertain about their profitability in different countries and products, but learn it as they start to export. As a c...Read more...

Journal article

Business History:

The Population of Non-corporate Business Proprietors in England and Wales 1891–1911

This article uses population censuses to provide the first consistent counts of the population of business proprietors for 1891–1911. After appropriate adjustments for imperfect Census design the article confirms the per...Read more...

CEP discussion paper

Managing global production: theory and evidence from just-in-time supply chains

Global value chains are highly fragmented across countries and dominated by a few large multinational firms. But the challenges of an increasingly difficult international business environment are raising the question of ...Read more...

Journal article

The Quarterly Journal of Economics:

The fall of the labor share and the rise of superstar firms

The fall of labor's share of GDP in the United States and many other countries in recent decades is well documented but its causes remain uncertain. Existing empirical assessments typically rely on industry or macro data...Read more...

CEP discussion paper

Import competition, heterogeneous preferences of managers and productivity

When managers have objectives beyond maximizing monetary profits, inefficiencies may arise. An increase in competition may then force managers to improve the productivity of the firm in order to ensure survival. While th...Read more...

Journal article

Journal of International Economics:

Globalization and state capitalism: Assessing Vietnam's accession to the WTO

What do state-owned enterprises (SOEs) do? How do they respond to market incentives? Can we expect substantial efficiency gains from trade liberalization in economies with a strong presence of SOEs? Using a new dataset o...Read more...

CentrePiece article

In brief... Brexit and outward investment by UK firms

Media reports have highlighted that some UK firms have started to move production abroad in anticipation of Brexit. CEP analysis confirms that there has indeed been a substantial increase in outward investments. The shif...Read more...

Journal article

European Economic Review:

Host-country financial development and multinational activity

This paper evaluates the influence of host-country financial conditions on the global operations of multinational firms. Using detailed U.S. data, we establish that financial development in a country is associated with r...Read more...

CEP discussion paper

The comparative advantage of firms

Resource based theories propose that firms grow by diversifying into products which use common capabilities. We provide evidence for common input capabilities using a policy that removed entry barriers in input markets t...Read more...

Journal article

Review of Economic Studies:

Carry-along trade

Large multi-product firms dominate international trade flows. This paper documents new facts about multi-product manufacturing exporters that are not easily reconciled with existing multi-product models. Using novel link...Read more...

CentrePiece article

Measuring the economic costs of discrimination: insights from Nazi Germany

Kilian Huber and colleagues analyse the effects of the Nazis' purge of Jewish managers from German firms....Read more...

CentrePiece article

Europe's transformation after Gutenberg: the impact of new media and competition

Jeremiah Dittmar explores the effects of the printing press and the new forms of competition that accompanied its introduction....Read more...

CEP Brexit analysis

Voting with their money: Brexit and outward investment by UK firms

Foreign direct investment (FDI) has grown rapidly in recent decades. Through FDI, firms headquartered in the UK can own and operate subsidiaries throughout the world. FDI opportunities give firms a choice between investi...Read more...

CEP discussion paper

New media and competition: printing and Europe's transformation after Gutenberg

We study the role of book content in economic, religious, and institutional development after the introduction of printing, and the role of competition in determining the amount and content of local printing. We focus on...Read more...

CEP discussion paper

Discrimination, managers, and firm performance: evidence from “Aryanizations” in Nazi Germany

Large-scale increases in discrimination can lead to dismissals of highly qualified managers. We investigate how expulsions of senior Jewish managers, due to rising discrimination in Nazi Germany, affected large corporati...Read more...

CEP discussion paper

Globalization and state capitalism: assessing Vietnam's accession to the WTO

What do state-owned enterprises (SOEs) do? How do they respond to market incentives? Can we expect substantial efficiency gains from trade liberalization in economies with a strong presence of SOEs? Using a new dataset o...Read more...

CEP discussion paper

Technology, market structure and the gains from trade

We study the gains from trade in a new model with oligopolistic competition, firm heterogeneity, and innovation. Lowering trade costs reduces markups on domestic sales but increases markups on export sales, as firms do n...Read more...

Journal article

Industrial and Corporate Change:

A cross-country analysis of start-up employment dynamics

This article carries out a detailed descriptive analysis of employment dynamics of new firms, using comparable and highly representative data for 19 countries. It does so by using a novel analytical decomposition of the ...Read more...

Journal article

Review of Economics and Statistics:

Two-sided heterogeneity and trade

This paper develops a multicountry model of international trade that provides a simple microfoundation for buyer-seller relationships in trade. We explore a rich data set that identifies buyers and sellers in trade and e...Read more...

Journal article

Journal of Economic Literature:

Global firms

Research in international trade has changed dramatically over the last twenty years, as attention has shifted from countries and industries towards the firms actually engaged in international trade. The now-standard hete...Read more...

Journal article

The Review of Financial Studies:

Managing the family firm: Evidence from CEOs at work

We build a comparable and bottom-up measure of CEO labor supply for 1,114 CEOs and investigate whether family and professional CEOs differ along this dimension. Family CEOs work 9% fewer hours relative to professional CE...Read more...

CEP discussion paper

Firm-to-firm connections in Colombian imports

The vast majority of world trade flows is between firms. Only recently has research in international trade started to emphasize the importance of the connections between exporters and importers both in aggregate trade fl...Read more...

CEP discussion paper

All in the family? CEO choice and firm organization

Family firms are the most prevalent firm type in the world, particularly in emerging economies. Dynastic family firms tend to have lower productivity, though what explains their underperformance is still an open question...Read more...

CEP discussion paper

Product diversification in Indian manufacturing

The presence of global value chains challenges the neoclassical idea of the firm since it implies firms are not monolithic but are rather interdependent on the larger economic environment. Examining establishments, the s...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Matching Firms and Workers in a Field Experiment in Ethiopia

Do matching frictions affect youth employment in developing countries? We organise job fairs in Addis Ababa, to match firms with a representative sample of young, educated job-seekers. We create very few jobs: one for ap...Read more...

Blog

LSE British Politics and Policy:

Where industry is strong and where it’s weak – key facts of UK business geography

Financial services aren’t as London-centric as the creative industries, and the coast-inland divide is growing, write Sandra Bernick, Richard Davies, and Anna Valero. The UK’s financial services industry is not nearly as...Read more...

Journal article

American Economic Review:

Exporter dynamics and partial-year effects

Two identical firms who start exporting in different months, one each in January and December, will report dramatically different exports for the first calendar year. This partial-year effect biases down firstyear export...Read more...

CEP discussion paper

The fall of the labor share and the rise of superstar firms

The fall of labor's share of GDP in the United States and many other countries in recent decades is well documented but its causes remain uncertain. Existing empirical assessments typically rely on industry or macro data...Read more...

Journal article

American Economic Review:

Concentrating on the fall of the labor share

The recent fall of labor's share of GDP in numerous countries is well-documented, but its causes are poorly understood. We sketch a "superstar firm" model where industries are increasingly characterized by "winner take m...Read more...

CEP discussion paper

Concentrating on the fall of the labor share

In this paper, we discuss an explanation for the fall in share of labour in GDP based on the rise of “superstar firms.” If globalization or technological changes advantage the most productive firms in each industry, prod...Read more...

CEP discussion paper

Multi-product firms and product quality

We examine the global operations of multi-product firms. We present a flexible heterogeneous-firm trade model with either limited or strong scope for quality differentiation. Using customs data for China during 2002-2006...Read more...

Journal article

Journal of International Economics:

Multi-product firms and product quality

We examine the global operations of multi-product firms. We present a flexible heterogeneous-firm trade model with either limited or strong scope for quality differentiation. Using customs data for China during 2002–2006...Read more...

CentrePiece article

In brief... Management practices in Pakistan

For more than a decade, CEP economists have been leading efforts to get measures of management incorporated into the statistical infrastructure used by governments and researchers. The authors report on the latest initia...Read more...

CEP discussion paper

Product switching and the business cycle

This paper explores role of product adding and dropping within manufacturing firms over the business cycle. While a substantial body of work has explored the importance of the extensive margins of firm entry and exit in ...Read more...

CEP discussion paper

Protectionism through exporting: subsidies with export share requirements in China

We study the effect of subsidies subject to export share requirements (ESR) - that is, conditioned on a firm exporting at least a given fraction of its output - on exports, the intensity of competition and welfare, throu...Read more...

CEP discussion paper

Exporter dynamics and partial-year effects

Two identical firms that start exporting in different months, one each in January and December, will report dramatically different exports for the first calendar year. This partial-year effect biases down first year expo...Read more...

Journal article

Journal of International Economics:

How firms export: Processing vs. ordinary trade with financial frictions

The fragmentation of production across borders allows firms to make and export final goods, or to perform only intermediate stages of production by processing imported inputs for re-exporting. We examine how financial fr...Read more...

CEP discussion paper

Two-sided heterogeneity and trade

This paper develops a multi-country model of international trade that provides a simple micro-foundation for buyer-seller relationships in trade. We explore a rich dataset that identifies buyers and sellers in trade and ...Read more...

CEP discussion paper

Rethinking deindustrialization

Manufacturing in high-income countries is on the decline and Denmark is no exception. Manufacturing employment and the number of firms have been shrinking as a share of the total and in absolute levels. This paper uses a...Read more...

CEP discussion paper

Global firms

Research in international trade has changed dramatically over the last twenty years, as attention has shifted from countries and industries towards the firms actually engaged in international trade. The now-standard hete...Read more...

CEP discussion paper

Swimming upstream: input-output linkages and the direction of product adoption

Multiproduct firms dominate production, and their product turnover contributes substantially to aggregate growth. Firms continually adapt their product mix, but what determines which products firms expand into? Theories ...Read more...

CEP discussion paper

Contracting and the division of the gains from trade

This paper examines the microstructure of import markets and the division of the gains from trade among consumers, importers and exporters. When exporters and importers transact through anonymous markets, double marginal...Read more...

CEP discussion paper

How firms export: processing vs. ordinary trade with financial frictions

The fragmentation of production across borders allows firms to make and export final goods, or to perform only intermediate stages of production by processing imported inputs for re-exporting. We examine how financial fr...Read more...

Journal article

The Review of Economics and Statistics:

Intermediaries in international trade: Products and destinations

This paper examines the factors that give rise to intermediaries in exporting and explores the implications for trade volumes. Export intermediaries such as wholesalers serve different markets and export different produc...Read more...