Alessandra Bonfiglioli, Rosario Crinò, Gino Gancia, 10 June 2018

To date there has been little systematic evidence on the role of firms in explaining country performance. This column explores how the products of firms from all over the globe fare in competition in the US market. Results show that the countries that capture larger market shares have more exporters, producing higher-quality products, with a more dispersed distribution of firm attributes. Larger and richer markets are characterised by a more dispersed distribution of sales and quality, and a higher incidence of superstar firms.

Daisuke Fujii, Yukiko Saito, Tatsuro Senga, 10 February 2018

Firms develop inter-firm networks throughout their lifecycles, continually adding and dropping trading partners. This column examines the role that the dynamics of these networks play in firm growth. The findings point to the importance of searching for potential trading partners and learning match-specific productivity for younger firms. Surviving older firms, in contrast, tend to enjoy a stable set of customers and suppliers to keep their operations.

Emanuele Colonnelli, 01 February 2018

Atsushi Ohyama, 14 December 2017

The length of time industries prosper varies significantly. This column examines why some industries grow and prosper for a long period of time through the lens of submarket creation and destruction. Using data from the Japanese Census of Manufacture, it shows that the creation and the destruction of products allow an industry to continue attracting new entrants, that start-up and spinoff firms are more likely to enter a newly created submarket than incumbent firms, and that new entry is encouraged when unrealised business opportunities are reallocated smoothly.

Samuel Bazzi, Amalavoyal Chari, Shanthi Nataraj, Alex Rothenberg, 28 November 2017

Amrit Amirapu, Michael Gechter, 27 November 2017

Mariassunta Giannetti, Xiaoyun Yu, 30 October 2017

One of Chinese President Xi Jinping’s defining policies has been in the fight against corruption, which hinders innovation and growth by creating privileges for established firms. This column shows that extensive corruption in China may indeed have hampered the process of firm progress, and that the anti-corruption campaign has been a good move towards favouring an efficient allocation of resources and, ultimately, sustained growth.

Roberto Ganau, Andrés Rodríguez-Pose, 19 August 2017

Whether organised crime undermines productivity has been studied extensively in broad terms, but not at the firm level. This column uses extensive firm-level data from across Italy to suggest that this is firmly the case, both through direct and indirect channels. The results point to a substantial negative direct effect of organised crime on firms' productivity growth. Moreover, any positive impact derived from industrial clustering and agglomeration economies is thoroughly debilitated by a strong presence of organised criminality.

Jacques Bughin, Jan Mischke, 04 August 2017

The economic narrative of the EU since the Global Crisis has focused on successive debt crises and persistent stagnation. This column addresses the accompanying, but less well studied, investment slump that occurred over the last decade, using evidence from an extensive survey of business decisionmakers across Europe. Business sentiment towards increased investment is affected not just by historic cash flows and expected future demand, but also the growth of digital economies as well as political concerns such as anti-Europe sentiment.

Fabio Berton, Sauro Mocetti, Andrea Presbitero, Matteo Richiardi, 09 February 2017

Understanding the real effects of financial shocks is essential for the design of effective growth-restoring policies. This column uses data on job contracts matched with the universe of firms and their banks from a region of Italy to analyse the employment effects of financial shocks. Financially constrained firms – especially the least productive ones – significantly reduced employment, mostly of less-educated and lower-skilled workers with temporary contracts. While these results suggest possible distributional effects across workers, they could also reflect a productivity-enhancing reallocation function of financial shocks.

Lucian Cernat, Marion Jansen, 07 February 2017

For some time, it was possible to win over trade sceptics by providing explicit numbers reflecting the losses from protectionism. Now it seems that the larger public has become indifferent to evidence-based debates. This column argues for increased use of micro-evidence and firm-level data in policy debates to make the case for trade. By linking trade to personal well-being, an increased focus on micro-economic evidence can generate stronger narratives and greater credibility among voters.

Harald Fadinger, Christian Ghiglino, Mariya Teteryatnikova, 24 December 2016

Economists are just starting to understand how observed input-output linkages and productivity differences are connected. This column investigates how differences in the distribution of sectoral input-output multipliers interact with sectoral productivities to determine cross-country differences in aggregate income. It finds that the impact of the linkages on productivity are substantial, which in turn has significant implications for policy.

Lionel Fontagné, Gianluca Orefice, 18 December 2016

Regulation is a barrier to trade. This column uses French firm-level panel data to assess how technical barriers to trade impact firms’ exports. In the presence of stringent barriers, exporters balance the cost of complying with this regulation against the fixed cost of entering a new market. Barriers reduce the number of exporting firms in each sector-destination, especially in sectors with many multi-destination firms.

Marcio Cruz, Maurizio Bussolo, Leonardo Iacovone, 01 December 2016

A recent literature has shown that successful firms have in common a deliberate and active management of their internal structure. This column uses an export promotion programme in Brazil that provided consulting on management and production practices to small and medium enterprises to examine whether policies can prompt and support firm reorganisations. It finds that firms participating in the programme were 20% more likely to add a new layer of workers with more specialised skills and competencies.

Hylke Vandenbussche, Christian Viegelahn, 02 October 2016

In a world where production is increasingly fragmented across borders, a large number of firms import their raw material inputs from abroad. This column investigates how firms’ input and output choices are affected by import tariffs on inputs that domestic firms use in production. Based on firm-product level data for India, it finds that firms decrease their use of inputs subject to the tariff, relative to other inputs. Firms also decrease their sales of outputs made of these inputs, relative to other outputs.

Dalia Marin, Linda Fache Rousová, Thierry Verdier, 21 September 2016

We know little detail about how much multinational firms transplant their organisational culture to affiliates. Data from Austrian and German multinational firms shows that, contrary to what we might expect, almost 70% of foreign investments do not adopt the parent firm's mode of organisation. This column argues that the size of the home and host markets, and the level of competition in each market, all influence the decision to transplant culture. Globalisation also creates 'reverse transplanting', in which the parent firm's organisation becomes more like the optimal organisation of the subsidiary. 

Alex Edmans, Clifford Holderness, 15 September 2016

The separation of ownership and control for public firms may lead to fully dispersed ownership where no shareholder has an incentive to engage in governance. This column argues that blockholders (owners of large stakes) play a critical role in long-term governance, partly through a credible threat to sell their stakes. This threat is undermined by well-intentioned policy moves to create holding-period incentives and requirements. If they succeed, these policies will make exit less likely and blockholders will lose a method to discipline managers.

Jérôme Héricourt, Clément Nedoncelle, 11 June 2016

The idea that exchange rate volatility generates additional costs and uncertainty that are detrimental to international trade is widely accepted. This column argues that big, multi-destination firms – which account for the bulk of aggregate exports – reallocate exports across countries as a foreign exchange hedge. When bilateral volatility increases relative to multilateral volatility, exports towards the considered market are hampered, but exports remain mainly unchanged at the macro level.

Manuel García Santana, Josep Pijoan-Mas, Enrique Moral-Benito, Roberto Ramos, 23 May 2016

Spain enjoyed substantial growth in the decade prior to the Global Crisis, despite declining aggregate productivity. Recent research blames the poor productivity on different forms of a ‘financial resource curse’. This column argues that resource misallocation was particularly severe due to corruption and crony capitalism. This suggests future growth will require serious political reforms. 



CEPR Policy Research