When does leverage hurt productivity growth? A firm-level analysis:a firm-level analysis

In the wake of the global financial crisis, several macroeconomic contributions have highlighted the risks of excessive credit expansion. In particular, too much finance can have a negative impact on growth. We examine the microeconomic foundations of this argument, positing a non-monotonic relationship between leverage and firm-level productivity growth in the spirit of the trade-off theory of capital structure. A threshold regression model estimated on a sample of Central and Eastern European countries confirms that TFP growth increases with leverage until the latter reaches a critical threshold beyond which leverage lowers TFP growth. This estimate can provide guidance to firms and policy makers on identifying "excessive" leverage. We find similar non-monotonic relationships between leverage and proxies for firm value. Our results are a first step in bridging the gap between the literature on optimal capital structure and the wider macro literature on the finance-growth nexus. © 2012 Elsevier Ltd.

An overview of Total Factor Productivity estimations adjusted for pollutant outputs:an application to sugarcane farming

The conventional Total Factor Productivity (TFP) measurement does not incorporate the effects of undesirable outputs, which are harmful to the environment. Using sugarcane farming in Kenya, this paper illustrates the differences between the conventional Malmquist index measures where the environment variable is not adjusted and environment-adjusted measures using both hyperbolic and directional distance functions. The mean TFP change estimates for the conventional Malmquist index, adjusted hyperbolic index and Luenberger indicator were 3.13%, 0.11% and 2.21%, respectively. The conventional non-adjusted measure lies between the two adjusted measures of hyperbolic index and Luenberger indicator. © 2012 Inderscience Enterprises Ltd.

High-growth firms and productivity:evidence from the United Kingdom

Abstract There is considerable evidence that high-growth firms (HGFs) contribute significantly to employment and economic growth. However, the literature so far does not adequately explore the link between HGFs and productivity. This paper investigates the empirical link between total factor productivity (TFP) growth and HGFs, defined in terms of sales growth, in the United Kingdom over the period 2001-2010, by examining two related research questions. Firstly, does higher TFP growth lead to HGF status and secondly, does HGF experience help firms achieve faster TFP growth? Our findings reveal that firms in both the manufacturing and services sectors are more likely to become HGFs when they exhibit higher TFP growth. In addition, firms that have had HGF experience tend to enjoy faster TFP growth following the high-growth episodes. Policy implications are drawn based on the self-reinforcing process of the high-growth phenomenon that is revealed by our results. © 2014 The Author(s).

Essays on Firm Heterogeneity with Empirical Applications in Economic History and Agricultural Economics

This thesis uses models of firm-heterogeneity to complete empirical analyses in economic history and agricultural economics. In Chapter 2, a theoretical model of firm heterogeneity is used to derive a statistic that summarizes the welfare gains from the introduction of a new technology. The empirical application considers the use of mechanical steam power in the Canadian manufacturing sector during the late nineteenth century. I exploit exogenous variation in geography to estimate several parameters of the model. My results indicate that the use of steam power resulted in a 15.1 percent increase in firm-level productivity and a 3.0-5.2 percent increase in aggregate welfare. Chapter 3 considers various policy alternatives to price ceiling legislation in the market for production quotas in the dairy farming sector in Quebec. I develop a dynamic model of the demand for quotas with farmers that are heterogeneous in their marginal cost of milk production. The econometric analysis uses farm-level data and estimates a parameter of the theoretical model that is required for the counterfactual experiments. The results indicate that the price of quotas could be reduced to the ceiling price through a 4.16 percent expansion of the aggregate supply of quotas, or through moderate trade liberalization of Canadian dairy products. In Chapter 4, I study the relationship between farm-level productivity and participation in the Commercial Export Milk (CEM) program. I use a difference-in-difference research design with inverse propensity weights to test for causality between participation in the CEM program and total factor productivity (TFP). I find a positive correlation between participation in the CEM program and TFP, however I find no statistically significant evidence that the CEM program affected TFP.

A Sustainable Century? Genuine Savings in developing and developed countries, 1900-2000

This chapter traces the long-run development of Genuine Savings (GS) using a panel of eleven countries during the twentieth century. This panel covers a number of developed countries (Great Britain, Germany, Switzerland, France, the US, and Australia) as well as a set of resource-abundant countries in Latin America (Argentina, Brazil, Chile, Colombia, and Mexico). These countries represent approximately 50 percent of the world’s output in terms of Gross Domestic Product (GDP) by 1950, and include large economies and small open economies, and resource-rich and resource-scarce countries, thus allowing us to compare their historical experiences. Components of GS considered include physical and human capital as well as resource extraction and pollution damages. Generally, we find evidence of positive GS over the course of the twentieth century, although the two World Wars and the Great Depression left considerable marks. Also, we found striking differences between Latin American and developed countries when Total Factor Productivity (TFP) is included; this could be a signal of natural resource curse or technological gaps unnoticed in previous works.

Essays on Information Frictions, Prices and Unemployment

I investigate the effects of information frictions in price setting decisions. I show that firms' output prices and wages are less sensitive to aggregate economic conditions when firms and workers cannot perfectly understand (or know) the aggregate state of the economy. Prices and wages respond with a lag to aggregate innovations because agents learn slowly about those changes, and this delayed adjustment in prices makes output and unemployment more sensitive to aggregate shocks. In the first chapter of this dissertation, I show that workers' noisy information about the state of the economy help us to explain why real wages are sluggish. In the context of a search and matching model, wages do not immediately respond to a positive aggregate shock because workers do not (yet) have enough information to demand higher wages. This increases firms' incentives to post more vacancies, and it makes unemployment volatile and sensitive to aggregate shocks. This mechanism is robust to two major criticisms of existing theories of sluggish wages and volatile unemployment: the flexibility of wages for new hires and the cyclicality of the opportunity cost of employment. Calibrated to U.S. data, the model explains 60% of the overall unemployment volatility. Consistent with empirical evidence, the response of unemployment to TFP shocks predicted by my model is large, hump-shaped, and peaks one year after the TFP shock, while the response of the aggregate wage is weak and delayed, peaking after two years. In the second chapter of this dissertation, I study the role of information frictions and inventories in firms' price setting decisions in the context of a monetary model. In this model, intermediate goods firms accumulate output inventories, observe aggregate variables with one period lag, and observe their nominal input prices and demand at all times. Firms face idiosyncratic shocks and cannot perfectly infer the state of nature. After a contractionary nominal shock, nominal input prices go down, and firms accumulate inventories because they perceive some positive probability that the nominal price decline is due to a good productivity shock. This prevents firms' prices from decreasing and makes current profits, households' income, and aggregate demand go down. According to my model simulations, a 1% decrease in the money growth rate causes output to decline 0.17% in the first quarter and 0.38% in the second followed by a slow recovery to the steady state. Contractionary nominal shocks also have significant effects on total investment, which remains 1% below the steady state for the first 6 quarters.

Understanding import diversification: an empirical analysis

This paper analyzes import diversification in an aggregated perspective -- Using a dataset for 60 countries covering the period 1995-2010, we study the main determinants of import diversification -- We expect to contribute to the current literature, taking into account that there have been few empirical studies addressing import diversification and more specifically, at the cross-country level -- We take into account variables classified into four categories: Structural factors, macroeconomic factors, international trade factors and political factors -- We find robust evidence that total factor productivity (TFP), capital stock, real Exchange rates and terms of trade are key drivers of import diversification -- On the other hand, domestic consumption and trade openness exert an effect leading to import concentration -- We interpret this finding, taking into account the theoretical framework provided by the international trade and growth theories

Samverkan Trafikförsörjningsprogram

Med stöd i Förordning (2010:185) med instruktion för Trafikverket 2§ punkt 12 utgår vi ifrån att Trafikverket ska vara ett stöd i arbetet att utveckla ett effektivt och hållbart transportsystem utifrån ett trafikslagsövergripande synsätt i nära dialog med RKM för att skapa en långsiktig infrastrukturplanering, i det att Trafikverket ska stödja arbetet med att ta fram trafikförsörjningsprogrammen (TFP). Föreliggande rapport fokuserar på Trafikverkets roll i samverkan med de Regionala kollektivtrafikmyndigheterna.   För att närmare studera, utveckla och tydliggöra ramarna för trafikverkets stöd och ansvar för kollektivtrafikfrågor, använder vi i denna rapport en förståelseorienterad metod som bygger på att förstå och tolka den kontext som Trafikverket agerar i. Föreliggande text är en inventering av olika utformningar av kollektivtrafikmyndigheter i landet samt Trafikverkets olika Regionkontor. Fokus är i huvudsak riktad mot hur de är organiserade och hur de arbetar för att hantera olika frågor. Syftet är att med denna samlade kunskap se hur samverkansutmaningar har hanterats i olika lösningar och på så sätt öppna upp för ett ömsesidigt lärande och stärka förutsättningarna för samverkan.   Föreliggande studie visar att samverkan mellan kollektivtrafikmyndigheterna och Trafikverket inte är statisk utan en del i en dynamisk process som baseras på kunskap, personliga relationer och förtroende. Genom att få kunskap om den andra organisationen och skapa sig en förståelse om hur man kan samverka för att uppnå bättre effekter av sina satsningar skapas en grund för samarbete. Det är sedan genom personliga relationer som ett förtroende skapas mellan parterna och som fördjupar samarbetet. Ett samarbete likt den mellan Trafikverket och Kollektivtrafikmyndigheterna som varken är bundet till hierarkiska eller beroendemässiga parametrar kräver förtroende och relationella band mellan parterna för att fungera. Den kunskapsintegration som uppstår mellan organisationerna när man klarar av att länka och integrera människors kunskaper och färdigheter genom sina personliga relationer och organisatoriska processer bidrar till ökad organisatorisk kapacitet för respektive organisation. Samspelet mellan organisationerna bidrar till att respektive organisation på ett bättre sätt kan anpassa sig till föränderliga samhällsbehov och skapa interna strukturer som följer de förändrade behov som finns i samhället.

Probing synechocystis-arsenic interactions through extracellular nanowires.

Microbial nanowires (MNWs) can play an important role in the transformation and mobility of toxic metals/metalloids in environment. The potential role of MNWs in cell-arsenic (As) interactions has not been reported in microorganisms and thus we explored this interaction using Synechocystis PCC 6803 as a model system. The effect of half maximal inhibitory concentration (IC50) [~300 mM As (V) and ~4 mM As (III)] and non-inhibitory [4X lower than IC50, i.e., 75 mM As (V) and 1 mM As (III)] of As was studied on Synechocystis cells in relation to its effect on Chlorophyll (Chl) a, type IV pili (TFP)-As interaction and intracellular/extracellular presence of As. In silico analysis showed that subunit PilA1 of electrically conductive TFP, i.e., microbial nanowires of Synechocystis have putative binding sites for As. In agreement with in silico analysis, transmission electron microscopy analysis showed that As was deposited on Synechocystis nanowires at all tested concentrations. The potential of Synechocystis nanowires to immobilize As can be further enhanced and evaluated on a large scale and thus can be applied for bioremediation studies.