This paper examines the interaction between productivity growth, firms’ monopolistic market power, and workers’ wage bargaining power. Our study contributes to several strands of literatures. First, we examine a monopolistic framework which accounts for wage bargaining. In addition to the...

A body of literature suggests that ethnic heterogeneity limits economic growth. This paper provides microeconometric evidence on the direct effect of ethnic divisions on productivity. In team production at a plant in Kenya, an upstream worker supplies and distributes flowers to two downstream...

This paper considers the effect of acquisition FDI on the knowledge production function. We distinguish between acquisitions by MNEs from technologically leading countries and those behind the technological frontier. We show that both acquire similarly R&D intensive domestic firms, but there are...

Recent contributions on offshoring often assume that firms can freely split their production process into separate steps which can be ranked according to the cost savings from producing abroad. We replace this assumption by the notion of a technologically determined sequence of production steps....

This study investigates the impact of firm-specific discount factors on merger formation and market performance. We estimate firm-specific discount factors for 228 publicly traded and privately held firms operating in the semiconductor market and apply a heterogeneous treatment effects model...

To what extent does a tax credit affect firms’ R&D activity? What are the mechanisms? This paper examines the effect of R&D tax credits on firms’ R&D expenditure by exploiting the variation across firms in the changes in the eligible tax credit rate between 2000 and 2003. Estimating the...

Financial constraints are an important impediment to the growth of small businesses. We study theoretically and empirically how the financial constraints of agents affect their decisions to exert effort, and, hence the organizational decisions and growth of principals, in the context of...

We use payroll data on 1.2 million bank employee years in the Austrian, German, and Swiss banking sector to identify incentive pay in the critical banking segments of treasury/capital market management and investment banking for 66 banks. We document an economically significant correlation of...

We determine workforce composition and wages in firms in the presence of productivity spill-overs between co-workers. In equilibrium, workers’ wages depend on the production structure of firms, own group size, and aggregate workforce composition in the firm. We estimate the wage effects of...

In this paper we aim to discuss the strengths and weaknesses of the fiscal consolidation package adopted recently by the Italian Government in order to achieve a balanced budget by 2013. Revenues are forecasted to increase by more than 3.3 GDP percentage points; these stem mostly from indirect...