EAPCE-DECRG Kuala Lumpur Recruitment Seminar Schedule 2020
Tuesday, January 21
Yu Cao (University of Southern California)
MC 2-324 (12) (VC) Private; Kuala Lumpur WBG 3-2 (10) (VC)
ABSTRACT: This paper investigates the role of financial constraints in shaping innovation quality and firm-growth dynamics through heterogeneous innovation. I build a unique data-set combining patent activities with the operating data of private Chinese manufacturing firms and show a strong negative relationship between the severity of financial constraints with a) firm growth, b) innovation intensity, and c) innovation quality. Based on these empirical regularities, I build a tractable endogenous growth model in which a multi-product firm invests in heterogeneous innovation in the face of imperfect financial markets. Tighter financial constraints cause firms to undertake more low quality innovation, which yields temporary payoffs but no longer-term productivity improvements. This lowers firm and aggregate growth rates. The quantitative model suggests financial frictions reduce firm R&D investment by 50.7 percent on average, and slows aggregate annual productivity growth by 17.5 percent.
Thursday, January 23
Shafaat Khan (University of Rochester)
MC 2-324 (12) (VC) Private; Kuala Lumpur WBG 3-2 (10) (VC)
ABSTRACT: We study how anticipation to policy changes affects the estimate of the elasticity of substitution, the most important parameter in international trade. Standard identification of this parameter uses the tariff variation from the Free Trade Agreements (FTA) and assumes that the trade flows equal their consumption. However, FTAs eliminate initial tariffs through announced phaseouts over multiple years. Firms respond to these future policy changes by delaying their purchases until the tariff cut is effective while consuming past purchases held in inventories. These anticipatory dynamics bias the elasticity of substitution as imports diverge from their consumption. We document that around NAFTA’s staged tariff reductions, imports experienced sizable anticipatory slumps followed by liberalization bumps. A trade model with inventories replicates these dynamics and illustrates that consumption of imports provides unbiased estimates of the elasticity of substitution. To overcome the lack of consumption data, we propose an empirical measure of consumed imports, which eliminates the bias in the model simulations. Application to the data shows that using import flows instead of consumed imports overestimates the annual elasticity by 68% and the average elasticity of substitution by 16%. The use of consumed imports increases the ratio of long- to short-run response from 2 to 3.5 which implies a bigger proportion of the gradual response to trade liberalizations.
Friday, January 31
Horng Wong (University of Warwick)
MC 10-300 (24) (VC); Kuala Lumpur WBG 3-1 (30) (VC)
ABSTRACT: I study why some firms pay a wage premium relative to other firms for identical workers. To unpack the firm wage premium distribution, I develop and implement a novel structural decomposition using datasets covering the universe of employers and employees in France. Existing research shows that firm wage premia depend on firms’ productivity and wage-setting power. This paper shows that they also depend on firms’ product market power and labor share of production. My decomposition reveals important relationships between these firm characteristics. First, the negative relationship between productivity and the labor share of production (i) provides a new explanation for exceptionally productive superstar firms’ low labor shares of revenue, and (ii) implies that conventional measures of labor misallocation overstate the degree of misallocation. Second, firms with more product market power generally do not have more labor market power, but superstar firms have more market power in both markets than other firms.
Tuesday, February 4
Maurício Matsumoto (Princeton University)
MC 3-570 (30) (VC) ; Kuala Lumpur WBG 3-1 (30) (VC)
ABSTRACT: Preferential treatment of small businesses in the tax code is ubiquitous around the world. However, its empirical effects are not well understood, in particular how these policies affect business dynamics. This paper combines administrative and survey data to provide empirical evidence of the effects of a preferential tax regime for small businesses in Brazil (Simples) that reduced effective tax rates and compliance costs. I use a differences-in-differences strategy to show that the introduction of the policy has led to increased firm entry, higher employment growth and lower firm exit rates, and effects are persistent for many years. I additionally show that businesses bunch strongly below the revenue eligibility limit of Simples, in order to benefit from lower tax obligations in the following year.
Wednesday, February 19
Tobias Pfutze (Florida International University)
MC2-324 (VC); Kuala Lumpur WBG 3-1 (30) (VC)
ABSTRACT: Better enforcement of property rights reduces the incentives to engage in violent competition over resources. At the same time, greater tenure security may disrupt a key mechanism for political and social control, the discretionary allocation of land by local authorities, also potentially affecting the level of violence. We investigate the effect of a land certification program, which produced exogenous variation in tenure security, on violent deaths in Mexico’s rural municipalities from 1993-2007. We find that land titles significantly decrease violent deaths on average. However, this reduction is present only in municipalities where the dominant political party has never lost an election. If all ejidos had been certified instantaneously in 1993, our estimates give a 12.8% reduction in homicides, pointing to a large social cost of having land as a political tool.