Události

Let us invite you to a Brown Bag Seminar by Galina Vereshchagina, Associate Professor and Director of the Ph.D. Program, Department of Economics at Arizona State University, on Tuesday, December 16, from 13:00 in room 402. You can also attend online.

Presenter: Galina Vereshchagina (Tato e-mailová adresa je chráněna před spamboty. Pro její zobrazení musíte mít povolen Javascript.)

Title: Uncertainty and Firm Dynamics

Abstract: This paper incorporates endogenous productivity investment into an otherwise standard model of firm dynamics to study the effects of changes in firm-level idiosyncratic risk on firm behavior and aggregate outcomes. It shows that the interaction between endogenous productivity investment and endogenous entry/exit creates a mechanism through which greater uncertainty reduces firms' productivity investment, slows firm growth over the lifecycle, and lowers aggregate output and productivity. These predictions are consistent with empirical evidence: in poorer countries, firms face higher idiosyncratic risk, are on average smaller, and grow less over the life cycle. In a model calibrated to match the U.S. firm dynamics and aggregate data, an increase in firm-level risk that increases firm exit rate from 9 percent to 12 percent (similar to Mexico), reduces the share of productivity investment in value-added from 12 percent to 8.6 percent, leading to a 14 percent decline in firm growth over 20 years of life, a 43 percent drop in average firm size, and 5 and 4 percent declines in per capita output and TFP, respectively. In contrast, a firm dynamics model with exogenous evolution of firm productivity predicts that higher firm-level risk is associated with higher productivity, output, and life-cycle firm growth.

You can join the seminar in person at the following address: CERGE-EI, Politických vězňů 7, Praha 1, room 402

Meeting link: https://cerge-ei.webex.com/cerge-ei/j.php?MTID=m970f0ae59758ae4f4135403800c4ceba
Meeting number: 2741 310 1945
Meeting password: 527631