Demand Shocks and Firm Investment: Micro-evidence from fiscal retrenchment in Italy

2021 ◽  
Author(s):  
Decio Coviello ◽  
Immacolata Marino ◽  
Tommaso Nannicini ◽  
Nicola Persico
Keyword(s):  
Capital Investment ◽  
Firm Investment ◽  
Demand Shock ◽  
Demand Shocks ◽  
Legislative Change ◽  
Fiscal Retrenchment ◽  
Theoretical Mechanism ◽  
Identification Strategy

Abstract We study the effect of a persistent demand shock on corporate factor utilization. Our identification strategy leverages a legislative change designed to permanently reduce spending in certain targeted municipalities. This change generates an arguably-exogenous drop in the revenue of procurement firms, which differs depending on each firm’s reliance for its revenue on procurement in the targeted municipalities. We find that firms responded to the demand shock by cutting capital rather than labor. We propose a theoretical mechanism based on the irreversibility of capital investment.

scholarly journals Human Capital Investment Effects On Firm Returns

2011 ◽  
Vol 12 (1) ◽  
pp. 30 ◽  
Author(s):  
Marvin L. Bouillon ◽  
B. Michael Doran ◽  
Peter F. Orazem
Keyword(s):  
Human Capital ◽  
Capital Investment ◽  
Human Capital Investment ◽  
Market Value ◽  
Annual Reports ◽  
Common Stock ◽  
Net Income ◽  
Firm Investment ◽  
Book Value ◽  
Specific Human Capital

This paper demonstrates that two measures of firm investment in specific human capital are significantly and positively correlated with long-term rates of return on investment. The final sample of 260 firms is a subset of the 805 firms included in the June 1984 edition of Forbes survey of executive compensation. We utilize two proxies for firm return-net income and cash flow. The return measures are scaled by both book value of total assets and market value of common stock yielding four alternative specifications of the rate of return measure. The firm investment in specific human capital measures are generally found to be significant explanatory variables in the regressions that have returns scaled by book value of assets. These measures of investment are insignificant when market value of common stock outstanding is used to scale the return measures. We interpret these findings to imply that a public or regulatory policy needs to be established to require firms to include at least some basic rudimentary information regarding their human capital investment, such as turnover rates and training cots, in their annual reports.

scholarly journals Owners’ Portfolio Diversification and Firm Investment

2019 ◽  
Vol 32 (12) ◽  
pp. 4855-4904 ◽  
Author(s):  
Evgeny Lyandres ◽  
Maria-Teresa Marchica ◽  
Roni Michaely ◽  
Roberto Mura
Keyword(s):  
Capital Investment ◽  
Portfolio Diversification ◽  
Risk Averse ◽  
Firm Investment ◽  
Publicly Traded ◽  
Oxford University ◽  
Editorial Decision ◽  
Portfolio Structure ◽  
Investment Choices ◽  
Published Paper

Abstract Portfolio diversification of firms’ controlling owners influences their firms’ capital investment. Empirically, the effect of owners’ portfolio diversification on their firms’ investment levels is positive for publicly traded firms and tends to be negative for privately held ones. These findings are consistent with predictions of a model in which a risk-averse investor simultaneously chooses her portfolio structure, and both the level and riskiness of capital investment of the firm she controls, and in which the firm can be potentially constrained in its capital investment choices. Overall, our results indicate that owners’ portfolio underdiversification and firms’ financial constraints can affect firms’ resource allocation. Received May 3, 2017; editorial decision March 8, 2019 by Editor Francesca Cornelli. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Research Insights: How Do Job and Worker Flows Respond to Firms' Idiosyncratic Technology and Demand Shocks?

2020 ◽  
Author(s):  
Mikael Carlsson ◽  
Julián Messina ◽  
Oskar Nordström Skans
Keyword(s):  
Standard Deviation ◽  
Employment Rate ◽  
Demand Shock ◽  
Demand Shocks ◽  
Worker Flows ◽  
Percentage Points ◽  
Long Run ◽  
Main Driver ◽  
Technology Shock

Permanent demand shocks are the main driver of labor adjustments. A one standard deviation demand shock increases the net employment rate by 6 percentage points in the long run, while a technology shock increases it by 0.5. Transitory demand shocks have much smaller impacts. When hit by a permanent demand shock, firms adjust fast and symmetrically. Most of the labor change occurs within a year. If the shock is positive, firms adjust by increasing hires. If the shock is negative, they increase separations without reducing hires.

Structural Transformation, Service Sector Growth and Poverty Alleviation: The Role of Formal–Informal Interaction and Rising Informal Wage

2020 ◽  
Vol 25 (2) ◽  
pp. 151-168
Author(s):  
Sugata Marjit ◽  
Ritwik Sasmal ◽  
Joydeb Sasmal
Keyword(s):  
Capital Investment ◽  
Service Sector ◽  
Empirical Support ◽  
Formal Service ◽  
Indian Context ◽  
Consumer Services ◽  
Theoretical Mechanism ◽  
Capital Intensive ◽  
Formal And Informal Sectors

The motivation of this article is to develop a theoretical mechanism on the interaction between formal and informal sectors and rising informal wage, in the process of service sector growth. Based on empirical support for service sector growth, structural change, higher employment of labour in unorganised sector and rising informal wage in the Indian context, this article develops a theoretical model on the formal–informal interaction in labour employment using a trade-theoretic general equilibrium framework. The results show that with the expansion of capital-intensive, organised service sector, following capital investment in the country, the informal, non-traded intermediate sector, which supplies inputs to the formal service sector, expands with greater employment. The labour-intensive domestic sector of consumer services declines, with the result that the price of consumer services rises, leading to rise in informal wage rate.

Patience, Risk-Taking, and Human Capital Investment Across Countries

2021 ◽  
Author(s):  
Eric A Hanushek ◽  
Lavinia Kinne ◽  
Philipp Lergetporer ◽  
Ludger Woessmann
Keyword(s):  
Human Capital ◽  
Risk Taking ◽  
Fixed Effects ◽  
Capital Investment ◽  
Investment Decisions ◽  
Human Capital Investment ◽  
Migrant Students ◽  
Cross Country ◽  
Opposing Effects ◽  
Identification Strategy

Abstract Patience and risk-taking – two preference components that steer intertemporal decision-making – are fundamental to human capital investment decisions. To understand how they contribute to international skill differences, we combine PISA tests with the Global Preference Survey. We find that opposing effects of patience (positive) and risk-taking (negative) together account for two-thirds of the cross-country variation in student skills. In an identification strategy addressing unobserved residence-country features, we find similar results when assigning migrant students their country-of-origin preferences in models with residence-country fixed effects. Associations of national preferences with family and school inputs suggest that both may act as channels.

scholarly journals Foreign Demand and Local House Prices

2020 ◽  
Vol 20 (43) ◽  
Author(s):  
Damien Puy ◽  
Anil Ari ◽  
Yu Shi
Keyword(s):  
Causal Effect ◽  
House Prices ◽  
Home Bias ◽  
Political Crisis ◽  
High Concentration ◽  
Demand Shocks ◽  
Real Estate Markets ◽  
Foreign Demand ◽  
The Us ◽  
Identification Strategy

We test whether foreign demand matters for local house prices in the US using an identification strategy based on the existence of “home bias abroad” in international real estate markets. Following an extreme political crisis event abroad, a proxy for a strong and exogenous shift in foreign demand, we show that house prices rise disproportionately more in neighbourhoods with a high concentration of population originating from the crisis country. This effect is strong, persistent, and robust to the exclusion of major cities. We also show that areas that were already expensive in the late 1990s have experienced the strongest foreign demand shocks and the biggest drop in affordability between 2000 and 2017. Our findings suggest a non-trivial causal effect of foreign demand shocks on local house prices over the last 20 years, especially in neighbourhoods that were already rather unaffordable for the median household.

Exergoeconomic analysis of renewable multi-generation system

2020 ◽  
pp. 99-111
Author(s):  
Vontas Alfenny Nahan ◽  
Audrius Bagdanavicius ◽  
Andrew McMullan
Keyword(s):  
Capital Investment ◽  
Combined Cycle ◽  
Asian Countries ◽  
Generation System ◽  
Integrated Gasification Combined Cycle ◽  
Heating And Cooling ◽  
Integrated Gasification ◽  
Exergoeconomic Analysis ◽  
Main Components ◽  
The Cost

In this study a new multi-generation system which generates power (electricity), thermal energy (heating and cooling) and ash for agricultural needs has been developed and analysed. The system consists of a Biomass Integrated Gasification Combined Cycle (BIGCC) and an absorption chiller system. The system generates about 3.4 MW electricity, 4.9 MW of heat, 88 kW of cooling and 90 kg/h of ash. The multi-generation system has been modelled using Cycle Tempo and EES. Energy, exergy and exergoeconomic analysis of this system had been conducted and exergy costs have been calculated. The exergoeconomic study shows that gasifier, combustor, and Heat Recovery Steam Generator are the main components where the total cost rates are the highest. Exergoeconomic variables such as relative cost difference (r) and exergoeconomic factor (f) have also been calculated. Exergoeconomic factor of evaporator, combustor and condenser are 1.3%, 0.7% and 0.9%, respectively, which is considered very low, indicates that the capital cost rates are much lower than the exergy destruction cost rates. It implies that the improvement of these components could be achieved by increasing the capital investment. The exergy cost of electricity produced in the gas turbine and steam turbine is 0.1050 £/kWh and 0.1627 £/kWh, respectively. The cost of ash is 0.0031 £/kg. In some Asian countries, such as Indonesia, ash could be used as fertilizer for agriculture. Heat exergy cost is 0.0619 £/kWh for gasifier and 0.3972 £/kWh for condenser in the BIGCC system. In the AC system, the exergy cost of the heat in the condenser and absorber is about 0.2956 £/kWh and 0.5636 £/kWh, respectively. The exergy cost of cooling in the AC system is 0.4706 £/kWh. This study shows that exergoeconomic analysis is powerful tool for assessing the costs of products.

Towards New Policy Incentives for Fixed Capital Investment and Technological Upgrades in Russia

2011 ◽  
pp. 43-56
Author(s):  
A. Apokin
Keyword(s):  
Economic Policy ◽  
Capital Investment ◽  
Empirical Studies ◽  
Fixed Capital ◽  
Policy Framework ◽  
Private Companies ◽  
Russian Economy ◽  
Technological Modernization ◽  
Fixed Capital Investment ◽  
Policy Incentives

The paper approaches the problem of private fixed capital underinvestment in Russia. The author uses empirical studies of the Russian economy and cases of successful technological modernization to outline several groups of disincentives for private companies to perform fixed capital investment in Russia. To counter these constraints, a certain incentive-based economic policy framework is developed.

International Remittances and Private Healthcare in Kerala, India

2020 ◽  
Vol 17 (3) ◽  
pp. 445-460
Author(s):  
Mohd Imran Khan ◽  
Valatheeswaran C.
Keyword(s):  
Instrumental Variable ◽  
Capital Investment ◽  
Healthcare Expenditure ◽  
Healthcare Services ◽  
Private Healthcare ◽  
International Remittances ◽  
Variable Approach ◽  
Using Data ◽  
The Impact ◽  
Instrumental Variable Approach

The inflow of international remittances to Kerala has been increasing over the last three decades. It has increased the income of recipient households and enabled them to spend more on human capital investment. Using data from the Kerala Migration Survey-2010, this study analyses the impact of remittance receipts on the households’ healthcare expenditure and access to private healthcare in Kerala. This study employs an instrumental variable approach to account for the endogeneity of remittances receipts. The empirical results show that remittance income has a positive and significant impact on households’ healthcare expenditure and access to private healthcare services. After disaggregating the sample into different heterogeneous groups, this study found that remittances have a greater effect on lower-income households and Other Backward Class (OBC) households but not Scheduled Caste (SC) and Scheduled Tribe (ST) households, which remain excluded from reaping the benefit of international migration and remittances.

Rekindling the Flame: Zoroastrianism in Iraqi Kurdistan

2019 ◽  
Vol 7 (2) ◽  
pp. 161-188
Author(s):  
Samme Dick
Keyword(s):  
Historical Context ◽  
Islamic State ◽  
Organisational Structure ◽  
Kurdistan Region ◽  
Legislative Change ◽  
Iraqi Kurdistan ◽  
The World ◽  
Legislative Changes ◽  
New Religion

This article examines the emergence of Zoroastrianism in the Kurdistan Region of Iraq since 2015 as a new religion inspired by Kurdish nationalism, feminism, ecologism and humanism. The author argues that the emergence of Zoroastrianism at this particular time is due to a combination of the rise of the Islamic State in Iraq and the Levant in 2014, legislative change and the importance some Kurdish nationalists historically attached to Zoroastrianism as the suggested original religion of the Kurds. The article outlines the historical context of Zoroastrianism in Kurdistan, and then explores the origins, beliefs and organisational structure of Kurdish Zoroastrianism. Also discussed are the legislative changes enabling the rise of the movement since 2015. This study draws on interviews with Kurdish Zoroastrian leaders as well as with representatives from the World Zoroastrian Organization, the Kurdistan Regional Government’s Ministry of Endowments and Religious Affairs and the Alliance of Iraqi Minorities.ABSTRACT IN KURMANJIJi nû ve pêxistina agir: Baweriya Zerduştî li Kurdistana IraqêEv gotar, li ser peydabûna Zerduştiyê li Herêma Kurdistanê ya Iraqê hûr dibe, ku ji 2015an vir ve wek dînekî nû yê ji netewegeriya kurd, femînîzm, ekolojîzm û humanîzmê îlham wergirtî tê dîtin. Nivîskar îddia dike ku peydabûna Zerduştiyê ya bi taybetî wê demê ji ber hejmareke sedeman e: di 2014an de peydabûn û xurtbûna Dewleta Îslamî li Iraqê û Levantê, guherîna qanûnî û girîngiya nêrîna hin netewegerên kurd ku ji aliyê dîrokî Zerduştiyê wek dînê resen ê kurdan dibînin. Gotar, çarçoveya dîrokî ya Zerduştiyê li Kurdistanê bi kurtî rave dike û paşê li kok, bawerî û avahiya rêxistinî ya Zerduştiya kurdî dikole. Ji hêleke din, nîqaş dike ku guherînên hiqûqî ji 2015an vir ve rê li ber xurtbûna tevgerê vekiriye. Ev xebat xwe dispêre hevpeyvînên bi rêberên Zerduştiyên kurd re ligel hin şandeyên ji Rêxistina Zerduştiyan a Cîhanê, Wezareta Bexş û Karên Dînî ya Hikumeta Herêma Kurdistanê û Hevpeymaniya Kêmîneyên Iraqê.ABSTRACT IN SORANIGeşandinewey agireke: Zerdeştêtî le Kurdistanî ÊraqdaEm babete timaşay rewşî  wediyarkewtinî Zerdeştêtî dekat le Kurdistanî Êraqda, le sall 2010da wek ayînêkî nwê debînrêt ke le netewegerîy kurdî, fêmênîzm, jîngeparêzî û mirovparêzî îlham werdegirêt. Nûser bangeşey ewe dekat ke derkewtinî Zerdeştêtî lem kateda ke Dewlletî Îslamî Da'îş le Şam û Êraq le 2013 ser helldeda û be yasa rêgey pê dedirêt, şitêkî giringe  bo gerranewey kurd bo  ayînî neteweyî xoy wek ewey ke hendêk kurdî neteweperist  basî deken.  Babeteke rîşey mêjûyî Zerdeştêtî le Kurdistan nîşan dedat, herwaş rîşey  bawerr û binaẍey damezrawey Zerdeştêtî dedate ber roşnayî. Dîsan guftugoy gorranî yasa lew bareyewe bote hoyî derkewtinî em ayîne le 2015da. Em babete legell serok û bawerrdaranî Zerdeştîy le Kurdistan û damezrawey Zerdeştîyanî cîhanî û legell wezaretî karubarî ayînî le ḧukumetî herêmî Kurdistan û damezrawey kemînekanî Êraqda çawpêkewtinî encam dawe.ABSTRACT IN ZAZAKINewe ra geşkerdişê adirî: Kurdîstanê Îraqî de zerduştîyeNa meqale qayîtê zerduştîye kena ke sey bawerîya newîye serra 2015î ra nat Herêmê Kurdîstanî yê Îraqî de vejîyaye û hetê neteweperwerîya kurdan, femînîzm, dorûverperwerîye û merdimperwerîye ra îlham girewt. Nuştox musneno ke vejîyayîşê zerduştî yê ê demî çend sebeban ra qewimîya: hêzdarbîyayîşê DAÎŞ yê serra 2014î, vurîyayîşê qanûnî û tayê neteweperwerê kurdan ê ke tarîx de giranî daye zerduştîye ser ke aye sey dînê kurdan o eslî pêşnîyaz bikerê. Na meqale xulasaya kontekstê tarîxî yê zerduştîya Kurdîstanî dana û dima esl, bawerî û awanîya rêxistinan yê zerduştîya kurdan ser o cigêrayîş kena. Ser o kî vurîyayîşê qanûnî munaqeşe benê. Nê vurîyayîşî serra 2015î ra nat vejîyayîşê tevger kerd mumkîn. No cigêrayîş roportajanê bi serekanê kurdan ê zerduştîye û bi temsîlkaranê Rêxistina Zerduştîyan a Dinya, Wezaretê Ewqaf û Kar û Barê Dînî yê hukmatê Herêmê Kurdîstanî û Yewîya Eqalîyetanê Îraqî esas gêno

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