instrumental variable estimation
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2021 ◽  
Author(s):  
Oliver Binz

This paper examines how agents’ response to macroeconomic uncertainty affects firms’ revenues, expenses, and profitability in a global sample of firms spanning 1997 to 2018. Consistent with consumers reducing purchases and managers cutting costs, I find that increases in macroeconomic uncertainty lead to both lower revenues and lower expenses. The net short-term effect on profitability is positive as the reduction in expenses exceeds the fall in revenues. This favorable profitability effect is attenuated for firms whose institutional environment restrains cost-cutting, holds for both the cash and accrual components of earnings, and is robust to instrumental variable estimation employing exogenous variation in macroeconomic uncertainty arising from natural disasters, political unrest, revolutions, and terrorist attacks.


2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Georges V. Houngbonon ◽  
Julienne Liang

Abstract Digital technologies like the Internet can affect income inequality through increased demand for employment in manual and abstract jobs and reduced demand for employment in routine jobs. In this paper, we combine city-level income distribution and jobs data with broadband data from France to investigate the impact of broadband Internet access on income inequality. Using an instrumental variable estimation strategy, we find that broadband Internet reduces income inequality through increased employment in manual jobs. These effects increase with the availability of skilled workers and are significant in cities with a large service sector or high-speed Internet access. Further, the diffusion of broadband Internet comes with relatively greater benefits in low-income cities compared to high-income cities. Several robustness checks support these findings.


Author(s):  
Liudas Giraitis ◽  
George Kapetanios ◽  
Massimiliano Marcellino

Author(s):  
Irene Mosca ◽  
Vincent O’Sullivan ◽  
Robert E Wright

Abstract The relationship between maternal employment and the educational attainment of children is examined using data from the third wave of The Irish Longitudinal Study on Ageing. Because maternal employment is potentially endogenous with respect to child educational attainment, instrumental variable estimation is used. In this analysis, two sets of instruments are used based on whether the mother’s employment was affected by the Marriage Bar that was in place at that time in Ireland. A Marriage Bar is the requirement that women in certain jobs must leave that job when they marry. It is found that the probability that a child completes university is 1–3 percentage points lower for each additional year of maternal employment during the first 18 years of the child’s life.


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