Browsing Working Papers (ECON) by Year Published
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Junge, Martin; Severgnini, Battista; Sørensen, Anders (Frederiksberg, 2012)[More information][Less information]
Abstract: The role of product and marketing innovation for productivity growth is addressed using survey and register data for the Danish economy. It is argued that marketing and product innovation are complementary inputs and that innovation activities are skill-intensive. It is found that product and marketing innovation in skill-intensive firms results in significantly faster productivity growth than in unskilled-intensive firms that introduce this combination of innovation activities. More precisely, an increase in the share of educated workers of one percentage point, increases productivity growth by around 0.1 percentage point in firms with product and marketing innovation. In addition, it is found that firms that engage in product innovation but not in marketing innovation or the other way around do not demonstrate a growth effect from their innovation activities. It is also found that product and marketing innovation has an independent role in productivity growth that cannot be attributed to organisational changes, even though the majority of innovative firms engage in this latter innovation type. URI: http://hdl.handle.net/10398/8468 Files in this item: 1
JungeSevergniniSoerensen-WP-1-2012.pdf (417.0Kb) -
Waisman, Gisela; Larsen, Birthe (Frederiksberg, 2012)[More information][Less information]
Abstract: We exploit the regional variation in negative attitudes towards immigrants to Sweden in order to analyse the consequences of the attitudes on immigrants welfare. We find that attitudes towards immigrants are of importance: they both affect their labour market outcomes and their quality of life. We interpret the negative effect on wages as evidence of labour market discrimination. We estimate the welfare effects of negative attitudes, through their wage and local amenities, for immigrants with different levels of skills, origin, gender and age. URI: http://hdl.handle.net/10398/8519 Files in this item: 1
Waisman_Larsen_wp2012-4.pdf (542.0Kb) -
Larsen, Birthe; Waisman, Gisela (Frederiksberg, 2012)[More information][Less information]
Abstract: We examine the impact of discrimination on labour market performance when workers are subject to a risk of losing skills during the experience of unemployment. Within a search and matching model, we show that all natives and immigrants are affected by discrimination. Discrimination in one sector has positive spillovers, inducing employment increases in the other sector. Discrimination may induce immigrants to train more or less than natives, depending on the sector where it is present. Welfare tends to be most negatively affected by discrimination among highproductivity workers. URI: http://hdl.handle.net/10398/8520 Files in this item: 1
Larsen_Waisman_wp2012-5.pdf (374.6Kb) -
Junge, Martin; Severgnini, Battista; Sørensen, Anders (Frederiksberg, 2012)[More information][Less information]
Abstract: This paper investigates the importance of the educational mix of employees at the firm level for the probability of firms being involved in innovation activities. We distinguish between four types of innovation: product, process, organisational, and marketing innovation. Moreover, we consider three different types of education for employees with at least 16 years of schooling: technical sciences, social sciences, and humanities. Furthermore, we examine the influence of these different innovation activities on firm productivity. Using a rotating panel data sample of Danish firms, we find that different types of innovations are related to distinct educational types. Moreover, we find that firms that adopt product and marketing innovation are more productive than firms that adopt product innovation but not marketing innovation and firms that adopt marketing innovation but not product innovation. In addition, firms that adopt organisational and process innovation demonstrate greated productivity levels than forms that adopt organisational innovation but not process innovation that again demonstrate greater productivity than firms that do not adopt process innovation but not organisational innovation. Finally, we establish that product and marketing innovation as well as organisational and process innovation are complementary inputs using formal tests for supermodularity. Complementarity can be rejected for all other pairs of innovation types. URI: http://hdl.handle.net/10398/8498 Files in this item: 1
Junge_Severgnini_Sørensen.pdf (517.4Kb) -
Do We Observe “Creative Destruction” in China?Deng, Poul; Jefferson, Gary (Frederiksberg, 2012)[More information][Less information]
Abstract: We adopt the framework of Schumpeterian creative destruction formalized by Aghion et al. (2009) to analyze the impact of foreign entry on the productivity growth of domestic firms. In the face of foreign entry, domestic firms exhibit heterogeneous patterns of growth depending on their technological distance from foreign firms. Domestic firms with smaller technological distance from their foreign counterparts tend to experience faster productivity growth, while firms with larger technological distance tend to lag further behind. We test this hypothesis using a unique firm-level data of Chinese manufacturing. Our empirical results confirm that foreign entry indeed generates strong heterogeneous growth patterns among domestic firms. URI: http://hdl.handle.net/10398/8594 Files in this item: 1
Deng_Jefferson.pdf (203.9Kb) -
Dalgaard, Carl-Johan; Schultz, Esben Anton; Sørensen, Anders (Frederiksberg, 2012)[More information][Less information]
Abstract: Is the wage gap between majors in human arts and other fields caused by their education per se? If the educational choice is endogenous, the gap may instead be caused by selection. We document that individuals’ educational choice is correlated with that of older students, and argue that it should not influence wages directly. Exploiting this "cohort dependence" as an instrument for educational choice, our 2SLS estimates show that the hourly wage gap is attributable to selection. However, only half of the gap in annual earnings is explained by selection, whereas the other half is due to lower work hours. URI: http://hdl.handle.net/10398/8521 Files in this item: 1
dalgaard_schultz_sorensen_2012.pdf (476.2Kb) -
Evidence from Survival Rates in a Natural ExperimentAndersen, Steffen; Meisner Nielsen, Kasper (Frederiksberg, 2012)[More information][Less information]
Abstract: We use a natural experiment in Denmark to test the hypothesis that aspiring entrepreneurs face financial constraints because of low entrepreneurial quality. We identify 304 constrained entrepreneurs who start a business after receiving windfall wealth and examine the performance of these marginal entrepreneurs. We find that constrained entrepreneurs have significantly lower survival rates and lower profits when compared with a matched sample of unconstrained entrepreneurs. These results are consistent with the hypothesis that the marginal entrepreneur is of low quality. URI: http://hdl.handle.net/10398/8499 Files in this item: 1
Andersen_MeisnerNielsen.pdf (402.7Kb) -
Staff utilisation in branches of a large Canadian bankAsmild, Mette; Bogetoft, Peter; Hougaard, Jens Leth (, 2011)[More information][Less information]
Abstract: In this paper we consider staffing decisions in branches of a large Canadian bank. The bank has well-developed staffing models and the branches work in a highly competitive environment. One would therefore expect limited ’inefficiency’ in the sense of wasted resources and over-staffing. Using Data Envelopment Analysis (DEA) we nevertheless find considerable ’inefficiency’ which raises the question whether this is best interpreted as waste or if the apparent inefficiency may serve other purposes. To investigate this, we invoke the theoretical framework of Rational Inefficiency (Bogetoft and Hougaard 2003). A systematic pattern of slack consumption emerges, which suggests that the allocation of slack between sta↵ groups is far from random. The slack pattern seems natural from the point of view of employee value and hierarchy and also considering employee flexibility and substitutability. For example we find relatively large over-staffing at the supervisor level which is natural given both their strong bargaining position derived from their role in the branch hierarchy and given the relative flexibility of supervisor resources. URI: http://hdl.handle.net/10398/8634 Files in this item: 1
Asmild Bogetoft Hougaard_2011.pdf (567.5Kb) -
Labour Market, Health Care and Prescription DrugsHøjbjerg Jacobsen, Rasmus (Frederiksberg, 2011)[More information][Less information]
Abstract: This paper uses a register dataset for the entire Danish population to examine the effect of early motherhood on labour market measures, health care measures and family measures for the mothers and their offspring. The dataset is divided into three groups according to the age of the woman at the time of her first child delivery. Using standard cross-sectional econometric techniques the results show that very young mothers (aged 16-21) have significantly lower employment rates, higher propensity to receive welfare benefits and a lower wage income. Children of very young mothers have a higher family replacement rate, more services received from General Practitioners and a higher propensity to receive ADHD-medications. The majority of the effects reported are also significantly greater for mothers who were aged 22-25 at the birth of their first child compared to older mothers. URI: http://hdl.handle.net/10398/8377 Files in this item: 1
Rasmus_Hoejbjerg_Jacobsen_wp_2011.pdf (92.36Kb) -
Kolm, Ann-Sofie; Larsen, Birthe (Frederiksberg, 2011)[More information][Less information]
Abstract: This paper develops a four sector equilibrium search and matching model with informal sector employment opportunities and educational choice. We show that underground activities reduce educational at- tainments if informal employment opportunities mainly are available to low educated workers. More zealous enforcement policy will in this case improve educational incentives as it reduces the attractiveness of remaining a low educated worker. Characterizing the optimal enforce- ment policies, we nd that relatively more audits should be targeted towards the sector employing low educated workers, elsewise a too low stock of educated workers is materialized. URI: http://hdl.handle.net/10398/8328 Files in this item: 1
Kolm_Larsen_WP_2-2011.pdf (309.1Kb) -
Andersen, Steffen; Ertaç, Seda; Gneezy, Uri; Hoffman, Moshe; List, John A. (Frederiksberg, 2011)[More information][Less information]
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Heterogeneity and Non-LinearitiesIversen, Jens; Malchow-Møller, Nikolaj; Sørensen, Anders (Frederiksberg, 2010)[More information][Less information]
Abstract: The returns to education in self-employment are addressed in four different specifications of the relationship between log income and years of schooling. The specifications range from a standard Mincer equation with a constant percentage increase in income to an additional year of schooling to the most flexible specification with dummy variables for the different number of years of schooling split into different types of education. Based on the more flexible specifications, important non-linearities and heterogeneity in the returns to education in self-employment are found. These results are robust across different estimation methods: OLS; Heckit correction models to handle sample selection; and IV to deal with the potential endogeneity of years of schooling. Moreover, the results are insensitive to the use of different sample years, different definitions of self-employment, and different income measures for the self-employed. URI: http://hdl.handle.net/10398/8225 Files in this item: 1
Sorensen_WP_2010.pdf (411.9Kb) -
Kolm, Ann-Sofie; Larsen, Birthe (Frederiksberg, 2010)[More information][Less information]
Abstract: This paper develops a general equilibrium search and matching model where an underground economy co-exists along with the formal part of the economy. In analyzing how tax and punishment policies a¤ect labour market performance, we find that punishment of infor- mal sector activities induce workers and firms to reallocate towards the formal sector. However, more importantly, we find that this real- location tends to improve e¢ ciency in search, reduce the overall wage pressure, and reduce actual unemployment. URI: http://hdl.handle.net/10398/8209 Files in this item: 1
wp5-2010.pdf (158.2Kb) -
Andersen, Steffen; Harrison, Glenn W.; Hole, Arne Risa; Rutström, E. Elisabet (Frederiksberg, 2010)[More information][Less information]
Abstract: We develop an extension of the familiar linear mixed logit model to allow for the direct estimation of parametric non-linear functions defined over structural parameters. A classic application is the estimation of coefficients of utility functions to characterize risk attitudes. There are several unexpected benefits of this extension, apart from the ability to directly estimate structural parameters of theoretical interest. URI: http://hdl.handle.net/10398/8171 Files in this item: 1
wp4-2010.pdf (174.4Kb) -
Foley, Kelly; Gallipoli, Giovanni; Green, David (Bristol, 2010)[More information][Less information]
Abstract: We use a large, rich Canadian micro-level dataset to examine the channels through which family socio-economic status and unobservable characteristics a ect children's decisions to drop out of high school. First, we document the strength of observable socio-economic factors: our data suggest that teenage boys with two parents who are themselves high school dropouts have a 16% chance of dropping out, compared to a dropout rate of less than 1% for boys whose parents both have a university degree. We examine the channels through which this socio-economic gradient arises using an extended version of the factor model set out in Carneiro, Hansen, and Heckman (2003). Speci cally, we consider the impact of cognitive and non-cognitive ability and the value that parents place on education. Our results support three main conclusions. First, cognitive ability at age 15 has a substantial impact on dropping out. Second, parental valuation of education has an impact of approximately the same size as cognitive ability e ects for medium and low ability teenagers. A low ability teenager has a probability of dropping out of approximately .03 if his parents place a high value on education but .36 if their education valuation is low. Third, parental education has no direct e ect on dropping out once we control for ability and parental valuation of education. Our results point to the importance of whatever determines ability at age 15 (including, potentially, early childhood interventions) and of parental valuation of education during the teenage years. We also make a small methodological contribution by extending the standard factor based estimator to allow a non-linear relationship between the factors and a covariate of interest. We show that allowing for non-linearities has a substantial impact on estimated e ects. URI: http://hdl.handle.net/10398/8582 Files in this item: 1
Foley_2009.pdf (369.2Kb) -
Evidence from a Matrilineal and a Patriarchal SocietyAndersen, Steffen; Ertac, Seda; Gneezy, Uri; List, John A.; Maximiano, Sandra (Frederiksberg, 2010)[More information][Less information]
Abstract: Economists and other social scientists typically rely on gender differences in the family-career balance, discrimination, and ability to explain gender gaps in wages and in the prospect for advancement. A new explanation that has recently surfaced in the economics literature is that men are more competitively inclined than women, and having a successful career requires competitiveness. A natural question revolves around the underlying determinants of these documented competitive differences: are women simply born less competitive, or do they become so through the process of socialization? To shed light on this issue, we compare the competitiveness of children in matrilineal and patriarchal societies to show that the difference starts around puberty. Moreover, most of the changes during this period of life are within the patriarchal society, in which boys become more competitive with age while girls become less competitive. URI: http://hdl.handle.net/10398/8389 Files in this item: 1
Steffen_Andersen_2010.pdf (203.8Kb) -
Evidence from Unexpected Inheritance due to Sudden DeathAndersen, Steffen; Meisner Nielsen, Kasper (Frederiksberg, 2010)[More information][Less information]
Abstract: We use a natural experiment to investigate the impact of participation constraints on individuals' decisions to invest in the stock market. Unexpected inheritance due to sudden deaths results in exogenous variation in financial wealth and allows us to examine whether fixed entry and ongoing participation costs cause non-participation. We have three key findings. First, windfall wealth has a positive effect on participation. Second, the majority of households do not react to sizeable windfalls by entering the stock market, but hold on to substantial safe assets—even over longer horizons. Third, the majority of households inheriting stock holdings actively sell the entire portfolio. Overall, these findings suggest that participation by many individuals is unlikely to be constrained by financial participation costs. URI: http://hdl.handle.net/10398/8169 Files in this item: 1
wp3-2010.pdf (254.6Kb) -
Theory and ExperimentsAndersen, Steffen; Fountain, John; Harrison, Glenn W.; Rutström, E. Elisabet (, 2009)[More information][Less information]
Abstract: Subjective beliefs play a role in many economic decisions. There is a large theoretical literature on the elicitation of beliefs, and an equally large empirical literature. However, there is a gulf between the two. The theoretical literature proposes a range of procedures that can be used to recover beliefs, but stresses the need to make strong auxiliary assumptions or “calibrating adjustments” to elicited reports in order to recover the latent belief. With some notable exceptions, the empirical literature seems intent on either making those strong assumptions or ignoring the need for calibration. We make three contributions to bridge this gulf. First, we offer a general theoretical framework in which the belief elicitation task can be viewed as an exchange of state-dependent commodities between two traders. Second, we provide a specific elicitation procedure which has clear counterparts in field betting environments, and that is directly motivated by our theoretical framework. Finally, we illustrate how one can jointly estimate risk attitudes and subjective beliefs using structural maximum likelihood methods. This allows the observer to make inferences about the latent subjective belief, calibrating for virtually any well-specified model of choice under uncertainty. We demonstrate our procedures with an experiment in which we elicit subjective probabilities over three future events and one fact. URI: http://hdl.handle.net/10398/7799 Files in this item: 1
wp2009-3.pdf (2.043Mb) -
Andersen, Steffen; Fountain, John; Harrison, Glenn W.; Rutström, E. Elisabet (, 2009)[More information][Less information]
Abstract: It is intuitive that decision-makers might have attitudes towards uncertainty just as they might have attitudes towards risk. However, it is only recently that this intuitive notion has been formalized and axiomatically characterized. We estimate the extent of uncertainty aversion in a manner that is parsimonious and consistent with theory. We demonstrate that one can jointly estimate attitudes towards uncertainty, attitudes towards risk, and subjective probabilities in a rigorous manner. Our structural econometric model constructively demonstrates the theoretical claims that it is possible to define uncertainty aversion in an empirically tractable manner. Our results show that attitudes towards risk and uncertainty can be different, qualitatively and quantitatively, and that allowing for these differences can have significant effects on inferences about subjective probabilities. URI: http://hdl.handle.net/10398/7803 Files in this item: 1
wp2009-7.pdf (467.5Kb) -
Baghdasaryan, Delia; la Cour, Lisbeth (København, 2009)[More information][Less information]
Abstract: This study empirically investigates if competition’s impact on firm performance depends on the ownership structure. Our results show that an increase in import competition has a positive effect on firms with concentrated ownership and a negative effect on firms with dispersed ownership, regardless of the level of domestic competition. Given that the optimal level of ownership concentration with respect to firm productivity is high (low) if tariffs are low (high) in the case when import competition is high these results are consistent with theoretical findings that competition has positive effects in companies that are a priori efficient but not in unproductive firms. If tariffs are high, however, they support inferences based on the x-inefficiency literature. Contrary to what has been suggested by some theoretical results, the riskiness of a firm’s environment does not seem to influence our results. URI: http://hdl.handle.net/10398/7660 Files in this item: 1
wp1-2009.pdf (296.5Kb)
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