Browsing Centre for Economic and Business Research (CEBR) by Year Published
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Glazer, Amihai; Kanniainen, Vesa; Poutvaara, Panu (København, 2008)[More information][Less information]
Abstract: We consider the effects of income redistribution when people can migrate from one country to another, and when land within each country is heterogeneous. Taxes related to income can then affect property values, and can induce migration, which further affects property values. We show that under these conditions a utilitarian government should never equalize after-tax incomes. If migration is impossible, it may even transfer income from the poor to the rich, reducing the rents earned by absentee landlords. The redistributive tax on the rich may be higher or lower when the rich can migrate than when they cannot. A Rawlsian government in the absence of mobility will equalize after-tax incomes. Under mobility, Rawlsian governments cut their taxes if and only if the relative pre-tax income of the poor is sufficiently low. URI: http://hdl.handle.net/10398/7689 Files in this item: 1
dp 2008-05.pdf (163.9Kb) -
Kaiser, Ulrich; Grimpe, Christoph (København, 2008)[More information][Less information]
Abstract: Determining the research and development (R&D) boundaries of the firm as the choice between internal, collaborative and external technology acquisition has since long been a major challenge for firms to secure a continuous stream of innovative products or processes. While research on R&D cooperation or strategic alliances is abundant, little is known about the outsourcing of R&D activities to contract research organizations and its implications for innovation performance. This paper investigates the driving forces of external technology sourcing through contract research based on arguments from transaction cost theory and the resource-based view of the firm. Using a large and comprehensive data set of innovating firms from Germany our findings suggest that technological uncertainty, contractual experience and openness to external knowledge sources motivate the choice for engaging in contract research activities. Moreover, we show that internal and external R&D sourcing are complements: the marginal contribution of internal (external) R&D is the larger the more firms spend on external (internal) R&D. URI: http://hdl.handle.net/10398/7690 Files in this item: 1
dp 2008-02.pdf (227.6Kb) -
Malchow-Møller, Nikolaj; Schjerning, Bertel; Sørensen, Anders (København, 2008)[More information][Less information]
Abstract: This paper analyses the importance of entrepreneurs for job creation and wage growth. Relying on unique data that covers all plants, firms and individuals in the Danish private sector, we are able to distil a number of different measures of entrepreneurial plants from the set of new plants, including measures that much more precisely capture the "truly new” or "entrepreneurial” plants than in previous studies. Using these data, we find that while new plants in general account for one third of the gross job creation in the economy, entrepreneurial plants are responsible for between 15% and 25% of this, and thus only account for up to 8% of total gross job creation in the economy. However, entrepreneurial plants seem to generate more additional jobs than other new plants in the years following entry. Finally, the jobs generated by entrepreneurial plants are to a large extent low-wage jobs, as they are not found to contribute to the growth in average wages. However, this insight varies across the different types of entrepreneurial plants. URI: http://hdl.handle.net/10398/7713 Files in this item: 1
dp 2008-13.pdf (122.6Kb) -
Malchow-Møller, Nikolaj; Rose Skaksen, Jan (København, 2008)[More information][Less information]
Abstract: In this paper, we show that the welfare implications of immigration which takes place in upturns, and may be partly reversed in downturns, are very different from the implications of immigration usually found in static models. Abstracting from any gains to capital owners and native workers due to complementarities, we find that (especially temporary) immigration may still benefit native workers in a European type of labour market where minimum wages may bind in downturns. However, in the presence of hiring costs, these effects may be reversed. Thus, promoting temporary immigration schemes may lead to adverse consequences if they also increase the costs of hiring foreign labour. URI: http://hdl.handle.net/10398/7700 Files in this item: 1
dp 2008-12.pdf (351.9Kb) -
Koskela, Erkki; Poutvaara, Panu (København, 2008)[More information][Less information]
Abstract: We evaluate the effects of international outsourcing and labor taxation on wage formation and equilibrium unemployment in dual labor markets. Outsourcing promotes wage dispersion between the high-skilled and low-skilled workers. Higher domestic low-skilled wage tax, higher payroll tax and lower wage tax exemption increase optimal outsourcing. Outsourcing will reduce equilibrium unemployment of low-skilled workers both in the presence and absence of labor taxation. In the presence of outsourcing, wage tax, tax exemption and payroll tax have an ambiguous effect on equilibrium unemployment. Increasing the degree of tax progression decreases the wage rate and increases the demand of low-skilled workers. URI: http://hdl.handle.net/10398/7697 Files in this item: 1
dp 2008-09.pdf (203.0Kb) -
Glazer, Amihai; Kanniainen, Vesa; Poutvaara, Panu (København, 2008)[More information][Less information]
Abstract: This paper develops a theory of consumer boycotts. Some consumers care not only about the products they buy but also about whether the firm behaves ethically. Other consumers do not care about the behavior of the firm but yet may like to give the impression of being ethical consumers. Consequently, to affect a firm’s ethical behavior, moral consumers refuse to buy from an unethical firm. Consumers who do not care about ethical behavior may join the boycott to (falsely) signal that they do care. In the firm’s choice between ethical and unethical behavior, the optimality of mixed and pure strategies depends on the cost of behaving ethically. In particular, when the cost is (relatively) low, ethical behavior arises from a prisoners’ dilemma as the firm’s optimal strategy. URI: http://hdl.handle.net/10398/7706 Files in this item: 1
dp 2008-08.pdf (225.8Kb) -
Harr, Thomas; Rønde, Thomas (København, 2006)[More information][Less information]
Abstract: We study the optimal regulation of banking groups ("banks”), taking both minimum capital requirements and legal structure into account. A bank can set up either as one legal unit facing limited liability jointly (branch structure) or as a bank holding company with subsidiaries (subsidiary structure). Banks are exposed to risk from their unobservable asset choices and to exogenous risk from their environment. We show that banks with branches are more prudent in normal times than banks with subsidiaries, but are also less prudent when problems arise. A regulator that observes banks’ exogenous risk should optimally determine both capital requirements and legal structure. If the exogenous risk is private information to banks, it can be optimal to screen banks according to risk by setting capital requirements appropriately, and letting banks choose their legal structure. URI: http://hdl.handle.net/10398/7708 Files in this item: 1
artikel 01.pdf (717.4Kb) -
Kolm, Ann-Sofie; Nielsen, Søren Bo (København, 2007)[More information][Less information]
Abstract: To examine the effects on labor market performance of government tax and enforcement policies, this paper develops an equilibrium model featuring tax evasion, matching frictions, and worker-firm wage bargains. In the wage bargains, workers and firms can agree on the amount of remuneration that should not be reported to the tax authorities. We find that increased taxation actually reduces unemployment, whereas more zealous enforcement has the opposite effect. URI: http://hdl.handle.net/10398/7699 Files in this item: 1
artikel 10.pdf (464.6Kb) -
Junge, Martin; Meisner Nielsen, Kasper; Torp Jespersen, Svend; Kragh Jacobsen, Jesper; Bennedsen, Morten (København, 2007)[More information][Less information]
Abstract: Firms in the European countries today have the possibility of choosing from a range of control enhancing mechanisms giving the controlling owners an amount of influence which is disproportional to their share of cash flow. The list of control enhancing mechanisms includes dual class shares, pyramidal ownership structures and several others. The justification for these control enhancing mechanisms is currently the subject of much debate within the European Union. The opposing positions in the debate can be stated briefly as i) the control enhancing mechanisms are an impediment to takeovers and should therefore be removed to improve the market for corporate control. ii) Removing the control enhancing mechanisms reduces the contractual freedom to decide desirable ownership structures. This report investigates whether ownership structures affect firm performance. To do so this study provides a description of the current ownership structures in European countries and the economic outcomes for firms using different ownership structures. The results are presented in the tables below. URI: http://hdl.handle.net/10398/7491 Files in this item: 1
rep03-2007.pdf (359.3Kb) -
Munch, Jakob Roland; Rose Skaksen, Jan; Malchow-Møller, Nikolaj (København, 2007)[More information][Less information]
Abstract: While immigration is unlikely to affect the employment of native workers in the long run, employment of immigrants may be associated with significant short-run adjustment costs for native workers as they have to fi nd alternative employment or are temporarily pushed into unemployment. In this paper, we therefore study the impact of immigrants at the workplace on the employment of native co-workers using a rich matched worker-fi rm data set for Denmark. Estimation of a single risk duration model for job spells of native workers shows that job separation rates increase if more immigrants are hired, especially when it comes to immigrants from Eastern Europe and less developed countries (LDCs). Furthermore, in a competing risks duration model, we fi nd that while immigrants from LDCs increase the unemployment risk for native workers, immigrants from Eastern Europe instead increase the job change probability of native workers. Thus, adjustment costs for native workers are more likely in the case where LDC immigrants are hired. Finally, we fi nd that the results only apply for low-skilled native workers. URI: http://hdl.handle.net/10398/7510 Files in this item: 1
wp17-2007.pdf (729.2Kb) -
Munch, Jakob Roland; Rose Skaksen, Jan; Malchow-Møller, Nikolaj (København, 2007)[More information][Less information]
Abstract: We propose a complementary approach to analyze the impact of immigration on the wages of native workers. Using linked employer-employee data from Denmark for a relatively long time period (1993-2004), we study the consequences of an increased use of immigrants at the most disaggregate level – the workplace. We find that an increase in the share of workers from less developed countries at the workplace has a signifi cantly negative effect on the wages of natives – also when controlling for potential endogeneity using both fi xed effects and IV. The use of immigrants from more developed countries also appears to be correlated with wages. However, these correlations disappear when controlling for unobserved fi rm and worker characteristics and are thus likely to reflect selection rather than a causal effect of these immigrants. Finally, we find a positive impact on the wages of native workers from having Eastern European co-workers. URI: http://hdl.handle.net/10398/7638 Files in this item: 1
wp18-2007.pdf (697.2Kb) -
Omfang, udvikling og konsekvenserMalchow-Møller, Nikolaj; Rose Skaksen, Jan; Munch, Jakob Roland; Aastrup Jensen, Claus (København, 2007)[More information][Less information]
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Konsekvenserne for løn og beskæftigelseMunch, Jakob Roland; Rose Skaksen, Jan; Malchow-Møller, Nikolaj (København, 2007)[More information][Less information]
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Do Police Reduce Group Violence?Priks, Mikael; Poutvaara, Panu (København, 2007)[More information][Less information]
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Poutvaara, Panu; Siemers, Lars (København, 2007)[More information][Less information]
Abstract: We study the social interaction of non-smokers and smokers as a sequential game, incorporating insights from social psychology and experimental economics into an economic model. Social norms a®ect human behavior such that non-smokers do not ask smokers to stop smoking and stay with them, even though disutility from smoking exceeds utility from social interaction. Overall, smoking is unduly often accepted when accommodating smoking is the social norm. The introduction of smoking and non-smoking areas does not overcome this speci¯c ine±ciency. We conclude that smoking bans may represent a required (second-best) policy. smoking policy, health, social norms, guilt aversion, social interaction URI: http://hdl.handle.net/10398/7702 Files in this item: 1
artikel 14.pdf (283.5Kb) -
Määttänen, Niku; Poutvaara, Panu (København, 2007)[More information][Less information]
Abstract: We study the welfare effects of earnings testing flat-rate old-age benefits in a quantitative overlapping generations model with idiosyncratic labor income risk. In our model economy, even a moderate earnings testing reduces individuals’ expected lifetime utility, whenever other taxes are taken into account. Moreover, it also lowers the realized lifetime utilities of those at the bottom of the lifetime utility distribution. Social security; Retirement; Means-testing URI: http://hdl.handle.net/10398/7705 Files in this item: 1
artikel 09.pdf (315.4Kb) -
Schneider, Cédric (København, 2007)[More information][Less information]
Abstract: The aim of this paper is to study the determinants of the outcomes of patent applications (withdrawal, refusal or grant). The application process at the European Patent O¢ ce is modelled in three stages, using a Trivariate Probit model with double selectivity correction in order to test whether the applicants patenting history has an eect on the outcome of the current application. I investigate the behavior of the applicant after the patent o¢ ce has established the "state of the art", a precondition to an invention being patentable. The main results are (i) rms with large patents portfolios act following a "trial and error" strategy, by applying for large numbers of patents and thereafter waiting for the patent o¢ ce s nal decision when the expected probability of grant is high, (ii) the technological importance of a patent is a crucial determinant of a successful application grant, (iii) a withdrawal is to be regarded as an expected refusal, since applicants tend to withdraw their applications when there is evidence that the inventions cannot be considered to be novel or to involve an inventive step. patents, intellectual property rights URI: http://hdl.handle.net/10398/7693 Files in this item: 1
artikel 12.pdf (278.2Kb) -
Could Prosperity Backfire?Priks, Mikael; Poutvaara, Panu (København, 2007)[More information][Less information]
Abstract: Empirical evidence reveals that unemployment tends to increase property crime but that it has no effect on violent crime. To explain these facts, we examine a model of criminal gangs and suggest that there is a substitution effect between property crime and violent crime at work. In the model, non-monetary valuation of gang membership is private knowledge. Thus the leaders face a trade-off between less crime per member in large gangs and more crime per member in small gangs. Unemployment increases the relative attractiveness of large and less violent gangs engaging more in property crime. Violence, Crime, Gangs, Unemployment, Identity URI: http://hdl.handle.net/10398/7692 Files in this item: 1
artikel 13.pdf (172.5Kb) -
Country-of-Origin or End-Use of Products.Sørensen, Anders (København, 2007)[More information][Less information]
Abstract: This paper investigates the empirical consequences for the relationship between skill upgrading and internationalization by decomposing import after country-of-origin and after the end-use of products. I find that the break-down after country-of-origin is of crucial importance, implying that international trade with low-wage countries leads to comprehensive skill upgrading, whereas international trade with high-wage countries leads to skill downgrading in Danish Manufacturing. The empirical literature on skill-upgrading and internationalization has mainly focused on international outsourcing and has to a large extent disregarded import penetration. By splitting import after country-of-origin, this reintroduces import penetration as an important explanation for skill upgrading. skill upgrading, import, country-of-origin, end-use of products URI: http://hdl.handle.net/10398/7686 Files in this item: 1
artikel 19.pdf (143.0Kb) -
The Effect on Transitional GenerationsKoethenbuerger, Marko; Poutvaara, Panu (København, 2007)[More information][Less information]
Abstract: We show that taxation of rents may yield an intergenerational Pareto-improvement in a small open economy provided tax revenues are earmarked to reduce wage taxes. Previous literature has shown that rent taxation benefits current young and future generations, while we show that it also benefits the current old generation when the initially prevailing tax mix is sufficiently skewed towards wage taxation. Rent Taxes, Capitalization, Transitional Dynamics, Labor Supply, Asset Prices. URI: http://hdl.handle.net/10398/7685 Files in this item: 1
artikel 08.pdf (154.1Kb)