A COHORT ANALYSIS OF US AGE–EARNINGS PROFILES

Aggregate data on US earnings, classified by period and by age, are decomposed into age, period and cohort effects, using the Bayesian cohort models, which were developed to overcome the identification problem in cohort analysis. The main findings, obtained by comparing college and high school graduates, are threefold. First, the age effects show a downward trend for the age group of 45–49 onwards for high school graduates but do not show any such trend for college graduates. Second, the period effects show a downward trend for high school graduates but reveal no such trend for college graduates. Third, the cohort effects are negligible for both college and high school graduates.     

Corruption and Age

In recent years the topic of corruption has attracted a great deal of attention. However, there is still a lack of substantial empirical evidence about the determinants of corruption. The major aim in the paper is to investigate empirically the correlation between age and justifiability of corruption. We use data on eight Western European countries from the World Values Survey and the European Values Survey that span the period from 1981 to 1999 to distinguish between an age effect (the changing attitudes of the same cohort over time) and a cohort effect (the differences in attitudes among similar age groups in different time periods). The results suggest that there is a strong age effect and no cohort effect.     

Does Age Exacerbate the Gender-Wage Gap? New Method and Evidence From Germany, 1984–2014

ABSTRACT

Given theoretical premises, the gender-wage gap adjusted for individual characteristics is likely to vary according to age. This study adapts John DiNardo, Nicole M. Fortin, and Thomas Lemieux's (1996) semi-parametric technique to disentangle year, cohort, and age effects in adjusted gender-wage gaps. The study relies on a long panel of data from the German Socio-Economic Panel (SOEP) covering 1984–2015. The results indicate that, in Germany, the gender-wage gap increases over a birth cohort's lifetime, including in the post-reproductive age for some birth cohorts. The results suggest that age and gender are overlapping handicaps in the labor market and call for a policy intervention.     

Performance-related pay and gender wage differences

We study the impact of performance-related pay (PRP) on gender wage differences using Finnish-linked employer–employee panel data. Controlling for unobserved person and firm effects, we find that bonuses increase women’s earnings slightly less than men’s, but the economic significance of the difference is negligible. Piece rates and reward rates, however, tend to increase gender wage differentials. Thus, the nature of a PRP plan is important for gauging the impact of PRP on gender wage differentials. A comparison with OLS results shows the importance of controlling for an unobserved person and firm effects.     

Does corporate social responsibility make over-educated workers more productive?

This article provides first evidence on whether corporate social responsibility (CSR) influences the productivity effects of over-education. By relying on detailed Belgian-linked employer–employee panel data covering the period 1999–2010, our empirical results exhibit a positive and significant impact of over-education on firm productivity. Moreover, they suggest that the effect of over-education is positively enhanced when the firm implements a CSR process, especially when it aims to have: (i) a good match between job requirements and workers’ educational level, (ii) a diverse workforce in terms of gender and age, and (iii) a long-term relationship with its workers. When focussing on required education and over-education, the results suggest that CSR, besides representing an innovative and proactive approach for the firms’ stakeholders, may also be beneficial for the firm itself through a bigger increase in productivity for each additional year of required education or over-education.     

Medical consumption over the life-cycle

We investigate the association between age and medical spending in the U.S. using data from the Medical Expenditure Panel Survey. We estimate a partially linear seminonparametric model and construct “pure” life-cycle profiles of health spending simultaneously controlling for time effects (i.e., institutional changes and business cycles effects) and cohort effects (i.e., generation specific conditions). We find that time and cohort effects together introduce a significant estimation bias into predictions of health expenditures per age group, especially for individuals older than 60 years. The estimation bias introduced by cohort effects increases monotonically with age while the bias due to time effects is not significant. The overall effect of Medicare on the cohort and time effects biases is negligible.     

Consumption,Income, and Wealth: Evidence from Age,Cohort, and Period Elasticities

This paper examines the relationship between non‐durable consumption, income, and wealth (housing and financial) allowing explicitly for generational heterogeneity. A framework is proposed to disentangle cohort, age, and period effects and the empirical analysis is based on the U.S. Consumer Expenditure Survey data. We find that there are significant generational differences and the results highlight the range of elasticities implicit in results presented, thus far, by age groups. Moreover, we find supporting evidence of humped shaped age profiles for the elasticity of consumption with respect to income and the importance of financial wealth for those aged 60+. The framework also allows us to generate cohort profiles which draw attention to the negative role of housing wealth for generation X, and period profiles which reinforce the role of financial wealth for the baby‐boom generation.     

A synthetic cohort analysis of female labour supply: the case of Thailand

This study analyzes trends and patterns in employment, hours worked, and women’s wages for Thai women, and relations among these variables in models of female labour supply. Labour supply behaviour of Thai women is investigated with synthetic cohort data defined by age, year of birth, and level of educational attainment, constructed from annual labour force surveys from 1985 to 2004. According to pseudo-panel estimates, wage increases lead to a reduction in hours worked, but also an increase in the employment/population ratio, with elasticity estimates that are robust across a variety of specifications. Estimates based on disaggregation by marital status show that marriage provides protection against wage decreases, allowing married women greater choice between hours of work and other household activities. Alternative disaggregations find that younger cohorts of women and those with the highest education show the greatest (positive) response of the employment rate to wage changes, leading to a future Thai labour force with more women and higher educational attainment.     

IS THE COST OF DEBT CAPITAL HIGHER FOR YOUNGER FIRMS?

Not much is known about the returns to aging (maturing) in the market for small business finance. Using a large panel of closely held micro firms, we document that the cost of debt capital is higher for young firms. The main finding of this paper is that this negative qualitative relation is also obtained when cross‐sectional variation in unobservable creditworthiness of small businesses and within‐firm (i.e., inter‐temporal) variation in their observable creditworthiness are held constant. We control for the former by firm‐specific fixed effects and for the latter by a commercial credit score. We also provide an estimate of the quantitative magnitude of the aging effect, on which both economic theory and earlier empirical research are silent. We find that when a small business ages one year, its cost of debt capital decreases by 1–2 basis points. The effect is neither negligible nor alarmingly large.     

Firm age and liquidity ratio as predictors of firm growth: evidence from Indian firms

The result of the study shows that liquidity ratio and firm age increases the probability of firm becoming high growth or low growth. However, the result indicates that the chances of being high-growth firm are higher for young firms. Quantile results show that the coefficient of liquidity ratio switches from negative in lower quantiles to become positive in upper quantile with the strong positive effect and firm age coefficients are largest in the lower quantiles. These results also confirm the probit result as per which firm age is negatively significant with the growth of the firm. The present study considers an innovative approach that considers balance sheet issued the year prior to the observation of rapid growth as predictors of firm growth (similar to the credit scoring models, i.e. the Z-score model, to measure the probability of default).     

Corporation Diversification and Firm Performance: Evidence from Vietnamese Listed Firms

We examine the effect of corporate diversification on the performance of firms listed on the Vietnamese stock exchanges, using 2744 firm year observations over the period from 2007 to 2012. We find that corporate diversification has a negative impact on firm performance. Our results are robust to various econometric estimation techniques including fixed effect, instrumental fixed effect, Heckman selection model and system generalised method of moments. In the Vietnamese context, the lack of an efficient corporate governance system may encourage firms to follow corporate diversification strategies, thus impairing their performance.     

The within-distribution business cycle dynamics of German firms

In this article, we analyse stylized facts for Germany's business cycle at the firm level. Based on longitudinal firm-level data from the Bundesbank's balance sheet statistics covering, on average, 55 000 firms per year from 1971 to 1998, we estimate transition probabilities of a firm in a certain real sales growth regime switching to another regime in the next period, e.g. whether a firm that has witnessed a high growth rate is likely to stay in a regime of high growth or is bound to switch to a regime of low growth in the subsequent period. We find that these probabilities depend on the business cycle position.     

Diversity among Norwegian Boards of Directors: Does a Quota for Women Improve Firm Performance?

Exploiting the Norwegian boards of directors’ quota reform of 2003, this study evaluates the impact of increased diversity on firm performance. Applying difference-in-difference approaches to accounting data covering the period 2003–07, the paper compares the return on assets for non-finance public limited companies (PLCs) and ordinary limited companies (LTDs), whereof only the former were affected by the reform. The impact of the reform on firm performance is negligible. Neither changed return on total assets (ROA) nor changed operating revenues and cost can be attributed to the reform. However, following the reform PLCs have to a larger extent accumulated capital, financed by debt or by a combination of debt and own capital.     

企业生产率的代际效应和年龄效应

本文利用1998年到2004年中国制造业企业数据,从企业代际和年龄的角度研究了中国制造业企业的生产率变动,得到三个基本发现:(1)新进入企业总是能够将当时先进的技术知识和组织制度"物化"在企业的物质和组织资本中,存续企业也能通过"干中学"而提升其生产效率;而且只有在改革开始以后成立的企业才显现出显著的日益上升的代际优势;(2)中国制造业企业的代际和年龄优势并没有相应反映在外资企业上,外资企业的代际优势几乎没有,正年龄效应在第6年后也几乎消失;(3)尽管国有企业平均来看较其他所有制企业的生产率低,但在1988年之后新成立的国有企业日益增加的代际优势,表现出了明显的"追赶"效应。     

Automobile demand,model cycle and age effects

This paper is aimed at exploring the existence of typical patterns of automobile model life and the formal test for age effects in a discrete-choice demand framework estimated with data on the models sold in the Spanish market. Estimates show that the evolution of market shares entails and quantifies age effects resulting from consumer demand. These effects are clearly distinguishable from the impacts generated by changes in attributes and firm pricing. They carry an exogenous factor that is full of implications for firm behaviour over the life of a model: the modification of demand price sensitivities. As a result, for example, equilibrium own-price elasticities are observed to decrease until the fourth year of a model life, and then to increase again.      

Ownership Structure and Firm Performance: Evidence from Vietnamese Listed Firms

We examine the effect of ownership structure on firm performance, for firms listed on Vietnamese stock exchanges, using 2744 firm‐year observations over the period from 2007 to 2012. We find a non‐linear relationship between ownership structure and firm performance. State ownership has a convex relationship with firm performance. This paper finds that firm performance increases beyond 28.67 percent level of state ownership. Foreign ownership has a concave relationship with firm performance. We find that firm performance increases with an increase of foreign ownership up to a level of 43 percent and then decreases. Policy makers should encourage foreign ownership and widely dispersed state ownership in firms, which can help improve firm performance.     

Nonparametric measures of returns to scale: an application to German water supply

The evaluation of market structures and the quantification of returns to scale in network industries usually are of high interest for researchers and policy makers. Regarding the debate on optimal market structures in German potable water supply, we use a cross-sectional sample of 364 German water utilities observed in 2006 to derive a nonparametric measure of scale elasticity for the water industry. The data sample is validated by applying a super-efficiency approach and a statistical testing procedure for outlier detection. Besides using a standard data envelopment analysis approach, a conditional efficiency approach is applied to account for the water utilities’ operating environments. The results indicate non-decreasing returns to scale for the majority of water utilities and constant or non-increasing returns for larger utilities. Optimal firm size is found to be generally larger than the current sample median firm size. Efficiency improvements could be realized by increases in firm sizes and through a consolidation of the industry.     

Knowledge,Competence, And Regional Development

This study examines the impact that locational spillovers have on firm performance. On the basis of a uniquely created data set consisting of high-technology start-ups publicly listed in Germany, this paper tests the proposition of locational spillovers positively affecting firm performance, as measured by abnormally high profits on the stock market. The results provide evidence that geographic proximity and university spillovers are complementary determinants of firm performance. Although neither geographic proximity nor academic research spillovers alone can explain firm performance, a combination of both factors results in significant higher stock market performance. The results also show that academic spillovers are heterogeneous in their impact, depending on the type. In particular, spillovers from social sciences have a different impact on firm performance than do spillovers from natural sciences.     

Price leadership and firm size asymmetry: an experimental analysis

We use laboratory experiments to examine the effect of firm size asymmetry on the emergence of price leadership in a price-setting duopoly with capacity constraints. Independent of the level of size asymmetry, the unique subgame perfect equilibrium of our timing game predicts that the large firm is the price leader. Experimental data show that price leadership by the large firm is frequent, but simultaneous moves are also often observed. Profit outcomes in the previous period affect the subjects’ decisions to announce or wait in a way that hampers convergence to the equilibrium. Furthermore, while both small and large firms display a strong tendency to wait to announce their price when firm size asymmetry is low, they often set prices early when size asymmetry is high. Prices are higher when price setting is sequential rather than simultaneous and when firm size asymmetry is high. Hence, price leadership by either type of firm has an anti-competitive effect that is more pronounced when the size difference between firms is large.     

不同管理风格下创业投资参与程度对创业企业绩效的影响

基于创业投资参与程度对企业绩效具有双重效应,以中国创业投资市场为研究背景,运用CVSource数据库2000-2014年的大样本数据,使用多变量回归模型,研究不同管理风格下创业投资参与程度对创业企业绩效的影响。结果发现,不同管理风格下VC参与程度与企业绩效间存在显著倒U型关系,在VC参与程度达到最优值之前,随着参与程度的增加,企业绩效随之提升,VC参与程度对企业绩效具有促进效应;但超过最优值后,随着VC参与程度的增加,企业绩效却呈递减趋势,VC参与程度对企业绩效具有抑制效应。