S. Davis, J. Haltiwanger, Kyle Handley, Ben Lipsius, J. Lerner, Javier Miranda
We examine thousands of U.S. private equity (PE) buyouts from 1980 to 2013, a period that saw huge swings in credit market tightness and GDP growth. Our results show striking, systematic differences in the real-side effects of PE buyouts, depending on buyout type and external conditions. Employment at target firms shrinks 13% over two years in buyouts of publicly listed firms but expands 13% in buyouts of privately held firms, both relative to contemporaneous outcomes at control firms. Labor productivity rises 8% at targets over two years post buyout (again, relative to controls), with large gains for both public-to-private and private-to-private buyouts. Target productivity gains are larger yet for deals executed amidst tight credit conditions. A post-buyout widening of credit spreads or slowdown in GDP growth lowers employment growth at targets and sharply curtails productivity gains in public-to-private and divisional buyouts. Average earnings per worker fall by 1.7% at target firms after buyouts, largely erasing a pre-buyout wage premium relative to controls. Wage effects are also heterogeneous. In these and other respects, the economic effects of private equity vary greatly by buyout type and with external conditions.
{"title":"The Economic Effects of Private Equity Buyouts","authors":"S. Davis, J. Haltiwanger, Kyle Handley, Ben Lipsius, J. Lerner, Javier Miranda","doi":"10.2139/ssrn.3465723","DOIUrl":"https://doi.org/10.2139/ssrn.3465723","url":null,"abstract":"We examine thousands of U.S. private equity (PE) buyouts from 1980 to 2013, a period that saw huge swings in credit market tightness and GDP growth. Our results show striking, systematic differences in the real-side effects of PE buyouts, depending on buyout type and external conditions. Employment at target firms shrinks 13% over two years in buyouts of publicly listed firms but expands 13% in buyouts of privately held firms, both relative to contemporaneous outcomes at control firms. Labor productivity rises 8% at targets over two years post buyout (again, relative to controls), with large gains for both public-to-private and private-to-private buyouts. Target productivity gains are larger yet for deals executed amidst tight credit conditions. A post-buyout widening of credit spreads or slowdown in GDP growth lowers employment growth at targets and sharply curtails productivity gains in public-to-private and divisional buyouts. Average earnings per worker fall by 1.7% at target firms after buyouts, largely erasing a pre-buyout wage premium relative to controls. Wage effects are also heterogeneous. In these and other respects, the economic effects of private equity vary greatly by buyout type and with external conditions.","PeriodicalId":375725,"journal":{"name":"SPGMI: Capital IQ Data (Topic)","volume":"103 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115143358","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Until recently, few efforts have been made to systematically measure and aggregate the nominal value of the different types of sovereign government debt in default. To help fill this gap, the Bank of Canada (BoC) developed a comprehensive database of sovereign defaults that is posted on its website and updated in partnership with the Bank of England (BoE). Our database draws on previously published datasets compiled by various public and private sector sources. It combines elements of these, together with new information, to develop comprehensive estimates of stocks of government obligations in default. These include bonds and other marketable securities, bank loans and official loans, valued in US dollars, for the years 1960 to 2018 on both a country-by-country and a global basis. This update of the BoC-BoE database, and future updates, will be useful to researchers analyzing the economic and financial effects of individual sovereign defaults and, importantly, the impact on global financial stability of episodes involving multiple sovereign defaults.
{"title":"The BoC-BoE Sovereign Default Database: What’s New In 2019?","authors":"D. Beers, Patrisha de Leon-Manlagnit","doi":"10.2139/ssrn.3460540","DOIUrl":"https://doi.org/10.2139/ssrn.3460540","url":null,"abstract":"Until recently, few efforts have been made to systematically measure and aggregate the nominal value of the different types of sovereign government debt in default. To help fill this gap, the Bank of Canada (BoC) developed a comprehensive database of sovereign defaults that is posted on its website and updated in partnership with the Bank of England (BoE). Our database draws on previously published datasets compiled by various public and private sector sources. It combines elements of these, together with new information, to develop comprehensive estimates of stocks of government obligations in default. These include bonds and other marketable securities, bank loans and official loans, valued in US dollars, for the years 1960 to 2018 on both a country-by-country and a global basis. This update of the BoC-BoE database, and future updates, will be useful to researchers analyzing the economic and financial effects of individual sovereign defaults and, importantly, the impact on global financial stability of episodes involving multiple sovereign defaults.","PeriodicalId":375725,"journal":{"name":"SPGMI: Capital IQ Data (Topic)","volume":"249 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-09-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132273931","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Assessing liquidity transformation risks in MFs is difficult, largely due to a lack of detailed data on fund assets’ liquidity. In this note, we identify some indicators of funds’ liquidity profiles, and examine them in a sample of bank loan (BL, also referred to as “leveraged loans”) and high-yield corporate bond (HY) MFs, which invest in relatively illiquid and riskier assets and, thus, for which vulnerabilities associated with liquidity transformation are generally most salient. We find that the ten largest BL MFs have increased their holdings of the hardest-to-value, generally most illiquid assets over the past decade. Moreover, the average fraction of liquid assets (by our measure) to total assets held by BL MFs have held relatively stable over the same period. This combination of rising hard-to-value, illiquid holdings amid generally stable liquid holdings might indicate rising liquidity risks. We also find that the ten largest HY MFs’ relative holdings of the hardest-to-value assets declined modestly in recent years, and liquid assets have held relatively stable, although the range has widened.
{"title":"Liquidity Transformation Risks in U.S. Bank Loan and High-Yield Mutual Funds","authors":"Kenechukwu Anadu, F. Cai","doi":"10.17016/2380-7172.2412","DOIUrl":"https://doi.org/10.17016/2380-7172.2412","url":null,"abstract":"Assessing liquidity transformation risks in MFs is difficult, largely due to a lack of detailed data on fund assets’ liquidity. In this note, we identify some indicators of funds’ liquidity profiles, and examine them in a sample of bank loan (BL, also referred to as “leveraged loans”) and high-yield corporate bond (HY) MFs, which invest in relatively illiquid and riskier assets and, thus, for which vulnerabilities associated with liquidity transformation are generally most salient. We find that the ten largest BL MFs have increased their holdings of the hardest-to-value, generally most illiquid assets over the past decade. Moreover, the average fraction of liquid assets (by our measure) to total assets held by BL MFs have held relatively stable over the same period. This combination of rising hard-to-value, illiquid holdings amid generally stable liquid holdings might indicate rising liquidity risks. We also find that the ten largest HY MFs’ relative holdings of the hardest-to-value assets declined modestly in recent years, and liquid assets have held relatively stable, although the range has widened.","PeriodicalId":375725,"journal":{"name":"SPGMI: Capital IQ Data (Topic)","volume":"196 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133718560","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
For a long time, China was viewed as the world's “workbench,” rather than as a global innovator. However, recently, China undertook significant efforts to transform towards a research and innovation orientation, by, e.g., setting research goals in its 12th Five-Year Plan that established a Chinese National Patent Development Strategy. In this paper, we examine the effects of that government policy change and assess how it has impacted firm innovation. To address potential endogeneity concerns, we use the policy change as a quasi-natural experiment, and explain the exogenously caused variations. We also use a “difference-in-differences” approach to, e.g., propensity score matched U.S. peers, and find that the policy change had a positive effect on Chinese firms’ research spending, as measured by research intensity. We also show that Chinese firms increased their research spending in response to the strategic shift by the government in 2008, relatively outpacing their U.S. peers during the same time period. However, Chinese companies have not yet overtaken their U.S. peers. Rather, they have reduced the gaps between them.
{"title":"China: From Imitator to Innovator?","authors":"F. Zhan, J. Proelss, D. Schweizer","doi":"10.2139/ssrn.2846428","DOIUrl":"https://doi.org/10.2139/ssrn.2846428","url":null,"abstract":"For a long time, China was viewed as the world's “workbench,” rather than as a global innovator. However, recently, China undertook significant efforts to transform towards a research and innovation orientation, by, e.g., setting research goals in its 12th Five-Year Plan that established a Chinese National Patent Development Strategy. In this paper, we examine the effects of that government policy change and assess how it has impacted firm innovation. To address potential endogeneity concerns, we use the policy change as a quasi-natural experiment, and explain the exogenously caused variations. We also use a “difference-in-differences” approach to, e.g., propensity score matched U.S. peers, and find that the policy change had a positive effect on Chinese firms’ research spending, as measured by research intensity. We also show that Chinese firms increased their research spending in response to the strategic shift by the government in 2008, relatively outpacing their U.S. peers during the same time period. However, Chinese companies have not yet overtaken their U.S. peers. Rather, they have reduced the gaps between them.","PeriodicalId":375725,"journal":{"name":"SPGMI: Capital IQ Data (Topic)","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126495126","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Financial journalists have two countervailing incentives when reporting on a firm’s quarterly earnings guidance. On the one hand, their explicit incentive to attract readership leads them to express discrepant views that deviate from the guidance news managers intend to deliver. We hypothesize that journalists’ tendency to express discrepant views induces managers to stop issuing guidance because it leads to greater investor response uncertainty and, in turn, nondisclosure in equilibrium (media framing hypothesis). On the other hand, financial journalists have implicit quid pro quo incentives to curry favor with managers in exchange for information access or advertising revenue. Their coverage of guidance news would reinforce the intended guidance message and have no incremental impact on future guidance decisions (media reinforcing hypothesis). Using a comprehensive dataset of financial journalists’ articles covering quarterly earnings guidance, we find evidence supporting the media framing hypothesis. Our study provides fresh insight into the information flow in financial markets. We document evidence that the media, through the effect of its discrepant views, curtails the likelihood of managers issuing earnings guidance.
{"title":"Financial Journalism and Quarterly Earnings Guidance","authors":"Jihun Bae, Robin Litjens, Yachang Zeng","doi":"10.2139/ssrn.3432334","DOIUrl":"https://doi.org/10.2139/ssrn.3432334","url":null,"abstract":"Financial journalists have two countervailing incentives when reporting on a firm’s quarterly earnings guidance. On the one hand, their explicit incentive to attract readership leads them to express discrepant views that deviate from the guidance news managers intend to deliver. We hypothesize that journalists’ tendency to express discrepant views induces managers to stop issuing guidance because it leads to greater investor response uncertainty and, in turn, nondisclosure in equilibrium (media framing hypothesis). On the other hand, financial journalists have implicit quid pro quo incentives to curry favor with managers in exchange for information access or advertising revenue. Their coverage of guidance news would reinforce the intended guidance message and have no incremental impact on future guidance decisions (media reinforcing hypothesis). Using a comprehensive dataset of financial journalists’ articles covering quarterly earnings guidance, we find evidence supporting the media framing hypothesis. Our study provides fresh insight into the information flow in financial markets. We document evidence that the media, through the effect of its discrepant views, curtails the likelihood of managers issuing earnings guidance.","PeriodicalId":375725,"journal":{"name":"SPGMI: Capital IQ Data (Topic)","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114266023","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Are public firm investment rates more sensitive than private firm rates to new investment opportunities? We offer a new explanation for differences in public and private firm investment sensitivities: investment sensitivities differ because the type of investments favored by firms varies with their listing status. Specifically, we consider the geography of investment opportunities and find that private firms have a much stronger investment home-bias than similar public firms which makes their investment decisions more sensitive to local investment opportunities than public firms. Controlling for local investment opportunities explains four-fifths of the differential sensitivity between public and private firms not explained by more traditional measures of investment opportunities.
{"title":"Firm Listing Status and the Investment Home Bias","authors":"Casey Dougal, Daniel A. Rettl","doi":"10.2139/ssrn.3426143","DOIUrl":"https://doi.org/10.2139/ssrn.3426143","url":null,"abstract":"Abstract Are public firm investment rates more sensitive than private firm rates to new investment opportunities? We offer a new explanation for differences in public and private firm investment sensitivities: investment sensitivities differ because the type of investments favored by firms varies with their listing status. Specifically, we consider the geography of investment opportunities and find that private firms have a much stronger investment home-bias than similar public firms which makes their investment decisions more sensitive to local investment opportunities than public firms. Controlling for local investment opportunities explains four-fifths of the differential sensitivity between public and private firms not explained by more traditional measures of investment opportunities.","PeriodicalId":375725,"journal":{"name":"SPGMI: Capital IQ Data (Topic)","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125427132","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
L. Bencivelli, Flavia Tonelli, Alberto Coco, Raffaele De Marchi, A. Furgeri, maurizio ghirga, Pietro Ginefra, Alessandro Giraudo, S. Iezzi, S. Longoni, Giovanni Majnoni d'Intignano, D. Marconi, Anna Marra, I. Musu, Elisa Sales, Raffaele Tartaglia Polcini, G. Trebeschi, A. Zanotti, A. Zucchini
Italian Abstract: Dall’inizio della sua presidenza, Xi Jinping ha progressivamente riorientato la politica estera al fine di meglio proteggere gli interessi cinesi nel mondo. A questo fine, Pechino ha significativamente aumentato la propria esposizione internazionale su vari fronti, alternando spesso approcci assertivi con altri piu cooperativi, ai quali si associa la proposta di un “modello alternativo” di cooperazione economica mondiale. La proiezione esterna dell’economia cinese ha continuato a crescere e a diversificarsi, come si desume dall’andamento della quota delle esportazioni, dalla loro composizione (oggi caratterizzate da maggiore valore aggiunto che in passato), dall’ammontare di investimenti esteri e di linee di credito internazionali accordate da istituti finanziari cinesi. Questa evoluzione si confronta con l’incompiutezza della trasformazione della Cina in economia di mercato, evidente nel perdurante ruolo dello Stato nell’indirizzare le decisioni economiche (anche attraverso la leva delle imprese e delle banche di proprieta pubblica), fonte di crescenti tensioni con i maggiori partner commerciali. English Abstract: [Since the beginning of his presidency, Xi Jinping has progressively redirected foreign policy in order to better protect Chinese interests around the world. To this end, Beijing has significantly increased its international exposure on various fronts, often combining assertive approaches with more cooperative ones, among them the proposal of an "alternative model" of world economic cooperation. The external projection of the Chinese economy has continued to grow and diversify, as can be seen from the trend in exports, their composition (today characterized by greater added value than in the past), the amount of foreign investments and the credit granted by Chinese financial institutions to foreign borrowers. This evolution faces up to the incompleteness of China’s transformation into a market economy, evident in the ongoing role of the State in directing economic decisions (also through the lever of companies and public-owned banks), a source of growing tensions with its major trading partners.]
{"title":"La proiezione internazionale della Cina nell'era di Xi Jinping [China’s International Projection in the Xi Jinping’s Era]","authors":"L. Bencivelli, Flavia Tonelli, Alberto Coco, Raffaele De Marchi, A. Furgeri, maurizio ghirga, Pietro Ginefra, Alessandro Giraudo, S. Iezzi, S. Longoni, Giovanni Majnoni d'Intignano, D. Marconi, Anna Marra, I. Musu, Elisa Sales, Raffaele Tartaglia Polcini, G. Trebeschi, A. Zanotti, A. Zucchini","doi":"10.2139/ssrn.3446740","DOIUrl":"https://doi.org/10.2139/ssrn.3446740","url":null,"abstract":"Italian Abstract: \u0000Dall’inizio della sua presidenza, Xi Jinping ha progressivamente riorientato la politica estera al fine di meglio proteggere gli interessi cinesi nel mondo. A questo fine, Pechino ha significativamente aumentato la propria esposizione internazionale su vari fronti, alternando spesso approcci assertivi con altri piu cooperativi, ai quali si associa la proposta di un “modello alternativo” di cooperazione economica mondiale. La proiezione esterna dell’economia cinese ha continuato a crescere e a diversificarsi, come si desume dall’andamento della quota delle esportazioni, dalla loro composizione (oggi caratterizzate da maggiore valore aggiunto che in passato), dall’ammontare di investimenti esteri e di linee di credito internazionali accordate da istituti finanziari cinesi. Questa evoluzione si confronta con l’incompiutezza della trasformazione della Cina in economia di mercato, evidente nel perdurante ruolo dello Stato nell’indirizzare le decisioni economiche (anche attraverso la leva delle imprese e delle banche di proprieta pubblica), fonte di crescenti tensioni con i maggiori partner commerciali. \u0000 \u0000English Abstract: \u0000[Since the beginning of his presidency, Xi Jinping has progressively redirected foreign policy in order to better protect Chinese interests around the world. To this end, Beijing has significantly increased its international exposure on various fronts, often combining assertive approaches with more cooperative ones, among them the proposal of an \"alternative model\" of world economic cooperation. The external projection of the Chinese economy has continued to grow and diversify, as can be seen from the trend in exports, their composition (today characterized by greater added value than in the past), the amount of foreign investments and the credit granted by Chinese financial institutions to foreign borrowers. This evolution faces up to the incompleteness of China’s transformation into a market economy, evident in the ongoing role of the State in directing economic decisions (also through the lever of companies and public-owned banks), a source of growing tensions with its major trading partners.]","PeriodicalId":375725,"journal":{"name":"SPGMI: Capital IQ Data (Topic)","volume":"520 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131956013","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We examine the role of private deposit insurance for deposit flows and bank lending during a financial crisis. Exploiting the availability of private deposit insurance to banks in Massachusetts, we show that banks whose deposits are privately insured experience greater deposit inflows and expand lending during the recent crisis, in contrast to banks whose deposits are only federally insured. The deposit inflows are particularly pronounced prior to the increase of the federal deposit insurance limit and the introduction of the Transaction Account Guarantee Program. Our results highlight the complementary role of private sector solutions for the regulatory framework in banking.
{"title":"Private Deposit Insurance, Deposit Flows, and Bank Lending","authors":"Piotr Danisewicz, chun hei lee, K. Schaeck","doi":"10.2139/ssrn.3436040","DOIUrl":"https://doi.org/10.2139/ssrn.3436040","url":null,"abstract":"We examine the role of private deposit insurance for deposit flows and bank lending during a financial crisis. Exploiting the availability of private deposit insurance to banks in Massachusetts, we show that banks whose deposits are privately insured experience greater deposit inflows and expand lending during the recent crisis, in contrast to banks whose deposits are only federally insured. The deposit inflows are particularly pronounced prior to the increase of the federal deposit insurance limit and the introduction of the Transaction Account Guarantee Program. Our results highlight the complementary role of private sector solutions for the regulatory framework in banking.","PeriodicalId":375725,"journal":{"name":"SPGMI: Capital IQ Data (Topic)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131215782","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Engineers, as implementers of technology, are highly complementary to the intangible knowledge assets that firms accumulate. This paper seeks to address whether technical talent is a source of rents for corporate employers, both in general and in the specific case of the surprising open-source launch of TensorFlow, a deep learning software package, by Google. First, I present a simple model of how employers can use job design as a tool to exercise monopsony power by partially allocating employee time to firm-specific tasks. Then, using over 180 million position records and over 52 million skill records from LinkedIn, I build a panel of firm-level investment in technological human capital (information technology, research, and engineering talent quantities) to measure the market value of technological talent. I find that on average, an additional engineer at a firm is correlated with approximately $854,000 more market value. Firm fixed effects and instrumental variables analyses provide mixed evidence on the marginal causal value of engineers in general. Specifically for AI talent, the value of engineering skills is clearer. AI skills are strongly correlated with market value, though variation in AI skills from 2014-2017 does not explain contemporaneous revenue productivity within firms. AI-intensive companies rapidly gained market value following the launch of TensorFlow, while companies with opportunities to automate relatively larger quantities of labor with machine learning did not. Using a differencein- differences approach, I show that the TensorFlow launch is associated with an approximate market value increase of 4-7% for AI-using firms. Firms outside the top quintile of AI use (as measured by skill counts on LinkedIn) grow by approximately $3.56 million for a 1% increase in AI skill. AI superstar firms in the top quintile also appear to benefit, but show pre-trends in market value growth.
{"title":"Engineering Value: The Returns to Technological Talent and Investments in Artificial Intelligence","authors":"Daniel Rock","doi":"10.2139/ssrn.3427412","DOIUrl":"https://doi.org/10.2139/ssrn.3427412","url":null,"abstract":"Engineers, as implementers of technology, are highly complementary to the intangible knowledge assets that firms accumulate. This paper seeks to address whether technical talent is a source of rents for corporate employers, both in general and in the specific case of the surprising open-source launch of TensorFlow, a deep learning software package, by Google. First, I present a simple model of how employers can use job design as a tool to exercise monopsony power by partially allocating employee time to firm-specific tasks. Then, using over 180 million position records and over 52 million skill records from LinkedIn, I build a panel of firm-level investment in technological human capital (information technology, research, and engineering talent quantities) to measure the market value of technological talent. I find that on average, an additional engineer at a firm is correlated with approximately $854,000 more market value. Firm fixed effects and instrumental variables analyses provide mixed evidence on the marginal causal value of engineers in general. \u0000 \u0000Specifically for AI talent, the value of engineering skills is clearer. AI skills are strongly correlated with market value, though variation in AI skills from 2014-2017 does not explain contemporaneous revenue productivity within firms. AI-intensive companies rapidly gained market value following the launch of TensorFlow, while companies with opportunities to automate relatively larger quantities of labor with machine learning did not. Using a differencein- differences approach, I show that the TensorFlow launch is associated with an approximate market value increase of 4-7% for AI-using firms. Firms outside the top quintile of AI use (as measured by skill counts on LinkedIn) grow by approximately $3.56 million for a 1% increase in AI skill. AI superstar firms in the top quintile also appear to benefit, but show pre-trends in market value growth.","PeriodicalId":375725,"journal":{"name":"SPGMI: Capital IQ Data (Topic)","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122710164","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-04-16DOI: 10.15728/BBR.2019.16.4.6
D. Viana, D. Caixe, V. Ponte
This paper investigates the moderating effect of economic instability in the relationship between the concentration of control and market value of firms. For this purpose, we built an unbalanced panel dataset composed of 341 Latin American companies from six countries: Argentina, Brazil, Chile, Colombia, Mexico, and Peru. The results of the dynamic models, estimated using the systemic generalized method of moments, indicate, in general, that concentration of control only reduces the market value of firms in environments with high economic instability. Thus, this study provides empirical evidence that times of economic instability encourage controlling shareholders to act even more strongly in their own interests, which may result in the expropriation of the wealth of smaller shareholders.
{"title":"Moderating Effect of Economic Instability in the Relationship between Concentration of Control and Market Value: Empirical Evidence in Latin America","authors":"D. Viana, D. Caixe, V. Ponte","doi":"10.15728/BBR.2019.16.4.6","DOIUrl":"https://doi.org/10.15728/BBR.2019.16.4.6","url":null,"abstract":"This paper investigates the moderating effect of economic instability in the relationship between the concentration of control and market value of firms. For this purpose, we built an unbalanced panel dataset composed of 341 Latin American companies from six countries: Argentina, Brazil, Chile, Colombia, Mexico, and Peru. The results of the dynamic models, estimated using the systemic generalized method of moments, indicate, in general, that concentration of control only reduces the market value of firms in environments with high economic instability. Thus, this study provides empirical evidence that times of economic instability encourage controlling shareholders to act even more strongly in their own interests, which may result in the expropriation of the wealth of smaller shareholders.","PeriodicalId":375725,"journal":{"name":"SPGMI: Capital IQ Data (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129001320","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：