Heterogeneity and Input Reallocation



In this dissertation, we analyze some patterns of aggregate job reallocation that are significantly determined by the coexistence of heterogeneous businesses in any industry. First, we argue that the interaction of non-strictly convex adjustment costs and learning about true efficiency can explain the significant growth of survivors in a cohort of entering firms. Using Portuguese data we find evidence that survivors are the main source of growth in the cohort’s average size, and that their contribution varies across sectors. By simulation, we show that we need adjustment costs to match this evidence with a selection model of industry dynamics. In a calibration of the model, we find that proportional costs and the fixed exit cost are key parameters in matching the evidence, and that firms in manufacturing learn relatively less initially about their efficiency, and are subject to much larger adjustment costs than firms in services.

Second, we analyze how does structural heterogeneity across classes of firms affects the cyclical behavior of aggregate job flows. We find that types of firms whose optimalemployment is relatively more determined by aggregate shocks than by idiosyncratic shocks influence the dynamics of aggregate job flows by more than they affect average aggregate flows. In Portuguese data, we conclude that large and old firms tend to affect aggregate dynamics by more than their already large employment shares would suggest. This tends to make job reallocation less procyclical than otherwise, and affects aggregate behavior in some sectors.

Finally, as a background for the empirical analysis that is used in this dissertation, we analyze basic facts about the business cycle and gross job flows in Portugal from 1986 to 2000. We conclude that gross job flows are large and react in predictable ways to the business cycle and that patterns of job reallocation vary widely across sectors and firm’s age and size.

URI: http://hdl.handle.net/1903/3903
Appears in Collections: Economics Theses and Dissertations UM Theses and Dissertations

Reference : Copyright by Eugénio Pinto 2006







<< back

Tags : Agricultural Economics Thesis Topics, Economics Dissertation, Economic Project Topics or Ideas, High School Economic Project Ideas, Civilization Economic Project Ideas, Economic Projects for High School Students, Economic Projects for Elementary, Economic Projects for Kids, Economic Projects for students, Economic Project Ideas, Economic School Projects, Economics Projects for Middle School, Econometrics Project Ideas, Economics Project Topics or Ideas, Economic Projects Thesis Dissertation, Economics Projects for Elementary Students, Economics Projects for MBA, Economics Projects for Students, Economics Projects for High School Students, Economics Project Ideas, High School Economics Projects, Top Project Economics, Difference between Economics Project, Development Economics Project Topics, Economics Project Topics for Class 11|12, Economics Projects

Copyright © Dissertation Ideas 2012 through 2016