Browsing by Subject "D21"

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  • Hyytinen, Ari; Lahtonen, Jukka; Pajarinen, Mika (2012)
    Bank of Finland Research Discussion Papers 20/2012
    This paper uses entrepreneurs´ survival expectations around the time of market entry and subsequent venture exits to study entrepreneurial optimism. Using data on a large number of nascent entrepreneurs in the US and start-ups in Finland, we find that new entrepreneurs´ survival beliefs are on average optimistic but heterogeneous: Some are excessively optimistic, whereas a small subset holds unbiased beliefs. Entrepreneurial optimism is increasing in the relative (interpersonal) optimism and de- creasing in entrepreneurs´ level of education and industry experience in both countries. At least in Finland, those holding optimistic views are more likely to transit into entrepreneurship. JEL: D21, L20 Key words: entrepreneurship, survival, optimism, overestimation
  • Hyytinen, Ari; Putkuri, Hanna (2012)
    Bank of Finland Research Discussion Papers 21/2012
    Published in Journal of Money, Credit and Banking, Vol 50, Issue 1, February 2018: 55-76 ; https://dx.doi.org/10.1111/jmcb.12453
    A unique Finnish household-level data from 1994 to 2009 allow us to measure how households financial expectations are related to the sub- sequent outcomes. We use the difference between the two to measure forecast errors and household optimism and link the errors to households´ borrowing behaviour. We find that households making greatest optimistic forecast errors carry greater levels of debt and are most likely to suffer from excessive debt loads (overindebtedness). They also are less attentive to forecast errors than their pessimistic counterparts when forming their expectations for a subsequent period JEL: D21, L20 Key words: forecast errors, ex ante optimism, borrowing
  • Acemoglu, Daron; Akcigit, Ufuk; Alp, Harun; Bloom, Nicholas; Kerr, William (2018)
    American Economic Review 11 ; November
    We build a model of firm-level innovation, productivity growth, and reallocation featuring endogenous entry and exit. A new and central economic force is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using US Census microdata on firm-level output, R&D, and patenting. The model provides a good fit to the dynamics of firm entry and exit, output, and R&D. Taxing the continued operation of incumbents can lead to sizable gains (of the order of 1.4 percent improvement in welfare) by encouraging exit of less productive firms and freeing up skilled labor to be used for R&D by high-type incumbents. Subsidies to the R&D of incumbents do not achieve this objective because they encourage the survival and expansion of low-type firms.
  • Verona, Fabio (2013)
    Bank of Finland Research Discussion Papers 18/2013
    Published in Journal of Money, Credit and Banking, Volume 46, Issue 8, December 2014:1627–1656
    Investment in physical capital at the micro level is infrequent and large, or lumpy. The most common explanation for this is that firms face non-convex physical adjustment costs. The model developed in this paper shows that information costs make investment lumpy at the micro level, even in the absence of non-convex adjustment costs. When collecting and processing information is costly, the firm optimally chooses to do it sporadically and to be inactive most of the time. This behavior results in infrequent and possibly large capital adjustments. The model fits plant-level investment rate moments well, and it also matches some higher order moments of aggregate investment rates. Keywords: investment dynamics, information costs, inattentiveness, lumpy investment JEL classification: D21, D83, D92, E22