Browsing by Subject "L16"

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  • Juselius, Mikael; Kim, Moshe; Ringbom, Staffan (2009)
    Bank of Finland Research Discussion Papers 12/2009
    Persistent shifts in equilibria are likely to arise in oligopolistic markets and may be detrimental to the measurement of conduct, related markups and intensity of competition. We develop a cointegrated VAR (vector autoregression) based approach to detect long-run changes in conduct when data are difference stationary. Importantly, we separate the components in markups which are exclusively related to long-run changes in conduct from those explained solely by fundamentals. Our approach does not require estimation of markups and conduct directly, thereby avoiding complex problems in existing methodologies related to multiple and changing equilibria. Results from applying the model to US and five major European banking sectors indicate substantially different behavior of conventional raw markups and conduct-induced markups. Keywords: markups, cointegration, VAR, macroeconomic fundamentals, competition, banking JEL classification numbers: C32, C51, G20, L13, L16
  • Akcigit, Ufuk; Kerr, William R. (2013)
    Bank of Finland Research Discussion Papers 28/2013
    We study how exploration versus exploitation innovations impact economic growth through a tractable endogenous growth framework that contains multiple innovation sizes, multi-product firms, and entry/exit. Firms invest in exploration R&D to acquire new product lines and exploitation R&D to improve their existing product lines. We model and show empirically that exploration R&D does not scale as strongly with firm size as exploitation R&D. The resulting framework conforms to many regularities regarding innovation and growth differences across the firm size distribution. We also incorporate patent citations into our theoretical framework. The framework generates a simple test using patent citations that indicates that entrants and small firms have relatively higher growth spillover effects. JEL Classification: O31, O33, O41, L16 Keywords: Endogenous Growth, Innovation, Exploration, Exploitation, Research and Development, Patents, Citations, Scientists, Entrepreneurs
  • Timmer, Marcel P.; Voskoboynikov, Ilya B. (2013)
    BOFIT Discussion Papers 19/2013
    Published in Review of Income and Wealth, Volume 60, Issue Supplement S2, pages S398–S422, November 2014.
    GDP per capita growth rates in Russia have been among the highest in the world since the mid?1990s. Previous growth accounting research suggests that this was mainly driven by multi-factor productivity (MFP) growth. In this paper we analyse for the first time the drivers of Russian growth for thirty-four industries over the period 1995 to 2008. We pay in particular attention to the construction of a proper measure of capital services, to use in place of the stock measures employed in previous research. Based on these new measures, we find that aggregate GDP growth is driven as much by capital input as by MFP growth. Mining and Retailing account for an increasing share of the inputs, but are weak in terms of MFP performance. In contrast, MFP growth was rapid in goods-producing industries, but the sector's GDP share declined. The major drivers of MFP growth were in the high-skilled services industries that were particularly underdeveloped in the Russian economy in the 1990s. JEL: O47; P28; L16 Key words: industrial growth accounting, structural change, Russia
  • Balistreri, Edward J.; Olekseyuk, Zoryana; Tarr, David G. (2017)
    BOFIT Discussion Papers 2/2017
    The accession negotiations of Belarus to the WTO are unusual since, due to its obligations in the Eurasian Economic Union, WTO accession is not expected to impact its tariffs or formerly substantial trade distorting agricultural subsidies. Nonetheless, we estimate that WTO accession will increase welfare by 8.8 percent per year in Belarus in the medium term. We show that inclusion of (i) foreign direct investment; (ii) reduction on non-discriminatory barriers against services providers; and (iii) our model with imperfect competition and endogenous productivity effects together produce esti-mated gains eleven times larger than a model of perfect competition with only cross-border trade in services. Our analysis is enabled by our production of a dataset on both discriminatory and non-discriminatory barriers in services and their ad valorem equivalents. Based on a new dataset on labor productivity by sector and type of ownership, in our central model we estimate that privatization will increase welfare by 35.4 percent. We find substantial variance in the estimated gains from privatiza-tion depending on model assumptions; but all the estimates of the impacts of privatization indicate substantial welfare gains.
  • Kauko, Karlo (2010)
    Bank of Finland Research Discussion Papers 14/2010
    It has been proposed that the potential procyclicality of Basel II could be alleviated by using through-the-cycle (TTC) ratings in IRBA models. A TTC rating would be based on the structural component of the debtor s credit risk ignoring cyclical fluctuations. This paper tests for the existence of such fluctuations in corporate sector credit risk and finds vietually no evidence for their existence at the company level. It is not possible to assign satisfactory TTC ratings to debtors if there are no cyclical variations to be filtered out. Keywords: through-the-cycle rating, credit risk, procyclicality JEL classification numbers: G21, G33, L16
  • Nurmi, Satu; Vanhala, Juuso; Virén, Matti (2020)
    Bank of Finland Research Discussion Papers 8/2020
    We analyze the demographics of zombie firms and durations of zombie spells as well as their determinants, including an application on public subsidies using firm level population panel data from Finland. Firm-level analysis of firm demographics reveals that zombie-firms, as commonly defined in the literature, are often not truly distressed firms but rather companies with temporarily low revenues relative to interest payments. More importantly, we find that roughly a third of these firms are in fact growing companies and two thirds recover from the zombie status to become healthy firms. We also show that the increase of zombie firms over the past 15 years has mainly been driven by cyclical factors, as opposed to a secular trend. In our policy application on government subsidies to firms, estimation results strongly suggest that subsidy-receiving firms are less likely to die, regardless of the type of subsidy. However, with regard to recovery there is heterogeneity in the effects depending on the type of firm and the type of subsidy received. Thus, we do not find a robust positive association of subsidies with zombie recovery.
  • Voskoboynikov, Ilya B.; Solanko, Laura (2014)
    BOFIT Policy Brief 6/2014
    Based on newly available data, we argue that multifactor productivity increases over the period 1995-2008 generated only about a half of Russia's GDP growth, a smaller increase than most previous estimates. Further, growth in multifactor productivity seems to have contributed to a smaller share of GDP growth in 2003-2008 than in the first seven years of our observation period. These results imply that increases in capital inputs, and consequently investments in fixed capital, are more important than previously thought for Russia's economic growth. Detailed analysis of industry-level data reveals two drivers of economic growth in the period: the extended oil & gas sector and high-skill-intensive services. Our analysis indicates that growth in the extended oil & gas sector reflected increased capital inputs, while growth in high-skill-intensive services seems to be part of catching up with more advanced markets. Neither sector is likely to spur growth in the coming decade.