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This paper investigates the relationship between product market competition (PMC) and innovation. A growth model is developed in which competition may increase the incremental profit from innovating; on the other hand, competition may also reduce innovation incentives for laggards. There are four key predictions. First, the relationship between product(More)
We propose uncertainty shocks as a new shock that drives business cycles. First, we demonstrate that microeconomic uncertainty is robustly countercyclical, rising sharply during recessions, particularly during the Great Recession of 2007-2009. Second, we quantify the impact of time-varying uncertainty on the economy in a dynamic stochastic general(More)
The impact of R&D on growth through spillovers has been a major topic of economic research over the last thirty years. A central problem in the literature is that firm performance is affected by two countervailing " spillovers " : a positive effect from technological knowledge spillovers and negative business stealing effects from product market rivals. We(More)
A long standing question in social science is whether management matters. Certainly management differs across firms, as does performance. However, perhaps every firm chooses its management practices optimally, so that differences across firms simply reflect differences in their environments. To investigate this we run a field experiment on large Indian(More)
U U ncertainty is an amorphous concept. It refl ects uncertainty in the minds of ncertainty is an amorphous concept. It refl ects uncertainty in the minds of consumers, managers, and policymakers about possible futures. It is also a consumers, managers, and policymakers about possible futures. It is also a broad concept, including uncertainty over the path(More)
About 10% of US employees now regularly work from home (WFH), but there are concerns this can lead to " shirking from home. " We report the results of a WFH experiment at CTrip, a 16,000-employee, NASDAQ-listed Chinese travel agency. Call center employees who volunteered to WFH were randomly assigned to work from home or in the office for 9 months. Home(More)
We build a model of …rm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high-and low-type …rms, which di¤er in terms of their innovative capacity. We estimate the parameters of the model using detailed US Census micro data on …rm-level output, R&D and patenting. The model(More)
Empirical studies on information communication technologies (ICT) typically aggregate the " information " and " communication " components together. We show theoretically and empirically that these have very different effects on the empowerment of employees, and by extension on wage inequality. If managerial hierarchies are devices to acquire and transmit(More)
The productivity of firms in developing countries appears to be extremely low. Table 1 reports GDP per capita and average firm-level sales per employee in manufacturing—commonly known as labor revenue productivity—across a sample of countries from a new international firm database (ORBIS). While there are some data comparability issues, the broad message(More)