Research Seminars

27.11.2024

11.00-12.00

Zoom

JAANIKA MERIKÜLL

(Eesti Pank, University of Tartu)

Productivity-enhancing reallocation during the covid-19 pandemic 

This paper studies how the Covid-19 pandemic and the extensive job retention support that accompanied it affected productivity in Europe. The focus is on the reallocation channel and productivity-enhancing reallocation of jobs, following Foster et al., 2016. An extensive micro-distributed analysis of firm-level data for 11 euro area countries is used. The unique firm-level datasets are constructed by merging balance-sheet and income-statement data with policy support data. The paper exploits variation in employment responsiveness to productivity over time, particularly examining the relationship between changes in employment responsiveness and the job retention support in 2020 and studying how well the support was targeted by firm productivity. Acknowledging limitations of a small set of countries covered and occasionally large confidence bounds around estimates, the findings suggest that (1) productivity-enhancing reallocation was weaker in the pandemic than in the Great Recession; (2) The countries that were more generous with job retention support and countries where more support was allocated to low-productivity firms showed weaker productivity-enhancing reallocation in 2020.

Co-authors: Tibor Lalinsky, Paloma Lopez-Garcia

The paper is published in the Working Paper Series of the Eesti Pank: https://haldus.eestipank.ee/sites/default/files/2024-09/wp_2024_5.pdf

04.12.2024

11.00-12.00

Delta room 1024,

Zoom

PETR HOUDEK

(Prague University of Economics and Business)

Benevolent Machiavellianism: A Study of the Nature of Prosocietal Political Skills in Organizations

Corporations cause significant social harm. However, these organizations also employ people who stand against their harmful doings, but to no avail. Our study aims to uncover why these individuals cannot change their organizations' detrimental impacts. We test whether prosocietal employees lack the political will and political skills, unlike self-centered or Machiavellian employees, and thus cannot obtain the power to change the organization for the better. We created a novel behavioral task in which a group of participants could withdraw funds from charities. Participants could also gain power and reduce or exacerbate the negative impact of their group. We found that participants with high political will, power motive, and preferring their and their group's gains invested more in power. Conversely, we found no evidence of an association between obtaining power and contributing to charities, high affiliation motive, or political skill. Thus, Malevolent Machiavellians prevailed, and the groups they controlled continued to harm. In the follow-up study, we found evidence that Benevolent Machiavellianism can be nudged by emphasizing the need to acquire power and by emphasizing the impending prosocietal costs. Our research shows a clear need to encourage prosocietal employees of harmful organizations to be proactive, think strategically about their actions, and provide them opportunities to reflect on and discuss these issues.

Co-authors: Štěpán Bahník, Marek Vranka

ERIC FRENCH

(University of Cambridge)

Genetics and Lifetime Earnings: Understanding the Mechanisms

This paper examines the mechanisms linking genetic factors to lifetime earnings using data from a British cohort followed from birth to retirement. We develop and estimate a life-cycle model that integrates childhood skill formation with sequential schooling and occupational choices in adulthood. The model accounts for two types of genetic channels: mechanical (via skill formation and earnings equations) and behavioral (via parental investments, schooling, and occupational choices). We find both channels equally important: a one standard deviation increase in the polygenic score for educational attainment leads to a 15% increase in lifetime earnings, with 7% attributed to mechanical channels and 8% to behavioral channels. Our paper highlights the value of unifying early-life skill formation and sequential choices into a single framework for understanding genetic influences on lifetime earnings determination.

18.10.2024

SUSAN FREEMAN

(University of South Australia)

Unpacking the digital barriers in emerging market SMEs: Towards a resource-adaptive model

Existing literature acknowledges that digital transformation is invaluable yet particularly challenging for small and medium-sized enterprises (SMEs). Yet, knowledge is limited on the specific barriers faced by SMEs in their digital transformation across different stages, especially in emerging market settings. Compared to large enterprises, SMEs typically operate with financial and human resource constraints, which may entail unique challenges and tailored solutions in their digitalization. We extend the resource-based view (RBV) within digital transformation literature, which typically treats digitalization as a uniform process with static resource and capability needs. We argue that success in digital transformation hinges not only on possessing valuable resources but also on the strategic timing and deployment of stage-specific capabilities that effectively leverage digital resources. This underscores the necessity for a more flexible and adaptive application of RBV to the study of digital transformation. Drawing on data from a multi-case research design, we develop a resource-adaptive model consisting of three distinct stages of digital transformation –exploration, scaling, and maturity. Our findings also reveal different barriers associated with digital mindset, capabilities, leadership, and institutional support, each aligned with discrete stages of digital transformation. This study makes important contributions to SME digital transformation literature, with implications for SME owners, entrepreneurs, and policymakers from emerging markets

Keywords: SMEs, Digital transformation; Digital barriers; Resource-adaptive model; Emerging markets

Co-Authors: Michael Yao and Dr Dan Wang (Monash University, Australia) 

18.09.2024

PEI-FEN CHEN

(National Sun Yat-sen University, Taiwan)

Entrepreneurship, Mobile Payment, and Financial Inclusion for Low and Middle Income Asian Economies

Despite the burgeoning interest in financial technology , its cor relation to entrepreneurship remains unknown. This research addresses the gap in the literature by examining the determinants of new business entrepreneurship, specific ally focusing on mobile payment , traditional financial inclusion, and regulatory factors across selected low and middle income economies. Employing a baseline panel regression model, we conduct empirical analysis from data collected from multiple sources covering 25 developing economies in Asia spanning 2014 to 2021. The findings reveal a direct and positive effect of mobile payment systems and regulatory quality on entrepreneurship versus a negative effect of traditional financial inclusion. T he study further uncovers the impact channels through which regulatory factors interact with mobile payment systems and significantly contributes to the literature by examining how financial innovations, especially mobile payment systems, stimulate entrepreneurship on a global scale. It expands research by investigating the impact of traditional financial inclusion on new business entrepreneurship sheds light on nuanced pathways through which regulatory factors shape entrepreneurship and highlights the potential interaction effect of regulatory quality with mobile payment systems. The insights generated herein are invaluable for regulators and policymakers to make informed decisions that promote entrepreneurial growth. This is especially pertinent in the post COVID 19 era, where fostering small/new business entrepreneurship drive s sustainable economic development, while also potentially catalyzing the development of financial technology solutions to enhance financial inclusivity and entrepreneurial opportunities.

04.09.2024

PEETER PEDA (University of Tartu)

To build or not to build? Mobilization of uncertainty arguments in public decision-making on private megaprojects

Uncertainty, a state of unknowing linked to threats and opportunities, is a key characteristic of megaprojects, making it challenging for government officials and politicians to decide on their initiation. For them, implementation by the private sector adds an extra layer of complexity and uncertainty to megaproject planning. In this context, only a few studies have focussed on governing and the mobilization of uncertainty arguments in communication between government actors and private developers either in favour of or against megaprojects. The purpose of this article is to shed light on how private megaproject proposals progress towards political acceptance or rejection in public decision-making. The authors’ findings suggest that while public decision-making on megaprojects is a conflictual and dynamic process, some types of uncertainty are relatively more important in affecting the perceived feasibility of the projects in the eyes of public sector decision-makers. This study contributes to the debate on uncertainty management in megaprojects, proposing a new type of uncertainty – uncertainty about privateness – which has not been explicitly visible thus far.