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- PublicationCapital-Energy Substitution: Evidence from a Panel of Irish Manufacturing FirmsUsing firm-level data from the Irish Census of Industrial Production for the period from 1991-2009, we look at how Irish manufacturing firms adjust their input mix in response to changing energy prices. We find that an increase in the price of energy causes the demand for energy inputs to fall, while the demand for capital, material and labour inputs rises. This indicates that the other factors of production are substitutable with energy in the Irish manufacturing sector.
- PublicationWhat Determines the Diffusion of ICT at Firm Level?Empirical evidence indicates that the diffusion of ICT has been uneven across firms, industries, regions and countries. From the policy perspective, to the extent that a wide and fast diffusion of ICT is desirable, it is essential to understand what factors are likely to influence the diffusion of ICT. New technologies are adopted at different dates and speed depending on firm characteristics and the characteristics of the environment in which firms operate. To understand the diffusion of ICT as a new technology it is essential to uncover the factors that explain the variation in the rates of its adoption and use across firms, industries, regions and countries.
- PublicationOwnership Change and its Implications for the Match between the Plant and its WorkersIs ownership change an opportunity for new owners to make systematic changes in the workforce of the acquired plant? This paper explores the adjustments to plant size and the composition of the workforce that occur around ownership change using matched employer-employee data. Furthermore,we explore changes in the workforce along unobservable dimensions of worker quality and the quality of the match between the plant and its workers. We observe excess labour turnover around ownership change, but only in the case of foreign acquisitions do we find an improvement in unobserved worker and match quality at the plant level.
- PublicationInternationalisation of Services, Productivity and Economic Growth: Literature ReviewOver the past decade there has been an increased internationalisation of services via trade and investment as well as an increased international outsourcing of services. However, to date there is a lack of solid empirical evidence on the extent and determinants of the internationalisation of services in the European Union and its effects on productivity, employment growth and competitiveness. This study discusses recent theory and empirical evidence on the internationalisation of services and its effects on firm performance. In addition, it outlines existing knowledge gaps and proposes a research agenda and methodology to address them.
- PublicationExporters and Shocks: Dissecting the International Elasticity PuzzleAggregate exports are not very responsive to real exchange rates, though they re- spond strongly to trade liberalizations, a fact sometimes referred to as the International Elasticity Puzzle. We use micro data on firms and exports for Ireland to dissect the puzzle. Our identification strategy uses within-firm-year cross-market variation in real exchange rates and tariffs to identify the responses of export participation, export rev- enue and the product dimension of exporting to these variables. We show that (i) the weak response of export revenue of long-time market participants to real exchange rates is key to the behavior of aggregate exports, (ii) export participation also responds less to real exchange rates than to tariffs, but this alone cannot explain the puzzle; and (iii) the revenue response of long-time market participants cannot be accounted for by product entry responses. Hence any model that can successfully account for the puzzle needs to match the intensive margin responses of exporting firms.
- PublicationFirm-level estimates of fuel substitution: an application to carbon pricingWe estimate partial- and total-fuel substitution elasticities between electricity, gas and oil, using firm-level data. We find that, based on the partial elasticity measure, electricity is the least-responsive fuel to changes in its own price and in the price of other fuels. The total elasticity measure, which adjusts the partial elasticity for changes in aggregate energy demand induced by individual fuel price changes, reveals that the demand for electricity is much more price responsive than the partial elasticity suggests. Our results illustrate the importance of accounting for the feedback effect between interfactor and interfuel substitution elasticities when considering the effectiveness of environmental taxation. We use the estimated elasticities to simulate the impact of a e15/tCO2 carbon tax on average energy-related CO2 emissions. The carbon tax results in a small reduction in CO2 emissions from oil and gas use, but this reduction is partially offset by an increase in emissions due to increased electricity consumption by some firms.
- PublicationHow Exporters GrowWe document how export quantities and prices evolve after entry to a market. Controlling for marginal cost, and taking account of selection on idiosyncratic demand, there are economically and statistically significant dynamics of quantities, but no dynamics of prices. To match these facts, we estimate a model where firms invest in customer base through non-price actions (e.g. marketing and advertising), and learn gradually about their idiosyncratic demand. The model matches quantity, price and exit moments. Parameter estimates imply costs of adjusting investment in customer base, and slow learning about demand, both of which generate sluggish responses of sales to shocks.
- PublicationProductivity is higher among some service firms when broadband becomes available, but not allUsing internet services over broadband connections may help some firms become more productive, generating more output from a given amount of labour and capital equipment. However, there is mixed evidence internationally about how large this benefit has been in practice and which types of firms are most likely to improve their productivity by using these technologies. In this research we examine the effects of broadband availability on the productivity of service sector firms.
- PublicationIntra-firm trade, exporting, importing and firm performance(Wiley, 2012-11)This paper examines firm heterogeneity in terms of size, wages, capital intensity, and productivity between domestic and foreign-owned firms that engage in intra-firm trade, firms that export and import, firms that import only, and firms that export only. As previously documented, heterogeneity between different groups of trading firms issubstantial. Taking into account intra-firm trade in addition to exporting and importingyields new insights into the productivity advantage previously established for exportingfirms. The results presented here show that this premium accrues only to exporters thatalso import and to exporters that also engage in intra-firm trade, but not to firms that export only. Using simultaneous quantile regressions, the paper illustrates that heterogeneity within different groups of trading firm is equally large. Some of this within-group heterogeneity can be attributed to differences in trading partners
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