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Papers Containing Keywords(s): 'finance'

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Longitudinal Business Database - 38

Standard Industrial Classification - 25

Ordinary Least Squares - 23

Center for Economic Studies - 21

North American Industry Classification System - 21

National Science Foundation - 21

Federal Reserve Bank - 18

Census Bureau Disclosure Review Board - 17

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Business Dynamics Statistics - 9

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Alfred P Sloan Foundation - 9

Census Bureau Business Register - 8

Disclosure Review Board - 8

International Trade Research Report - 8

Standard Statistical Establishment List - 8

Chicago Census Research Data Center - 8

Survey of Business Owners - 7

Center for Research in Security Prices - 7

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Journal of Economic Literature - 4

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National Income and Product Accounts - 4

Current Population Survey - 4

PSID - 4

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Financial, Insurance and Real Estate Industries - 4

Boston College - 4

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Survey of Income and Program Participation - 3

National Institute on Aging - 3

Regression Discontinuity Design - 3

Generalized Method of Moments - 3

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2010 Census - 3

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Employer-Household Dynamics - 3

University of California Los Angeles - 3

Federal Reserve Bank of Chicago - 3

Linear Probability Models - 3

Michigan Institute for Teaching and Research in Economics - 3

Net Present Value - 3

Cornell University - 3

Duke University - 3

financial - 39

investment - 29

financing - 28

debt - 23

leverage - 22

market - 21

loan - 20

bank - 18

bankruptcy - 17

lender - 17

entrepreneur - 17

company - 16

recession - 16

equity - 15

entrepreneurship - 15

investor - 14

lending - 14

earnings - 13

borrower - 13

invest - 13

economically - 13

borrowing - 12

enterprise - 12

banking - 12

macroeconomic - 12

acquisition - 11

sector - 10

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entrepreneurial - 10

liquidation - 9

corporation - 9

growth - 9

employ - 9

econometric - 9

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funding - 8

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quarterly - 8

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estimating - 6

sale - 6

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establishment - 5

security - 5

asset - 5

younger firms - 5

earn - 5

spillover - 5

firms plants - 5

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agency - 4

longitudinal - 4

innovation - 4

firms size - 4

profit - 4

survey - 4

saving - 4

conglomerate - 4

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employment dynamics - 4

merger - 4

contract - 4

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incorporated - 3

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research - 3

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manufacturing - 3

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estimation - 3

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prospect - 3

demand - 3

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immigrant - 3

census bureau - 3

filing - 3

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premium - 3

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Viewing papers 1 through 10 of 71


  • Working Paper

    Leveraged Payouts: How Using New Debt to Pay Returns in Private Equity Affects Firms, Employees, Creditors, and Investors

    January 2025

    Working Paper Number:

    CES-25-12

    We study the causal effect of a large increase in firm leverage. Our setting is dividend recapitalizations in private equity (PE), where portfolio companies take on new debt to pay investor returns. After accounting for positive selection into more debt, we show that large leverage increases make firms much riskier, dramatically raising exit and bankruptcy rates but also IPOs. The debt-bankruptcy relationship is in line with Altman-Z model predictions for private firms. Dividend recapitalizations increase deal returns but reduce: (a) wages among surviving firms; (b) pre-existing loan prices; and (c) fund returns, which seems to reflect moral hazard via new fundraising. These results suggest negative implications for employees, pre-existing creditors, and investors.
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  • Working Paper

    Measuring the Business Dynamics of Firms that Received Pandemic Relief Funding: Findings from a New Experimental BDS Data Product

    January 2025

    Working Paper Number:

    CES-25-05

    This paper describes a new experimental data product from the U.S. Census Bureau's Center for Economic Studies: the Business Dynamics Statistics (BDS) of firms that received Small Business Administration (SBA) pandemic funding. This new product, BDS-SBA COVID, expands the set of currently published BDS tables by linking loan-level program participation data from SBA to internal business microdata at the U.S. Census Bureau. The linked programs include the Paycheck Protection Program (PPP), COVID Economic Injury Disaster Loans (COVID-EIDL), the Restaurant Revitalization Fund (RRF), and Shuttered Venue Operators Grants (SVOG). Using these linked data, we tabulate annual firm and establishment counts, measures of job creation and destruction, and establishment entry and exit for recipients and non-recipients of program funds in 2020-2021. We further stratify the tables by timing of loan receipt and loan size, and business characteristics including geography, industry sector, firm size, and firm age. We find that for the youngest firms that received PPP, the timing of receipt mattered. Receiving an early loan correlated with a lower job destruction rate compared to non-recipients and businesses that received a later loan. For the smallest firms, simply participating in PPP was associated with lower employment loss. The timing of PPP receipt was also related to establishment exit rates. For businesses of nearly all ages, those that received an early loan exited at a lower rate in 2022 than later loan recipients.
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  • Working Paper

    A Granular Look into Firms' Cash Portfolios

    January 2025

    Authors: Youngsuk Yook

    Working Paper Number:

    CES-25-02

    This paper uses confidential Census data to provide a granular look into the U.S. firms' cash holding portfolios encompassing nearly four decades. The data provide information on short-term investment securities held in the portfolios, such as time deposits, commercial paper and government securities in addition to cash. The security-level information reveals that portfolios of the same size can have very different levels of liquidity and riskiness as the composition of securities varies considerably across firms and over time. Firms with strong precautionary motives tend to allocate more toward relatively more liquid and less risky securities. Firms actively rebalance their portfolios in response to changing economic conditions or idiosyncratic shocks to securities they hold. Event studies using shocks to Treasury securities and commercial paper shows firms shifting away from affected securities and simultaneously adjusting weights of other securities.
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  • Working Paper

    Financing, Ownership, and Performance: A Novel, Longitudinal Firm-Level Database

    December 2024

    Working Paper Number:

    CES-24-73

    The Census Bureau's Longitudinal Business Database (LBD) underpins many studies of firm-level behavior. It tracks longitudinally all employers in the nonfarm private sector but lacks information about business financing and owner characteristics. We address this shortcoming by linking LBD observations to firm-level data drawn from several large Census Bureau surveys. The resulting Longitudinal Employer, Owner, and Financing (LEOF) database contains more than 3 million observations at the firm-year level with information about start-up financing, current financing, owner demographics, ownership structure, profitability, and owner aspirations ' all linked to annual firm-level employment data since the firm hired its first employee. Using the LEOF database, we document trends in owner demographics and financing patterns and investigate how these business characteristics relate to firm-level employment outcomes.
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  • Working Paper

    Industry Shakeouts after an Innovation Breakthrough

    November 2024

    Authors: Xiaoyang Li

    Working Paper Number:

    CES-24-70

    Conventional wisdom suggests that after a technological breakthrough, the number of active firms first surges, and then sharply declines, in what is known as a 'shakeout'. This paper challenges that notion with new empirical evidence from across the U.S. economy, revealing that shakeouts are the exception, not the rule. I develop a statistical strategy to detect breakthroughs by isolating sustained anomalies in net firm entry rates, offering a robust alternative to narrative-driven approaches that can be applied to all industries. The results of this strategy, which reliably align with well-documented breakthroughs and remain consistent across various validation tests, uncover a novel trend: the number of entry-driven breakthroughs has been declining over time. The variability and frequent absence of shakeouts across breakthrough industries are consistent with breakthroughs primarily occurring in industries with low returns to scale and with modest learning curves, shifting the narrative on the nature of innovation over the past forty years in the U.S.
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  • Working Paper

    Socially Responsible Investment and Gender Equality in the United States Census

    August 2024

    Authors: Minsu Ko, Cynthia Yin

    Working Paper Number:

    CES-24-44

    With administrative data, we test whether institutional ownership with a social preference is related to employee-level gender equality. We show that the gender pay gap, which is an unexplained part of the lower wages of female employees, does not have a significant relation with socially responsible investments. Next, we show that female directorship strengthens the relation between socially responsible investments and the gender pay gap. When there are female directors, socially responsible investments have a robust correlation with a lower gender pay gap. This is because female directorship alleviates information asymmetry in gender equality.
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  • Working Paper

    Employer Dominance and Worker Earnings in Finance

    August 2024

    Authors: Wenting Ma

    Working Paper Number:

    CES-24-41

    Large firms in the U.S. financial system achieve substantial economic gains. Their dominance sets them apart while also raising concerns about the suppression of worker earnings. Utilizing administrative data, this study reveals that the largest financial firms pay workers an average of 30.2% more than their smallest counterparts, significantly exceeding the 7.9% disparity in nonfinance sectors. This positive size-earnings relationship is consistently more pronounced in finance, even during the 2008 crisis or compared to the hightech sector. Evidence suggests that large financial firms' excessive gains, coupled with their workers' sought-after skills, explain this distinct relationship.
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  • Working Paper

    Measuring Income of the Aged in Household Surveys: Evidence from Linked Administrative Records

    June 2024

    Working Paper Number:

    CES-24-32

    Research has shown that household survey estimates of retirement income (defined benefit pensions and defined contribution account withdrawals) suffer from substantial underreporting which biases downward measures of financial well-being among the aged. Using data from both the redesigned 2016 Current Population Survey Annual Social and Economic Supplement (CPS ASEC) and the Health and Retirement Study (HRS), each matched with administrative records, we examine to what extent underreporting of retirement income affects key statistics such as reliance on Social Security benefits and poverty among the aged. We find that underreporting of retirement income is still prevalent in the CPS ASEC. While the HRS does a better job than the CPS ASEC in terms of capturing retirement income, it still falls considerably short compared to administrative records. Consequently, the relative importance of Social Security income remains overstated in household surveys'53 percent of elderly beneficiaries in the CPS ASEC and 49 percent in the HRS rely on Social Security for the majority of their incomes compared to 42 percent in the linked administrative data. The poverty rate for those aged 65 and over is also overstated'8.8 percent in the CPS ASEC and 7.4 percent in the HRS compared to 6.4 percent in the linked administrative data. Our results illustrate the effects of using alternative data sources in producing key statistics from the Social Security Administration's Income of the Aged publication.
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  • Working Paper

    After the Storm: How Emergency Liquidity Helps Small Businesses Following Natural Disasters

    April 2024

    Working Paper Number:

    CES-24-20

    Does emergency credit prevent long-term financial distress? We study the causal effects of government-provided recovery loans to small businesses following natural disasters. The rapid financial injection might enable viable firms to survive and grow or might hobble precarious firms with more risk and interest obligations. We show that the loans reduce exit and bankruptcy, increase employment and revenue, unlock private credit, and reduce delinquency. These effects, especially the crowding-in of private credit, appear to reflect resolving uncertainty about repair. We do not find capital reallocation away from neighboring firms and see some evidence of positive spillovers on local entry.
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  • Working Paper

    Good Dispersion, Bad Dispersion

    March 2024

    Working Paper Number:

    CES-24-13

    We document that most dispersion in marginal revenue products of inputs occurs across plants within firms rather than between firms. This is commonly thought to reflect misallocation: dispersion is 'bad.' However, we show that eliminating frictions hampering internal capital markets in a multi-plant firm model may in fact increase productivity dispersion and raise output: dispersion can be 'good.' This arises as firms optimally stagger investment activity across their plants over time to avoid raising costly external finance, instead relying on reallocating internal funds. The staggering in turn generates dispersion in marginal revenue products. We use U.S. Census data on multi-plant manufacturing firms to provide empirical evidence for the model mechanism and show a quantitatively important role for good dispersion. Since there is less scope for good dispersion in emerging economies, the difference in the degree of misallocation between emerging and developed economies looks more pronounced than previously thought.
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