Papers Containing Tag(s): 'North American Industry Classification System'
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Viewing papers 1 through 10 of 357
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Working PaperAn Anatomy of U.S. Establishments' Trade Linkages in Global Value Chains
June 2025
Working Paper Number:
CES-25-44
Global value chains (GVC) are a pervasive feature of modern production, but they are hard to measure. Using confidential microdata from the U.S. Census Bureau, we develop novel measures of the linkages between U.S. manufacturing establishments' imports and exports. We find that for every dollar of exports, imported inputs represent 13 cents in 2002 and 20 cents by 2017. Examining GVC trade flows in a gravity framework, we find that these flows are higher within 'round-trip' (input and output market is the same) linkages, regional trade agreements, and multinational firm boundaries. The strong complementarities between input and output markets are muted by the proportionality assumptions embedded in global input-output tables. Finally, with an off-the-shelf model, we show the round-trip results can be obtained when firm-specific sourcing and exporting fixed costs are linked.View Full Paper PDF
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Working PaperInvestments under Risk: Evidence from Hurricane Strikes
June 2025
Working Paper Number:
CES-25-43
We demonstrate that firms with plants in areas subject to a significant hurricane strike reduce their capital expenditures at the hurricane-affected plants and shift capital expenditures to plants in non-hurricane-affected areas. This effect is not present prior to 1997 and only appears from 1997 on. Our evidence is consistent with the possibility that a significant climate event such as the signing of the Kyoto Protocol raised the salience of the perceived risk from actual hurricane strikes and shifted firm behavior.View Full Paper PDF
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Working PaperUnderstanding Criminal Record Penalties in the Labor Market
June 2025
Working Paper Number:
CES-25-39
This paper studies the earnings and employment penalties associated with a criminal record. Using a large-scale dataset linking criminal justice and employer-employee wage records, we estimate two-way fixed effects models that decompose earnings into worker's portable earnings potential and firm pay premia, both of which are allowed to shift after a worker acquires a record. We find that firm pay premia explain a small share of earnings gaps between workers with and without a record. There is little evidence of variable within-firm premia gaps either. Instead, components of workers' earnings potential that persist across firms explain the bulk of gaps. Conditional on earnings potential, workers with a record are also substantially less likely to be employed. Difference-in-differences estimates comparing workers' first conviction to workers charged but not convicted or charged later support these findings. The results suggest that criminal record penalties operate primarily by changing whether workers are employed and their earnings potential at every firm rather than increasing sorting into lower-paying jobs, although the bulk of gaps can be attributed to differences that existed prior to acquiring a record.View Full Paper PDF
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Working PaperDynamics of High-Growth Young Firms and the Role of Venture Capitalists
June 2025
Working Paper Number:
CES-25-38
Motivated by the substantial growth and upfront investments of venture capital (VC) backed firms observed in administrative US Census data, this paper develops a firm dynamics model over the life cycle. In the model, startups choose the source of financing from VC, Angel investors, or banks, depending on their growth potential, and invest in innovation. The calibrated model explains the life-cycle dynamics of firms with different sources of financing and implies that venture capitalists' advice accounts for around 22% of the growth of VC-backed firms. A counterfactual economy without VC financing would lose aggregate consumption by around 0.4%.View Full Paper PDF
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Working PaperTapping Business and Household Surveys to Sharpen Our View of Work from Home
June 2025
Working Paper Number:
CES-25-36
Timely business-level measures of work from home (WFH) are scarce for the U.S. economy. We review prior survey-based efforts to quantify the incidence and character of WFH and describe new questions that we developed and fielded for the Business Trends and Outlook Survey (BTOS). Drawing on more than 150,000 firm-level responses to the BTOS, we obtain four main findings. First, nearly a third of businesses have employees who work from home, with tremendous variation across sectors. The share of businesses with WFH employees is nearly ten times larger in the Information sector than in Accommodation and Food Services. Second, employees work from home about 1 day per week, on average, and businesses expect similar WFH levels in five years. Third, feasibility aside, businesses' largest concern with WFH relates to productivity. Seven percent of businesses find that onsite work is more productive, while two percent find that WFH is more productive. Fourth, there is a low level of tracking and monitoring of WFH activities, with 70% of firms reporting they do not track employee days in the office and 75% reporting they do not monitor employees when they work from home. These lessons serve as a starting point for enhancing WFH-related content in the American Community Survey and other household surveys.View Full Paper PDF
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Working PaperFirm Heterogeneity, Misallocation, and Trade
May 2025
Working Paper Number:
CES-25-33
To what extent do domestic distortions influence the gains from trade? Using data from Chinese manufacturing surveys and U.S. census records, I document two novel stylized facts: (1) Larger producers in China exhibit lower revenue productivity, whereas larger producers in the U.S. exhibit higher revenue productivity. (2) Larger exporters in China exhibit lower export intensity, whereas larger exporters in the U.S. exhibit higher export intensity. A model of heterogeneous producers shows that only the U.S. patterns are consistent with an efficient allocation. To reconcile the observed patterns in China, I introduce producer- and destination-specific subsidies and estimate the model without imposing functional form assumptions on the joint distribution of productivity and subsidy rates. Accounting for distortions in China leads to substantially smaller estimated gains from trade.View Full Paper PDF
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Working PaperMulti-Market Contact in International Trade; Evidence from U.S. Battery Exporters
May 2025
Working Paper Number:
CES-25-32
When competitors compete in more than one market they are said to have multi-market contact (MMC). Firms with MMC are more likely collude to avoid cross-market retaliation. This paper investigates the impact of MMC among U.S. battery exporters on the prices they set in foreign markets using confidential export transaction data provided by the U.S. Census Bureau. The ability of firms to exploit MMC for collusive gain in international markets can be both detrimental to import-dependent consumers and harder for anti-trust authorities to detect. Motivated by litigation finding evidence of collusive behavior by multi-national battery manufacturers, MMC has an upward effect on export prices set by U.S. battery exporters. These results are robust across different panel regression specifications using different measures of MMC.View Full Paper PDF
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Working PaperProperty Rights, Firm Size and Investments in Innovation: Evidence from the America Invents Act
May 2025
Working Paper Number:
CES-25-31
I analyze whether a change in patent systems differentially affects firm-level innovation investments at patent-valuing firms of different sizes. Using legally required, economically representative, U.S. Census Bureau microdata, I separate firms into groups based on a firm's response to a question asking it to rank the degree of patent importance to its business and firm-size. I then measure how firms' innovation inputs/outputs respond to the America Invents Act (AIA). Results show the AIA reduced innovation investments at smaller, patent-valuing firms while increasing innovation investments at larger, patent-valuing firms, highlighting differential firm-size effects of patent policy and policy's importance to investments.View Full Paper PDF
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Working PaperImpact Investing and Worker Outcomes
May 2025
Working Paper Number:
CES-25-30
Impact investors claim to distinguish themselves from traditional venture capital and growth equity investors by also pursuing environmental, social, and governance (ESG) objectives. Whether they successfully do so in practice is unclear. We use confidential Census Bureau microdata to assess worker outcomes across portfolio companies. Impact investors are more likely than other private equity firms to fund businesses in economically disadvantaged areas, and the performance of these companies lags behind those held by traditional private investors. We show that post-funding impact-backed firms are more likely to hire minorities, unskilled workers, and individuals with lower historical earnings, perhaps reflecting the higher representation of minorities in top positions. They also allocate wage increases more favorably to minorities and rank-and-file workers than VC-backed firms. Our results are consistent with impact investors and their portfolio companies acting according to non-pecuniary social goals and thus are not consistent with mere window dressing or cosmetic changes.View Full Paper PDF
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Working PaperThe Rise of Industrial AI in America: Microfoundations of the Productivity J-curve(s)
April 2025
Working Paper Number:
CES-25-27
We examine the prevalence and productivity dynamics of artificial intelligence (AI) in American manufacturing. Working with the Census Bureau to collect detailed large-scale data for 2017 and 2021, we focus on AI-related technologies with industrial applications. We find causal evidence of J-curve-shaped returns, where short-term performance losses precede longer-term gains. Consistent with costly adjustment taking place within core production processes, industrial AI use increases work-in-progress inventory, investment in industrial robots, and labor shedding, while harming productivity and profitability in the short run. These losses are unevenly distributed, concentrating among older businesses while being mitigated by growth-oriented business strategies and within-firm spillovers. Dynamics, however, matter: earlier (pre-2017) adopters exhibit stronger growth over time, conditional on survival. Notably, among older establishments, abandonment of structured production-management practices accounts for roughly one-third of these losses, revealing a specific channel through which intangible factors shape AI's impact. Taken together, these results provide novel evidence on the microfoundations of technology J-curves, identifying mechanisms and illuminating how and why they differ across firm types. These findings extend our understanding of modern General Purpose Technologies, explaining why their economic impact'exemplified here by AI'may initially disappoint, particularly in contexts dominated by older, established firms.View Full Paper PDF
