Papers Containing Tag(s): 'Bureau of Economic Analysis'
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Viewing papers 1 through 10 of 225
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Working PaperThe U.S. Multinational Advantage during the 2008-2009 Financial Crisis: The Role of Services Trade
January 2026
Working Paper Number:
CES-26-04
We document the augmenting role of services exports in U.S. multinationals' goods-export growth during the global financial crisis. Using newly linked data on U.S. firms' foreign sales of goods and services and a triple-difference identification strategy combined with propensity-score matching, we find that compared to multinationals that only export goods (mono-exporters), multinationals that also export services to the same destination (bi-exporters) experienced higher goods-export growth. This result is driven by sales of intellectual property rights related to industrial processes (e.g., patents, trademarks). We also find higher growth in bi-exporters' foreign affiliate services sales and domestic employment in services sectors. These results reveal a pivotal role of services exports in supporting foreign demand for U.S. goods during the crisis.View Full Paper PDF
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Working PaperSame Shock, Separate Channels: House Prices and Firm Performance in the Great Recession
January 2026
Working Paper Number:
CES-26-03
Combining confidential business-level microdata with housing and banking data, I document large and persistent effects of local house prices on employment at small businesses, and particularly young businesses, during the Great Recession. I show that the effect on entry is important for explaining the disproportionate effect on young businesses, while young firm exit is also disproportionately affected. I then explore the channels through which house prices affect business outcomes. I use survey data to show that reliance on either personal assets or home equity is associated with increased sensitivity to house prices. I then use local bank balance sheet information to show both young and old firms are sensitive to local credit shocks, with some evidence of a larger effect on young businesses. I develop a macroeconomic model that is consistent with these findings where house prices work through two channels: a bank credit supply channel and a housing collateral channel.View Full Paper PDF
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Working Paper'Class of Customer' Question from the US Economic Census
September 2025
Working Paper Number:
CES-25-66
The Economic Census (EC) collects detailed information on the class of customers served by establishments'for example, the share of an establishment's sales to other businesses or to government entities'for a subset of sectors in the economy. In this paper, we evaluate the data from the 'Class of Customer' question from the EC, with a particular focus on sales to the government. These data have seldom been used in empirical research and are unique in that they enable researchers to link establishment-level Census data with information on government procurement. We compile and analyze large volumes of publicly available tabulated data about the class of customer question over time. Using these data, we document three main findings. First, total sales to government from establishments covered by the class of customer question account for approximately 4 percent of GDP'just under half of total government procurement as measured in the national accounts. Second, the sectoral distribution of government expenditure is significantly different from that of private sector spending. Certain industries, such as Construction and Professional, Scientific, and Technical Services, account for a much larger share of government expenditure relative to private sector expenditure. Third, sales to the government make up a substantial portion of total sales in several sectors'for instance, 70 percent in Facilities Support Services, 30 percent in Waste Treatment and Disposal, and 17 percent in Construction. Finally, we use the microdata to examine nonresponse rates to the class of customer question across establishments based on the number of employees.View Full Paper PDF
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Working Paper'Oh, Give Me a Home (Trade Share)': Differential Import Price Inflation and Gains from Trade Across U.S. Households
July 2025
Working Paper Number:
CES-25-47
Consumers are differentially exposed to trade based on their expenditures, but there is little data on how such trade exposure differs across consumer groups and over time. In this paper, we construct 'home trade shares' that vary by age, race, marital status, education, and urban status, and use these to analyze differences in inflation and welfare gains from trade for U.S. demographic groups over the years 1996'2018. We show that over this time period, import prices (inclusive of the effects of taste change) held down overall inflation for all groups. For the typical group, more than a quarter of the gains from trade relative to autarky accrued in our time period. Welfare gains from trade over our time period are largest for rural households, and smallest for Black households. Adding taste change to the typical welfare gains from trade formula boosts the gains for every group relative to the standard formula.View Full Paper PDF
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Working PaperTrade Within Multinational Boundaries
July 2025
Working Paper Number:
CES-25-46
We leverage newly linked data from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis to study transactions within U.S. multinational enterprises (MNEs). We show that using administrative data on intrafirm trade allows us to correct for measurement error in survey data and to identify the positive relationship between input-output (IO) linkages and the probability of trade between U.S. parents and their foreign affiliates. We also document the prevalence of intrafirm trade: more than half (three-quarters) of affiliates worldwide (in North America) export to or import from their U.S. parent. Our findings provide strong empirical support for traditional theories of firm boundaries that predict trade between vertically linked units of the same firm, and underscore the importance of accounting for the trade frictions that shape MNEs' regional supply chains.View Full Paper PDF
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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 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 PaperThe Rising Returns to R&D: Ideas Are Not Getting Harder to Find
May 2025
Working Paper Number:
CES-25-29
R&D investment has grown robustly, yet aggregate productivity growth has stagnated. Is this because 'ideas are getting harder to find'? This paper uses micro-data from the US Census Bureau to explore the relationship between R&D and productivity in the manufacturing sector from 1976 to 2018. We find that both the elasticity of output (TFP) with respect to R&D and the marginal returns to R&D have risen sharply. Exploring factors affecting returns, we conclude that R&D obsolescence rates must have risen. Using a novel estimation approach, we find consistent evidence of sharply rising technological rivalry. These findings suggest that R&D has become more effective at finding productivity-enhancing ideas but these ideas may also render rivals' technologies obsolete, making innovations more transient.View Full Paper PDF
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Working PaperThe Intangible Divide: Why Do So Few Firms Invest in Innovation?
February 2025
Working Paper Number:
CES-25-15
Investments in software, R&D, and advertising have surged, nearing half of U.S. private nonresidential investment. Yet just a few hundred firms dominate this growth. Most firms, including large ones, regularly invest little in capitalized software and R&D, widening this 'intangible divide' despite falling intangible prices. Using comprehensive US Census microdata, we document these patterns and explore factors associated with intangible investment. We find that firms invest significantly less in innovation-related intangibles when their rivals invest more. One firm's investment can obsolesce rivals' investments, reducing returns. This negative pecuniary externality worsens the intangible divide, potentially leading to significant misallocation.View Full Paper PDF
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Working PaperFighting Fire with Fire(fighting Foam): The Long Run Effects of PFAS Use at U.S. Military Installations
December 2024
Working Paper Number:
CES-24-72
Tens of millions of people in the U.S. may be exposed to drinking water contaminated with perand poly-fluoroalkyl chemicals (PFAS). We provide the first estimates of long-run economic costs from a major, early PFAS source: fire-fighting foam. We combine the timing of its adoption with variation in the presence of fire training areas at U.S. military installations in the 1970s to estimate exposure effects for millions of individuals using natality records and restricted administrative data. We document diminished birthweights, college attendance, and earnings, illustrating a pollution externality from military training and unregulated chemicals as a determinant of economic opportunity.View Full Paper PDF
