Contracts, Firm Dynamics and Aggregate Productivity

We construct a framework of firm dynamics to evaluate the impact of the enforcement of contracts between final goods producers and their intermediate goods suppliers on firm life-cycle growth, technology accumulation and aggre-gate productivity. We build upon the tractable contracts model of Acemogl...

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Autores:
Lopez Martin, Bernabe
Perez Reyna, David
Tipo de recurso:
Work document
Fecha de publicación:
2018
Institución:
Universidad de los Andes
Repositorio:
Séneca: repositorio Uniandes
Idioma:
spa
OAI Identifier:
oai:repositorio.uniandes.edu.co:1992/41046
Acceso en línea:
http://hdl.handle.net/1992/41046
Palabra clave:
Size dependent-distortions
Contracts
Aggregate productivity
firm dynamics
D86, E23, O11, O40
Rights
openAccess
License
http://creativecommons.org/licenses/by-nc-nd/4.0/
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spelling Al consultar y hacer uso de este recurso, está aceptando las condiciones de uso establecidas por los autores.http://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccesshttp://purl.org/coar/access_right/c_abf2Lopez Martin, Bernabe84d2fd41-98f5-4563-ba47-8447c194243f500Perez Reyna, Davida645aee0-7104-43aa-b5da-e26e373709a64002020-07-28T17:15:52Z2020-07-28T17:15:52Z20181657-5334http://hdl.handle.net/1992/410461657-719110.57784/1992/41046instname:Universidad de los Andesreponame:Repositorio Institucional Sénecarepourl:https://repositorio.uniandes.edu.co/We construct a framework of firm dynamics to evaluate the impact of the enforcement of contracts between final goods producers and their intermediate goods suppliers on firm life-cycle growth, technology accumulation and aggre-gate productivity. We build upon the tractable contracts model of Acemoglu et al. (2007), where the final goods firm chooses technology in contractible activi- ties conducted by suppliers of intermediate inputs. Suppliers select investments in noncontractible activities, anticipating the pay offs of a bargaining game with the producer of the final goods. We show that contractual incompleteness im-plies a wedge on profits for producers of final goods, potentially dependent on the level of technology of the firm, which disincentives technology accumulation at the firm level in our dynamic model. We evaluate this mechanism in general equilibrium to analyze its quantitative implications. Our model accounts for differences in output per worker of up to 33 percent across economies with complete and incomplete contracts. The impact on firm life-cycle growth, the age and size distribution of firms is quantitatively significant.28 páginasspaUniversidad de los Andes, Facultad de Economía, CEDEDocumentos CEDE No. 47 Octubre de 2018https://ideas.repec.org/p/col/000089/016821.htmlContracts, Firm Dynamics and Aggregate ProductivityDocumento de trabajoinfo:eu-repo/semantics/workingPaperhttp://purl.org/coar/resource_type/c_8042http://purl.org/coar/version/c_970fb48d4fbd8a85Texthttps://purl.org/redcol/resource_type/WPSize dependent-distortionsContractsAggregate productivityfirm dynamicsD86, E23, O11, O40Facultad de EconomíaPublicationTHUMBNAILdcede2018-47.pdf.jpgdcede2018-47.pdf.jpgIM Thumbnailimage/jpeg10625https://repositorio.uniandes.edu.co/bitstreams/e77bd0e2-41e8-4084-9f81-2d2c7e5e2b2d/download91432ffa0ca8454dcfd5cf21e0979136MD55TEXTdcede2018-47.pdf.txtdcede2018-47.pdf.txtExtracted texttext/plain56258https://repositorio.uniandes.edu.co/bitstreams/baea8e43-9c8d-4053-8814-e108c8c12e46/download436a267c6ac6a718ecc2d818ba5264c1MD54ORIGINALdcede2018-47.pdfdcede2018-47.pdfapplication/pdf1415971https://repositorio.uniandes.edu.co/bitstreams/628ebbf9-d3fe-47ca-8b07-9efb96866162/download4b6f719865ce04222d35abb2d8fb68b8MD511992/41046oai:repositorio.uniandes.edu.co:1992/410462024-06-04 15:44:22.782http://creativecommons.org/licenses/by-nc-nd/4.0/open.accesshttps://repositorio.uniandes.edu.coRepositorio institucional Sénecaadminrepositorio@uniandes.edu.co
dc.title.none.fl_str_mv Contracts, Firm Dynamics and Aggregate Productivity
title Contracts, Firm Dynamics and Aggregate Productivity
spellingShingle Contracts, Firm Dynamics and Aggregate Productivity
Size dependent-distortions
Contracts
Aggregate productivity
firm dynamics
D86, E23, O11, O40
title_short Contracts, Firm Dynamics and Aggregate Productivity
title_full Contracts, Firm Dynamics and Aggregate Productivity
title_fullStr Contracts, Firm Dynamics and Aggregate Productivity
title_full_unstemmed Contracts, Firm Dynamics and Aggregate Productivity
title_sort Contracts, Firm Dynamics and Aggregate Productivity
dc.creator.fl_str_mv Lopez Martin, Bernabe
Perez Reyna, David
dc.contributor.author.none.fl_str_mv Lopez Martin, Bernabe
Perez Reyna, David
dc.subject.keyword.none.fl_str_mv Size dependent-distortions
Contracts
Aggregate productivity
firm dynamics
topic Size dependent-distortions
Contracts
Aggregate productivity
firm dynamics
D86, E23, O11, O40
dc.subject.jel.none.fl_str_mv D86, E23, O11, O40
description We construct a framework of firm dynamics to evaluate the impact of the enforcement of contracts between final goods producers and their intermediate goods suppliers on firm life-cycle growth, technology accumulation and aggre-gate productivity. We build upon the tractable contracts model of Acemoglu et al. (2007), where the final goods firm chooses technology in contractible activi- ties conducted by suppliers of intermediate inputs. Suppliers select investments in noncontractible activities, anticipating the pay offs of a bargaining game with the producer of the final goods. We show that contractual incompleteness im-plies a wedge on profits for producers of final goods, potentially dependent on the level of technology of the firm, which disincentives technology accumulation at the firm level in our dynamic model. We evaluate this mechanism in general equilibrium to analyze its quantitative implications. Our model accounts for differences in output per worker of up to 33 percent across economies with complete and incomplete contracts. The impact on firm life-cycle growth, the age and size distribution of firms is quantitatively significant.
publishDate 2018
dc.date.issued.none.fl_str_mv 2018
dc.date.accessioned.none.fl_str_mv 2020-07-28T17:15:52Z
dc.date.available.none.fl_str_mv 2020-07-28T17:15:52Z
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url http://hdl.handle.net/1992/41046
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language spa
dc.relation.ispartofseries.none.fl_str_mv Documentos CEDE No. 47 Octubre de 2018
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dc.rights.uri.*.fl_str_mv http://creativecommons.org/licenses/by-nc-nd/4.0/
dc.rights.accessrights.spa.fl_str_mv info:eu-repo/semantics/openAccess
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http://purl.org/coar/access_right/c_abf2
eu_rights_str_mv openAccess
dc.format.extent.none.fl_str_mv 28 páginas
dc.publisher.none.fl_str_mv Universidad de los Andes, Facultad de Economía, CEDE
publisher.none.fl_str_mv Universidad de los Andes, Facultad de Economía, CEDE
institution Universidad de los Andes
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