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Title: Essays on Firms, Technology, and Macroeconomics

Citation Type: Dissertation/Thesis

Publication Year: 2020

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Abstract: This thesis consists of three chapters. Chapter 1 studies the role of marketing in the economy. Using aggregate and firm-level data, I find that aggregate marketing intensity in the US increased sharply around the mid-1990s, which coincides with a rapid rise of elasticity between firm-level Marketing Produc- tion Cost Ratio and markup. To explain these facts, I develop a model with heterogeneous firms and endogenous markups in which firms engage in market- ing to signal their quality. I use a calibrated version of the model to quantify the impact of information frictions and marketing on aggregate productivity. I find that quality information revealed by marketing is valuable and access to marketing cannot undo the information frictions completely. Chapter 2 examines the impact of zombie firms on resource allocation. Using firm-level data in China, I show that zombie firms are larger, less productive, and receive a higher subsidy rate on average. The difference in average subsidy rate between zombies and non-zombies reflects both the selection criterion of zombies and the underlying joint distribution of subsidy rate and productivity. I develop a model with heterogeneous firms to quantify the impact of zombies on aggregate productivity. Quantitative exercise shows that reducing the dis- persion in subsidy rate across firms can lead to significant productivity gains, while policies that increase the exit rate of zombies have limited productivity effects. Chapter 3 establishes two facts along with the rise of information technol- ogy: (i) the output from the information sector is more intensively used as an intermediate input; (ii) the wage of information workers and their total em- ployment increase relative to those of non-information workers. To understand the causes, we develop a two-sector accounting framework with sector-factor specific technical changes. We find that labor-augmenting technical change is important in explaining the observed change in wage premium and intermedi- ate shares.

Url: https://etheses.lse.ac.uk/4180/1/Gao__Essays-firms-technology-macroeconomics.pdf

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Authors: Gao, Xijie

Institution: London School of Economics and Political Science

Department: Economics

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Pages: 1-164

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure

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