Are subsidies to business R&D effective? Regression discontinuity evidence from the TA CR ALFA programme
Bajgar, Matěj; Srholec, Martin
2023 - English Governments subsidise business research and experimental development (R&D) to promote development of the economy, because externalities and information asymmetries inherent to the innovation process make private funding of these activities fall short of what is socially desirable. Nevertheless, how effective such subsidies are and whether they achieve their goals is an open question that needs to be studied empirically. This study leverages the state-of-the-art method of regression discontinuity (RD) that allows us to come very close to making causal inferences about the effects of subsidies, to find out whether the Technology Agency of the Czech Republic’s (TA CR) ALFA programme stimulated new business R&D inputs, outputs, and positive economic impacts that would not have happened otherwise. Keywords: government subsidies; innovations; economic development Fulltext is available at external website. Are subsidies to business R&D effective? Regression discontinuity evidence from the TA CR ALFA programme

Governments subsidise business research and experimental development (R&D) to promote development of the economy, because externalities and information asymmetries inherent to the innovation process ...

Bajgar, Matěj; Srholec, Martin
Národohospodářský ústav, 2023

Sexual-orientation discrimination and biological attributions: experimental evidence from Russia
Baghumyan, Gayane
2023 - English Understanding what drives discriminatory behavior is important in order to identify the best strategy to combat it. In this study, I exogenously manipulate participants’ beliefs about the origins of sexual orientation by providing evidence that supports biological causes of homosexuality. I employ money allocation tasks to measure discrimination. This allows me to causally identify the impact of information on discriminatory behavior. I first document the prevalence of discrimination against individuals with same-sex partners in Russia. On average, roughly 54% of participants exhibit discriminatory behavior against profiles with same-sex partners by allocating 16 percentage points less money to them. Further, the results suggest that exposure to evidence on the biological causes of homosexuality negatively affects discriminatory behavior. Participants in the treatment group allocate less money to profiles with same-sex partners, relative to participants in the baseline group. Potential rationales for this behavior could include the following: (i) the provision of information that contradicts existing beliefs might cause cognitive dissonance, triggering irritation and intensifying discriminatory tendencies, (ii) the information might foster beliefs that individuals in same-sex partnerships are fundamentally ’other’ - even at a biological level - thereby widening the perceived social gap between participants and these sexual minority groups and fostering discrimination further. Keywords: discrimination; information; sexual minorities Fulltext is available at external website. Sexual-orientation discrimination and biological attributions: experimental evidence from Russia

Understanding what drives discriminatory behavior is important in order to identify the best strategy to combat it. In this study, I exogenously manipulate participants’ beliefs about the origins of ...

Baghumyan, Gayane
Národohospodářský ústav, 2023

Hostility, population sorting, and backwardness: quasi-experimental evidence from the Red Army after WWII
Ochsner, Christian
2023 - English Does a short episode of conflict or exposure to hostile troops cause regional economic backwardness, and if so, why and how does it persist? I answer these questions by exploiting economic differences across the idiosyncratic and short-lived line of contact between the Red Army and the Western Allies in South Austria at the end of WWII. Spatial regression discontinuity estimates show that hostile presence of the Red Army for 74 days caused an immediate relative population decline of around 12%, amplified to 25% by today. Age-specific migration patterns and subsequent fertility differences explain the multiplying effects. Sector development and measures of local labor productivity in 2011 also lag behind in regions briefly seized by the Red Army, likely driven by skill-specific migration and hampered investment patterns after WWII. The findings provide novel insights into the long-run effects of wars and conflicts, and point to the isolated role of the Red Army’s hostile actions after WWII to understand the European economic East-West divide.\n Keywords: conflict; hostility; population shock Fulltext is available at external website. Hostility, population sorting, and backwardness: quasi-experimental evidence from the Red Army after WWII

Does a short episode of conflict or exposure to hostile troops cause regional economic backwardness, and if so, why and how does it persist? I answer these questions by exploiting economic differences ...

Ochsner, Christian
Národohospodářský ústav, 2023

Facts and figures on gender in entrepreneurship and innovation
Křížková, Alena; Marková Volejníčková, Romana; Pospíšilová, Marie; Vohlídalová, Marta
2023 - English Keywords: gender equality; gender in entrepreneurship; gender in science; gender in innovation; gender stereotypes; good practices Available in digital repository of the ASCR Facts and figures on gender in entrepreneurship and innovation

Křížková, Alena; Marková Volejníčková, Romana; Pospíšilová, Marie; Vohlídalová, Marta
Sociologický ústav, 2023

Quo vadis? Evidence on new firm-bank matching and firm performance following “sin” bank closures
Goncharenko, R.; Mamonov, Mikhail; Ongena, S.; Popova, S.; Turdyeva, N.
2023 - English In this paper, we analyze how firms search for new lenders after a financial regulator forcibly closes their prior banks, and what happens to the firms’ performance during this transition period. In 2013, the Central Bank of Russia launched a large-scale bank closure policy and started detecting fraudulent (sin) banks and revoking their licenses. By 2020, two-thirds of all operating banks had been shuttered. We analyze this unique period in history using credit register data. First, we establish that before sin bank closures, there was no informational leakage and the borrowing firms remain unaffected. After the closures, there is a clear sorting pattern: poorly-performing firms rush to other (not-yet-detected) sin banks, while profitable firms transfer to financially solid banks. We find that the coupling of poorly-performing firms and not-yet-detected sin banks occurs more frequently when the two sin banks (the prior and the next lender) are commonly owned or when the local banking market is unconcentrated. Finally, we show that during the transition period (i.e., after the sin bank closures and before matching to new banks), poorly-performing firms shrink in size and experience a sharp decline in borrowings and market sales, whereas profitable firms strengthen in terms of employment, investment, and market sales. A potential mechanism involves credit risk underpricing by sin banks: we find that poorly-performing firms (especially commonly owned) received loans at lower interest rates than profitable firms prior to sin bank closures. Keywords: credit register; bank clean-up; regulatory forbearance Fulltext is available at external website. Quo vadis? Evidence on new firm-bank matching and firm performance following “sin” bank closures

In this paper, we analyze how firms search for new lenders after a financial regulator forcibly closes their prior banks, and what happens to the firms’ performance during this transition period. In ...

Goncharenko, R.; Mamonov, Mikhail; Ongena, S.; Popova, S.; Turdyeva, N.
Národohospodářský ústav, 2023

The price of war: macroeconomic and cross-sectional effects of sanctions on Russia
Mamonov, Mikhail; Pestova, Anna
2023 - English How much do sanctions harm the sanctioned economy? We examine the case of Russia, which has faced three major waves of international sanctions over the last decade (in 2014, 2017, and 2022). In a VAR model of the Russian economy, we first apply sign restrictions to isolate shocks to international credit supply to proxy for the financial sanctions shocks. We provide a microeconomic foundation for the sign restriction approach by exploiting the syndicated loan deals in Russia. We then explore the effects of the overall sanctions shocks (financial, trade, technological, etc.) by employing a high-frequency identification (HFI) approach. Our HFI is based on each OFAC/EU sanction announcement and the associated daily changes in the yield-to-maturity of Russia’s US dollar-denominated sovereign bonds. Our macroeconomic estimates indicate that Russia’s GDP may have lost no more than 0.8% due to the financial sanctions shock, and up to 3.2% due to the overall sanctions shock cumulatively over the 2014–2015 period. In 2017, the respective effects are 0 and 0.5%, and in 2022, they are 8 and 12%. Our cross-sectional estimates show that the real income of richer households declines by 1.5–2.0% during the first year after the sanctions shock, whereas the real income of poorer households rises by 1.2% over the same period. Finally, we find that the real total revenue of large firms with high (low) TFPs declines by 2.2 (4.0)% during the first year after the sanctions shock, whereas the effects on small firms are close to zero. Overall, our results indicate heterogeneous effects of sanctions with richer households residing in big cities and larger firms with high TFPs being affected the most. Keywords: sanctions news shock; monetary policy; commodity terms-of-trade Fulltext is available at external website. The price of war: macroeconomic and cross-sectional effects of sanctions on Russia

How much do sanctions harm the sanctioned economy? We examine the case of Russia, which has faced three major waves of international sanctions over the last decade (in 2014, 2017, and 2022). In a VAR ...

Mamonov, Mikhail; Pestova, Anna
Národohospodářský ústav, 2023

Disclosure discrimination: an experiment focusing on communication in the hiring process
Badalyan, S.; Korlyakova, Darya; Rehák, Rastislav
2023 - English We focus on communication among hiring team members and document the existence of discrimination in the disclosure of information about candidates. In particular, we conduct an online experiment with a nationally representative sample of Czech individuals who act as human resource assistants and hiring managers in our online labor market. The main novel feature of our experiment is the monitoring of information flow between human resource assistants and hiring managers. We exogenously manipulate candidates’ names to explore the causal effects of their gender and nationality on information that assistants select for managers. Our findings reveal that assistants disclose more information about family and less information about work for female candidates relative to male candidates. An in-depth analysis of the disclosed information suggests that gender stereotypes play an important role in this disclosure discrimination. Furthermore, assistants disclose less information about foreigners overall. This effect appears to be driven by the less attention assistants are willing to devote to the CVs of foreigners, measured by the extra effort to learn more about the candidates. Keywords: information; disclosure; hiring Fulltext is available at external website. Disclosure discrimination: an experiment focusing on communication in the hiring process

We focus on communication among hiring team members and document the existence of discrimination in the disclosure of information about candidates. In particular, we conduct an online experiment with ...

Badalyan, S.; Korlyakova, Darya; Rehák, Rastislav
Národohospodářský ústav, 2023

Racial discrimination and lost innovation: evidence from US inventors, 1895–1925
Coluccia, D. M.; Dossi, G.; Ottinger, Sebastian
2023 - English How can racial discrimination harm innovation? We study this question using data on US inventors linked to population censuses in 1895-1925. Our novel identification strategy leverages plausibly exogenous variation in the timing of lynchings and the name of the victims. We find an immediate and persistent decrease in patents granted to inventors who share their names with the victims of lynchings, but only when victims are Black. We hypothesize that lynchings accentuate the racial content of the victim’s name to patent examiners, who do not observe inventor race from patent applications. We interpret these findings as evidence of discrimination by patent examiners and provide evidence against alternative mechanisms. Keywords: discrimination; innovation; lynchings Fulltext is available at external website. Racial discrimination and lost innovation: evidence from US inventors, 1895–1925

How can racial discrimination harm innovation? We study this question using data on US inventors linked to population censuses in 1895-1925. Our novel identification strategy leverages plausibly ...

Coluccia, D. M.; Dossi, G.; Ottinger, Sebastian
Národohospodářský ústav, 2023

Quantitative easing in the euro area: implications for income and wealth inequality
Stojanović, Dušan
2023 - English This study examines how and to what extent quantitative easing of the ECB affects household income and wealth inequality in the euro area. Previous theoretical models have investigated the dynamics of inequality measures through differential access of households to financial/capital market (the portfolio rebalancing channel), neglecting the labor market differential (the earnings heterogeneity channel). Although the portfolio rebalancing channel may provide insight into wealth inequality and non-labor income inequality, this is not the case with labor (and thus total) income inequality. To be in line with the empirical evidence on labor income inequality, this study also considers segmented labor market on the basis of capital-skill complementarity in production and asymmetric real wage rigidities. When only financial market segmentation is considered, the quantitative results indicate a drop in total income inequality that is diminished over time, while wealth inequality experiences a rise that gradually becomes weaker. The introduction of the segmented labor market significantly mitigates the observed drop in total income inequality, while a rise in wealth inequality is largely amplified. Given the possible broadening of the ECB’s mandate towards distributional issues in the future, the analysis of segmented labor and financial markets can be more beneficial to the ECB as it provides a clearer picture of the inequality effects. Keywords: quantitative easing; capital-skill complementarity; asymmetric real wage rigidity Fulltext is available at external website. Quantitative easing in the euro area: implications for income and wealth inequality

This study examines how and to what extent quantitative easing of the ECB affects household income and wealth inequality in the euro area. Previous theoretical models have investigated the dynamics of ...

Stojanović, Dušan
Národohospodářský ústav, 2023

Social ties at work and effort choice: experimental evidence from Tanzania
Chegere, M.; Falco, P.; Menzel, Andreas
2023 - English Many firms hire workers via social networks. Whether workers who are socially connected to their employers exert more effort on the job is an unsettled debate. We address this question through a novel experiment with small-business owners in Tanzania. Participants are paired with a worker who conducts a real-effort task, and receive a payoff that depends on the worker’s effort. Some business owners are randomly paired with workers they are socially connected with, while others are paired with strangers. With a design that is sufficiently powered to detect economically meaningful effects, we find that being socially connected to one’s employer does not affect workers’ effort.\n Keywords: firms; hiring; productivity Fulltext is available at external website. Social ties at work and effort choice: experimental evidence from Tanzania

Many firms hire workers via social networks. Whether workers who are socially connected to their employers exert more effort on the job is an unsettled debate. We address this question through a novel ...

Chegere, M.; Falco, P.; Menzel, Andreas
Národohospodářský ústav, 2023