17 January 2019

Leverage Differences between Public and Private Firms

Matching private firms’ balance sheets to the U.S. Bureau of the Census Longitudinal Business Database (LBD) for the period 2005–2012, Emin Dinlersoz, Sebnem Kalemli-Ozcan, Henry Hyatt, and Veronika Penciakova find firm size and leverage are strongly positively correlated for private firms and weakly negatively correlated for public firms.

16 January 2019

Better Matching Between Firms and Workers, Higher Wages

Using German data, Wolfgang Dauth, Sebastian Findeisen, Enrico Moretti, and Jens Suedekum, estimate that the degree of within-city assortative matching increased by about 75 percent between 1985 and 2014, and that this raised aggregate labor earnings about in the country by 2.1 percent.

15 January 2019

Firm R&D Investment and Export Market Exposure

Using data from the German high-tech manufacturing sector, Bettina Peters, Mark J. Roberts, and Van Anh Vuong show that exporting firms invest more in R&D and have a higher payoff from the investment than firms that only sell in the domestic market. They also subsequently have higher rates of productivity growth.

14 January 2019

Household Finances and Unconventional Fiscal Policy

Pre-announced changes in state sales taxes over the period 1999-2017 were associated with increases in consumer spending on durable goods, according to Scott R. Baker, Lorenz Kueng, Leslie McGranahan, and Brian T. Melzer. On average, car sales rose about 8 percent in the month before a 1 percentage point increase in sales taxes.

11 January 2019

Gun Storage and Gun-Related Homicides by Juveniles

Analyzing data from the FBI’s Supplementary Homicide Reports for 1985-2013, D. Mark Anderson, Joseph J. Sabia, and Erdal Tekin find that laws requiring gun storage to prevent access to weapons by children are associated with a 19 percent reduction in firearm-related homicides committed by juveniles.

10 January 2019

Private Equity Indices and Secondary Market Transactions

Brian Boyer, Taylor D. Nadauld, Keith P. Vorkink, and Michael S. Weisbach estimate the performance of buyout and venture funds using prices paid for limited partner shares of the funds in secondary markets, and compare the results with returns calculate from the firm’s reported data.

9 January 2019

Regulation and Investment in Early-Stage Biopharma Firms

After EU adoption of the Orphan Drug Act, which arguably reduced the risk of investing in drugs covered by the act, Yujin Kim, Chirantan Chatterjee, and Matthew J. Higgins find an increase in venture capital investment in early-stage biopharmaceutical firms operating fields disproportionately affected by EU-ODA, as well as an upturn in financial performance at exit.

8 January 2019

Wealth Dynamics Vary by Race and Ethnicity

At the start of the 2007 financial crisis, both the debt-to-net worth ratio and the ratio of home equity to net worth were substantially higher for Hispanic and African-American households than for whites. Edward N. Wolff finds that these factors were key contributors to the decline in wealth of these two groups, relative to wealth of whites, between 2007 and 2016.

7 January 2019

Going the Extra Mile: Distant Loans and Credit Cycles

Distances between borrowers and lenders widen considerably when credit conditions are lax and shorten considerably when credit conditions become tighter, João Granja, Christian Leuz, and Raghuram Rajan find. A sharp departure from this trend is indicative of increased risk-taking.

4 January 2019

Variation across Insurers in Payments to Hospitals

Studying hospital-payer pairs in Massachusetts, Stuart V. Craig, Keith Marzilli Ericson, and Amanda Starc find that between-payer price variation is similar in magnitude to between-hospital price variation. Administrative-services-only contracts, in which insurers do not bear risk, have higher prices.
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