Matthias Kehrig
Duke University
Network
Latest external collaboration on country level. Dive into details by clicking on the dots.
Publication
Featured researches published by Matthias Kehrig.
Archive | 2015
Matthias Kehrig
Using plant-level data, I show that the dispersion of total factor productivity in U.S. durable manufacturing is greater in recessions than in booms. This cyclical property of productivity dispersion is much less pronounced in non-durable manufacturing. In durables, this phenomenon primarily reflects a relatively higher share of unproductive firms in a recession. In order to interpret these findings, I construct a business cycle model where production in durables requires a fixed input. In a boom, when the market price of this fixed input is high, only more productive firms enter and only more productive incumbents survive, which results in a more compressed productivity distribution. The resulting higher average productivity in durables endogenously translates into a lower average relative price of durables. Additionally, my model is consistent with the following business cycle facts: procyclical entry, procyclical aggregate total factor productivity, more procyclicality in durable than non-durable output, procyclical employment and countercyclicality in the relative price of durables and the cross section of stock returns.
2017 Meeting Papers | 2017
Matthias Kehrig; Nicolas Vincent
The aggregate labor share in U.S. manufacturing declined dramatically over the last three decades: Since the mid-1980’s, the compensation for labor declined from 67% to 47% of value added which is unseen in any other sector of the U.S. economy. The labor share of the typical U.S. manufacturing plants, in contrast, rose by over 5 percentage points. We reconcile these two facts by documenting (1) an important reallocation of production towards “hyper-productive plants” and (2) a downward adjustment of the labor share of those same plants over time. These two related forces account for almost all the change in the trend of aggregate labor share in the manufacturing sector, with only a small role for exit of high-labor-share plants. Relative to their peers, plants that account for the majority of production by the late 2000s arrive at a low labor share by gradually increasing value added by a factor of three while keeping employment and compensation unchanged.
Archive | 2013
Matthias Kehrig; Nicolas Vincent
Using confidential Census data on U.S. manufacturing plants, we document that most of the dispersion in investment rates across plants occurs within rms instead of across firms. Between- firm dispersion is almost acyclical, but within- rm dispersion is strongly procyclical. To investigate the role of rms in the allocation of capital in the economy, we build a multi-plant model of the firm with frictions at both levels of aggregation. We show that external nancing constraints at the level of the rm can have important implications for plant-level investment dynamics. Finally, we present empirical evidence supporting the predictions of the model.
Archive | 2017
Matthias Kehrig; Nicolas Vincent
Almost two thirds of the cross-plant dispersion in marginal revenue products of capital occurs across plants within the same firm rather than between firms. Even though firms allocate investment very differently across their plants, they do not equalize marginal revenue products across their plants. We reconcile these findings in a model of multi-plant firms, physical adjustment costs and credit constraints. Credit constrained multi-plant firms can utilize internal capital markets by concentrating internal funds on investment projects in only a few of their plants in a given period and rotating funds to another set of plants in the future. The resulting increase in within-firm dispersion of marginal revenue products of capital is hence not a symptom of misallocation within the firm, but rather actions taken by the firm to mitigate external credit constraints and adjustment costs of capital. Economies with multi-plant firms produce more aggregate output despite higher dispersion in marginal revenue products of capital compared to economies with single-plant firms. Because emerging economies are predominantly populated by single-plant firms, the gains from reducing their distortions to the level of developed are larger than previously thought.
Journal of Political Economy | 2018
Cosmin L. Ilut; Matthias Kehrig; Martin Schneider
Concave hiring rules imply that firms respond more to bad shocks than to good shocks. They provide a unified explanation for several seemingly unrelated facts about employment growth in macro- and microdata. In particular, they generate countercyclical movement in both aggregate conditional “macro” volatility and cross-sectional “micro” volatility, as well as negative skewness in the cross section and in the time series at different levels of aggregation. Concave establishment-level responses of employment growth to total factor productivity shocks estimated from census data induce significant skewness, movements in volatility, and amplification of bad aggregate shocks.
Archive | 2017
Wei Gao; Matthias Kehrig
We build a model of firm entry and exit and show how returns to scale shape firm survival, the equilibrium productivity and size distributions and firm concentration. High productivity dispersion and high concentration ratios need not reflect inefficiencies when returns to scale are strongly decreasing. We apply a broad set of structural and reduced-form estimation techniques to establishment-level data from the U.S. Census of Construction and Manufacturing to assess returns to scale and productivity dispersion across establishments. Indeed, industries with lower returns to scale are characterized by higher productivity dispersion and lower concentration ratios as predicted in the model. Returns to scale are 0.96 on average, but range from 0.86 in Non-metallic Minerals to 1.3 in Semiconductors. Returns to scale tend to be highest in durable manufacturing, medium in non-durable manufacturing and lowest in the production of housing. An economy characterized by such differences in its sectoral production structure will exhibit long-run structural change away from construction and non-durable manufacturing, as in the data, and endogenously replicate the cyclical behavior of relative prices in the U.S.: relative durable prices are counter-cyclical while relative housing prices are pro-cyclical.
Archive | 2016
Andres Donangelo; Francois Gourio; Matthias Kehrig; Miguel Palacios
Using a standard production model, we demonstrate theoretically that, even if labor is fully flexible, it generates a form of operating leverage if (a) wages are smoother than productivity and (b) the capital-labor elasticity of substitution is strictly less than one. Our model supports using labor share -- the ratio of labor expenses to value added -- as a proxy for labor leverage. We show evidence for conditions (a) and (b), and we demonstrate the economic significance of labor leverage: High labor-share firms have operating profits that are more sensitive to shocks, and they have higher expected asset returns.
2011 Meeting Papers | 2011
Matthias Kehrig
Journal of Monetary Economics | 2018
Matthias Kehrig
American Economic Journal: Macroeconomics | 2017
Matthias Kehrig; Nicolas L. Ziebarth