Conference report
Several presentations analyzed the dynamics between firms and the labor market. Jiaying Li of the Norwegian School of Economics presented research on how a firm’s relationship with the local community can contribute to value creation. By comparing firms’ local presence, employment, and sales, the study showed that firms with local workplaces sell more in the surrounding area. The effect was driven primarily by consumers purchasing more goods rather than by higher prices, and was stronger in areas where the firms’ employment was more important to the local economy.
Cedric Schneider of Copenhagen Business School presented research on how changing skill requirements, measured through job advertisements, affect employees who remain with their employer. By distinguishing between digital changes—such as new systems and digital tools—and more general changes in tasks and skill requirements, the study shows that digital changes can increase the value of experienced employees’ knowledge, resulting in higher wages and lower use of stress-related medication.
Oskar Nordström Skans of Uppsala University demonstrated how firms’ production technologies influence who they hire and how different skills are valued. Swedish administrative data show that workers sort into firms according to their relative strengths. Because an individual’s skills are sold as a package, whereas firms can assemble teams of specialists, generalists earn approximately 20 percent less than comparable teams of specialists.
Two contributions also examined the processes of entrepreneurship and innovation. Ari Hyytinen of Hanken School of Economics in Helsinki presented research on how ownership shares are allocated among founders of Finnish startups and what this means for the firms’ development. The results showed that founding teams that choose to divide ownership equally often have different underlying characteristics from teams that opt for an unequal distribution. He further showed that an equal distribution of ownership among founders can contribute to stronger long-term firm growth, particularly in terms of employment and revenue.
Charlotte Østergaard of Copenhagen Business School discussed how entrepreneurs allocate their wealth between their businesses and private assets. The results showed how younger and older business owners allocate their resources among business investment, housing, savings, debt, and private consumption, including through an analysis of how changes in housing values affect these priorities.
Pehr-Johan Norbäck of IFN presented a theoretical model of how regulatory sandboxes affect innovation and commercialization dynamics in the business sector. Regulatory sandboxes are controlled environments in which firms can test new technologies. The study shows how the design of these sandboxes and coordination among participants affect firms’ incentives to invest in research and development (R&D).
Sameer Malik of the Norwegian Business School presented research showing that firms rarely report the intermediate goods they produce in-house, such as fabric at various stages between yarn and finished shirting material. The study identifies such “invisible” goods in Indian manufacturing data. Tariff reductions on these goods are associated with increased specialization, imports, and productivity. The effects of trade policy may therefore be greater than previously estimated.
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