European firm adjustment during times of economic crisis

Fabiani, Silvia; Lamo, Ana; Messina, Julián; Rõõm, Tairi

doi:10.1186/s40173-015-0048-3

Cited by 60 publications

(59 citation statements)

References 17 publications

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“…Given the large heterogeneity across the 25 EU countries covered by WDN3 in terms 1 The first, second and third waves of the WDN survey are referred to as WDN1, WDN2 and WDN3 respectively. See Babecký et al (2012), Bertola et al (2012), Druant et al (2012) and Galuscak et al (2012) for an overview of WDN1 evidence and Fabiani et al (2015) for a summary of the main findings of WDN2. 2 The WDN survey collects information that enables researchers to examine the effects on wage, employment and price adjustments of firm characteristics as well as of the economic environment and institutional features of the countries in which the firms operate.…”

Section: Introductionmentioning

confidence: 99%

Labour Market Adjustment in Europe During the Crisis: Microeconomic Evidence from the Wage Dynamics Network Survey

Izquierdo¹,

Jimeno²,

Κοσμά³

et al. 2017

SSRN Journal

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Against the backdrop of continuing adjustment in EU labour markets in response to the Great Recession and the sovereign debt crisis, the European System of Central Banks (ESCB) conducted the third wave of the Wage Dynamics Network (WDN) survey in 2014-15 as a follow-up to the two previous WDN waves carried out in 2007 and 2009. The WDN survey collected information on wagesetting practices at the firm level. This third wave sampled about 25,000 firms in 25 European countries with the aim of assessing how firms adjusted wages and employment in response to the various shocks and labour market reforms that took place in the European Union (EU) during the period 2010-13. This paper summarises the main results of WDN3 by identifying some patterns in firms' adjustments and labour market reforms. It seeks to lay out the main lessons learnt from the survey in terms of both the general response of EU labour markets to the crisis and how these responses varied across the countries that took part in the survey. JEL: E24, J30, J52, J68 This evidence thus suggests a simple taxonomy of countries as regards their unemployment and GDP performance during the European sovereign debt crisis (2010-13):  Group I: countries where the unemployment rate decreased and GDP increased (the Czech Republic,

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Section: Introductionmentioning

confidence: 99%

Labour Market Adjustment in Europe During the Crisis: Microeconomic Evidence from the Wage Dynamics Network Survey

Izquierdo¹,

Jimeno²,

Κοσμά³

et al. 2017

SSRN Journal

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“…They demonstrate that constrained German firms de facto curtailed the number of their workforce during the recent financial crisis. In line with this, Fabiani et al (2015) and Bentolila et al (2017) utilize a broad survey of European firms and data from the Spanish credit registry, respectively, and show that the labour cost reduction strategy primarily works through reducing the number of employees rather than cutting down on wages. Just as such results suggest the existence of downward wage rigidity imposed by labour market regulations, it might also imply the higher share of temporary contracts used in financially constrained firms, which in turn makes it easier for them to dismiss workers.…”

Section: The Effect On the Labour Force Composition And Wagesmentioning

confidence: 81%

The Real Effects of Credit Supply: Review, Synthesis, and Future Directions

et al. 2019

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This paper reviews the rapidly growing literature on the real effects of bank credit supply fluctuations and identifies several worthwhile avenues for future research. In terms of the transmission of credit supply shocks into real effects, we suggest to further investigate the roles of (i) private borrower information, (ii) employment protection legislation, (iii) corporate governance, (iv) bank specialization, and (v) alternative financing sources. We also call for additional analyses of how these shocks affect (vi) investment efficiency, (vii) market structure, and (viii) the allocation of human capital, and emphasize the need for more evidence on (ix) the persistency, (x) asymmetry, and (xi) heterogeneity of their effects.JEL classification: E22, E24, E50, G21

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“…At the macrolevel, such an increase is suggested by the observation that Euro Area inflation and nominal labor cost growth actually increased somewhat in 2011 and declined only later ( Figure 5) in spite of an unemployment increase of 2 percentage, in stark contrast to the financial crisis related downturn, where core inflation and labor cost growth had visibly declined. Furthermore, Fabiani et al (2015) report microevidence from the first two waves of the Wage Dynamics Network survey showing that in the cross section, the decline in average nominal wage growth was associated with a disproportional increase of the share of wage freezes. The share of employees experiencing wage freezes increased from 3.9% in 2007 to 34.4% in 2009, while the incidence of wage cuts increased by a mere 0.9 percentage points to 1.1%.…”

Section: Baseline Simulation Resultsmentioning

confidence: 99%