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Essays on Access to External Finance, Acquisitions and Productivity
Ondko, Peter ; Hanousek, Jan (advisor) ; Jovanovic, Boyan (referee) ; Ortiz-Molina, Hernan (referee)
This thesis consists of three chapters that are empirical investigations of classical questions in the financial and industrial economics literature on the influence of institutions and industry conditions on the firm's access to finance, the propensity to merge, and productivity. In the first chapter, coauthored with Jan Bena, we examine whether financial markets development facilitates the efficient allocation of resources. Using European micro-level data for 1996-2005, we show that firms in industries with high growth opportunities use more external finance in financially more developed countries. This result is particularly strong for firms that are more likely to be financially constrained and dependent on domestic financial markets, such as small and young firms. Our findings are robust to controlling for technological determinants of external finance needs and to using different proxies for growth opportunities. In the second chapter, I investigate the role of productivity in the selection of firms into acquisitions and whether acquisitions lead to productivity gains. Using matching methodology and a large dataset of domestic acquisitions among public and private firms in Europe over the period 1998-2008, I find that first, targets are under-performing before engaging in horizontal...
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Impact of education on long-term economic growth and pension system deficits
Münich, Daniel ; Ondko, Peter ; Straka, Jan
Long-term economic growth has a significant impact on the quality of life in a country. The education of its citizens is an important factor influencing the growth. Nevertheless, the relationship between economic growth and education is very long-term and not apparent at the first glance. However, this long-term relation can be illuminated with the help of quantitative projections. For this purpose, we use empirical estimates presented in the recent OECD report by Erik Hanushek and Ludger Woessmann. If the Czech Republic puts in place educational reform that leads to the increase of average cognitive skill level of 15 year old pupils (as measured by PISA survey) by a mere 25 points - hence only a fourth of the standard deviation, GDP in the current value is estimated to cumulatively increase by 12 trillion CZK over the next 80 years, thus 357 percent of the current annual GDP of the country. Unfortunately, the decrease in average cognitive skills levels that took place in the Czech Republic in the last decade leads to a similar GDP loss. If we were able to improve the average cognitive skills levels to Finnish standards, the additional production would even reach 707% of today’s GDP. If the average cognitive skills levels of the children of parents without high school degrees could be brought up to the level of those whose parents have high school degrees, it would increase production by 152% of the current GDP. The potential benefits recalculated in terms of annual budget exceed the current state budget deficit or budget for education. Finally, the higher GDP growth would significantly reduce the cumulated pension deficit.
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Productivity gains from services liberalization in Europe
Bena, Jan ; Ondko, Peter ; Vourvachaki, E.
As part of the Single Market Program the European Commission commanded the liberalization and regulatory harmonization of utilities, transport and telecommunication services. This paper investigates whether and how this process affected the productivity of European network firms. Exploiting the variation in the timing and degree of liberalization efforts across countries and industries, we find that liberalization increased firm-level productivity but had no reallocation impact. Based on our estimates, the average firm-level productivity gain from liberalization amounts to 38 percent of the average total within-firm productivity gain in network industries. The results underscore the growth-promoting role of liberalization efforts.
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