Research

We study how firm growth reorganizes the division of labor across firms in global value chains. Using a novel dataset linking cross-border firm-to-firm transactions to matched employer–employee data, we show that demand shocks increase trade between firms while reducing occupational similarity, implying greater specialization. We develop and estimate a model of task outsourcing in which firms expand by reallocating tasks to suppliers. The model matches the data and implies endogenous scale economies. Eliminating outsourcing reduces average labor productivity by 25 percent and increases input costs by 10 percent, highlighting the central role of specialization in shaping firm performance.

We combine R&D survey data, Swedish and Danish register data, MNE group information, firm-to-firm trade linkages, and a plausibly exogenous policy shock that reduces firms’ employment related R&D expenditures to provide evidence for the allocation of R&D activities among Swedish-Danish trade and MNE partners. We first show that Swedish firms increased their R&D employment in response to the introduction of an R&D related tax deduction. We then show that the R&D tax reform leads to a fall in R&D employment among Danish MNE partners, but an increase among Danish trade partners. We conclude that R&D policies increase global research activities within trade networks, but substitution across affiliates dampens the reform’s effect on research activity within MNE networks.

How is knowledge transmitted across borders? We exploit the construction of the Øresund bridge which joined the capital region of Denmark with Malmö in Sweden, creating an integrated labor market. The bridge led to a steep increase in cross-border commuting, predominantly one-way from Sweden to Denmark. We examine the consequences of Swedish cross-border workers on the productivity of Danish firms and the wages of their close coworkers. We find substantial positive effects in Danish firms that (exogenously) increase the share of Swedish commuters, as cross-border commuters carry a productivity premium that likely reflects knowledge spillovers. To examine the extent of knowledge spillovers further, we estimate the impact of cross border commuters on wages of incumbent coworkers in occupations of the commuters and find a positive effect. We also find that high-skilled commuters and commuters with experience in high-tech occupations in the Swedish labor market have the strongest spillover effects on the wages of Danish coworkers.

In this paper I investigate the impact of a decrease in trade costs on firms’ decisions to export. The main contribution of this paper is to evaluate empirically the theoretical predictions of several models of multi-product exporters. The focus is on the firm export entry decision and the within firm adjustment regarding product scope and intensity. For identification I use a quasi-natural experiment, the introduction of the Öresund Bridge between southern Sweden and Denmark, to analyse the impact on firm behaviour. Using a difference-in-difference methodology, firms in the ‘treated’ municipality, Malmö, are compared to firms in more geographically distant Gothenburg and Stockholm (‘controls’). For the ‘treated’ manufacturing firms a theoretically consistent positive effect is found for firm entry into exporting, aggregate firm trade flow and the number of products exported. The models of multi-product exporters evaluated do not provide a clear theoretical prediction regarding the impact on average trade value per product. In this paper, however, I find that around 70-80% of the increase in aggregate firm trade value is due to increases in the average trade value per product (the product intensive margin), while only 20-30% is due to increases in the number of products exported (the product extensive margin).

Working with business partners in distant countries often requires operating outside standard working hours, potentially harming workers’ mental well-being—especially for women balancing professional and family responsibilities. This hypothesis is investigated using matched employer-employee data from Denmark merged with information on workers’ use of prescription antidepressants (AD) and firms’ import and export transactions. The analysis exploits variation within job spells and controls for both unobservable firm-year heterogeneity and for the average differential in annual AD use among men and women. The results indicate that a decline in the business hour overlap between a Danish firm and its foreign trading partners leads to an increased AD use among women relative to men. This effect is economically meaningful, largest for college-educated workers under 45 and more pronounced for single mothers. In addition to the gender effect, workers in occupations requiring establishing relationships with others are more strongly affected than those in other occupations.

We assess how global shocks propagate from global manufacturing firms to local service providers through a spatial variation in export‐driven service demand. We show that a 1 percent increase in a localized measure of exporting increases sales of service firms by around 0.08 percent. We also show that this link is local as the effect fades away after just 20 km, that it is more pronounced with larger and foreign‐owned service firms, and that the impact extends beyond sales as it also increases employment as well as productivity in local service plants and it also make them less likely to move.

This paper investigates the role of large outbreaks on the persistence of Covid-19 over time. Using data from 650 European regions in 14 countries, I first show that winter school holidays in late February/early March 2020 (weeks 8, 9 and 10) led to large regional outbreaks of Covid-19 in the spring with the spread being 60% and up-to over 90% higher compared to regions with earlier school holidays. While the impact of these initial large outbreaks fades away over the summer months, it systematically reappears from the fall as regions with school holidays in weeks 8, 9 and 10 had 30-70% higher spread. This suggests that following a large outbreak, there is a strong element of underlying (latent) regional persistence of Covid-19. The strong degree of persistence highlights the long-term benefits of effective (initial) containment policies, as once a large outbreak has occurred, Covid-19 persists. This result emphasizes the need for vaccinations against Covid-19 in regions that have recently experienced large outbreaks but are well below herd-immunity, to avoid a new surge of cases.

Export sales of multi-product firms are known to be skewed towards their best performing core products. Less is known about the large number of products outside the core that still account for a considerable share of the export value. I use high-quality Swedish firm-registry data to investigate if the exports of core and non-core products are systematically interconnected. Using a novel instrumental variable approach, I find evidence that the exports of non-core products respond to trade of the core. Conversely, the same complementarity is not found using non-core products as placebo-cores. Decomposing the response, I find that over a quarter of the effect can be attributed to price changes of non-core products, suggestive of demand-side explanations. The main contribution of this paper is identifying a new, sizeable, and systematic within-firm one-way complementarity between products that can explain non-core product trade flows. Ignoring this pattern of cross-product dependence may lead to an under-emphasis on the core and over-emphasis on individual trade flows as products should not be viewed in isolation, since the ‘superstar’ core has (contemporaneous) followers.

The Icelandic Act on Maternity/Paternity and Parental Leave (2000) introduced some major changes. The leave was extended from 6 to 9 months, and parents who were active in the labour market were paid 80% of their average salaries during the leave. The 9 months’ leave was distributed so that mothers could take 3 months’ leave, fathers could take 3 months’ leave and the remaining 3 months could be shared by the mother or father in any manner that the parents saw fit. Using information and data from the Althingi and Statice, this article discusses the new legislation and the implications of such a policy in reducing gender inequality in the Icelandic labour market.