Øivind A. Nilsen

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• PhD
• Professor (Full) at NHH Norwegian School of Economics

This study analyzes the dynamics of financing constraints under changing economic conditions and the role of firm size in this context. Using administrative data from Germany, we quantify financing constraints expressed as the probability that a firm encounters excess demand or excess supply. On average, small- and medium-sized enterprises (SMEs) a...

This paper investigates the micro‐foundations of pricing behaviour using monthly producer prices for Norwegian multi‐product firms. We find both infrequent and many small price changes together with a high degree of within‐firm synchronization. This points at fixed menu costs featuring scope economies, at additional linear and convex price adjustme...

In this paper, we analyze the bank merger between DnB and Gjensidige Bank in 2003, ranked by market share as number one and number three in the Norwegian bank market. Focusing on loans to firms, our difference-in-differences analysis shows no increase of concentration of new loans. The concentration in affected markets (markets where both merging p...

This paper provides evidence on price rigidity at the product- and firm-level in Norway. A strong within-firm synchronization is found supporting the theory of economies of scope in menu costs. The industry synchronization effects are found to be small suggesting that firms either have some monopoly power, or that a firm’s costs of changing their o...

We analyse all the major sources of direct and indirect research and development (R&D) support to the business enterprise sector in a single country, Norway, for the period 2002–2013, treating the financial support for R&D from several instruments as a multivariate dose exposure. The output additionality of support to incumbent firms that regularly...

Existing micro evidence of firms ’ price changes tends to show a downward sloping hazard rate – the longer the price of a product has remained the same, the less likely it is that the price will change. Using a panel of Norwegian plant- and product-specific prices, we also find a downward sloping hazard when applying a Kaplan–Meier model. After hav...

The price‐setting behaviour of manufacturing plants is examined using a large panel of monthly surveyed plant‐ and product‐specific prices. The sample shows a high frequency of zero changes, relatively small price changes and a strong seasonal price‐change pattern. The intermittent feature of price changes is modelled with thresholds which are smal...

We consider a model for matched data with two types of unobserved effects: a random effect related to the main observational unit and a random or fixed effect related to a secondary unit to which the main unit is matched. In typical applications, e.g., on registry data, there is a curse of dimensionality which we propose to mitigate using an iterat...

This study applies a successive oligopoly model, with an unobservable non-linear tariff between upstream and downstream firms, to analyze the possible anti-competitive effects of an upstream merger in the Norwegian food sector (specifically, the market for eggs). The theoretical predictions are that an upstream merger may lead to higher average pri...

In this report we study the effects of government financing policies aimed at promoting value creation and innovation. Our analysis includes the tax incentive scheme, Skattefunn (SKF), innovation-oriented policy of Innovation Norway (IN) and instruments of the Research Council of Norway (RCN), as well as export supporting programs by the Norwegian...

Globally installed wind power capacity has grown tremendously since 2000. This study focuses on the local economic impacts of wind power deployment. A theoretical model shows that wind power deployment is not necessarily driven by locally-accruing economic payoffs, but also by other factors such as emphasis on environmentally-friendly energy produc...

A disturbing phenomenon in modern welfare states is the positive correlation in the probability of receiving disability benefits across generations. Understanding the intergenerational transmission mechanism is crucial, especially when the proportion of the working-age population receiving public benefits or support is increasing in most OECD count...

This study applies a successive oligopoly model, with an unobservable non-linear tariff between upstream and downstream firms, to analyze the possible anti-competitive effects of an upstream merger in the Norwegian food sector (specifically, the market for eggs). The theoretical predictions are that an upstream merger may lead to higher average pri...

Joseph Farrell and Carl Shapiro proposed a simple test of the possible upward pricing pressure (UPP) following a merger. They showed that the test may give false negatives—that is, indicate that a merger may not give an UPP, while a more comprehensive test would indicate the opposite. We show that their test applied to a case with asymmetric firms...

This paper addresses whether children's exposure to parents receiving disability benefits induces a higher probability of receiving such benefits themselves. Most OECD countries experience an increasing proportion of the working-age population receiving permanent disability benefits. Using data from Norway, a country where around 10% of the working...

Using Norwegian intergenerational data, which include a substantial part of the life-cycle earnings for children and almost the entire life-cycle earnings for their fathers, we present new estimates of intergenerational mobility. Extending the length of fathers’ earnings window from 5 to 25 years increases estimated elasticities. Increasing the age...

Using Norwegian individual register data of young workers, from the period 1986-2008, we analyze whether there are large and persistent negative relationships between unemployment and the risk of repeated unemployment and being out of labor force. A nearest-neighbor propensity score matching method is applied to make the treatment group (the unempl...

Thermal-based power stations rely on water for cooling purposes. These water sources may be subject to incidents of scarcity, environmental regulations and competing economic concerns. This paper analyses the effect of water scarcity and increased river temperatures on German electricity prices from 2002 to 2009. Having controlled for demand effect...

A model for matched data with two types of unobserved heterogeneity is considered – one related to the observation unit, the other to units to which the observation units are matched. One or both of the unobserved components are assumed to be random. This mixed model allows identification of the effect of time-invariant variables on the observation...

In a growth accounting context one usually constructs a quality adjusted index of labor services by aggregating over predefined groups of workers, using the groups' relative wage bills as weights. In this article we suggest a method based on decomposing individual predicted wages into a skill-related part and a part unrelated to skill, where the fo...

A structural model is developed and estimated by a maximum likelihood routine to investigate interrelated factor demand subject to nonconvex adjustment costs. The dataset concerns Norwegian plants operating in manufacturing industries and it covers the period 1993-2005. The estimates indicate that it is advantageous to adjust the stock of labour an...

One approach to merger simulations used in antitrust cases is to calibrate demand from market shares and a few additional parameters. When the products involved in the merger case are differentiated along several dimensions, actual diversion ratios may be very different from those calculated from market shares. This again may affect the predicted p...

In this paper we carry out a structural analysis of the changes in relative wages and the effect of skill-biased technical changes on the development of relative labour demand. The empirical model is based on a production function in which capital and two types of labour – high skilled and low skilled – are specified as inputs. The classification o...

This paper describes firms’ output and factor demands before, during, and after episodes of lumpy investment. By using a rich employer–employee panel data set for two manufacturing industries and one service industry, we focus on simultaneous variations in output, capital, materials, man hours, labour productivity, and the skill composition and hou...

This article shows how the traditional merger simulation model based on market shares can be improved by using observed diversion ratios to calibrate demand. To illustrate the effects of this modified model we use diversion ratios for each pair of stores in a local grocery market in Norway. The predicted increase in average price following an acqui...

Using Norwegian intergenerational data with a substantial part of the life-cycle earnings of children and almost the entire life-cycle earnings for their fathers, we present new estimates of intergenerational mobility. Extending the length of the fathers' earnings windows from 5 to 30 years increases the estimated elasticities. Increasing the age o...

This paper investigates the existence of markups and their cyclical behaviour at the industry sector level. Markups are given as a price-cost relation that is estimated from a dynamic, structural model of the firm. The firms face costly adjustment of labour and potential financial constraints. The model is tested on a panel of firm- and plant-level...

Most studies of heterogeneous labor inputs use classifications of high skilled and low skilled based on workers' educational attainment. In this study we explore a wage-based skill measure using information from a wage equation. Evidence from matched employer--employee data show that skill is attributable to many variables other than educational le...

In this paper we develop a model to describe a firm’s demand for two production factors which is subject to the presence of nonconvex adjustment costs. In our model simultaneous adjustment of these two production factors may either increase or decrease the total costs incurred by the firm. The magnitude of this change in total costs ultimately dete...

A relatively unexplored question in dynamic labour demand regards the source of adjustment costs, whether they depend on net or gross changes in employment. We estimate a structural model of dynamic labour demand where the firm faces adjustment costs related to gross and net changes in its workforce. We focus on matching quarterly moments of hiring...

Based on matched employer–employee data from Norway, we analyze the effects of worker displacement in 1986–1987 on their children's earnings in 1999–2001. Using displacement of fathers to indicate an exogenous earnings shock we seek to identify whether family resources have a direct effect on children's economic outcome. Job losses appear to have a...

Using register data for Norwegian cohorts born in 1950, 1955, and 1960, we found intergenerational earnings mobility to be high, and lower at the lower end of offspring's earnings distribution than at the upper end. The findings also indicate that mobility has increased over time and that the increase is somewhat higher for lower earnings. The incr...

Using Norwegian data we find that married women's education is positivel y associated with completed fertility, but this relationship becomes insignificant after controlling for husbands' characteristics. Husbands' education has a positive effect on women's fertility. These findings suggest that the effect of education on marri ed women's fertility...

This paper describes firms' output and factor demand before, during and after episodes of lumpy investments using a rich employer-employee panel data set for two manufacturing industries and one service industry. We focus on the simultaneous adjustment of capital, materials, man-hours, as well as the skill composition and hourly cost of labour. The...

Sickness absence tends to be negatively correlated with unemployment rates. In addition to pure health effects, this may be due to moral hazard behavior by workers who are fully insured against income loss during sickness and to physicians who meet demand for medical certificates. Alternatively, it may reflect changes in the composition of the labo...

The analysis, based on register data for Norwegian cohorts born 1950, 1955, and 1960, shows that the intergenerational earnings mobility is high. Using quantile regression, mobility is found to be lower at the lower end of the earnings distribution than at the upper end. The findings also indicate that mobility increases over time and that the incr...

Using longitudinal data for Norwegian children born in 1950, 1955, 1960 and 1965, we find a relatively high degree of earnings mobility. There is no tendency toward decreasing mobility over the cohorts. Conditioning on the position in the earnings distribution, the analysis indicates quite high mobility in the middle of the distribution and somewha...

Apprenticeship programmes are in many countries important stepping stones into the labour market. However, recruitment of apprentices seems to follow the business cycle. This pattern may be caused by firms' contemporaneous demand for labour, but may also be consistent with an investment hypothesis. A model, in which the tightness in the labour mark...

In this paper, we analyze the pattern of employment adjustment using a rich panel of Norwegian plants. The data suggest that the frequency of episodes of zero net employment changes is inversely related to plant size. We develop and estimate a simple “q” model of labor demand, allowing for the presence of fixed, linear and quadratic components of a...

Previous research on changes in intergenerational mobility suggests that mobility is decreasing over time. One explanation for this pattern is increased cross-sectional income inequality. In contrast to most other OECD countries, income inequality in Norway has been remarkably stable through large parts of the 1980s and the 1990s, not least due to...

The objective of this paper is to investigate if and how capital adjustment departs from the smooth pattern implied by standard model based on convex adjustment costs. Using Norwegian micro data, we start by documenting the intermittent and lumpy nature of investment rates. We then present two pieces of econometric evidence on these issues. First,...

In this paper we analyse early retirement for men and women focusing on family characteristics such as marital status, spouse income and wealth, and spouses’ labour market status. The female participation rate is high in Norway, implying that the country is particularly suitable for the study of gender differences in the early retirement behaviour....

Sickness absence tends to be negatively correlated with unemployment. This may suggest disciplining effects of unemployment but may also reflect changes in the composition of the labour force. A panel of Norwegian register data for the years 1990-1995 is used to analyse sickness absences lasting more than two weeks. We estimate fixed effects models...

This paper examines wage effects of different measures of trade union membership rates. A demographic model separates union members into three categories: employed, unemployed and inactive union members. The union membership data from the demographic model are merged with industry data. The empirical findings indicate a positive effect on wages fro...

In this paper we analyze the pattern of employment adjustment at the plant level using a rich data set for Norway. We first document the stylized facts about employment changes in small and large plants. The data reveals important differences across size classes. In particular, episodes of zero net employment changes are more frequent for smaller p...

In a large representative sample of young Norwegian workers, we estimate gross transitions to unemployment, education, and other exits in a multinomial logit. In line with received literature, we find that individuals with high education, experience, and income have significantly lower probabilities of job exits. While female education rates have i...

This study analyses early retirement pathways for Norwegian male and female workers, applying a multinomial logit model to a data set covering more than 10 500 employees, ages 56-61, in 1989. The aim is to analyse the transition to different destinations, i.e. disability pension, unemployment benefits, and out of the labour force, in the period 198...

We consider transitions from school to work and the early market experience. The duration of post-school unemployment, wages, and job duration are estimated simultaneously. We find that individuals with higher levels of schooling get jobs more quickly and have longer employment durations. Apprentices have shorter unemployment periods and stay longe...

The organisation of the paper is as follows. Section II provides a short review of the job search and job-match theory, together with a discussion of previous empirical findings. In Section III, we give a brief description of some institutional features of the Norwegian educational system and the Norwegian labour market. The econometric model and e...

Absenteeism is affected by the sickness benefit system. Countries with generous compensation during sick leaves also experience high numbers of sick leave. Sick leaves may vary over the business cycle due to unemployment disciplining effects or changes in labour force composition. The latter hypothesis maintains that sickness may be pro-cyclical du...

Employment of apprentices seems to follow the business cycle. An interesting question is whether this is based on an investment policy where firms recruit when the labour market indicates skill shortage. Alternatively it may be that the firms are myopic and basically hire apprentices in booming periods since they can get hold of subsidised labour t...

In this paper we analyze early retirement pathways for Norwegian male and female workers. We apply a multinomial logit model to a data set covering more than 10 500 employees, ages 56-61, in 1989. The aim is to analyze the transition to different destinations, i.e. disability pension, unemployment benefits, out of the labour force, in the period fr...

We consider the early labour market experience of young persons. Using a large data sample of Norwegian individuals finishing education in 1989-91, we analyze the transition from school to work and the duration of the first job. We allow the search duration, the accepted wage, and the job duration to be connected in a system of simultaneous equatio...

The objective of this paper is to investigate if and how capital adjustment departs from the smooth pattern implied by standard model based on convex adjustment costs. Using Norwegian micro data, we start by documenting various aspects of the distribution of investment rates. We then present two pieces of econometric evidence on these issues. First...

Empirical evidence indicates that sickness absence tends to vary procyclically. This may suggest disciplining effects of unemployment, but may also reflect changes in the composition of the workforce or that health is affected adversely in boom periods. In this study a large panel of Norwegian register data for the years 1990- 1995 is used to asses...

Using intergenerational data with a substantial part of the life-cycle earnings of children and almost the entire life-cycle earnings for their fathers, we present new estimates of intergenerational mobility in Norway. Extending the length of the fathers’ earnings windows from 5 to 30 years increases the estimated elasticities. Varying the age of f...

In this paper we explore a model of firms' factor demand under the presence of nonconvex interrelated adjustment costs. These interrelated costs are such that two production factors may either increase or decrease the total costs incurred by the firm simultaneous adjustments. After having derived the maximum likelihood for the model where the two p...