Firm dynamics

• The Mutable Geography of Firms’ International Trade

  Staff Working Paper 2025-11 Lu Han

  Exporters frequently change their market destinations. This paper introduces a new approach to identifying the drivers of these decisions over time. Analysis of customs data from China and the UK shows most changes are driven by demand rather than supply-related shocks.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Firm dynamics, International topics, Trade integration JEL Code(s): F, F1, F12, F14, L, L1, L11

• Bouncing Back: How Mothballing Curbs Prices

  Staff Working Paper 2024-51 Thibaut Duprey, Artur Kotlicki, Daniel E. Rigobon, Philip Schnattinger

  We investigate the macroeconomic impacts of mothballed businesses—those that closed temporarily—on sectoral equilibrium prices after a negative demand shock. Our results suggest that pandemic fiscal support for temporary closures may have eased inflationary pressures.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Central bank research, Firm dynamics, Fiscal policy, Inflation and prices JEL Code(s): C, C5, C55, C8, C81, D, D2, D22, E, E3, E32

• The (Mis)Allocation of Corporate News

  Staff Working Paper 2024-47 Xing Guo, Alistair Macaulay, Wenting Song

  We study how the distribution of information supply by the news media affects the macroeconomy. We find that media coverage focuses particularly on the largest firms, and that firms’ equity financing and investment increase after media coverage. But these equity and investment responses are largest among small, rarely covered firms. Our quantitative studies highlight that the aggregate effects of media coverage depend crucially on how that coverage is allocated.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Financial markets, Firm dynamics JEL Code(s): D, D2, D22, D6, D61, L, L1, L11, L2, L20

• Gender Gaps in Time Use and Entrepreneurship

  Staff Working Paper 2024-43 Pedro Bento, Lin Shao, Faisal Sohail

  The prevalence of entrepreneurs, particularly low-productivity non-employers, declines as economies develop. This decline is more pronounced for women. Relative to men, women are more likely to be entrepreneurs in poor economies but less likely in rich economies.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Firm dynamics, Productivity JEL Code(s): J, J2, L, L2, O, O1

• Monetary Policy Transmission to Small Business Loan Performance: Evidence from Loan-Level Data

  Staff Working Paper 2024-41 Rodrigo Sekkel, Tamon Takamura, Yaz Terajima

  We analyze the dynamic and heterogeneous responses of small-business loan performance to a monetary-policy shock using loan-level data in Canada. We find evidence of monetary policy transmission through the cash-flow channel and the aggregate demand channel as well as some, though limited, impact of collateral to discipline loan repayment.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Firm dynamics, Monetary policy transmission JEL Code(s): C, C3, C32, E, E1, E17, E3, E37, E5, E52

• An Anatomy of Firms’ Political Speech

  Staff Working Paper 2024-37 Pablo Ottonello, Wenting Song, Sebastian Sotelo

  We study the distribution of political speech across U.S. firms. We develop a measure of political engagement based on firms’ communications (earning calls, regulatory filings, and social media) by training a large language model to identify statements that contain political opinions. Using these data, we document five facts about firms’ political engagement.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Firm dynamics, Market structure and pricing, Recent economic and financial developments JEL Code(s): D, D2, D22, D6, D63, G, G4, G41, L, L1, L11, L2, L20

• Markups and Inflation in Oligopolistic Markets: Evidence from Wholesale Price Data

  Staff Working Paper 2024-20 Patrick Alexander, Lu Han, Oleksiy Kryvtsov, Ben Tomlin

  We study how the interaction of market power and nominal price rigidity influences inflation dynamics. We find that pass-through declines with price stickiness when markets are concentrated, which implies a lower slope of the New Keynesian Phillips curve.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Firm dynamics, Inflation and prices, Market structure and pricing, Monetary policy transmission JEL Code(s): D, D4, D43, E, E3, E31, L, L1, L13, L8, L81

• Survey of Indigenous Firms: A Snapshot of Wages, Prices and Financing in the Indigenous Business Sector in Canada

  Staff Discussion Paper 2024-4 Calista Cheung, James Fudurich, Janki Shah, Farrukh Suvankulov

  What sources of financing do Indigenous-owned businesses in Canada use, and what are their expectations about prices, wages and inflation? We find Indigenous-owned firms are significantly less reliant on financial institutions as sources of financing compared with non-Indigenous firms. We also find Indigenous-owned firms have higher inflation expectations and weaker wage-growth expectations.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Firm dynamics JEL Code(s): C, C8, C83, D, D0, G, G3, G38, J, J1, J15

• Pricing behaviour and inflation during the COVID-19 pandemic: Insights from consumer prices microdata

  Staff Analytical Note 2024-6 Olga Bilyk, Mikael Khan, Olena Kostyshyna

  Using the microdata underlying the Canadian consumer price index, we study how often and by how much firms changed their prices during the COVID-19 pandemic. We find that the surge in inflation was mainly associated with retailers raising prices much more often than before. We also find that more recently, corporate price-setting behaviour appears to be approaching pre-pandemic norms.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Firm dynamics, Inflation and prices, Recent economic and financial developments JEL Code(s): D, D2, D22, E, E3, E31, L, L1, L11
• November 9, 2023

  Getting used to higher interest rates

  Speech summary Carolyn Rogers Advocis Vancouver Vancouver, British Columbia

  Senior Deputy Governor Carolyn Rogers talks about why interest rates could settle at a higher level than Canadians are used to and why preparing early for that possible outcome is important.

  Content Type(s): Press, Speeches and appearances, Speech summaries Research Topic(s): Credit risk management, Financial institutions, Financial markets, Financial stability, Firm dynamics, Interest rates, Monetary and financial indicators, Recent economic and financial developments