Theses Doctoral

Essays on Firm Dynamics and Inequality

Liu, Ou

The primary focus of this thesis is on the causes and macroeconomic implications of inequality. The first two chapters of this thesis concern firm size (measured by sales) inequality. The rise in inequality in the upper tail of firm size distribution has important macroeconomic implications on the product market, the labor market and aggregate productivity growth.

In Chapter 1, I seek to understand how acquisition and innovation drive the rise in the upper tail firm size inequality. This question is motivated by the fact that as top firms pull increasingly farther from the rest of the firms, they did not grow into superstar firms on their own. I construct a new dataset to track the dynamic ownership of firms and their patents to identify the mechanisms through which acquisitions drive the growth of the acquiring firms via innovation. I then examine the implications of these innovation mechanisms on upper tail firm size inequality — in terms of both stationary distribution and transition dynamics — using a range of firm random growth models.

In chapter 2, I study what do changes in top sales shares signal about changes in large firm dynamics. I use an accounting decomposition to identify two sources of top sales shares growth: (i) incumbent top firms grow bigger; (ii) new top firms replace old top firms. I then build a continuous-time random growth model to infer the growth dynamics of firms at the upper tail of firm size distribution.

In Chapter 3, in collaboration with Tam Mai, Istudy the implications of occupational and regional inequality on the labor market after the breakout of the COVID-19 pandemic.


This item is currently under embargo. It will be available starting 2025-05-11.

More About This Work

Academic Units
Thesis Advisors
Gomez, Matthieu
Uribe, Martin
Ph.D., Columbia University
Published Here
June 7, 2023