Dear colleagues, The Department of Economics cordially invites you to the WU Economics Research Seminar on Monday, May 23rd, with Rüdiger Bachmann (University of Notre Dame) on "Monopsony Makes Firms not only Small but also Unproductive: Why East Germany has not Converged" Abstract: When employers face a trade-off between growing large and paying low wages-that is, when they have monopsony power-some productive employers will decide to acquire fewer customers, forgo sales, and remain small. These decisions have adverse consequences for aggregate labor productivity. Using high-quality administrative data from Germany, we document that East German plants (compared to West German ones) face a steeper size- wage curve, invest less into marketing, and remain smaller. A model with labor market monopsony, product market power, and customer acquisition matching these features of the data predicts 10 percent lower aggregate labor productivity in East Germany. Date: Monday, May 23rd Time: 4.30 to 6 pm (CET) Location: building D4, ground floor, room D4.0.019 With best regards, Harald Oberhofer --- Univ.-Prof. Dr. Harald Oberhofer Department of Economics WU Vienna University of Economics and Business Phone: +43/1/31336-4984 Fax: +43/1/31336-4984 Email: harald.oberhofer@wu.ac.at<mailto:harald.oberhofer@wu.ac.at> Webpage: https://www.wu.ac.at/ie/mitarbeiter/harald-oberhofer/ Austrian Institute of Economic Research (WIFO) Phone: +43/1/7982601-468 Fax: +43/1/7989386 Email: harald.oberhofer@wifo.ac.at<mailto:harald.oberhofer@wifo.ac.at> Webpage: http://www.wifo.ac.at/harald_oberhofer