New Economics Papers
on Efficiency and Productivity
Issue of 2005‒09‒17
eight papers chosen by

  1. Individual Wage Setting, Efficiency Wages and Productivity in Sweden By Lundborg, Per
  2. Direct and Indirect Measures of Capacity Utilization: A Nonparametric Analysis of U.S. Manufacturing By Subhash C. Ray; Kankana Mukherjee; Yanna Wu
  3. The Transition to Agriculture: Climate Reversals, Population Density, and Technical Change By Gregory K. Dow; Nancy Olewiler; Clyde G. Reed
  4. Export Variety and Economic Growth in East European Transition Economies By Ralf Ruhwedel; Michael Funke
  5. Drifting Together or Falling Apart? The Empirics of Regional Economic Growth in Post-Unification Germany By Roberta Colavecchio; Declan Curran; Michael Funke
  7. Threshold Effects and Regional Economic Growth-Evidence from West Germany By Michael Funke; Annekatrin Niebuhr
  8. Ex-ante Evaluation of European ICTs Policies: Efficiency vs Cohesion Scenarios By Roberta Capello; Alessia Spairani

  1. By: Lundborg, Per (Trade Union Institute for Economic Research)
    Abstract: Swedish wage setting has undergone drastic changes during the last 10-15 years. While Sweden was known for its narrow wage distribution, wage differentiation and wage bargaining at the individual level has become leading principles among white-collar workers’ unions. The purpose of the present paper is to analyse the consequences of this wage policy shift. Wage differences have increased drastically among white-collar workers while remained constant or even decreased among blue collar workers. We show that wage differentiation has had a strong effect on white collar workers’ average wage, and caused a major increase in the wage gap between the aggregates of whitecollar and blue-collar workers. We also show that increases in the coefficient of variation of wages raise productivity in firms with many workers in that worker category. Last and foremost, we show that the transition to individual wage setting raises the scope for firms to set efficiency wages and we find support for the fair wage version of efficiency wage setting. The effects of higher wage/fair wage rates were stronger in the late 1990s, when wage differentiation increased more, than in the early 2000s.
    Keywords: Efficiency wages; productivity; wage differentials
    JEL: J31 J41 J51
    Date: 2005–09–09
  2. By: Subhash C. Ray (University of Connecticut); Kankana Mukherjee (Worcester Polytechnic Institute); Yanna Wu (PricewaterhouseCoopers LLP)
    Abstract: We measure the capacity output of a firm as the maximum amount producible by a firm given a specific quantity of the quasi-fixed input and an overall expenditure constraint for its choice of variable inputs. We compute this indirect capacity utilization measure for the total manufacturing sector in the US as well as for a number of disaggregated industries, for the period 1970-2001. We find considerable variation in capacity utilization rates both across industries and over years within industries. Our results suggest that the expenditure constraint was binding, especially in periods of high interest rates.
    Keywords: Data envelopment analysis, expenditure constraint, indirect production function
    JEL: D24 L6
    Date: 2005
  3. By: Gregory K. Dow (Simon Fraser University); Nancy Olewiler (Simon Fraser University); Clyde G. Reed (Simon Fraser University)
    Abstract: Until about 13,000 years ago all humans obtained their food through hunting and gathering, but thereafter people in some parts of the world began a transition to agriculture. Recent data strongly implicate climate change as the driving force behind the agricultural transition in southwest Asia. We propose a model of this process in which population and technology respond endogenously to climate. The key idea is that after a lengthy period of favorable environmental conditions during which regional population grew significantly, an abrupt climate reversal forced people to take refuge at a few ecologically favored sites. The resulting spike in local population density reduced the marginal product of labor in foraging and made agriculture attractive. Once agriculture was initiated, rapid technological progress through artificial selection on plant characteristics led to domesticated varieties. Farming became a permanent part of the regional economy when this productivity growth was combined with climate recovery
    Keywords: origins of agriculture, foraging, hunting and gathering, climate change, population density, technical change, domestication, archaeology, anthropology, economic prehistory
    JEL: N
    Date: 2005–09–09
  4. By: Ralf Ruhwedel; Michael Funke
    Abstract: Utilising panel data for 14 East European transition economies we find support for the hypothesis that a greater degree of export variety relative to the U.S. helps to explain relative per capita GDP levels.The empirical work relies upon some direct measures of product variety calculated from 5-digit OECD trade data.Although the issue is still far from being settled, the merging conclusion is that the index of relative export varietyacross countries is significantly correlated with relative per capity income levels.
    Keywords: Product Variety, Transition Economies, Eastern Europe, Economic Growth, Panel Data
    JEL: C33 F43 O31 O52
    Date: 2005–01
  5. By: Roberta Colavecchio; Declan Curran; Michael Funke
    Abstract: The objective of this paper is to address the question of convergence across German districts in the first decade after German unification by drawing out and emphasising some stylised facts of regional per capita income dynamics. We achieve this by employing non-parametric techniques which focus on the evolution of the entire cross-sectional income distribution. In particular, we follow a distributional approach to convergence based on kernel density estimation and implement a number of tests to establish the statistical significance of our findings. This paper finds that the relative income distribution appears to be stratifying into a trimodal/bimodal distribution.
    Keywords: Regional Economic Growth, Germany, Convergence Clubs, Density Estimation, Modality Tests
    JEL: C14 R11 R12
    Date: 2005–08
  6. By: Felici Roberto (BOLOGNA); Pagnini Marcello (BOLOGNA)
    Abstract: We examine the determinants of entry into Italian local banking markets during the period 1991-2002 and build a simple model in which the probability of branching in a new market depends on the features of both the local market and the potential entrant. Our econometric findings show that, all else being equal, banks are more likely to expand into those markets that are closest to their pre-entry locations. We also find that large banks are more able to cope with distance-related entry costs than small banks. Finally, we show that banks have become increasingly able to open branches in distant markets, probably due to the advent of information and communication technologies.
    Keywords: entry, barriers to entry, local banking markets, geographical distance.
    JEL: G21 L13 L22 R30
    Date: 2005–06
  7. By: Michael Funke; Annekatrin Niebuhr
    Abstract: We study an overlapping generations model of human capital accumulation with threshold effects using regional data for West Germany. Our basic goal is to shed light on what makes German regions grow. The paper finds that the relative income distribution appears to be stratifying into a trimodal distribution. Thus, application of the threshold model to a real world case, here West Germany, shows that the model might help to explain regional growth patterns.
    Keywords: Regional Economic Growth, Human Capital, Germany
    JEL: J24 O40 R11 C31
    Date: 2005–01
  8. By: Roberta Capello; Alessia Spairani
    Abstract: Normative interventions in the ICTs sector at the European level are in fact mainly driven by the idea that the impacts of advanced telecommunications technology adoptions are related both to their capacity to increase competitiveness and to their potential influence on regional disparities, enhancing growth rates and development of weaker and less developed regions. The result is that the well-known trade-off between efficiency and cohesion emerges quite evidently. In this paper, the aim is to provide an ex-ante evaluation of EU ICTs policies on regional development and regional disparities, through a scenario building methodology which allows to calculate the increase in per capita GDP at NUTS 2 level for all 15 EU member states according to efficiency or cohesion policy options. In particular, the aims are to provide a cost assessment of efficiency and cohesion ICTs policies and to detect different regional response to ICTs policies, by highlighting different behavioural attitudes and reacting capacities of regions in front of alternative ICTs policy scenarios.
    Date: 2004–08

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