New Economics Papers
on Efficiency and Productivity
Issue of 2008‒06‒07
nine papers chosen by

  1. Cross-border Investment and Economic Integration: The Case of Guangdong Province and Hong Kong SAR By Sharif, Naubahar; Huang, Can
  2. Stochastic FDH/DEA estimators for Frontier Analysis By Leopold Simar; Valentin Zelenyuk
  3. Mapping Prices into Productivity in Multisector Growth Models By L. Rachel Ngai; Roberto M. Samaniego
  4. FDI and the Consequences: Towards more complete capture of spillover effects By Ken Schoors; Bruno Merlevede
  5. Embodied Technological Progress and the Productivity Slowdown in Japan By TOKUI Joji; INUI Tomohiko; Young Gak KIM
  6. Knowledge Management through the Lens of Innovation and Labour Productivity in a Knowledge Based Economy By Constantinescu, Madalina
  7. Outsourcing and Offshoring in Canada By Baldwin, John R.; Gu, Wulong
  8. Intra-Industry Spillovers from Inward FDI: A Meta-Regression Analysis By Tomáš Havránek; Zuzana Iršová
  9. New Workplace Practices and Firm Performance: A Comparative Study of Italy and Britain By Cristini, Annalisa; Pozzoli, Dario

  1. By: Sharif, Naubahar (Hong Kong University of Science and Technology); Huang, Can (UNU-MERIT)
    Abstract: In this paper, we undertake a comparative study of the performance of local and foreign competitors’ manufacturing firms in a FDI-recipient region—Guangdong Province, China—and analyzes the policy implications of the comparison for the advanced, FDI-outflow region—Hong Kong Special Administrative Region (HKSAR). By highlighting changes in productivity that vary with changes in manufacturing firm ownership, we reveal that domestic firms have been catching up with their foreign counterparts, including Hong Kong-based firms, though foreign firms have successfully strengthened their dominating position in Guangdong’s manufacturing industry.
    Keywords: Total Factor Productivity, Manufacturing Sectors, Asia, China, Guangdong, Hong Kong
    JEL: D24 L60 O47
    Date: 2008
  2. By: Leopold Simar (Universite Catholique de Louvain and Toulouse School of Economics); Valentin Zelenyuk (Kyiv School of Economics and Kyiv Economics Institute)
    Abstract: In this paper we extend the work of Simar (2007) introducing noise in nonparametric frontier models. We develop an approach that synthesizes the best features of the two main methods in the estimation of production efficiency. Specifically, our approach first allows for statistical noise, similar to Stochastic Frontier Analysis (even in a more flexible way), and second, it allows modelling multiple-inputs-multiple-outputs technologies without imposing parametric assumptions on production relationship, similar to what is done in non-parametric methods (DEA, FDH, etc. . . ). The methodology is based on the theory of local maximum likelihood estimation and extends recent works of Park, Kumbhakar, Simar and Tsionas (2007) and Park, Simar and Zelenyuk (2006). Our method is suitable for modelling and estimation of the marginal effects onto inefficiency level jointly with estimation of marginal effects of input. The approach is robust to heteroskedastic cases and to various (unknown) distributions of statistical noise and inefficiency, despite assuming simple anchorage models. The method also improves DEA/FDH estimators, by allowing them to be quite robust to statistical noise and especially to outliers, which were the main problems of the original DEA/FDH. The procedure shows great performance for various simulated cases and is also illustrated for some real data sets.
    Keywords: Stochastic Frontier, Nonparametric Frontier, Local Maximum Likelihood
    JEL: C13 C14 C2
    Date: 2008–06
  3. By: L. Rachel Ngai; Roberto M. Samaniego
    Abstract: Two issues related to mapping a multi-sector model into a reduced-form value-added modelare often neglected: the composition of intermediate goods, and the distinction between valueadded productivity and gross output productivity. We demonstrate their quantitativesignificance for the case of the well known model of Greenwood, Hercowitz and Krusell(1997), who find that about 60% of economic growth can be attributed to investment-specifictechnical change (ISTC). When we recalibrate their model to allow for even a smallequipment share of intermediates, we find that ISTC accounts for almost the entirety of postwarUS growth.
    Keywords: Intermediate goods, investment-specific technical change, growth accounting,gross output, multisector growth models
    JEL: E13 O30 O41 O47
    Date: 2008–05
  4. By: Ken Schoors; Bruno Merlevede
    Abstract: We analyze productivity spillovers of FDI on domestic companies, both within and across industries. In the identification of intraindustry spillovers, we separate out labor market effects from other effects. Interindustry spillovers are identified through upstream, downstream, and supply-backward linkage effects. Dynamic input output tables are used to construct the linkages. For a panel of Romanian firms, we find evidence that labor market effects differ from other intraindustry effects. Spillovers across industries dominate those within industries. The supply-backward effect behaves as predicted by theory. Firm-specific level of technology, firm size, and ownership structure are all found to affect spillovers.
    Keywords: FDI, spillovers, absorptive capability, firm size, ownership structure
    JEL: F2
    Date: 2007–08–01
  5. By: TOKUI Joji; INUI Tomohiko; Young Gak KIM
    Abstract: Concerns over the rise in the vintage of capital in the Japanese economy have focused attention on the technological progress embodied in capital. In this paper, we derive the theoretical relationship between the rate of technological progress embodied in capital, the obsolescence rate of capital, and the average vintage of capital, then we estimate these rates by using firm-level panel data from the Ministry of Economy, Trade and Industry (METI) Basic Survey of Japanese Business Structure and Activities in the period between 1997 and 2002. To measure the obsolescence rate of capital by estimating the production function, it is necessary to construct a capital stock series that takes only physical depreciation into account for each vintage capital held by each firm. To do that, we prepared industry-specific patterns of the physical depreciation ratio of capital goods, based on the pattern of the physical depreciation ratio of each type of capital goods by obtaining information from the U.S. Bureau of Labor Statistics (BLS), and the Japan Industrial Productivity Database (JIP) 2006fs investment matrices cross-classified by types of capital goods and industries. We applied these industry-specific patterns of the physical depreciation ratio of capital goods to the individual firmsf investment series, constructing a capital stock series in each firm. We measured the obsolescence rate by estimating the production function, which is similar to the one employed in Sakellaris and Wilson (2004). We added several control variables to their equations. The estimated obsolescence rate of machinery and equipment is found to be between 8 and 22 percent per annum, which is very close to the estimated ratios in other previous research using the production function. This estimation result implies that the average rate of technological progress embodied in machinery and equipment is between 0.2 and 0.4 percent in Japan. The average vintage of capital in the manufacturing industry in the 1990s was estimated to increase by almost two years, because of weak investment during that decade, and it has the effect of lowering the rate of productivity growth in the industry by 0.4 to 0.8 percentage points.
    Date: 2008–06
  6. By: Constantinescu, Madalina
    Abstract: The 21st century brings along the recognition for the necessity to understand and measure the activity of knowledge management, for which reason organizations and system organizations, together with decisional governmental factors, do their best in order to develop policies that would promote these benefits. Knowledge management (KM) implies any activity regarding the capture and the diffusion of knowledge within the organization. In our study we analyze the impacts and dimensions of KM upon the innovation and labour productivity within the organization, and how KM affects the firm’s innovative performance. A key component of knowledge management is to provide access to stored knowledge components to improve decision making and to facilitate knowledge acquisition by the user.
    Keywords: knowledge-based economy; knowledge management; knowledge; explicit and implicit knowledge; innovation; productivity; diffusion of knowledge.
    JEL: A12 N00 O32 O31 D24 L60
    Date: 2008–06–02
  7. By: Baldwin, John R.; Gu, Wulong
    Abstract: This paper has three main objectives. First, it presents the long-term trends in outsourcing and offshoring across Canadian industries. Second, it examines the relationship between offshoring and changes in trade patterns at the industry level. It focuses on two major drivers that some have suggested are behind the recent trends toward offshoring: globalization and technological changes associated with information and communications technologies. Third, the paper examines the economic impact of offshoring by investigating the relationship between the extent of offshoring and productivity growth, shifts to high value-added activities and changes in labour markets.
    Keywords: International trade, Business performance and ownership, Business adaptation and adjustment
    Date: 2008–05–23
  8. By: Tomáš Havránek (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Zuzana Iršová (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: The present paper conducts a meta-analysis of literature on intra-industry spillovers from foreign direct investment, using 97 different outcomes from 67 empirical studies. Apart from the traditional approach, robust meta-regression, random-effects model, and normal probability regression are employed. Results of combined significance analysis are mixed but it is evident that studies published in leading academic journals tend to report rather insignificant results. Our findings suggest that the outcome of an empirical work is, in general, dependent on its design, although this pattern seems to weaken over time. Contrary to previous studies, evidence for publication bias was not detected.
    Keywords: meta-analysis, productivity spillovers, technology transfer, foreign direct investment, multinational companies
    JEL: D62 F21 F23 O12
    Date: 2008–06
  9. By: Cristini, Annalisa (Department of Economics); Pozzoli, Dario (Department of Economics, Aarhus School of Business)
    Abstract: Using data from the 2004 Workplace Employee Relations Survey on British establishments and two surveys on manufacturing firms located in the North of Italy, we look at the diffusion of new workplace practices in the two countries and at their impact on the firm's value added. We find that the adoption of innovation practices has spread substantially more across the British manufacturing firms than across the Italian ones; however our results also indicate that the practices' association with the firms' VA is much lower in Britain than in Italy. The counterfactual analysis shows that had the Italian workplaces the same characteristics of the British ones, in terms of diffusion of practices, capital intensity and skills, their average predicted value added would triplicate. On the other hand, were the Italian establishments to move and operate in the British context, their performance would improve very modestly. For the British establishments, we also investigate whether management practices improve job satisfaction.
    Keywords: Workplace practices; Financial Performance; Italy; UK
    JEL: C33 J41 J53 L20
    Date: 2008–05–01

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