New Economics Papers
on Efficiency and Productivity
Issue of 2009‒01‒03
24 papers chosen by

  1. Productivity: What Is It? How Is It Measured? What Has Canada's Performance Been? By Baldwin, John R.; Gu, Wulong
  2. Productivity Growth and Convergence in U.S. Agriculture: New Cointegration Panel Data Results By Yucan Liu; C. Richard Shumway; Robert Rosenman; V. Eldon Ball
  3. Understanding the Contributions of Reallocation to Productivity Growth: Lessons from a Comparative Firm-Level Analysis By J. David Brown; John Earle
  4. Exports and Profitability: First Evidence for German Manufacturing Firms By Fryges, Helmut; Wagner, Joachim
  5. Relative Multifactor Productivity Levels in Canada and the United States: A Sectoral Analysis By Baldwin, John R.; Gu, Wulong; Yan, Beiling
  6. Organic Farming Technologies and Agricultural Productivity: The case of Semi-Arid Ethiopia By Kassie, Menale; Zikhali, Precious; Pender, John; Köhlin, Gunnar
  7. Productivity Growth in Canadian and U.S. Regulated Industries By Gu, Wulong; Lafrance, Amélie
  8. Public-Sector Efficiency and Interjurisdictional Competition - an Empirical Investigation By Daniel Becker
  9. Les Facteurs Explicatifs d'Efficience-X Dans Les Banques Tunisiennes : Une Approche De Frontière Stochastique By ZAGHLA, ABDESSALEM; BOUJELBENE, YOUNES
  10. How Does Shared Capitalism Affect Economic Performance in the UK? By Alex Bryson; Richard B. Freeman
  11. Multifactor Productivity in Canada: An Evaluation of Alternative Methods of Estimating Capital Services By Baldwin, John R.; Gu, Wulong
  12. Foreign Market Conditions and Export Performance: Evidence from Italian Firm-Level Data By Holger Breinlich; Alessandra Tucci
  13. How do Taxes Affect Investment and Productivity?: An Industry-Level Analysis of OECD Countries By Laura Vartia
  14. Adoption of Organic Farming Technologies: Evidence from Semi-Arid Regions of Ethiopia By Kassie, Menale; Zikhali, Precious; Manjur, Kebede; Edwards, Sue
  15. Modern Management: Good for the Environment or Just Hot Air? By Nick Bloom; Christos Genakos; Ralf Martin; Raffaella Sadun
  16. Comparative Output and Labour Productivity in Manufacturing for China, Japan, Korea and the United States in Circa 1935 by a Production PPP Approach By Kyoji Fukao; Harry X. Wu; Tangjun Yuan
  17. Sectoral Productivity, Density and Agglomeration in the Wider Europe By Robert Stehrer; Neil Foster
  18. Derivation of the Hicks Elasticity of Substitution from the Input Distance Function By Stern, David I.
  19. Does Family Control Affect Trade Performance? Evidence for Italian Firms By Giorgio Barba Navaretti; Riccardo Faini; Alessandra Tucci
  20. Happiness and Productivity By Oswald, Andrew J.; Proto, Eugenio; Sgroi, Daniel
  21. Innovation and Productivity in SMEs: Empirical Evidence for Italy By Bronwyn H. Hall; Francesca Lotti; Jacques Mairesse
  22. Barriers to exporting: Firm-Level Evidence from Germany By Christian Arndt; Claudia M. Buch; Anselm Mattes
  23. Capital Intensity in Canada and the United States, 1987 to 2003 By Baldwin, John R.; Fisher, Anthony; Gu, Wulong; Lee, Frank C; Robidoux, Benoît
  24. An Analysis of New Zealand Economists' Research Output 2000-2006 By David L. Anderson; John Tresler

  1. By: Baldwin, John R.; Gu, Wulong
    Abstract: This paper provides an overview of the productivity program at Statistics Canada and a brief description of Canada's productivity performance. The paper defines productivity and the various measures that are used to investigate different aspects of productivity growth. It describes the difference between partial productivity measures (such as labour productivity) and a more complete measure (multifactor productivity) and the advantages and disadvantages of each. The paper explains why productivity is important. It outlines how productivity growth fits into the growth accounting framework and how this framework is used to examine the various sources of economic growth. The paper briefly discusses the challenges that face statisticians in measuring productivity growth. It also provides an overview of Canada's long-term productivity performance and compares Canada to the United States - both in terms of productivity levels and productivity growth rates.
    Keywords: Business performance and ownership, Economic accounts, Productivity accounts
    Date: 2008–02–25
  2. By: Yucan Liu; C. Richard Shumway; Robert Rosenman; V. Eldon Ball
    Abstract: Dynamic effects of health and inter-state and inter-industry knowledge spillovers, total factor productivity (TFP) growth and convergence in U.S. agriculture are examined using recently developed procedures for panel data and a growth accounting model. Strong evidence is found to support the hypothesis that TFP converges to a steady-state. Health care supply in rural areas and research spillovers from other states and from nonagricultural sectors are found to have significant impacts on the productivity growth rate both in the short-run and long-run. These results suggest richer opportunities for policymakers to enhance productivity growth.
    Keywords: convergence, growth, pooled mean group estimator, total factor productivity
    JEL: O30 D24
    Date: 2008–01
  3. By: J. David Brown; John Earle
    Abstract: We analyze comprehensive manufacturing firm data to measure the contribution of inter-firm employment reallocation to aggregate productivity growth during the socialist and reform periods in six transition economies. Modifying a standard decomposition technique to better reflect the role of firm entry, we find that reallocation rates and productivity contributions are very low under socialism. After reforms, they rise dramatically, and productivity contributions greatly exceed those observed in market economies. Early in transition, faster reform is associated with larger contributions from reallocation, but later, and on average over the whole transition, this relationship is reversed. Though reallocation rates are larger in faster reforming economies, higher productivity dispersion in slower reformers creates much higher productivity gains for a given volume of reallocation. The results imply that reallocation should be viewed as necessary regular maintenance for a well-functioning economy, and particularly large productivity contributions tend to reflect previous neglect more than current virtue.
    Keywords: productivity, reallocation, industry dynamics, entry, exit, creative destruction, reform, transition, Georgia, Hungary, Lithuania, Romania, Russia, Ukraine
    JEL: E32 O47 P23
    Date: 2008
  4. By: Fryges, Helmut; Wagner, Joachim
    Abstract: Using unique recently released nationally representative high-quality longitudinal data at the enterprise level for Germany, this paper presents the first comprehensive evidence on the relationship between exports and profitability. It documents that the positive profitability differential of exporters compared to non-exporters is statistically significant, though rather small, when observed firm characteristics and unobserved firm specific effects are controlled for. In contrast to nearly all empirical studies on the relationship between productivity and exports we do not find any evidence for selfselection of more profitable firms into export markets. Due to the sampling frame of the data used we cannot test the hypothesis that firms which start exporting perform better in the years after the start than their counterparts which do not start. Instead, we use a newly developed continuous treatment approach and show that exporting improves the profitability almost over the whole range of the export-sales ratio. Only firms that generate 90 percent and more of their total sales abroad do not benefit from exporting in terms of an increased rate of profit. This means, that the usually observed higher productivity of exporters is not completely absorbed by the extra costs of exporting or by higher wages paid by internationally active firms.
    Keywords: exports, profitability, micro data, Germany
    JEL: D21 F14
    Date: 2008
  5. By: Baldwin, John R.; Gu, Wulong; Yan, Beiling
    Abstract: This paper has three main objectives. First, it examines the level of multifactor productivity (MFP) in Canada relative to that of the United States for the 1994-to-2003 period. Second, it examines the relative importance of differences in capital intensity and MFP in accounting for the labour productivity differences between the two countries. Third, it traces the overall MFP difference between Canada and the United States to its industry origins and estimates the contributions of the goods, services and engineering sectors to the overall MFP gap. Our main findings are as follows. First, the overall capital intensity is as high in Canada as in the United States; but there are considerable differences in Canada's capital intensity across asset classes. Canada has considerably less machinery and equipment, about the same amount of buildings and considerably more engineering construction. Second, most of the differences in labour productivity between Canada and the United States are due to the differences in MFP. Third, our industry results show that the levels of labour productivity and MFP in the goods and the engineering sectors are closer to those of the United States. But, the level of labour and multifactor productivity in the services sector is much lower in Canada. The lower levels of labour productivity and MFP in the Canadian services sector account for most of the overall productivity level difference between the two countries.
    Keywords: Economic accounts, Productivity accounts
    Date: 2008–07–21
  6. By: Kassie, Menale (Department of Economics, School of Business, Economics and Law, Göteborg University); Zikhali, Precious (Department of Economics, School of Business, Economics and Law, Göteborg University); Pender, John (International Food Policy Research Institute, (IFPRI)); Köhlin, Gunnar (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Organic farming practices, in as far as they rely on local or farm renewable resources, present desirable options for enhancing agricultural productivity for resource-constrained farmers in developing countries. In this paper we use plot-level data from semi-arid area of Ethiopia to investigate the impact of organic farming practices on crop productivity, with a particular focus on conservation tillage. Specifically we seek to investigate whether conservation tillage results in more or less productivity gains than chemical fertilizer. Our results reveal a clear superiority of organic farming practices over chemical fertilizers in enhancing crop productivity. Thus our results underscore the importance of encouraging resource-constrained farmers in developing countries to adopt organic farming practices, especially since they enable farmers to reduce production costs, provide environmental benefits, and as our results confirm, enhance crop productivity.<p>
    Keywords: Conservation tillage; Chemical fertilizer; Crop productivity; Matched observations; Ethiopia
    JEL: C21 Q12 Q15 Q16 Q24
    Date: 2008–12–16
  7. By: Gu, Wulong; Lafrance, Amélie
    Abstract: This paper compares the productivity growth of a set of Canadian and U.S. regulated industries.. Using data from Statistics Canada's KLEMS database and the U.S. Bureau of Economic Analysis, the paper examines productivity growth in transportation services (which includes air and rail), broadcasting and telecommunications, and financial services (which includes financial intermediation and insurance), over the period from 1977 to 2003. The majority of these provide the foundational networks on which other industries rely. These sectors were quite heavily regulated in Canada at the beginning of the period of study (1977), experienced partial deregulation during the period and still faced various types of regulation at the end (2003). Deregulation also occurred in the United States, but regulation has generally been less restrictive there over most of the period. The evidence shows that many of the Canadian industries that underwent deregulation experienced faster labour productivity growth and multifactor productivity growth than did the aggregate Canadian business sector and had similar or higher productivity growth than did their counterparts in the United States over the 1977-to-2003 period. Those industries include rail transportation, broadcasting and telecommunications, financial intermediation and insurance carriers. The airline industry had slower productivity growth in Canada than in the United States over the 1977-to-2003 period.
    Keywords: Economic accounts, Productivity accounts
    Date: 2008–11–26
  8. By: Daniel Becker (University of Rostock)
    Abstract: This paper investigates the performance and efficiency of the public sector in countries worldwide for the years 1990 and 1995. Similar to what is done in Afonso / Schuhknecht / Tanzi (2005, Public Choice), I calculate performance measures for various fields of government policy, including education, health, security or macroeconomic stability. These performance measures are then used as output variables in a non-parametric FDH (free disposable hull) and DEA (data envelopment analysis) approach for the calculation of efficiency scores. Government expenditure is used as input for the evaluation of efficiency. In the last step the efficiency scores are regressed upon variables that describe the environment of government policy. I find that smaller public sectors tend to be more efficient, but the effect is not very sizeable. The same is true for countries that are more globalised. The pattern of (in-)efficiency can be large explained by continent-dummies.
    Keywords: Public-Sector Efficiency, Free Disposable Hull, Data Envelopment Analysis
    JEL: C14 H50
    Date: 2008
    Abstract: The Tunisian banks currently operate in a very competitive environment. Long-term viability of this sector depends on its degree of efficiency. Therefore a study relating to the determinants of X-Efficiency in Tunisian banks is of major interest. For that purpose, we made recourse to an extension of the stochastic frontier approach called " Improved SFA " which assumes a parameter of truncation specific to each bank. The empirical results reveal differences in efficiency pronounced according to the size and the structure of property of the banks. The average efficiency of the small and average sizes banks is significantly more significant than that of large banks. Moreover, the public banks are relatively more efficient than the private banks. Thereafter, we analyze the internal determinants of the level of the efficiency of the Tunisian banks. Within this framework, three results deserve to be underlined. Firstly, the improvement of the level of the efficiency of the Tunisian banks is related to the managerial capacity rather than with the size of the banks. Moreover, preponderance of the activity of credit, compared to other outputs represents a source of efficiency. Secondly, there is a negative relation between the ratio equity on total asset and the efficiency of banks, which seems to indicate that those are too committed in risk activities. Thirdly, the share of the non performants loans represents a source of inefficiency, insofar as it cost of a bank increases with these types of loans, especially for the banks of large sizes.
    Keywords: X-Efficiency; Stochastic Frontier Approach" SFA "; Trade banks; Translog Model; internal determinants .
    JEL: D21 C23 G32 G21
    Date: 2008–02
  10. By: Alex Bryson; Richard B. Freeman
    Abstract: This paper uses nationally representative linked workplace-employee data from the British2004 Workplace Employment Relations Survey to examine the operation of shared capitalistforms of pay - profit-sharing and group pay for performance, employee share ownership, andstock options—and their link to productivity. It shows that shared capitalism has grown inthe UK, as it has in the US; that different forms of shared capitalist pay complement eachother and other labour practices in the sense that firms use them together more than theywould if they chose modes of pay and work practices independently; and that workplacesswitch among schemes frequently, which suggests that they have trouble optimizing and thetransactions cost of switching are relatively low. Among the single schemes, shareownership has the clearest positive association with productivity, but its impact is largestwhen firms combine it with other forms of shared capitalist pay and modes of organization.
    Keywords: share ownership, payment systems, labour productivity
    JEL: J33 L23 L25
    Date: 2008–08
  11. By: Baldwin, John R.; Gu, Wulong
    Abstract: This paper examines the effects of alternative specifications of the user costs of capital on the estimated price and volume indices of capital services. It asks how sensitive the results are to the use of exogenous versus endogenous rates of return, to alternate ways of including capital gains, and to whether corrections are made for tax rates. The paper also examines the effect of the various user cost formulae on the measured multifactor productivity growth.
    Keywords: Economic accounts, Productivity accounts
    Date: 2007–04–04
  12. By: Holger Breinlich (University of Essex and Centre for Economic Performance, LSE); Alessandra Tucci (Centre for Economic Performance, LSE)
    Abstract: A large body of literature in International Economics has analysed the impact of increased import competition on domestic firms. The link between firm-level exports and changes in the competitive environment on foreign markets is less well understood, however. This is despite the fact that exports make up a significant and growing share of total manufacturing production in most countries. We derive a theory-based econometric specification linking destination-specific exports to foreign demand and the degree of competitiveness or “crowdedness” of a foreign market. The latter is a summary measure of the number and productive efficiency of firms competing in a given market and the barriers impeding their access, such as tariffs or physical distance. We estimate this specification on a large sample of Italian manufacturing firms in 1992-2003 and use the results for a series of counterfactual experiments. Our findings indicate that increased numbers and efficiency of foreign firms and improvements in their access to destination markets have reduced Italian exports by around 0.2-0.4% per year. This is similar to the effects of tariff reductions for Italian firms (+0.3%/year) but smaller than the impact of higher unit labour costs (-1.4%/year) and less favourable exchange rates (-2.0%/year). By far the most important determinant of export performance was foreign demand growth, however, raising Italian exports by up to 5.3% per year or almost 60% over the sample period. Our results also indicate that China’s impact on Italian export performance is small and if anything positive. Much more important in explaining the loss of export market shares in recent years has been the relatively slow demand growth in Italy’s main export market, the EU15.
    Keywords: International Trade, Competition, Exporters, Foreign Markets
    JEL: F12 F13 F15
    Date: 2008–10–27
  13. By: Laura Vartia
    Abstract: This paper analyses how different tax policies can affect investment and productivity. To address this question the paper uses industry-level data from a set of OECD countries and examines whether different industries are affected differently by taxation. Investment is shown to respond negatively to an increase in the corporate tax rate and a decrease in capital depreciation allowances through changes in the user cost of capital. The analysis of potential links between taxes and productivity tests the hypothesis that taxes affect productivity through different channels and that due to some salient industry characteristics some industries are inherently more affected than others by certain taxes. The paper finds evidence that corporate and top personal income taxes have a negative effect on productivity. In contrast, tax incentives for research and development (R&D) are found to have a positive effect on productivity. These effects are stronger in those industries that are inherently more profitable, have more entrepreneurial activity and are more R&D intensive, respectively. <P>L’effet des politiques de taxation sur les investissements and la productivité dans les pays de l'OCDE : Une analyse sectorielle <BR>Cette étude vise à étudier l’effet des politiques de taxation sur les investissements et la productivité des entreprises. Nous utilisons des données sectorielles pour un ensemble de pays de l’OCDE et analysons dans quelle mesure l’impact de la taxation diffère selon les secteurs. Selon nos résultats, une hausse de l’impôt sur les sociétés ou une baisse des provisions pour amortissement du capital provenant de variations du coût d’usage du capital induisent une baisse de l’investissement des entreprises. Nous analysons les mécanismes de l’impact de la taxation des entreprises sur leur productivité et nous testons si certains secteurs y sont plus sensibles que d’autres. Selon nos estimations, l’impôt sur les sociétés, mais aussi les dernières tranches de l’impôt sur le revenu, ont un impact négatif sur la productivité. En revanche, les avantages fiscaux visant à promouvoir la recherche et développement semblent avoir un effet bénéfique sur la productivité. Ces effets sont plus forts dans les secteurs plus rentables, dans les secteurs caractérisés par un niveau plus élevé d’activité entrepreneuriale, et dans les secteurs caractérisés par un niveau plus élevé de recherche et développement.
    Keywords: investment, investissement, impôt sur le revenu, user cost, coût d'usage, corporate and personal income taxation, total factor productivity, impôt sur les sociétés, productivité globale des facteurs
    JEL: C23 E22 H24 H25 H30
    Date: 2008–12–19
  14. By: Kassie, Menale (Department of Economics, School of Business, Economics and Law, Göteborg University); Zikhali, Precious (Department of Economics, School of Business, Economics and Law, Göteborg University); Manjur, Kebede (Tigray Agricultural Research Institute); Edwards, Sue (Institute for Sustainable Development,)
    Abstract: In the wake of resource constraints faced by farmers in developing countries in using external farm inputs, sustainable agricultural production practices that rely on local or farm renewable resources present desirable options for enhancing agricultural productivity. In this paper we use plot-level data from the semi-arid region of Ethiopia, Tigray, to investigate the factors influencing farmers' decisions to adopt sustainable agricultural production practices, with a particular focus on conservation tillage and compost. While there is heterogeneity with regards to factors influencing the choice to use either practice, results from a multinomial logit analysis underscore the importance of both plot and household characteristics on adoption decisions. In particular we find that poverty, and access to information, among other factors, impact the choice of farming practices significantly. We also find evidence that the impact of gender on technology adoption is technology specific while the significance of plot characteristics indicate the decision to adopt specific technologies is location-specific. Furthermore the use of stochastic dominance analysis supports the contention that sustainable farming practices enhance productivity -they even prove to be superior to the use of chemical fertilizers- justifying the need to investigate factors that influence adoption of these practices and use this knowledge to formulate policies that encourage adoption.<p>
    Keywords: Sustainable agriculture; Adoption; Productivity; Compost; Conservation tillage; Ethiopia
    JEL: Q12 Q16 Q24
    Date: 2008–12–16
  15. By: Nick Bloom; Christos Genakos; Ralf Martin; Raffaella Sadun
    Abstract: We use an innovative methodology to measure management practices in over 300 manufacturingfirms in the UK. We then match this management data to production and energy usage information forestablishments owned by these firms. We find that establishments in better managed firms aresignificantly less energy intensive. They use less energy per unit of output, and also in relation toother factor inputs. This is quantitatively substantial: going from the 25th to the 75th percentile ofmanagement practices is associated with a 17.4% reduction in energy intensity. This negativerelationship is robust to a variety of controls for industry, location, technology and other factor inputs.Better managed firms are also significantly more productive. One interpretation of these results is thatwell managed firms are adopting modern lean manufacturing practices, which allows them to increaseproductivity by using energy more efficiently. This suggests that improving the management practicesof manufacturing firms may help to reduce greenhouse gas emissions.
    Keywords: management, energy efficiency, energy intensity and productivity
    JEL: L2 M2 O32 O33 Q40 Q50
    Date: 2008–10
  16. By: Kyoji Fukao; Harry X. Wu; Tangjun Yuan
    Abstract: Following the standard methodology for measuring industry-of-origin or production-side PPPs, this study compares the unit values of manufacturing products in China, Japan, Korea and the US to calculate unit value ratios (UVRs) and hence estimates PPPs for individual manufacturing industries using the US as the base country in circa 1935. Based on the products that could be matched between these countries, the estimated manufacturing production PPPs for China, Japan and Korea are only from half to two thirds of the prevailing market exchange rates, suggesting much lower cost of production in manufacturing in these countries than in the US. The estimated PPPs are used to calculate industry-level output and labour productivity in China, Japan and Korea relative to those of the US in circa 1935. The results show that the size of factory manufacturing in Japan was 12 percent of the US level whereas in China it was only one percent and even lower in Korea. In terms of comparative labour productivity, measured as PPP$ per hour worked with the US as the reference, Japanese and Korean manufacturing was 24 and 23 percent of the US level, whereas Chinese manufacturing was only 7 percent of the US level.
    Keywords: Production (industry-of-origin) purchasing power parity (PPP), unit value ratio, comparative output and labour productivity, comparative advantage, economic development
    JEL: L60 O47 P52
    Date: 2008–12
  17. By: Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Neil Foster (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: In this paper we extend the agglomeration model of Ciccone (2002) to the level of industry. We then test this model using panel data for six sectors on regional level data for 27 EU member states. Our results for the aggregate economy confirm the estimates of Ciccone (2002). For our full sample of countries the sectoral level results also indicate significant agglomeration effects, with the exception of agriculture. Considering differences in the extent of agglomeration effects between new and old EU member states, however, leads to the conclusion that agglomeration effects tend to be stronger at both the aggregate and the sectoral level for new member states.
    Keywords: agglomeration, employment density, productivity, European regions
    JEL: R10
    Date: 2008–09
  18. By: Stern, David I.
    Abstract: The Hicks or direct elasticity of substitution is traditionally derived from the production function. This paper exploits duality theory to present a more general derivation from the input distance function, which is exactly dual to the Shadow Elasticity of Substitution. The new elasticity is more general than the traditional one as it can handle situations of technical inefficiency, nonseparability between inputs and outputs, and multiple outputs, but is equal to the traditional elasticity under the classical conditions. The new derivation is related to the Morishima and Antonelli Elasticities of Complementarity in the same way that the Shadow Elasticity of Substitution is related to the Morishima and Allen-Uzawa Elasticities of Substitution. Furthermore, distance (technical efficiency) is not constant for the Morishima and Antonelli Elasticities of Complementarity
    Keywords: Microeconomics; production; substitution
    JEL: D21 B21 D24
    Date: 2008–12–30
  19. By: Giorgio Barba Navaretti (University of Milan and Centro Studi Luca d\'Agliano); Riccardo Faini (University of Rome “Tor Vergata”, Centro Studi Luca d\'Agliano and CEPR); Alessandra Tucci (Centre for Economic Performance, LSE and Centro Studi Luca d\'Agliano)
    Abstract: This paper examines whether the export decision of firms is affected by their ownership structure, specifically it looks at whether family control is an obstacle to entering foreign markets. The underlying assumption is that family firms are risk averse. Risk aversion may be an obstacle to entering foreign markets, as far as these are perceived as more volatile and risky than the domestic one, particularly when such choice entices bearing relatively high sunk costs. We develop an illustrative theoretical model that shows how the combination between high risk aversion and low initial productivity may hinder family firms’ decision to enter foreign markets, particularly distant ones. The empirical analysis, based on a detailed panel data set of Italian firms covering the years from 1995 to 2003, confirms such predictions by showing that family controlled firms do indeed export less than other type of companies even after controlling for firm heterogeneity in productivity, size, technology and access to credit.
    JEL: F1 F14 L2
    Date: 2008–10–27
  20. By: Oswald, Andrew J. (Department of Economics, University of Warwick); Proto, Eugenio (Department of Economics, University of Warwick); Sgroi, Daniel (Department of Economics, University of Warwick)
    Abstract: Little is known by economists about how emotions affect productivity. To make persuasive progress, some way has to be found to assign people exogenously to different feelings. We design a randomized trial. In it, some subjects have their happiness levels increased, while others in a control group do not. We show that a rise in happiness leads to greater productivity in a paid piece-rate task. The effect is large; it can be replicated; it is not a reciprocity effect; and it is found equally among males and females. We discuss the implications for economics.
    Keywords: Labor productivity ; emotions ; well-being ; happiness ; positive affect ; experimental economics
    Date: 2008
  21. By: Bronwyn H. Hall; Francesca Lotti; Jacques Mairesse
    Abstract: Innovation in SMEs exhibits some peculiar features that most traditional indicators of innovation activity do not capture. Therefore, in this paper, we develop a structural model of innovation which incorporates information on innovation success from firm surveys along with the usual R&D expenditures and productivity measures. We then apply the model to data on Italian SMEs from the "Survey on Manufacturing Firms" conducted by Mediocredito-Capitalia covering the period 1995-2003. The model is estimated in steps, following the logic of firms' decisions and outcomes: in the first, R&D intensity is linked to a set of firm and market characteristics. We find that international competition fosters R&D intensity, especially for high-tech firms. Firm size, R&D intensity, along with investment in equipment enhances the likelihood of having both process and product innovation. Both these kinds of innovation have a positive impact on firm's productivity, especially process innovation. Among SMEs, larger and older firms seem to be less productive.
    JEL: D24 L25 L26 O30 O32
    Date: 2008–12
  22. By: Christian Arndt (Institute for Applied Economic Research, IAW); Claudia M. Buch (University of Tubingen and CESifo); Anselm Mattes (Institute for Applied Economic Research, IAW)
    Abstract: Recent literature stresses the importance of low productivity as a barrier to the international expansion of firms. But financial frictions or adverse employment conditions at home could matter as well. In this paper, we present new empirical evidence on the importance of these factors. We use a detailed micro-level dataset of German firms which simultaneously provides information on exports, financial frictions, and labor market conditions. Our paper has three main findings. First, in line with earlier literature, we find a positive impact of size and productivity on firms’ export activities. Second, financial constraints affect the entry into foreign market (extensive margin) more than the volume of exports (intensive margin). Third, labor market conditions have a mixed impact on export activities. The most consistent finding is that firms covered by collective bargaining agreements are less likely to be exporters and export less.
    Keywords: multinational firms, exports, firm heterogeneity, productivity
    JEL: F2 G2
    Date: 2008–11–30
  23. By: Baldwin, John R.; Fisher, Anthony; Gu, Wulong; Lee, Frank C; Robidoux, Benoît
    Abstract: Official data from statistical agencies are not always ideal for cross-country comparisons because of differences in data sources and methodology. Analysts who engage in cross-country comparisons need to carefully choose among alternatives and sometimes adapt data especially for their purposes. This paper develops comparable capital stock estimates to examine the relative capital intensity of Canada and the United States. To do so, the paper applies common depreciation rates to Canadian and U.S. assets to come up with comparable capital stock estimates by assets and by industry between the two countries. Based on common depreciation rates, it finds that capital intensity is higher in the Canadian business sector than in the U.S. business sector. This is the net result of quite different ratios at the individual asset level. Canada has as higher intensity of engineering infrastructure assets per dollar of gross domestic product produced. Canada has a lower intensity of information and communications technology (ICT) machinery and equipment (M&E). Non-ICT M&E and building assets intensities are more alike in the two countries. However, these results do not control for the fact that different asset-specific capital intensities between Canada and the United States may be the result of a different industrial structure. When both assets and industry structure are taken into account, the overall picture changes somewhat. Canada's business sector continues to have a higher intensity of engineering infrastructure and about the same intensity of building assets; however, it has a deficit in M&E that goes beyond ICT assets.
    Keywords: Economic accounts, Productivity accounts
    Date: 2008–07–10
  24. By: David L. Anderson (Queen's University); John Tresler (University of Waikato)
    Abstract: In this paper we examine, in some depth, the research practices of New Zealand’s academic economists. To date, virtually all published work in this area has focussed on the overall productivity of the country’s economics departments. However, such rankings give little information on the research performance of various sub-groups of economists. In order to address this situation, we utilize descriptive statistics to assess research output by academic rank, gender, educational attainment, and publication source. The paper concludes with a brief discussion of the performance of individual researchers.
    Keywords: economics departments; department rankings; research output; economics research
    JEL: A10 A14 C81 J24
    Date: 2008–08–12

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