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on Efficiency and Productivity |
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Issue of 2015‒04‒11
28 papers chosen by |
| By: | Twine, Edgar; Katjiuongua, Hikuepi |
| Abstract: | The study uses a partial equilibrium model to determine the benefits that would accrue to smallholder dairy producers and consumers from improved efficiency of Tanzania’s informal dairy value chain. Two sources of technical efficiency are analyzed, namely, cost efficiency and scale efficiency. Using aggregate time series data to simulate the model, the study finds that improvement in scale efficiency offers relatively large benefits to both producers and consumers. However, benefits from improvement in cost efficiency are relatively small and disproportionate. It is concluded that improving technical efficiency in general would lead to significant benefits for producers and consumers. |
| Keywords: | Tanzania’s informal dairy value chain, smallholder farmers, partial equilibrium model, Demand and Price Analysis, International Development, Livestock Production/Industries, Marketing, Production Economics, Productivity Analysis, Q11, Q13, Q18, |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:200329&r=eff |
| By: | Michele Imbruno |
| Abstract: | This paper highlights the crucial role played by international access to intermediate inputs to explain firm-level performance, via two channels simultaneously: trade and FDI. We develop a simple theoretical model showing that trade integration of input market entails an efficiency improvement within firms able to import (gains from input switching) and an efficiency decline within other firms (losses from domestic input availability). At the same time, FDI integration of input market implies non-importers’ efficiency enhancement (gains from input switching) and some ambiguous effects on importers’ efficiency (due to additional losses from foreign input availability). Using firm-level data from the Chinese manufacturing sector over the period 2002-2006, we find some results coherent with our theoretical predictions. |
| Keywords: | Heterogeneous firms, Trade liberalization, FDI, Intermediate inputs, Productivity |
| JEL: | F12 F14 F23 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:wsr:wpaper:y:2015:i:154&r=eff |
| By: | TABUCHI, Takatoshi (University of Tokyo, Faculty of Economics and Research Institute of Economics, Trade & Industry); THISSE, Jacques-François (Université catholique de Louvain, CORE, Belgium; NRU-Higher School of Economics, Russia; CEPR); ZHU, Xiwei (Center for Research of Private Economy and School of Economics, Zhejiang University) |
| Abstract: | We show that how technological innovations and migration costs interact to shape the space-economy. Regardless of the level of transport costs, rising labor productivity fosters the agglomeration of activities, whereas falling transport costs do not affect the location of activities. When labor is heterogeneous, the number of workers residing in the more productive region increases by decreasing order of productive efficiency when labor productivity rises. This process affects in opposite directions the welfare of those who have a lower productivity. |
| Keywords: | new economic geography, technological progress, labor productivity, migration costs, labor heterogeneity |
| JEL: | J61 R12 |
| Date: | 2014–11–18 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2014047&r=eff |
| By: | Reshmi Kumari; Yuko Nakano |
| Abstract: | Does land lease tenure insecurity cause decreased productivity and investment in the sugar industry? To answer this question, the present study examined the impact of weak formal tenure lease arrangements on tenants’ investment and the productivity of sugarcane in Ba province, Fiji. After controlling for potential endogeneity in the choice of lease tenure using instrumental variables (IV), it was shown that tenants under insecure lease tenure (expiring in 0–5 years) achieve significantly lower yields of sugarcane, by 9–11 tonnes per hectare, and plant smaller areas of new sugarcane, by 0.19–0.25 hectares on average, than do tenants under secure lease tenure. Insecure lease tenure also negatively affects chemical fertilizer use, although this impact is not statistically significant. An intervention to improve tenure security would likely enhance the production efficiency of and investment in the Fijian sugarcane industry. |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:tsu:tewpjp:2015-001&r=eff |
| By: | Obike, Kingsley Chukwuemeka; Osundu, Charles Kelechi |
| Abstract: | ABSTRACT This study investigated the comparative determinants of productivity among cassava farmer-beneficiaries and non-beneficiaries of Microfinance Institution (MFIs) in Abia state, Nigeria. Specifically, the study identified and examined factors influencing productivity of cassava farmers who are beneficiaries and non-beneficiaries of Microfinance Institutions (MFIs). Multistage random sampling technique was implored in sorting out respondents who are beneficiaries and non-beneficiaries of MFIs spread across the 3 agricultural zones in the state. This provided the sample frame from which primary data were collected with the use of a pre tested and structured questionnaire. A total of 240 cassava farmers who are both beneficiaries (120) and non-beneficiaries (120) of MFIs were used in this study. The method of data analysis used is the ordinary least square (OLS) regression technique with the choice of Cobb Douglas as the lead equation most suited to explain productivity analysis and chow test for test of difference between means of factors. The result revealed that gender, age, household size and farming experience were directly related to productivity at varied 1.0%, 5.0% and 10.0% levels of significance for beneficiaries of MFIs while non-beneficiaries coefficient for gender, age, education, farm size, household size and farming experience were statistically significant at varied critical probability levels. The chow test however reveals that the calculated F-value given as 5.784 is significant at 1.0% levels, hence proved that MFIs beneficiaries are more productive than non-beneficiaries. It is therefore necessary for government policies to consider encouraging male cassava farmers, with good farming experience and moderate household members to ensure and maintain productivity. |
| Keywords: | Comparative Determinants; Productivity; Beneficiaries and non-beneficiaries; Microfinance Institution (MFIs); Cassava |
| JEL: | Q14 Q18 |
| Date: | 2013–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63325&r=eff |
| By: | Johannes G. Hoogeveen (World Bank); Mariacristina Rossi (University of Torino, CeRP-CCA and Netspar); Dario Sansone (Georgetown University) |
| Abstract: | This paper uses new data available from a school census in Togo to analyze differences in primary school performances across regions. Our results, obtained from a stochastic frontier analysis, suggest that differences in efficiency explain only part of the observed variation, while resource availability is the most important driver of performance differences. In addition to this, the paper notes that resources are distributed quite unevenly among regions and schools. By improving access to inputs, particularly in the underserved schools, performance can be expected to go up considerably. |
| Keywords: | efficiency, education, Togo, stochastic frontier, performances |
| JEL: | C21 I21 I25 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:145&r=eff |
| By: | Jan Hanousek (CERGE-EI, Charles University and the Czech Academy of Sciences, Prague); Evžen Kočenda; Anastasiya Shamshur |
| Abstract: | Using a stochastic frontier model and a comprehensive dataset, we study factors that affect corporate efficiency in Europe. We find that (i) larger firms are less efficient than smaller firms, (ii) greater leverage contributes to corporate efficiency, and (iii) high competition is less conductive to efficiency than moderate or low competition. In terms of ownership, we find that (iv) efficiency increases when a majority owner must deal with minority shareholders and that (v) domestic majority owners improve efficiency more than foreign majority owners when no minority shareholders are present, but (vi) the opposite is true when minority shareholders hold a substantial fraction of the firm’s equity. In the analysis, we distinguish between a pre-crisis period (2001–2008) and a post-crisis period (2009–2011), and find that our results are sensitive to the period of observation. |
| Keywords: | efficiency; ownership structure; firms; panel data; stochastic frontier; Europe |
| JEL: | C33 D24 G32 L60 L80 M21 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:346&r=eff |
| By: | HIRAGUCHI Ryoji |
| Abstract: | We provide a microfoundation for the production function by using the concept of stochastic macro-equilibrium in Yoshikawa ("Stochastic Macro-equilibrium and Microfoundations for Keynesian Economics," RIETI Discussion Paper, 2013). We consider an economy with multiple firms, with each firm possessing Leontief technology. We assume that the allocation of labor is determined by entropy maximization. We show that for selected productivity distribution, aggregate production is described by the popular Cobb-Douglas type. |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15040&r=eff |
| By: | Andrzej Cieslik (University of Warsaw); Jan Michalek (University of Warsaw); Iryna Nasadiuk (University of Warsaw) |
| Abstract: | Following the new strand in the new trade theory literature that focuses on firm heterogeneity in this paper we investigate determinants of firm export performance in Ukraine. The study is based on the BEEPS firm level data compiled by EBRD and the World Bank. The study covers the period starting in 2005 and ending in 2013. We estimate probit regressions for each year of our sample as well as for the pooled dataset that includes all years. Our pooled estimation results indicate that the probability of exporting is related to the level of productivity, the firm size, R&D expenditure, the share of university graduates in productive employment, as well as the internationalization of firms. The estimation results obtained for particular countries reveal some degree of heterogeneity. In particular, the firm age is significant only in the last years of our sample. |
| Keywords: | Export activity, firm heterogeneity, Ukraine |
| JEL: | F14 P33 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2015:no41&r=eff |
| By: | Ruge Leiva, Diego Ivan |
| Abstract: | Studies which are based on Coe and Helpman (1995) and use weighted foreign R&D variables to estimate channel-specific R&D spillovers disregard the interaction between international R&D spillovers and other unobserved common spillovers and shocks. Using a panel of 50 economies from 1970-2011, we find that disregarding this interaction leads to inconsistent estimates whenever knowledge spillovers and other unobserved effects are correlated with foreign and domestic R&D. When this interaction is modeled, estimates are consistent; however, they confound foreign and domestic R&D effects with unobserved effects. Thus, the coefficient of a weighted foreign R&D variable cannot capture genuine channel-specific R&D spillovers. |
| Keywords: | Productivity, Cross-Section Dependence, Unobserved Common Spillovers and Shocks. |
| JEL: | C23 O11 O30 O40 |
| Date: | 2015–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63500&r=eff |
| By: | McCullough,Ellen B. |
| Abstract: | Drawing on a new set of nationally representative, internationally comparable household surveys, this paper provides an overview of key features of structural transformation?labor allocation and labor productivity?in four African economies. New, micro-based measures of sector labor allocation and cross-sector productivity differentials describe the incentives households face when allocating their labor. These measures are similar to national accounts-based measures that are typically used to characterize structural changes in African economies. However, because agricultural workers supply far fewer hours of labor per year than do workers in other sectors, productivity gaps disappear almost entirely when expressed on a per-hour basis. What look like large productivity gaps in national accounts data could really be employment gaps, calling into question the prospective gains that laborers can achieve through structural transformation. These employment gaps, along with the strong linkages observed between rural non-farm activities and primary agricultural production, highlight agriculture's continued relevance to structural change in Sub-Saharan Africa. |
| Keywords: | Economic Theory&Research,Labor Markets,Work&Working Conditions,Labor Policies,Banks&Banking Reform |
| Date: | 2015–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7234&r=eff |
| By: | Graetz, Georg (Uppsala University); Michaels, Guy (London School of Economics) |
| Abstract: | Despite ubiquitous discussions of robots' potential impact, there is almost no systematic empirical evidence on their economic effects. In this paper we analyze for the first time the economic impact of industrial robots, using new data on a panel of industries in 17 countries from 1993-2007. We find that industrial robots increased both labor productivity and value added. Our panel identification is robust to numerous controls, and we find similar results instrumenting increased robot use with a measure of workers' replaceability by robots, which is based on the tasks prevalent in industries before robots were widely employed. We calculate that the increased use of robots raised countries' average growth rates by about 0.37 percentage points. We also find that robots increased both wages and total factor productivity. While robots had no significant effect on total hours worked, there is some evidence that they reduced the hours of both low-skilled and middle-skilled workers. |
| Keywords: | robots, productivity, technological change |
| JEL: | E23 J23 O30 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8938&r=eff |
| By: | MAYNERIS, Florian (Université catholique de Louvain, CORE & IRES, Belgium); PONCET, Sandra (Paris School of Economics (University of Paris 1), CEPII and FERDI); ZHANG, Tao (Shangai University of International Business and Economics) |
| Abstract: | We here consider how Chinese firms adjust to higher minimum wages and how these affect aggregate productivity, exploiting the 2004 minimum-wage reform in China. We find that higher city-level minimum wages reduced the survival probability of firms which were the most exposed to the reform. For the surviving firms, thanks to significant productivity gains, wage costs rose without any negative employment effect. At the city-level, our results show that higher minimum wages affected aggregate productivity growth via both productivity growth in incumbent firms and the net entry of more productive firms. Hence, in a fast-growing economy like China, there is a cleansing effect of labor-market standards. |
| Keywords: | minimum wages, firm-level performance, aggregate TFP, China |
| JEL: | O14 J38 O47 |
| Date: | 2014–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2014044&r=eff |
| By: | Brunt, Liam |
| Abstract: | We estimate a time series model of weather shocks on English wheat yields for the early nineteenth century and use it to predict weather effects on yield levels from 1697 to 1871. This reveals that yields in the 1690s were depressed by unusually poor weather; and those in the late 1850s were inflated by unusually good weather. This has led researchers to overestimate the underlying growth of yields over the period by perhaps 50 per cent. Correcting for this effect would largely reconcile the conflicting primal and dual estimates of productivity growth over the period. |
| Keywords: | agriculture; productivity; weather |
| JEL: | N5 O3 Q1 Q2 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10530&r=eff |
| By: | Tin Htoo NAING (Asia Europe Institute, University of Malaya); Yap Su FEI (Department of Economics, Faculty of Economics and Administration, University of Malaya) |
| Abstract: | Myanmar’s clothing industry has played a pivotal role in generating employment and exports. This article makes a contribution to the explication of the role of supporting institutions in the development of clothing manufacturing in Myanmar. The statistical analysis show that technological intensity is not correlated with labour productivity and export-intensity, which may be a consequence of the infancy of the industry and the use of old technologies in Myanmar. Also, the Probit estimations show that regional linkages matter in labour productivity and exportintensities but not with technological intensities in the clothing industry in Myanmar. |
| Keywords: | Clothing, Myanmar, productivity, regional linkages, technology |
| JEL: | L62 L22 L14 O31 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-14&r=eff |
| By: | Lyubov Andrushko (Politechnika Swietokrzyska) |
| Abstract: | The paper presents the synthetic results of research on the evaluation of efficiency of selected food industries in Poland, in the years 2000-2013. A dynamic approach was applied to the studies which were based on the analysis of prices of raw materials, meat products and product assortments of meat processing companies. The mechanism of prices impact on the efficiency of management was examined using the term ”food chain” in the meat industry, which comprises: agriculture- food processing-consumers. The reasoning of the influence of micro and macro factors on the economic efficiency in the pursuit of sustainable development was applied in the study as well as theoretical knowledge. This was the knowledge on the price structure, the impact of internal transformations (changes) of enterprises on the level of prices of goods offered by them in the meat industry studied. |
| Keywords: | food chain, efficiency evaluation, prices dynamics, meat products consumption pattern |
| JEL: | D4 L1 O13 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2015:no26&r=eff |
| By: | Ferguson, Shon M.; Olfert, M. Rose |
| Abstract: | We estimate the impact of the removal of a railway transportation subsidy on the adoption of technology for Western Canadian farms, using a unique combination of Census and freight rate data. We exploit the large regional variation in these one-time freight rate increases in order to identify causal effects of increased competitive pressure. Using a difference-in differences methodology we find that higher freights rates – and hence lower farm gate prices – induced farmers to adopt new, more efficient production technology. We also find that farmers experiencing the greatest transportation cost increases also increased fertilizer usage and made significant land use changes. |
| Keywords: | Agricultural Trade Liberalization, Export Subsidy, Technical Change, Farm Support, Agricultural and Food Policy, Crop Production/Industries, Institutional and Behavioral Economics, International Relations/Trade, Land Economics/Use, Livestock Production/Industries, Research and Development/Tech Change/Emerging Technologies, F14, O13, Q16, Q17, Q18, |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:riiewp:164658&r=eff |
| By: | Ajai Chopra (Peterson Institute for International Economics) |
| Abstract: | Growth in developing Asia will need to rely more on improvements in productivity growth and less on capital deepening. Although there is no single reform path to spur productivity growth, financial system deepening is central to a more efficient allocation of capital across sectors and can facilitate innovation and technology transfer. But malfunctioning financial systems can also result in the misallocation of resources, making it important that policymakers focus less on increasing the size of the financial sector and more on improving its intermediation function. The paper discusses the general policy priorities for further financial development in Asia based on financial sector realities in the region and the level of country income. Steps to mobilize Asia's ample private savings for long-term financing, especially to tackle the region's infrastructure deficit and improve access to financing for small and medium enterprises, can help raise productivity. Further, as many countries in Asia shift from a development model based on technology absorption to one that promotes innovation, specialized finance and investors can play a critical role in allowing innovative firms to conduct research, adopt technologies necessary for inventions, and ultimately commercialize innovations. |
| Keywords: | Asia, financial sector, productivity |
| JEL: | G21 G23 G24 G28 O30 O40 O53 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp15-6&r=eff |
| By: | Ahsanuzzaman, Ahsanuzzaman |
| Keywords: | Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea15:200406&r=eff |
| By: | Mai Anh NGO (Univeristy of North Carolina at Chapel Hill) |
| Abstract: | This paper models how firms finance their fixed costs of exporting through internal financing from retained earnings and external financing (borrowing from banks). The theoretical model featrues firms with heterogeneity in productivity, liquidity and collateral. It also models banks’lending decisions explicitly, allowing for endogenous firm default rate as well as allowing for the loand interest rate to depend on firms’characteristics. The model predicts that credit access has a positive impact on firms’export propensity and that this effect is only signifincant form firms in the intermediate range of producitivity. These predicitons are suppoted by the empirical analysis of a longitudinal data set of Ghanaian firms and the empirical resluts are robust to various robustness checks. |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-27&r=eff |
| By: | Vanthana NOLINTHA (National Economic Research Institute, Vientiane, Lao PDR); Idris JAJRI (Faculty of Economics and Administration, University of Malaya) |
| Abstract: | This article examines the relationship between institutional support and regional production linkages, and technological capabilities and firm performance in the garment industry in Laos. The evidence shows that garment firms in Laos have achieved considerable technological upgrading, and that firm performance and technological capabilities are determined by export-intensity. Firms’ technological capabilities are determined by the quality of host-site institutional support, while foreign firms have invested little to upgrade human capital in Laos. In addition, firms of all ownership structure have invested little in R&D in Laos. |
| Keywords: | garment, global production chains, Laos, technological capabilities |
| JEL: | L62 L22 L14 O31 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-13&r=eff |
| By: | Nicholas Oulton; Gavin Wallis |
| Abstract: | This paper presents annual estimates of fixed capital stocks and capital services for the United Kingdom, 1950-2013, for the whole economy and for the market sector. Our estimates cover eight asset types (structures, machinery, vehicles, computers, purchased software, own-account software, mineral exploration and artistic originals) and also a ninth, R&D, from 1981 to 2013. We compare the effect on the estimates of capital services of using either an exogenous (ex post) rate of return or an endogenous one. The latter uses a model which allows for ex ante risk: firms' expectations may not be satisfied so the realised rate of return may not be equalised across assets. We see how much the inclusion of R&D matters. We also look at what has happened to capital intensity (capital services per hour worked) in the Great Recession, a period when labour productivity fell in the UK. And we consider the evolution of the aggregate depreciation rate and of capital consumption as a proportion of GDP. |
| Keywords: | Capital services, capital stocks, rate of return, ex post, hybrid |
| JEL: | E22 E23 D24 O47 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1342&r=eff |
| By: | Huikang Ying |
| Abstract: | This paper studies the interactions between urban labour informality and selective migration, and explores the consequences of productivity changes at both sectoral and individual levels. It proposes a general equilibrium model with heterogeneous workers to characterize the sizable agriculture sector and urban informality in developing economies, and discusses implications for wages and inequality. The model links the size of the urban informal sector to the distributions of individual productivity endowments. The finding suggests that improving average individual skills is an efficient way to alleviate urban underemployment. Equilibrium responses also indicate that changes in labour markets have only modest effects on wages and inequality. |
| Keywords: | Rural-urban migration, informal sector, productivity changes, wage inequality |
| JEL: | J24 O15 O17 |
| Date: | 2015–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:15/653&r=eff |
| By: | Alvarez-Cuadrado, Francisco (McGill University); Long, Ngo Van (McGill University); Poschke, Markus (McGill University) |
| Abstract: | Recent work has documented declines in the labor income share in the United States and beyond. This paper documents that these trends differ between manufacturing and services in the U.S. and in a broad set of other industrialized economies, and shows that a model where the degree of capital-labor substitutability differs across sectors is consistent with these trends. We calibrate the model exploiting additional information on the pace of structural change from manufacturing to services, on which the model also has predictions. We then conduct a decomposition to establish the relative importance of several potential drivers of changes in factor income shares and structural change that have been proposed in the literature. This exercise reveals that differences in productivity growth across sectors, combined with differences in substitution possibilities, have been the main driver of both changes in the labor income share and structural change. |
| Keywords: | structural change, labor income share, capital-labor substitution |
| JEL: | O40 O30 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8941&r=eff |
| By: | Dvoskin, Ariel; Fratini, Saverio M. |
| Abstract: | The paper addresses the ambiguity that surrounds the conception of capital and its role in neoclassical price-and-distribution theory. The difficulties encountered in the various attempts to define the marginal product either of capital or of a capital good are recalled and the conclusion is drawn that neither concept appears theoretically sound. This is combined with critical discussion of the recent attempt by Samuelson and Etula to determine income distribution by means of their ‘Master Function’ and its ‘non-neoclassical’ marginal products. Rather than the existence of a continuum of alternative technical possibilities, Samuelson and Etula assume the simultaneous coexistence of a discrete number of methods of production for the same commodity. Even though each technique employs the inputs in fixed proportions, the coexistence of various techniques permits the full employment of an arbitrarily given vector of input endowments. As is shown here, however, the coexistence of methods required for the differentiability of the Samuelson-Etula Master Function can take place, if capital goods are used in production, neither in the case with stationary relative prices nor in the non-stationary Arrow-Debreu framework. |
| Keywords: | capital – capital goods – marginal product of capital – Master Function - neoclassical theory of value and distribution –Samuelson |
| JEL: | B21 C61 D24 D46 D51 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63415&r=eff |
| By: | DAVILA, Julio (Université catholique de Louvain, CORE, Belgium) |
| Abstract: | The impact that output has on future total factor productivity —i.e. the dynamic complementarities shown to be empirically relevant in Cooper and Johri (1997)— is not internalized by competitive agents. As a result, the allocation that a planner would choose cannot be reached as a competitive equilibrium outcome (neither for infinitely-lived agents nor for overlapping generations): the market return to savings and wage rate are too low. The planner’s allocation can nonetheless be implemented by a fiscal policy subsidizing as needed the returns to savings and the wage rate. The exact policy differs depending on whether just past investment or total output influences productivity: in the first case only capital returns need to be subsidized, while in the second case labor income needs to be subsidized too. The policy is balanced period-by-period by means of a lump-sum tax. |
| Date: | 2014–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2014037&r=eff |
| By: | Patrick IMAM (FERDI); Kangni KPODAR (International Monetary Fund (IMF)) |
| Abstract: | The rapid growth of Islamic banking has attracted much attention lately in the economic literature. At the same time, a mature body of the literature has shown that financial development is broadly conducive to economic growth, which raises the question as to whether a similar conclusion holds for Islamic banking. Against this backdrop, this paper investigates the relationship between Islamic banking development and economic growth in a sample of low and middle income countries, using data over the period 1990-2010. The results show that, notwithstanding its relatively small size compared to the economy and the overall size of the financial system, Islamic banking is positively associated with economic growth even after controlling for various determinants, including the level of financial depth. The results are robust across across different specifications, sample composition and time periods. |
| JEL: | G0 G21 O10 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:2078&r=eff |
| By: | Cem Ertur (University of Orleans UMR 6221, CNRS Faculté de Droit d’Economie et de Gestion. Rue de Blois - B.P. 6739 45067 Orléans Cedex 2,France); Antonio Musolesi (Department of Economics and Management (DEM), University of Ferrara, and SEEDS, Via Voltapaletto 11, 44100 Ferrara - Italy.) |
| Abstract: | This paper provides an econometric examination of geographic R&D spillovers among countries by focusing on the issue of cross-sectional dependence, and in particular on the different ways – weak and strong – it may affect the model. A preliminary analysis based on the estimation of the exponent of cross-sectional correlation proposed by Bailey et al.(2013), a, provides a very clear-cut result with an estimate of a very close to unity, not only indicating the presence of strong cross-sectional correlation but also being consistent with the factor literature typically assuming that a = 1. Moreover, second generation unit roots tests suggest that while the unobserved idiosyncratic component of the variables under study may be stationary, the unobserved common factors appear to be nonstationary. Consequently, a factor structure appears to be preferable to a spatial error model and in particular the Correlated Common Effects approach is employed since, among other things, it is still valid in the more general case of nonstationary common factors. Finally, comparing the results with those obtained with a spatial model gives some insights on the possible bias occurring when allowing only for weak correlation while strong correlation is present in the data. |
| Keywords: | panel data; cross-sectional correlation; spatial models; factor models; unit root; international technology diffusion; geography. |
| JEL: | C23 C5 F0 O3 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:0415&r=eff |