nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒05‒02
twenty papers chosen by

  1. The Post 1990 Brazilian Trade Liberalization and the Performance of Large Manufacturing Firms: Productivity, Market Share and Profits By Donald A. Hay
  2. Do Manufacturing Firms Benefit from Services FDI? – Evidence from Six New EU Member States By J. Damijan; C. Kostevc; Philipp Marek; M. Rojec
  3. Firm-level Productivity Spillovers in China's Chemical Industry: A Spatial Hausman-Taylor Approach By Badi H. Baltagi; Peter H. Egger; Michaela Kesina
  4. The export-productivity link for Brazilian manufacturing firms By Cirera, Xavier; Lederman, Daniel; Máñez, Juan A.; Rochina, María E.; Sanchis, Juan A.
  5. Accounting for the Sources of Growth in the Chinese Economy By Harry WU
  6. Measuring relative efficiency of secondary education in selected EU and OECD countries: the case of Slovenia and Croatia By Aristovnik, Aleksander; Obadić, Alka
  7. Age and productivity as determinants of firm survival over the product life cycle By Silviano Esteve Pérez; Fabio Pieri; Diego Rodriguez
  8. "Heterogeneity and Productivity" By Quamrul Ashraf; Oded Galor; Marc Klemp
  9. Relative Earnings and Firm Performance: Evidence from Publicly-listed Firms in China, 2005-2012 By Peiwen Bai; Wenli Cheng
  10. Integrated estimates of capital stocks and services for the United Kingdom: 1950-2013 By Nicholas Oulton; Gavin Wallis
  11. Generalization of the Aoki-Yoshikawa sectoral productivity model based on extreme physical information principle By Ilona Bednarek; Marcin Makowski; Edward W. Piotrowski; Jan S{\l}adkowski; Jacek Syska
  12. Modelling bank asset quality and profitability: An empirical assessment By Swamy, Vighneswara
  13. Contribution of Structural Change to Productivity Growth: Evidence from Tunisia By Mohamed Ali Marouani; Rim Mouelhi
  14. Banking Innovations and New Income Streams: Impact on Banks’ Performance By Roy Trivedi, Smita
  15. Sustainability, Resource Efficiency and Competitiveness. An Assessment of Resource Efficiency Policies in the European Union. By Florian Flachenecker
  16. Efficiency and Contestability in the Colombian Banking System By Christian Daude; Julien Pascal
  17. Structural Change and Non-Constant Biased Technical Change By Edgar Cruz
  18. Isoelastic elasticity of substitution production functions By Jakub Growiec
  19. A Varying-Coefficient Panel Data Model with Fixed Effects: Theory and an Application to U.S. Commercial Banks By Guohua Feng; Jiti Gao; Bin Peng; Xiaohui Zhang
  20. A microeconometric analysis of the springboard subsidiary: The case of Spanish firms By Caicedo Marulanda, Carolina; Mora Rodríguez, Jhon James; Barber, José Bla; Darder, Fidel León

  1. By: Donald A. Hay
    Abstract: This paper analyses the effects of the 1990 Brazilian trade liberalization on the total factor productivity, market share and profits of a sample of 349 large manufacturing firms. A panel data production function analysis for the period 1986/94 indicates very large total factor productivity gains in the period to 1994, which were accompanied by large falls in market shares and profits. The explanation advanced is that the shock of trade liberalization to profits was so great that firms were stimulated to improve their efficiency dramatically.
    Date: 2015–01
  2. By: J. Damijan; C. Kostevc; Philipp Marek; M. Rojec
    Abstract: This paper focuses on the effect of foreign presence in the services sector on the productivity growth of downstream customers in the manufacturing sector in six EU new member countries in the course of their accession to the European Union. For this purpose, the analysis combines firm-level information, data on economic structures and annual national input-output tables. The findings suggest that services FDI may enhance productivity of manufacturing firms in Central and Eastern European (CEE) countries through vertical forward spillovers, and thereby contribute to their competitiveness. The consideration of firm characteristics shows that the magnitude of spillover effects depends on size, ownership structure, and initial productivity level of downstream firms as well as on the diverging technological intensity across sector on the supply and demand side. The results suggest that services FDI foster productivity of domestic rather than foreign controlled firms in the host economy. For the period between 2003 and 2008, the findings suggest that the increasing share of services provided by foreign affiliates enhanced the productivity growth of domestic firms in manufacturing by 0.16%. Furthermore, the firms’ absorptive capability and the size reduce the spillover effect of services FDI on the productivity of manufacturing firms. A sectoral distinction shows that firms at the end of the value chain experience a larger productivity growth through services FDI, whereas the aggregate positive effect seems to be driven by FDI in energy supply. This does not hold for science-based industries, which are spurred by foreign presence in knowledge-intensive business services.
    Keywords: production, cost, capital, total factor and multifactor productivity, capacity; economic integration
    JEL: D24 F15
    Date: 2015–04
  3. By: Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Peter H. Egger (ETH Zurich); Michaela Kesina (ETH Zurich)
    Abstract: This paper assesses the role of intra-sectoral spillovers in total factor productivity across Chinese producers in the chemical industry. We use a rich panel data-set of 12,552 firms observed over the period 2004-2006 and model output by the firm as a function of skilled and unskilled labor, capital, materials, and total factor productivity, which is broadly defined. The latter is a composite of observable factors such as export market participation, foreign as well as public ownership, the extent of accumulated intangible assets, and unobservable total factor productivity. Despite the richness of our data-set, it suffers from the lack of time variation in the number of skilled workers as well as in the variable indicating public ownership. We introduce spatial spillovers in total factor productivity through contextual effects of observable variables as well as spatial dependence of the disturbances. We extend the Hausman and Taylor (1981) estimator to account for spatial correlation in the error term. This approach permits estimating the effect of time-invariant variables which are wiped out by the fixed effects estimator. While the original Hausman and Taylor (1981) estimator assumes homoskedastic error components, we provide spatial variants that allow for both homoskedasticity and heteroskedasticity. Monte Carlo results show, that our estimation procedure performs well in small samples. We find evidence of positive spillovers across chemical manufacturers and a large and significant detrimental effect of public ownership on total factor productivity.
    Keywords: Technology Spillovers, Spatial econometrics, Panel data econometrics, Firm-level productivity, Chinese firms
    JEL: C23 C31 D24 L65
    Date: 2014–12
  4. By: Cirera, Xavier; Lederman, Daniel; Máñez, Juan A.; Rochina, María E.; Sanchis, Juan A.
    Abstract: This paper explores the link between exports and total factor productivity (TFP) for Brazilian manufacturing firms over the period 2000-2008, both under the assumption of an exogenous or an endogenous law of motion for productivity. The authors first obtain TFP estimates under each alternative assumption following Wooldridge (On estimating firm-level production functions using proxy variables to control for unobservables, 2009) GMM procedure. Second, using stochastic dominance techniques they analyse whether the ex-ante most productive firms are those that start exporting (self-selection hypothesis). Finally, the authors test whether exporting boosts firms TFP growth (learning-by-exporting hypothesis) using matching techniques, to control for the possibility that selection into exports may not be a random process. Their results confirm the self-selection hypothesis and show that starting to export yields firms an extra TFP growth that emerges since the first year exporting but lasts only from this year to the next. Further, this extra TFP growth is much higher under the assumption of an endogenous law of motion for productivity, which reinforces the importance of accounting for firm export status to study the evolution of productivity.
    Keywords: TFP,export status,exogenous vs. endogenous Markov,semi-parametric approach,self-selection,stochastic dominance,learning-by exporting,matching techniques
    JEL: F14 D24 C14 C33 C36
    Date: 2015
  5. By: Harry WU
    Abstract: Using a newly constructed China Industrial Productivity (CIP) data set, this study adopts the Jorgensonian aggregate production possibility frontier (APPF) framework incorporating Domar weights to account for the industry origin of China's aggregate growth for the period 1980-2010. We show that 7.14 percentage points of China's gross domestic product (GDP) growth of 9.16% per annum can be attributed to the increase in labor productivity and 2.02 percentage points to the number of hours worked. The labor productivity growth can be further decomposed into 5.55 percentage points of capital deepening, 0.35 percentage points of labor quality improvement, and 1.24 percentage points of total factor productivity (TFP) growth. Across industries, those less prone to government intervention, such as agriculture and "semi-finished & finished" manufacturing industries, appear to be more productive than those subject to more government intervention, typically the "energy" industry group. The Domar aggregation scheme also reveals that only two-thirds of the 1.24% annual TFP growth, or 0.84 percentage points, are directly from industries and the remaining 0.40 percentage points are from a net factor reallocation effect in which labor played a positive role of 0.56 percentage points whereas capital played a negative role of -0.16 percentage points.
    Date: 2015–04
  6. By: Aristovnik, Aleksander; Obadić, Alka
    Abstract: This article continues on a number of previous studies by other scientists in investigating secondary education efficiency by applying a non-parametric methodology. In this respect, the purpose of the article is to review some previous studies on measuring the efficiency of public (secondary) education sector as well as some conceptual and methodological issues of a non-parametric approach. Most importantly, the Data Envelopment Analysis (DEA) technique is presented and then applied to a wide range of EU and OECD countries, including Slovenia and Croatia, to evaluate the technical efficiency of secondary education. The empirical results show that technical efficiency in secondary education varies significantly across the great majority of EU and OECD countries. Both Slovenia and Croatia show a relatively high level of technical inefficiency in their secondary education as they respectively only rank in the third and fourth quartiles among selected countries. Therefore, rationalising public secondary education spending is strongly recommended with possible redirecting of some excessive resources to the tertiary education sector.
    Keywords: secondary education, technical efficiency, DEA, Slovenia, Croatia, EU, OECD
    JEL: C14 C61 H52 I21
    Date: 2014
  7. By: Silviano Esteve Pérez (Department of Applied Economics II, Universitat de València); Fabio Pieri (Department of Applied Economics, Universitat de València); Diego Rodriguez (Department of Applied Economics II, Universidad Complutense de Madrid)
    Abstract: This paper contributes to fill the gap between the literature on the determinants of firm survival and the theoretical and empirical works on the product life cycle (PLC). Using a representative sample of Spanish manufacturing firms with ten or more employees over the period 1991-2010, we empirically analyze the role played by firm age and productivity on firm survival across three different phases of the PLC to which firms are allocated according to firm- and product-level haracteristics. Firm age results to be negatively and significantly correlated with hazard rates mostly in the ‘young’ phase of the PLC, pointing out the role of ‘learning processes’ in this phase, while firm productivity is associated with lower hazard rates only in the ‘old’ phase of the PLC when market competition is primarily efficiency-driven. Our results qualify the roles of age and productivity as determinants of firm survival.
    Keywords: Product life cycle; firm survival; Spanish manufacturing firms; discrete time survival methods
    JEL: C41 L10 L60
    Date: 2015–04
  8. By: Quamrul Ashraf; Oded Galor; Marc Klemp
    Abstract: This research explores the effects of within-group heterogeneity on group-level productivity. It establishes that observed genetic diversity of 230 worldwide ethnic groups, as well as predicted genetic diversity of 1,331 ethnic groups across the globe, has a hump-shaped effect on economic prosperity, reflecting the trade-off between the beneficial and the detrimental effects of diversity on productivity. Moreover, the study demonstrates that variations in within-ethnic-group genetic diversity across ethnic groups contribute to ethnic and thus regional variation in economic development within a country.
    Keywords: Heterogeneity, Regional Development, Out-of-Africa Hypothesis, Comparative Development, Genetic Diversity, Nighttime Light Intensity
    Date: 2015
  9. By: Peiwen Bai; Wenli Cheng
    Abstract: This paper studies the relationship between three measures of relative earnings and firm performance based on data of 664 listed manufacturing companies in China over the period 2005-2012. It finds that (1) capital earnings relative to labor earnings and the overall average wage level relative to a firm’s average wage level had negative effects on firm performance; (2) the earnings of high-level managers relative to ordinary workers had a positive impact on firm performance; and (3) the effects of relative earnings on firm performance differed across regions, industry characteristics, and firm ownership structures, and over different time periods.
    Keywords: relative income share of capital and labor, relative earnings of management and workers, relative wage, firm performance in China
    JEL: D24 J31
    Date: 2014–11
  10. 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: D24 E22 E23 O47
    Date: 2015–03
  11. By: Ilona Bednarek; Marcin Makowski; Edward W. Piotrowski; Jan S{\l}adkowski; Jacek Syska
    Abstract: This paper presents a continuous variable generalization of the Aoki-Yoshikawa sectoral productivity model. Information theoretical methods from the Frieden-Soffer extreme physical information statistical estimation methodology were used to construct exact solutions. Both approaches coincide in first order approximation. The approach proposed here can be successfully applied in other fields of research.
    Date: 2015–04
  12. By: Swamy, Vighneswara
    Abstract: The determinants of default risk of banks in emerging economies have so far received inadequate attention in the literature. This paper seeks to study the determinants of bank asset quality and profitability using panel data techniques and robust data sets for the period between 1997 and 2009. The study findings reveal some interesting results that run contrary to established perceptions. Priority sector credit has been found to be not significant in affecting NPAs; this is contrary to the general perception. Similarly, with regard to rural bank branches, the results reveal that aversion to rural credit is a falsely founded perception. Bad debts are dependent more on the performance of industry than on other sectors of the economy. Public sector banks have shown significant performance in containing bad debts. Private banks have continued to be stable in containing bad debts, as they have better risk management procedures and technology, which definitely allows them to finish with lower levels of NPAs. Further, this study investigates the effect of determinants on profitability, and establishes that while capital adequacy and investment activity significantly affect the profitability of commercial banks, apart from other accepted determinants of profitability, asset size has no significant impact on profitability.
    Keywords: banks,risk management,ownership structure,financial markets,non-performing assets,lending policy,macro-economy,central banks,banking regulation,financial system stability
    JEL: G21 G28 G32 E44 E58
    Date: 2015
  13. By: Mohamed Ali Marouani (UMR « Développement et Société », IEDES / Université Paris1-Panthéon-Sorbonne, ERF, PSL, Université Paris-Dauphine, LEDa, IRD UMR DIAL); Rim Mouelhi (ISCAE, La Manouba University, LEFA Carthage and ERF)
    Abstract: The objective of the paper is to analyze the dynamics of sectoral productivity growth in Tunisia and assess the contribution of structural change to these dynamics. Using sectoral and firm data we show that productivity increased at a relatively sustained pace in Tunisia in the last three decades, but that the contribution of structural change remained limited. Trade and labor market reforms did not seem to increase it. The main reasons are barriers to entry in some sectors, the inefficiency of factor markets, and the focus of the firms’ upgrading program only on some selected sectors. _________________________________ L’objectif de ce papier est d’analyser la dynamique de la croissance sectorielle de la productivité en Tunisie et d’évaluer la contribution du changement structurel à cette dynamique. En utilisant des données sectorielles et de firmes nous montrons que la productivité a augmenté à un rythme relativement soutenu au cours des trois dernières décennies, mais que la contribution du changement structurel est restée limitée. Les réformes de la politique commerciale et du marché du travail ne semblent pas l’avoir affectée. Les principales raisons sont les barrières à l’entrée dans certains secteurs, l’inefficacité des marchés des facteurs et la focalisation du programme de mise à niveau sur un petit nombre de secteurs.
    Keywords: Productivity, Structural Change, Employment, Tunisia, Productivité, changement structurel, emploi, Tunisie.
    JEL: O14
    Date: 2015–03
  14. By: Roy Trivedi, Smita
    Abstract: Banks in India have focused on non-interest income streams to complement their income from traditional interest earning activities for some years now. This move to innovation adoption and new income streams has been more pronounced for new private and foreign banks, while there appears to have been certain hesitation on the part of public sector and old private banks. This article studies the impact of the move to new income streams and the consequent rising diversification on performance (as measured by profitability and stability of income) for Indian banks. A comparative analysis of income generated from these income streams for different bank groups in India shows that new private banks and foreign banks in India have been more successful than public sector banks in generating a greater proportion of their income from non-interest and fee-based sources. However, this increasing diversification cannot be linked to better risk-adjusted performance in the Indian context. Using multiple regression analysis, the impact of diversification and increasing share of fee-based income on profitability and risk-adjusted profitability is questioned for all banks in India over the period 2005–2012. The article finds that the rising share of fee-based income and non-interest income in total income and diversification has a positive impact on profitability, but the impact on risk-adjusted performance and hence stability is not statistically significant. While the results show a positive impact of diversification on profitability, the article underlines that the impact direction of diversification measures may be negative, which is in agreement to what many studies have shown in the US, European, Australian and Indian contexts. This article considers the impact of diversification in non-interest income separately from diversification in total income. This diversification score helps to know if the banks are generating their non-interest income from only fee income or only their own investments or have they diversified the non-interest income generation by focusing on both. Importantly, there is a positive impact of increasing share of ‘fee income’ in both total income and non-interest income on profitability as well as risk-adjusted measures. The results underscore that while public sector banks need to generate more income from fee-based activities, it would be imperative to choose sources of fee-based income that remain stable and have a positive impact on risk-adjusted measures.
    Keywords: Banking Innovation; Diversification; New Income Streams; Profitability
    JEL: C10 G21
    Date: 2015–01
  15. By: Florian Flachenecker
    Abstract: Addressing high and volatile natural resource prices, uncertain supply prospects, reindustrialization attempts and environmental damages related to resource use, resource efficiency has evolved into a highly debated proposal among academia, policy makers, firms and international financial institutions (IFIs). In 2011, the European Union (EU) declared resource efficiency as one of its seven flagship initiatives in its Europe 2020 strategy. This paper contributes to the discussions by assessing its key initiative, the Roadmap to a Resource Efficient Europe (EC 2011 571), following two streams of evaluation. In a first step, resource efficiency is linked to two theoretical frameworks regarding sustainability, (i) the sustainability triangle (consisting of economic, social and ecological dimensions) and (ii) balanced sustainability (combining weak and strong sustainability). Subsequently, both sustainability frameworks are used to assess to which degree the Roadmap follows the concept of sustainability. It can be concluded that it partially respects the sustainability triangle as well as balanced sustainability, primarily lacking a social dimension. In a second step, following Steger and Bleischwitz (2009), the impact of resource efficiency on competitiveness as advocated in the Roadmap is empirically evaluated. Using an Arellano–Bond dynamic panel data model reveals no robust impact of resource efficiency on competiveness in the EU between 2004 and 2009 – a puzzling result. Further empirical research and enhanced data availability are needed to better understand the impacts of resource efficiency on competitiveness on the macroeconomic, microeconomic and industry level. In that regard, strengthening the methodologies of resource indicators seem essential. Last but certainly not least, political will is required to achieve the transition of the EU-economy into a resource efficient future.
    Keywords: sustainability, resource efficiency, competitiveness, dynamic panel data model, European Union.
    JEL: Q38 Q51 Q56 Q58 C23
    Date: 2015–04
  16. By: Christian Daude; Julien Pascal
    Abstract: Despite progress in the past decade, financial markets in Colombia remain relatively small and shallow. In particular the banking system suffers high intermediation costs, which limit constrains access to finance by households and firms. This paper explores some of the causes behind these intermediation costs. An accounting decomposition of the lending-deposit spread suggests that the levels of contestability and efficiency are low. A more in-depth analysis using stochastic frontier and data envelopment analyses confirm that the efficiency of the Colombian commercial banking system is low compared to other emerging markets and OECD economies with similar levels of development. Furthermore, econometric estimates of market contestability support the hypothesis that contestability in Colombia is subpar. Finally, the paper also explores some of the potential determinants of efficiency and contestability for a sample of the 24 countries over the period 2004 – 2013. This Working Paper relates to the 2014 OECD Economic Survey of Colombia. (<P>Efficience et contestabilité du marché bancaire en Colombie<BR>Malgré les progrès accomplis durant la décennie précédente, les marchés financiers colombiens demeurent peu développés. En particulier, le système bancaire affiche des coûts d’intermédiation élevés qui limitent l’accès financier des ménages et des entreprises. Ce papier explore quelques-uns des déterminants de ces coûts d’intermédiation. Une décomposition comptable de la différence entre les taux d’emprunt et les taux de prêt indique que l’efficience et la contestabilité sont limitées. Une étude approfondie reposant sur les méthodes de frontière stochastique et d’enveloppement des données confirme que l’efficience des banques commerciales colombiennes est faible comparée à d’autres pays émergents et à des pays de l’OCDE ayant le même niveau de développement. Par ailleurs, une estimation économétrique du degré de contestabilité du marché bancaire colombien révèle que celui-ci est bas. Finalement, les déterminants de l’efficience et de la contestabilité sont analysés pour un échantillon de 24 pays sur la période 2004 – 2013. Ce document de travail se rapporte à l’Étude économique 2014 de l’OCDE sur la Colombie ( ique-colombie.htm).
    Keywords: efficiency, data envelopment analysis, contestability, banking system, lending-deposit spread, Panzar-Rosse model, stochastic frontier analysis, méthode de frontière stochastique, efficience, différence taux d’emprunt-taux de prêt, modèle de Panzar-Rosse, système bancaire, contestabilité, méthode d’enveloppement des données
    JEL: D43 G21 G28
    Date: 2015–04–15
  17. By: Edgar Cruz (Facultat d'Economia i Empresa; Universitat de Barcelona (UB))
    Abstract: Empirical evidence suggests that the differences in rates of technical progress across sectors are time-variant, implying that the bias in technological change is not constant. In this paper, we analyze the implications of this non-constant sectoral biased technical change for structural change and we assess whether this is an important factor behind structural transformations. To this end, we develop a multi-sectoral growth model where TFP growth rates across sectors are non-constant. We calibrate our model to match the development of the U.S. economy during the twentieth century. Our findings show that, by assuming non-constant biased technical change, a purely technological approach is able to replicate the sectoral transformations in the U.S. economy not only after but also prior to the World War II.
    Keywords: Multi-sector growth model, Structural change, Sector biased technical change, Baumol effect.
    JEL: O41 O47 O14 E29
    Date: 2015
  18. By: Jakub Growiec
    Abstract: We generalize the normalized Constant Elasticity of Substitution (CES) production function by allowing the elasticity of substitution to vary isoelastically with (i) relative factor shares, (ii) marginal rates of substitution, (iii) capital–labor ratios, or (iv) capital–output ratios. Ensuing four variants of Isoelastic Elasticity of Substitution (IEES) production functions have a range of intuitively desirable properties and yield empirically testable predictions for the functional relationship between relative factor shares and capital–labor ratios.
    Keywords: production function, factor share, elasticity of substitution, marginal rate of substitution, normalization.
    JEL: E23 O47
    Date: 2015
  19. By: Guohua Feng; Jiti Gao; Bin Peng; Xiaohui Zhang
    Abstract: In this paper, we propose a panel data semiparametric varying-coefficient model in which covariates (variables affecting the coefficients) are purely categorical. This model has two features: first, fixed effects are included to allow for correlation between individual unobserved heterogeneity and the regressors; second, it allows for cross-sectional dependence through a general spatial error dependence structure. We derive a semiparametric estimator for our model by using a modified within transformation, and then show the asymptotic and finite properties for this estimator. Finally, we illustrate our model by analysing the effects of state-level banking regulations on the returns to scale of commercial banks in the U.S. Our empirical results suggest that returns to scale is higher in more regulated states than in less regulated states.
    Keywords: Categorial variable; estimation theory; nonlinear panel data model; returns to scale.
    JEL: C23 C51 D24 G21
    Date: 2015
  20. By: Caicedo Marulanda, Carolina; Mora Rodríguez, Jhon James; Barber, José Bla; Darder, Fidel León
    Abstract: This article provides a microeconometric analysis of the distinctive characteristics of springboard subsidiaries that have a positive impact on the subsidiaries' performance. Based on panel data estimations for subsidiaries of European multinational companies with a presence in Spain, the authors found that if the subsidiary located in the springboard country is a springboard subsidiary, its performance increases by 3.6%. When the subsidiary has a technological relationship with another subsidiary, its performance increases by 1.9%. If the subsidiary that has the technological relationship is a springboard subsidiary located in a springboard country, this increases performance by 1.8%. Growth of 1% in absorption capacity increases a subsidiary's performance by 1.2%. Finally, low autonomy reduces the performance of a subsidiary by 34.4% compared to independent subsidiaries or those with a high degree of autonomy.
    Keywords: Microeconometric Analysis,Springboard Country,Springboard Subsidiary,Subsidiary - Specific Advantage,Firms Performance,Panel Data
    JEL: C23 D22
    Date: 2015

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