nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2017‒04‒09
twelve papers chosen by

  1. The impact of the Great Recession on TFP convergence among EU countries By Dolores Añón Higón; Juan A. Mañez; A. Sanchis; A. Sanchis
  2. Productivity and Exports in Korea: Comparisons with China and Japan By Bae, Chankwon
  3. Aggregate Uncertainty and Sectoral Productivity Growth: The Role of Credit Constraints By Sangyup Choi; Davide Furceri; Yi Huang; Prakash Loungani
  4. Multifactor CES elasticity and productivity growth : a cross-sectional approach By Kim, Jiyoung; Nakano, Satoshi; Nishimura, Kazuhiko
  5. Innovation, Spillovers and Productivity Growth: A Dynamic Panel Data Approach By Christopher Baum; Hans Lööf,; Pardis Nabavi
  6. A New Approach to Estimation of the R&D-Innovation-Productivity Relationship By Andreas Stephan; Christopher BAUM,; Pardis NABAVI; Hans LÖÖF,
  7. Offshore Profit Shifting and Domestic Productivity Measurement By Fatih Guvenen; Raymond J. Mataloni Jr.; Dylan G. Rassier; Kim J. Ruhl
  8. Spatial externalities and growth in a Mankiw-Romer-Weil world: Theory and evidence By Fischer, Manfred M.
  9. The sustainable land management program in the Ethiopian highlands: An evaluation of its impact on crop production: By Schmidt, Emily; Tadesse, Fanaye
  10. Does input-trade liberalization affect firms' foreign technology choice? By Maria Bas; Antoine Berthou
  11. TFP growth and commodity prices in emerging economies By Iván Kataryniuk; Jaime Martínez-Martín
  12. The Causal Impact of Human Capital on R&D and Productivity: Evidence from the United States By Verónica Mies; Matías Tapia; Ignacio Loeser

  1. By: Dolores Añón Higón (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); Juan A. Mañez (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).; Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); A. Sanchis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).); A. Sanchis (Department of Economic Structure, University of Valencia, Avda. dels Tarongers s/n, 46022 Valencia (Spain).)
    Abstract: This paper provides evidence on the effect of the Great Recession on productivity convergence among EU economies. We use firm data, aggregated at the country-year level, to analyse the evolution of beta-convergence on total factor productivity (TFP) for 2003-2014. We obtain a positive impact of the recession on TFP (unconditional and conditional) beta-convergence across EU economies. These results support the existence of a catching-up process within the EU during the recent financial crisis. Other macroeconomic and institutional characteristics are important in fostering TFP growth, namely R&D intensity and quality of governance.
    Keywords: convergence, TFP, Great Recession, European Union countries
    JEL: F43 O47 O52
    Date: 2017–02
  2. By: Bae, Chankwon (Korea Institute for International Economic Policy)
    Abstract: This article aims to assess Korea's competitiveness in manufacturing exports, focusing on the rivalry among the three countries. To this end, we examine the productivities of C-J-K and estimates the effect of relative productivity on exports in Korea. It finds that first, China has drastically caught up with Korea since 2000, while there still exists a relatively large productivity gap between Japan and Korea. This is reminiscent of the sandwich theory, meaning that Korea is literally sandwiched between a fast-growing China and a technologically advanced Japan. Second, technical efficiency, an important determinant of productivity, has improved rapidly and steadily in China during the 2000s, while it has declined in Korea and Japan since the global financial crisis. Third, there seems to be a positive link between productivity and exports in Korea. In particular, a relative increase in productivity to China and Japan is highly related to its export performance. Not only technological progress, but also the enhancement of production efficiency is important for boosting export volumes and global market share.
    Keywords: TFP; Technical Efficiency; Productivity; C-J-K
    Date: 2016–10–25
  3. By: Sangyup Choi (International Monetary Fund); Davide Furceri (International Monetary Fund); Yi Huang (IHEID, Graduate Institute of International and Development Studies, Geneva); Prakash Loungani (International Monetary Fund)
    Abstract: We show that an increase in aggregate uncertainty—measured by stock market volatility—reduces productivity growth more in industries that depend heavily on external finance. The mechanism at play is that during periods of high uncertainty, firms that are credit constrained switch the composition of investment by reducing productivity-enhancing investment—such as on ICT capital—which is more subject to liquidity risks (Aghion et al., 2010). The effect is larger during recessions, when financing constraints are more likely to be binding, than during expansions. Our statistical method—a difference-in-difference approach using productivity growth of 25 industries from 18 advanced economies over the period 1985-2010—mitigates concerns with omitted variable bias and reverse causality. The results are robust to the inclusion of other sources of interaction effects, instrumental variable approaches, and different datasets. The results also hold if economic policy uncertainty (Baker et al., 2016) is used instead of stock market volatility as a measure of aggregate uncertainty.
    Keywords: productivity growth; financial dependence; uncertainty; information and communication technology investment.
    JEL: E22 F43 O30 O47
    Date: 2017–03
  4. By: Kim, Jiyoung; Nakano, Satoshi; Nishimura, Kazuhiko
    Abstract: Sector-wise productivity growth is measured, along with the sectoral elasticity of substitution, under the multifactor CES framework by regressing the growth of factor-wise cost shares against the growth of relative factor prices. We use linked input–output tables for Japan and Korea as the data sources for factor price and cost shares in two temporally distant states. We then construct a multisectoral general equilibrium model using the system of estimated CES unit cost functions and evaluate the economy-wide distribution of exogenous productivity gains in terms of welfare. Further, we examine the differences between models based on a priori elasticities such as the Leontief and the Cobb–Douglas systems.
    Keywords: Productivity, Input-output tables, East Asia, Japan, South Korea, Productivity Growth, Multi-Factor CES, Elasticity of Substitution, General Equilibrium, Linked Input-Output Tables
    JEL: D24 D57 D58
    Date: 2017–03
  5. By: Christopher Baum; Hans Lööf,; Pardis Nabavi
    Abstract: This paper examines variation in productivity growth within a given location and between different locations. Implementing a dynamic panel data approach on Swedish micro data, we test the separate and complementary effect of internal innovation efforts and spillovers from the local milieu. Measuring the potential knowledge spillover by access to knowledgeintensive services, the estimation results produce strong evidence of differences in the capacity to benefit from external knowledge among persistent innovators, temporary innovators and non-innovators. The results are consistent regardless of whether innovation efforts are measured in terms of the frequency of patent applications or R&D investments see above see above
    Keywords: Sweden, Growth, Sectoral issues
    Date: 2015–07–01
  6. By: Andreas Stephan; Christopher BAUM,; Pardis NABAVI; Hans LÖÖF,
    Abstract: We evaluate a Generalized Structural Equation Model (GSEM) approach to the estimation of the relationship between R&D, innovation and productivity that focuses on the potentially crucial heterogeneity across technology levels and sectors. see above see above
    Keywords: Sweden, Growth, Macroeconometric modeling
    JEL: C00 L00 O00
    Date: 2015–07–01
  7. By: Fatih Guvenen; Raymond J. Mataloni Jr.; Dylan G. Rassier; Kim J. Ruhl (Bureau of Economic Analysis)
    Date: 2017–03
  8. By: Fischer, Manfred M.
    Abstract: This paper presents a theoretical growth model that accounts for technological interdependence among regions in a Mankiw-Romer-Weil world. The reasoning behind the theoretical work is that technological ideas cannot be fully appropriated by investors and these ideas may diffuse and increase the productivity of other firms. We link the diffusion of ideas to spatial proximity and allow for ideas to flow to nearby regional economies. Through the magic of solving for the reduced form of the theoretical model and the magic of spatial autoregressive processes, the simple dependence on a small number of neighbouring regions leads to a reduced form theoretical model and an associated empirical model where changes in a single region can potentially impact all other regions. This implies that conventional regression interpretations of the parameter estimates would be wrong. The proper way to interpret the model has to rely on matrices of partial derivatives of the dependent variable with respect to changes in the Mankiw-Romer-Weil variables, using scalar summary measures for reporting the estimates of the marginal impacts from the model. The summary impact measure estimates indicate that technological interdependence among European regions works through physical rather than human capital externalities.
    Keywords: Spatial economics, spatial econometrics, growth empirics, human capital externalities, physical capital externalities, technological interdependence, European regions
    JEL: C31 O18 O47 R11 R15
    Date: 2016
  9. By: Schmidt, Emily; Tadesse, Fanaye
    Abstract: Agricultural productivity in the highlands of Ethiopia is threatened by severe land degradation, resulting in significant reductions in agricultural GDP. In order to mitigate ongoing erosion and soil nutrient loss in the productive agricultural highlands of the country, the government of Ethiopia initiated a Sustainable Land Management Program (SLMP) targeting 209 woredas (districts) in six regions of the country. This study evaluates the impact of SLMP on the value of agricultural production in select woredas by using a panel survey from 2010 to 2014. Whereas previous studies have used cross-sectional data and short timeframe field trials to measure sustainable land management (SLM) effects on agricultural productivity, this analysis exploits data collected over four years to assess impact. The results of this analysis show that participation by farmers in SLMP, regardless of the number of years of participation in the program, is not associated with significant increases in value of production. This may be due to several reasons. First, similar to previous studies, it is possible that longer term maintenance is necessary in order to experience significant benefits. For example, Schmidt and Tadesse (2014) report that farmers must maintain SLM for a minimum of seven years to reap benefits in value of production. Second, this analysis finds that value of production, as well as SLM investments, increased significantly in both treatment and non-treatment areas over the study period. Previous research has found that non-treatment neighbors learn from nearby program areas, and adopt technologies similar to programmed areas, which would dilute the impact measurement of program effects (Bernard et al. 2007; Angelucci and DiMaro 2010). Finally, it is important to note that kebeles that were not selected in the SLMP, but are downstream relative to a targeted kebele may receive indirect benefits through reduced flooding, increased water tables, etc. Thus, the impact of the SLMP may be underestimated in this analysis if non-program kebeles are benefiting indirectly from the program.
    Keywords: ETHIOPIA; EAST AFRICA; AFRICA SOUTH OF SAHARA; AFRICA, sustainability; land management; land degradation; productivity; agricultural development; water management
    Date: 2017
  10. By: Maria Bas (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Antoine Berthou (Banque de France)
    Abstract: This paper studies the impact of input-trade liberalization on firms' decision to upgrade foreign technology embodied in imported capital goods. Our empirical analysis is motivated by a simple theoretical framework of endogenous technology adoption, heterogeneous firms and imported inputs. The model predicts a positive effect of input tariff reductions on firms' technology choice to source capital goods from abroad. This effect is heterogeneous across firms depending on their initial productivity level. Relying on India's trade liberalization episode in the early 1990s, we demonstrate that the probability of importing capital goods is higher for firms producing in industries that have experienced greater cuts on tariffs on intermediate goods. Only those firms in the middle range of the initial productivity distribution have benefited from input-trade liberalization to upgrade their technology. JEL classification: F10, F12 and F14.
    Keywords: firm heterogeneity and Indian firm-level data,Input-trade liberalization,firms' decision to import capital goods
    Date: 2016
  11. By: Iván Kataryniuk (Banco de España); Jaime Martínez-Martín (Banco de España)
    Abstract: In this paper we aim at empirically testing cross-country impacts of commodity price shocks to aggregate TFP growth for a sample of emerging economies. Under a growth accounting framework, we estimate country-specific TFP growth (1992-2014) and select the attendant robust determinants by means of a Bayesian Model Averaging (BMA) approach. To identify the effects of structural shocks, we propose a Bayesian panel VAR model and calculate cyclically adjusted TFP growth net of demand shocks (i.e. output gap) and commodity prices. Our results suggest that: i) the relationship of commodity prices to TFP growth has been very high in small commodity-exporting economies (i.e. an increase of 10% in commodity prices is associated with a sizable expansion of TFP growth in a year for an average commodity exporter); ii) although our evidence is not suf?cient to empirically distinguish among theoretical explanations, our results favour an interpretation that weights short-term effects of commodity prices on productivity, either through transitional dynamics to the manufacturing sector or through mismeasurement of TFP; and iii) cyclically adjusted TFP growth highlights the importance of negative supply shocks in commodity-exporting countries. All in all, much of the increase in TFP growth in the last decade was related to a favourable cyclical environment, a result with potentially significant policy implications for commodity-dependent economies.
    Keywords: total factor productivity, commodity prices, Bayesian model averaging, panel VAR.
    JEL: O47 Q02 C11 C23
    Date: 2017–03
  12. By: Verónica Mies; Matías Tapia; Ignacio Loeser
    Abstract: This paper contributes to the empirical literature on the impact of human capital on technology adoption and the production structure of the economy by using census micro data aggregated at the state level data for US cohorts born between 1915 and 1939. We test the impact of secondary and tertiary schooling in the US at the state-cohort level on R&D and TFP growth across industries in 1970. While we follow the literature in using the variation in the timing of compulsory schooling laws across states to instrument secondary schooling, we propose a novel instrument for tertiary enrollment. In particular, we exploit, as in Acemoglu, Autor and Lyle (2004), the differences across states and cohorts in World War II mobilization rates. While Acemoglu, Autor, and Lyle (2004) used this variation as an exogenous shift in female labor supply, we exploit the fact that WWII veterans were benefited by the GI Bill Act (1944), which granted them free college education once they were discharged from service. This provides a clean source of variation in the costs of attending college, which allows us to exploit differences in college enrollment across states and cohorts. Our results suggest that, consistent with the initial discussion, different types of human capital are associated to different effects on the productive structure of the economy. Two-stage least squared regressions find no effect of the share of population with secondary schooling over outcomes such as R&D per worker or TFP growth. On the other hand, the share of population with tertiary education has a significant effect on both R&D per worker or TFP growth. In particular, a 1% increase in the share of workers with tertiary education increases R&D per worker by 1.8 percentage points, and annual TFP growth by 1% for 17 years. Creation-Date: 2015
    JEL: J14 O12 L26 M53

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