nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2019‒07‒22
ten papers chosen by

  2. Skill Complementarity in Production Technology: New Empirical Evidence and Implications By Stoyanov, Andrey; Zubanov, Nick
  3. Ageing and productivity growth in OECD regions: Combatting the economic impact of ageing through productivity growth? By Federica Daniele; Taku Honiden; Alexander C. Lembcke
  4. Productivity Drag from Small and Medium-Sized Enterprises in Japan By Mariana Colacelli; Gee Hee Hong
  5. Worker flows, entry, and productivity in New Zealand’s construction industry By Jaffe, Adam; Chappell, Chappell
  6. E-commerce as a Potential New Engine for Growth in Asia By Tidiane Kinda
  7. How Can Inclusive Agricultural Health Policy Intervention Promote Shared Agricultural Productivity in Nigeria? Evidence from Randomized Control Trial By Toyin Samuel Olowogbon; Raphael Olanrewaju Babatunde; Edward Asiedu
  8. Training, Soft Skills and Productivity: Evidence from a Field Experiment By Prada, Maria; Rucci, Graciana; Urzua, Sergio
  9. Skill-biased technological change, endogenous labor supply, and the skill premium By Knoblach, Michael
  10. How are digital technologies changing innovation?: Evidence from agriculture, the automotive industry and retail By Caroline Paunov; Sandra Planes-Satorra

  1. By: Aleksandra Kordalska (Gdansk University of Technology, Gdansk, Poland); Magdalena Olczyk (Gdansk University of Technology, Gdansk, Poland)
    Abstract: This study examines labour productivity performance and its determinants in Eastern European and Central Asian (EECA) firms using micro-level data. We find significant differences in labour productivity among members of the European Union in Eastern Europe and other Eastern European and Central Asian countries. We also confirm the important impact of foreign ownership, exporter status, and highly skilled workers on productivity levels. However, we reveal a non-linear relationship between firm age and their labour productivity. Additionally, significant differences in labour productivity determinants between the services and manufacturing are found. The productivity of service firms, unlike manufacturing firms, is much more sensitive to changes in productivity factors.
    Keywords: Eastern Europe and Central Asia, firm-level analysis, labour productivity
    JEL: C21 J24 O52 O53
    Date: 2019–07
  2. By: Stoyanov, Andrey (York University, Canada); Zubanov, Nick (University of Konstanz)
    Abstract: Matched worker-firm data from Danish manufacturing reveal that 1) industries differ in within-firm worker skill dispersion, and 2) the correlation between within-firm skill dispersion and productivity is positive in industries with higher average skill dispersion. We argue that these patterns are a manifestation of technological differences across industries: firms in the "skill complementarity" industries profit from hiring workers of similar skill level, whereas firms in the "skill substitutability" industries benefit from hiring workers of different skill levels. An empirical method we devise produces a robust classification of industries into the distinct complementarity and substitutability groups. Our study unveils hitherto unnoticed technological heterogeneity between industries within the same economy, and demonstrates its importance. Specifically, we show through simulations on a simple general equilibrium model that failing to take technological heterogeneity into account results in large prediction errors.
    Keywords: skill dispersion, complementarity, production technology, firm productivity
    JEL: D24 D58 J2
    Date: 2019–06
  3. By: Federica Daniele; Taku Honiden; Alexander C. Lembcke
    Abstract: OECD countries and their regions are ageing fast. In principle, the negative impact of ageing on the growth rate of per capita gross domestic product could be offset by increases in productivity. However, for many regions, productivity growth required to maintain per capita GDP levels constant has been higher than the actual growth rates they recorded in the past years. One reason for this is that ageing also has a direct negative impact on productivity growth, with the effect being concentrated in urban areas. One possible explanation is that cities specialise in sectors, such as tradable services, where the content of tasks makes it difficult to automate stages of the production process and where business dynamism, negatively affected by demographic change, is a more solid driver of productivity growth. Finally, ageing seems to be associated with a redistribution of revenues away from workers and towards capital and firm owners.
    Keywords: ageing,, cities, productivity growth, regions,
    JEL: J11 J24 R11
    Date: 2019–07–18
  4. By: Mariana Colacelli; Gee Hee Hong
    Abstract: Productivity growth in Japan, as in most advanced economies, has moderated. This paper finds supportive evidence for the important role of small and medium-sized enterprises (SMEs) in explaining Japan’s modest productivity growth. Results show a substantial dispersion in firm-level productivity growth across sectors and even across firms within the same sector. SMEs, on average, exhibit lower productivity growth than non-SMEs in Japan, with smaller and older SMEs showing particularly low productivity growth. Estimates suggest that boosting productivity growth in all of the worst-performing SMEs could improve overall productivity growth by up to 1.8 percentage points. The SME credit guarantee system, SME financing constraints, demographic factors, and lack of intangible capital investment are discussed as contributors to the slow productivity growth of Japan’s small and old SMEs.
    Date: 2019–07–01
  5. By: Jaffe, Adam; Chappell, Chappell
    Abstract: We use administrative data on the population of New Zealand construction firms from 2001-2012, along with linked data on their employees and working proprietors, to study the relationships among worker flows, entry, and firm productivity. We find that job churn is prevalent in construction, with around 60 percent of firm-worker pairs not existing previously or not existing subsequently. Firms with new employees are more productive than those with no change in workforce, in part because of knowledge flows from other construction firms. In our preferred specification, with firm fixed effects, a standard deviation increase in the productivity of new employees’ previous firms is associated with a 0.6 percent increase in productivity. Entrants are more productive than pre-existing firms. Firms that enter briefly and disappear exhibit high productivity for that brief period, and firms that enter and stay exhibit a persistent productivity advantage that averages about 6 percent, but which grows as experience accumulates. The entry and worker-knowledge-flow phenomena are distinct, in that the entry effect is not explained by employee composition, and non-entrant firms also benefit from worker knowledge flows.
    Keywords: Productivity Analysis
    Date: 2018–03
  6. By: Tidiane Kinda
    Abstract: The use of e-commerce around the world has accelerated in recent years, with Asia, led by China, spearheading the rise. Using cross-country enterprise survey data, this paper shows that firms engaged in e-commerce have higher productivity and generate a larger share of their revenues from exports than other firms. This is particularly true in Asia, where firms have 30 percent higher productivity and generate about 50 percent more of their revenues from exports. The results presented in this paper are robust to the use of instrumental variables, which highlight possible larger effects of e-commerce on Asian productivity and exports when essential elements are in place for its effective use, such as reliable electricity, telecommunication, and transport infrastructure. Despite the rapid growth of e-commerce in recent years, gaps persist in digital infrastructure and legislation, preventing many Asian countries from fully reaping the potential benefits of e-commerce.
    Date: 2019–07–01
  7. By: Toyin Samuel Olowogbon; Raphael Olanrewaju Babatunde; Edward Asiedu
    Abstract: We engaged randomized control trial to measure the effects of an agricultural health training intervention among 480 randomly assigned crop farmers from 24 farming communities in Nigeria. Structured questionnaire, interviews and random farm visit were used for data collection. The intervention component includes one-time village level agricultural health training and a three-month farm safety mobile text messaging follow up. We engaged a peer-developed module covering safe ergonomic practices and safe use of agrochemicals for the training. Findings from the study revealed that every one day increase in sickness absence decreases farmers’ labour productivity by 3% (p
    JEL: D03 D6 D9 I1 I12 I15 Q1
    Date: 2019–07
  8. By: Prada, Maria (University of Maryland); Rucci, Graciana (IADB); Urzua, Sergio (University of Maryland)
    Abstract: This paper examines a training intervention aimed at boosting leadership and communication skills among employees of a large Latin American retailer. The identification exploits an experimental design in the context of a difference-in-difference strategy. Using longitudinal information obtained from the firm and two skills surveys, we document large positive effects of the training on store- and individual- level productivity. The intervention was more effective in boosting leadership than communication skills. Spillovers from trained managers to untrained sales representatives also contribute to the main effects. Our findings confirm the possibility of increasing productivity through training targeting critical soft-skills.
    Keywords: socio-emotional skills, training, productivity, experiments with firms
    JEL: C93 J24 M53 O15
    Date: 2019–06
  9. By: Knoblach, Michael
    Abstract: The evolution of the U.S. skill premium over the past century has been characterized by a U-shaped pattern. The previous literature has attributed this observation mainly to the existence of exogenous, unexpected technological shocks or changes in institutional factors. In contrast, this paper demonstrates that a U-shaped evolution of the skill premium can also be obtained using a simple two-sector growth model that comprises both variants of skill-biased technological change (SBTC): technological change (TC) that is favorable to high-skilled labor and capital-skill complementarity (CSC). Within this framework, we derive the conditions necessary to achieve a non-monotonic evolution of relative wages and analyze the dynamics of such a case. We show that in the short run for various parameter constellations an educational, a relative substitutability, and a factor intensity effect can induce a decrease in the skill premium despite moderate growth in the relative productivity of high-skilled labor. In the long run, as the difference in labor productivity increases, the skill premium also rises. To underpin our theoretical results, we conduct a comprehensive simulation study.
    Keywords: Skill-Augmenting Technological Change,Capital-Skill Complementarity,Skill Premium,Neoclassical Growth Model
    JEL: E24 J24 J31 O33 O41
    Date: 2019
  10. By: Caroline Paunov; Sandra Planes-Satorra
    Abstract: Digital technologies impact innovation in all sectors of the economy, including traditional ones such as agriculture, the automotive industry, and retail. Similar trends across sectors include that the Internet of Things and data are becoming key inputs for innovation, innovation cycles are accelerating, services innovation is gaining importance and collaborative innovation matters more. Sector-specific dynamics are driven by differences in opportunities such technologies offer for innovation in products, processes and business models, as well as differences in the types of data needed for innovation and the conditions for digital technology adoption. The analysis calls for revisiting innovation policy mixes to ensure these remain effective and address emerging challenges. A sectoral approach is needed when designing innovation policies in some domains, especially regarding data access and digital technology adoption policies. The current focus of innovation policies on boosting R&D to meet R&D intensity targets also requires scrutiny.
    Date: 2019–07–18

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