nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2022‒03‒14
seven papers chosen by

  1. Growth Factors in Developed Countries: A 1960–2019 Growth Accounting Decomposition By Gilbert Cette; Aurélien Devillard; Vincenzo Spiezia
  2. State-Level Electricity Generation Efficiency: Do Restructuring and Regulatory Institutions Matter in the US? By Victor Ajayi; Tom Weyman-Jones
  3. Foreign Direct Investment, Information Technology and Total Factor Productivity Dynamics in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  4. Designing wartime economic controls: Productivity and firm dynamics in the Japanese cotton spinning industry, 1937–1939 By Tetsuji OKAZAKI
  5. Capital Investment and Labor Demand By E. Mark Curtis; Daniel G. Garrett; Eric Ohrn; Kevin A. Roberts; Juan Carlos Suarez Serrato
  6. Government procurement and access to credit: firm dynamics and aggregate implications By Julian di Giovanni; Manuel García-Santana; Priit Jeenas; Enrique Moral-Benito; Josep Pijoan-Mas
  7. Does Over-Education Raise Productivity And Wages Equally ? The Moderating Role Of Workers’ Origin And Immigrants’ Background By Valentine Jacobs; François Rycx; Mélanie Volral

  1. By: Gilbert Cette (Banque de France - Banque de France - Banque de France, NEOMA - Neoma Business School); Aurélien Devillard (NEOMA - Neoma Business School, Centre de recherche de la Banque de France - Banque de France); Vincenzo Spiezia (OECD - The Organisation for Economic Coopération and Development)
    Abstract: Using a new and original database, our paper contributes to the growth accounting literature with three original aspects: First, it covers a long period from the early 60's to 2019, just before the COVID-19 crisis; second, it analyzes a large set of economies (30 plus the Euro Area) at the country level; finally, it singles out the growth contribution of information and communications technologies (ICTs) capital as well as robots. Our findings show that the main drivers of labor productivity growth over the whole 1960–2019 period appear to have been education, total factor productivity (TFP), non-ICT and non-robot capital deepening. The relative contribution of ICT capital is found to be declining from the mid-2000s, although our country-level economy dataset does not make it possible to estimate the TFP contribution of ICTs. The contribution of robots to productivity growth through capital deepening and TFP appears to be significant in Germany and Japan in the sub-period 1975–1995, in France and Italy in 1995–2005, and in several Eastern European countries in 2005–2019. Our findings also confirm the slowdown in TFP in most countries from at least 1995 onwards. This slowdown is mainly accounted for by a decrease in the contributions of non-ICT non-robot capital deepening and TFP.
    Keywords: Growth,Productivity,ICTs,Robots
    Date: 2022
  2. By: Victor Ajayi (EPRG, CJBS, University of Cambridge); Tom Weyman-Jones (School of Business and Economics, Loughborough University)
    Keywords: Electricity generation, technical efficiency, marginal effect, restructuring, regulatory institutions
    JEL: C23 D24 L51 L94
    Date: 2021–09
  3. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: Compared to other regions of the world, the potential for information technology penetration in sub-Saharan Africa (SSA) is very high. Unfortunately, productivity levels in the region are also very low. This study investigates the importance of information technology in influencing the effect of foreign direct investment (FDI) on total factor productivity (TFP) dynamics. The focus is on 25 countries in SSA. Information technology is measured with mobile phone penetration and internet penetration, while the engaged TFP productivity dynamics are TFP, real TFP, welfare TFP, and real welfare TFP. The empirical evidence is based on the Generalised Method of Moments. The findings show that, with the exception of regressions pertaining to real TFP growth for which the estimations do not pass post-estimation diagnostic tests, it is apparent that information technology (i.e. mobile phone penetration and internet penetration) modulate FDI to positively influence TFP dynamics (i.e. TFP, welfare TFP, and welfare real TFP). Policy and theoretical implications are discussed.
    Keywords: Productivity; Foreign Investment; Information Technology; Sub-Saharan Africa
    JEL: E23 F21 F30 L96 O55
    Date: 2022–01
  4. By: Tetsuji OKAZAKI
    Abstract: In 1937, the Japanese government accelerated the expansion of its military expenditure and began to impose controls on the economy to maintain the balance of international payments. The controls were developed through trial and error. The cotton spinning industry was one of the industries most deeply affected by these controls. Initially, the government simply reduced the allocation of foreign exchange for raw cotton imports. However, because this measure prevented the export of cotton products, especially to countries outside the yen bloc, a new scheme of control, the export–import link system, was adopted from the second half of 1938. This scheme was intentionally designed to give firms incentives to export to non-yen bloc countries and to incorporate elements of market mechanism into economic control. Analyzing firm-level data, we find that under the link system, firms with higher labor productivity tended to grow faster, as occurs under a market economy. This relationship was not observed during the early stage of the control. This difference is reflected in the pattern of the change in aggregate labor productivity. Under the export–import link system, the positive reallocation effect was substantial, similar to a market economy, whereas it was almost zero under the early controls. These findings indicate that the design of controls matters for the performance of controlled economies. Key words: Economic control, war economy, World War II, productivity, textile industry, Japan JEL classification numbers: D22, L22, L52, L67, N45, N65
    Date: 2022–02
  5. By: E. Mark Curtis; Daniel G. Garrett; Eric Ohrn; Kevin A. Roberts; Juan Carlos Suarez Serrato
    Abstract: We study how bonus depreciation, a policy designed to lower the cost of capital, impacted investment and labor demand in the US manufacturing sector. Difference-in-differences estimates using restricted-use US Census Data on manufacturing establishments show that this policy increased both investment and employment, but did not lead to wage or productivity gains. Using a structural model, we show that the primary effect of the policy was to increase the use of all inputs by lowering overall costs of production. The policy further stimulated production employment due to the complementarity of production labor and capital. Supporting this conclusion, we nd that investment is greater in plants with lower labor costs. Our results show that recent policies that incentivize capital investment do not lead manufacturing plants to replace workers with machines.
    Keywords: capital-labor substitution, bonus depreciation, corporate taxation
    JEL: D22 H25 H32 J23
    Date: 2022–02
  6. By: Julian di Giovanni; Manuel García-Santana; Priit Jeenas; Enrique Moral-Benito; Josep Pijoan-Mas
    Abstract: We provide a framework to study how different allocation systems of public procurement contracts affect firm dynamics and long-run macroeconomic outcomes. We start by using a newly created panel dataset of administrative data that merges Spanish credit register loan data, quasicensus firm-level data, and public procurement projects to study firm selection into procurement and the effects of procurement on credit growth and firm growth. We show evidence consistent with the hypotheses that there is selection of large firms into procurement, that procurement contracts provide useful collateral for firms -more so than sales to the private sector- and that procurement contracts facilitate firm growth beyond the contract duration. We next build a model of firm dynamics with both asset-based and earnings-based borrowing constraints and a government that buys goods and services from private sector firms. We use the calibrated model to quantify the long-run macroeconomic consequences of alternative procurement allocation systems. We find that granting procurement contracts to small firms, either by directly targeting them or by slicing large contracts into smaller ones, helps these firms grow and overcome financial constraints in the long run. However, we also find that reducing the average size of contracts -or making it less likely for large firms to access them- removes saving incentives for large firms, whose negative effects on capital accumulation can overcome the expansionary consequences for small firms and hence generate a drop in aggregate output.
    Keywords: Government procurement, financial frictions, capital accumulation, aggregate productivity
    JEL: E22 E23 E62 G32
    Date: 2022–02
  7. By: Valentine Jacobs (Université de Mons (Soci&ter) and Université libre de Bruxelles (CEBRIG and DULBEA)); François Rycx (Université libre de Bruxelles (CEBRIG and DULBEA), GLO, IRES, IZA, Soci&ter); Mélanie Volral (Université de Mons (Soci&ter) and DULBEA)
    Abstract: We provide first evidence of the impact of over-education, among natives and immigrants, on firmlevel productivity and wages. We use Belgian linked panel data and rely on the methodology from Hellerstein et al. (1999) to estimate ORU (over-, required, and under-education) equations aggregated at the firm level. Our results show that the over-education wage premium is higher for natives than for immigrants. However, since the differential in productivity gains associated with over-education between natives and immigrants outweighs the corresponding wage premium differential, we conclude – based on OLS and dynamic GMM-SYS estimates – that over-educated native workers are in fact underpaid to a greater extent than their over-educated immigrant counterparts. This conclusion is refined by sensitivity analyses, when testing the role of immigrants’ background (e.g. region of birth, immigrant generation, age at arrival in the host country, tenure).
    Keywords: Immigrants, over-education, productivity, wages, linked panel data, Belgium
    JEL: J24 J71
    Date: 2022–02–07

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