nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2022‒11‒21
eleven papers chosen by

  1. Productivity Slowdown and Tax Havens: Where Is Measured Value Creation? By Jean-Charles Bricongne; Samuel Delpeuch; Margarita Lopez Forero
  2. Digging into the Technological Dimension of Environmental Productivity By Filippo Belloc; Edilio Valentini
  3. Productivity Spillovers among Knowledge Workers in Agglomerations: Evidence from GitHub By Abou El-Komboz, Lena; Fackler, Thomas
  4. Labor Share Decline and Productivity Slowdown: A Micro-Macro Analysis By Francesca Crucitti; Lorenza Rossi
  5. Can water productivity improvements save us from global water scarcity?. White paper By Yu, Winston; Uhlenbrook, Stefan; von Gnechten, Rachel; van der Bliek, Julie
  6. On the Elasticity of Substitution between Labor and ICT and IP Capital and Traditional Capital By Vahagn Jerbashian
  7. The impact of air pollution on labour productivity in France By Clara Kögel
  8. Agricultural Productivity in Burkina Faso: The Role of Gender and Risk Attitudes By Mohammad Sepahvand
  9. Do Innovative Firms Pay Higher Wages ? Micro-Level Evidence from Brazil By Cirera,Xavier; Soares Martins Neto,Antonio
  10. Matching Efficiency and Heterogeneous Workers in the UK By Lisauskaite, Elena
  11. Bank profitability measurements and its determinants: an empirical study of commercial banks in Iraq By Ghafar, Safeen; Abdullah, Hariem; Haji Rasul, Van

  1. By: Jean-Charles Bricongne (Centre de recherche de la Banque de France - Banque de France); Samuel Delpeuch (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique); Margarita Lopez Forero (Université Paris-Saclay)
    Abstract: Based on French firm-level data over 15 years we evaluate the contribution of the microlevel profit-shifting-through tax haven foreign direct investments to the aggregate productivity slowdown measured in France. We show that firm measured productivity in France declines over the immediate years following the establishment in a tax haven, with an average estimated around 3.5% in labor apparent productivity. To isolate the contribution of multinationals' tax optimization to this decline of apparent productivity, we then exploit the 2006 Cadbury-Schweppes decision of the European Court of Justice limiting the extent to which member States can counter European MNEs' tax planning strategies. We find that multinational groups benefiting from that loosening of the legal constraints do exhibit lower apparent productivity in France following that ruling. Our results moreover suggest that this bias is bigger when firms rely more intensively on intangible capital. Finally, given these firms' weight in the economy, our results imply an annual loss of 9.7% in terms of the aggregate annual labor productivity growth.
    Keywords: Profit-shifting FDI,Productivity slowdown,Productivity mismeasurement,Intangible capital,Tax Havens
    Date: 2022–04–15
  2. By: Filippo Belloc (Department of Economics and Statistics, University of Siena); Edilio Valentini (Department of Economic Studies, University of Chieti-Pescara)
    Abstract: We propose a mixture model approach to identify locally optimal technologies and to dissect environmental productivity (output produced per unit of emission) into a technological and a managerial component. For a large sample of plants covered by the EU ETS, we find that the share of plants adopting the frontier technology is about 21%. We also find that the average output gains that plants could reach by adopting optimal technologies and managerial practices are 75% and 80% respectively. These results remain qualitatively similar after addressing endogeneity of emissions. Finally, we match EU ETS data with balance-sheet data on parent companies and find that better environmental technologies tend to be adopted by larger, listed, multi-plant and international companies, while older firms and firms with higher intangibles assets intensity more commonly show improved environmental management. Our results suggest that existing technologies have large unexploited potentials and deliver important insights for policy.
    Keywords: Environmental productivity, Emission intensity, Environmental technology, Environmental management
    JEL: D24 L60 Q54 Q55
    Date: 2022–10
  3. By: Abou El-Komboz, Lena; Fackler, Thomas
    JEL: D62 J24 O36 R32
    Date: 2022
  4. By: Francesca Crucitti; Lorenza Rossi
    Abstract: This paper uses firm-level data to empirically investigate the relative contribution of the declining relative price of investments, the increasing automation, and the rising price markups on the labor share decline and productivity slowdown witnessed in the last 20 years in the Spain manufacturing sector. The results point to automation and markups as important drivers of both phenomena, while the relative price of investments has the opposite sign, coherent with the evidence of capital-labor complementarity. A theoretical model characterized by rm heterogeneity, endogenous markups distribution, and financial market frictions, parsimoniously accounts for the empirical findings, and it is used to draw aggregate implications. Last, the model accounts for the observed changes in the distribution of rm markup and size and for the decline in business dynamism that occurred in the last decades.
    Keywords: Labor share, TFP Losses, Firm dynamics, Capital Misallocation
    JEL: E22 E25 O16 O33 O40
    Date: 2022
  5. By: Yu, Winston (International Water Management Institute); Uhlenbrook, Stefan (International Water Management Institute); von Gnechten, Rachel (International Water Management Institute); van der Bliek, Julie (International Water Management Institute)
    Keywords: Water productivity; Water scarcity; Agricultural water use; Water allocation; Water accounting; Sustainable Development Goals; Water resources; Water management; Groundwater; Climate change; Food security; Water policies; Policy making; Stakeholders; Farmers
    Date: 2021
  6. By: Vahagn Jerbashian
    Abstract: I estimate CES aggregate production functions for the US, the UK, Japan, Germany, and Spain using data from the EU KLEMS database. I distinguish between three types of capital: information and communication technologies (ICT), intellectual property (IP) capital, and traditional capital. I assume that the aggregate output is produced using labor and these three types of capital and allow for differences in the elasticities of substitution between labor, an aggregate of ICT and IP capital, and traditional capital. The estimated elasticities of substitution between ICT and IP capital are strictly below one for all sample countries implying gross complementarity. ICT and IP capital together are gross substitutes for labor while traditional capital is a gross complement. The results for the US imply that the fast pace of technological progress in ICT and IP capital accumulation together are responsible for about 80 percent of the fall in labor income share.
    Keywords: CES production function, elasticities of substitution, system of equations, ICT, IP capital, traditional capital
    JEL: E22 E25 J23 O33
    Date: 2022
  7. By: Clara Kögel (OECD Directorate for Science, Technology and Innovation and Centre d'Economie de la Sorbonne - Université Paris 1 Panthéon-Sorbonne)
    Abstract: This paper investigates the effect of air pollution on labour productivity in French establishments in both manufacturing and non-financial market services sectors from 2001 to 2018. An instrumental variable approach based on planetary boundary layer height and wind speed allows identifying the causal effect of air pollution on labour productivity. The finding shows that a 10% increase in fine particulate matter leads, on average, to a 1.5% decrease in labour productivity, controlling for firm-specific characteristics and other confounding factors. The analysis also considers different dimensions of heterogeneity driving this adverse effect. The negative effect of pollution is mainly driven by service-intensive firms and sectors with a high share of highly skilled workers. This finding is in line with the expectation that air pollution affects cognitive skills, concentration, headache, and fatigue in non-routine cognitive tasks. Compared to an estimation of the marginal abatement cost of PM 2.5 reductions by the Air Quality Directive 2008/50/EC, gains only from the labour productivity channel are equivalent to one-third of the abatement cost over the implementation period. All in all, these estimates suggest that the negative impact of air pollution is much larger than previously documented in the literature
    Keywords: air pollution; labour productivity; planetary boundary layer height
    JEL: J24 O13 Q53 Q51 Q52
    Date: 2022–10
  8. By: Mohammad Sepahvand
    Abstract: This study analyzes how risk attitudes influence the agricultural productivity of men and women in a sub-Saharan African country, Burkina Faso. By using a large representative panel survey of farmers, the results show that as female farmers increase risk taking, the productivity of female-owned plots goes down. The study controls for various socio-economic factors and explores how the diversity of the regions of the country affects gender differences. Findings show that agricultural policy interventions in Burkina Faso need to be gender sensitized when addressing issues related to credit constraints, improved inputs, and policies that support increase in productivity.
    Keywords: risk attitudes, gender differences, agriculture, productivity, sub-Saharan Africa, Burkina Faso
    Date: 2022–10
  9. By: Cirera,Xavier; Soares Martins Neto,Antonio
    Abstract: Several studies have documented a positive and causal relationship product or process innovation -- and labor productivity. Given the links between labor productivity and wages, a likely implication of this positive relationship is that innovation is associated with higher wages of more productive firms. This paper explores the relationship between innovation and wages using Brazil's employer-employee census and a novel measure of innovation derived from the share of technical and scientific occupations of workers in the firm. The results show a robust and positive wage premium associated with innovative firms. The decomposition of this innovation-related wage premium suggests a series of important stylized facts: (i) the innovation wage premium is larger for manufacturing but also positive and significant for agriculture and services; (ii) it is larger for large firms, but also positive and significant for all firm size categories including micro firms; and (iii) it is larger for medium- and low-skill occupations, although this depends on the use of firm fixed effects. More importantly, the paper explores the causality between innovation and wages and finds empirical support for the ideas that “self-selection†—firms that innovate already pay higher wages before becoming innovators -- and increases in wages associated with starting innovation activity, which are persistent for three years after firms start innovating.
    Keywords: Labor Markets,Food&Beverage Industry,Plastics&Rubber Industry,Business Cycles and Stabilization Policies,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Common Carriers Industry,Construction Industry,General Manufacturing,Skills Development and Labor Force Training,Food Security
    Date: 2020–10–19
  10. By: Lisauskaite, Elena (University of Portsmouth)
    Abstract: The matching efficiency of the standard matching function is known to follow a pro-cyclical pattern. An observed rightward shift in the UK's Beveridge Curve after the Great Recession, suggests a decrease in the matching efficiency between vacancies and unemployed workers. This paper studies the changes in the labour market's efficiency over the period between 2001 and 2015 in the UK, and decomposes various factors behind it, such as industrial labour market segmentation and characteristics of unemployed, using the standard aggregate matching function. Consistent with the findings for the US (Barnichon and Figura (2015), Hall and Schulhofer-Wohl (2018)), I find that the UK labour market experienced a decrease in the matching efficiency during the Great Recession. However, contrary to what Barnichon & Figura (2015) observed in the US, composition of the labour market did not account for much of this decrease, leaving labour market tightness as the main factor for the decline in efficiency in matching unemployed workers and available vacancies. Accounting for labour market segmentation and worker heterogeneity, can explain 24% of movements in the matching efficiency over the period between 2001Q3 and 2014Q3.
    Keywords: unemployment, mismatch, matching efficiency
    JEL: J6 J41 J42
    Date: 2022–09
  11. By: Ghafar, Safeen; Abdullah, Hariem; Haji Rasul, Van
    Abstract: The current study is an empirical attempt to measure the profitability of commercial banks in developing countries. It deals with aspects of understanding the impact of a number of firm-specific factors such as liquidity, debt leverage, retained earnings, bank size, growth rate and age of the bank on the profitability of commercial banks in Iraq for the period between 2009 and 2018. The sample study includes a number of commercial banks listed on the Iraq Stock Exchange. Data were collected from banks for the above period and analysed by using the multiple linear regression model and Brinson correlation coefficient using EVIEWS program. The results of the empirical analysis show that liquidity ratio, leverage ratio, retained earnings ratio, bank size and growth rate have a positive impact on the profitability of Iraqi commercial banks, with a negative impact from the age of the bank. The study recommends the necessity of conducting more in-depth studies in the field of profitability determinants, to include other non-financial sectors that have a distinctive position in the economic sectors in the Iraq Stock Exchange, to find out the extent of the variation in the determinants of profitability in the different sectors.
    Keywords: profitability measurement, profitability determinants, commercial banks, internal factors, Iraq.
    JEL: G21 G32 L25
    Date: 2021

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