nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2023‒01‒09
twenty-two papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. On the Estimation of Cross-Firm Productivity Spillovers with an Application to FDI By Malikov, Emir; Zhao, Shunan
  2. Picking Winners? Government Subsidies and Firm Productivity in China By Lee G. Branstetter; Guangwei Li; Mengjia Ren
  3. APPROACHES TO ANALYSIS OF RESOURCE ALLOCATION IN THE RUSSIAN ECONOMY AND ITS RELATIONSHIP WITH PRODUCTIVITY By Zhemkova Alexandra
  4. The Role of Firm Dynamics in the Green Transition: Carbon Productivity Decomposition in Finnish Manufacturing By Kuosmanen, Natalia; Maczulskij, Terhi
  5. Sectoral decomposition of convergence in labor productivity: A re-examination from a new dataset By Dieppe, Alistair; Matsuoka, Hideaki
  6. The Dimensions of Productivity Change in the U.S. Food Manufacturing Industries By Lopez, Rigoberto A.
  7. Returns on Informal and Formal finance for Indian Informal firms: A Pseudo panel data analysis By POSTI, LOKESH; KHOLIYA, MAMTA; POSTI, AKHILESH KUMAR
  8. What Explains the Reduction of Greenhouse Gas Emissions of the Finland’s Manufacturing Sector? By Kuosmanen, Natalia; Maczulskij, Terhi
  9. Firm Heterogeneity and Productivity: The Contribution of Microdata By Riadh Ben Jelili
  10. Government Spending Efficiency in Latin America By António Afonso; Gabriel Baquero Fraga
  11. Global Value Chain Participation and Labour Productivity in Manufacturing Firms in Viet Nam: Firm-Level Panel Analysis By Upalat Korwatanasakul; Tran Thi Hue
  12. Firing costs and productivity: Evidence from a natural experiment By Andrea Caggese; Ozan Guler; Mike Mariathasan; Klaas Mulier
  13. Sourcing of services and total factor productivity By Emmanuel Dhyne; Cédric Duprez
  14. Returns to scale with a Cobb-Douglas production function for a small italian mechanical firm By Osti, Davide
  15. How Do Industrial Guidance Funds Affect the Performance of Chinese Enterprises? By KAJITANI Kai; CHEN Kuang-hui; MITSUNAMI Kohei
  16. Macroeconomic Perspectives on Productivity By Jagjit S. Chadha; Issam Samiri
  17. Energy Poverty, Environmental Degradation and Agricultural Productivity in Sub-Saharan Africa By Stephen K. Dimnwobi; Kingsley I. Okere; Favour C. Onuoha; Chukwunonso Ekesiobi
  18. Productivity and Wages: What Was the Productivity-Wage Link in the Digital Revolution of the Past, and What Might Occur in the AI Revolution of the Future? By Edward Lazear; Kathryn L. Shaw; Grant E. Hayes; James M. Jedras
  19. Investment Grants and Firms' Productivity: How Effective Is a Grant Booster Shot? By Alexandre, Fernando; Chaves, Miguel; Portela, Miguel
  20. Using Satellite Images to Measure Crop Productivity: Long-Term Impact Assessment of a Randomized Technology Adoption Program in the Dominican Republic By Salazar, Lina; Palacios, Ana Claudia; Selvaraj, Michael; Montenegro, Frank
  21. On the Non-Identification of Revenue Production Functions By David Van Dijcke
  22. The Economic Consequences of IT By Bayoumi, Tamim; Barkema, Jelle

  1. By: Malikov, Emir; Zhao, Shunan
    Abstract: We develop a novel methodology for the proxy variable identification of firm productivity in the presence of productivity-modifying learning and spillovers which facilitates a unified "internally consistent" analysis of the spillover effects between firms. Contrary to the popular two-step empirical approach, ours does not postulate contradictory assumptions about firm productivity across the estimation steps. Instead, we explicitly accommodate crosssectional dependence in productivity induced by spillovers which facilitates identification of both the productivity and spillover effects therein simultaneously. We apply our model to study cross-firmspillovers in China’s electric machinery manufacturing, with a particular focus on productivity effects of inbound FDI.
    Keywords: Production Economics, Productivity Analysis
    Date: 2022–01
    URL: http://d.repec.org/n?u=RePEc:ags:assa23:316529&r=eff
  2. By: Lee G. Branstetter; Guangwei Li; Mengjia Ren
    Abstract: Are Chinese industrial policies making the targeted Chinese firms more productive? Alternatively, are efforts to promote productivity undercut by efforts to maintain or expand employment in less productive enterprises? In this paper, we attempt to shed light on these questions through the analysis of previously underutilized microdata on direct government subsidies provided to China’s publicly traded firms. We categorize subsidies into different types. We then estimate total-factor productivity (TFP) for Chinese listed firms and investigate the relationship between these estimates of TFP and the allocation of government subsidies. We find little evidence that the Chinese government consistently “picks winners”. Firms’ ex-ante productivity is negatively correlated with subsidies received by firms, and subsidies appear to have a negative impact on firms’ ex-post productivity growth throughout our data window, 2007 to 2018. Neither subsidies given out under the name of R&D and innovation promotion nor industrial and equipment upgrading positively affect firms’ productivity growth. On the other hand, we find a positive impact of subsidy on current year employment, both for the aggregated and employment-related subsidies. These findings suggest that China’s increasingly prescriptive industrial policies may have generated limited effects in promoting productivity.
    JEL: O25 O32
    Date: 2022–12
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:30699&r=eff
  3. By: Zhemkova Alexandra (Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper proposes an approach to assessing the efficiency of resource allocation in the Russian economy.
    Keywords: resource allocation, resources, productivity, firm heterogeneity, allocative efficiency
    Date: 2021–01
    URL: http://d.repec.org/n?u=RePEc:rnp:wpaper:s21107&r=eff
  4. By: Kuosmanen, Natalia; Maczulskij, Terhi
    Abstract: Abstract This paper investigates the importance of firm dynamics, including entry and exit and the allocation of carbon emissions across firms, on the green transition. Using the 2000–2019 firm-level register data on greenhouse gas emissions matched with the Financial Statement data in the Finnish manufacturing sector, we examine the sources of carbon-productivity growth and assess the relative contributions of structural change and firm dynamics. We find that continuing firms were the main drivers of carbon productivity growth whereas the contribution of entering and exiting firms was negative. In addition, the allocation of emissions across firms seems to be inefficient; its impact on carbon productivity growth was negative over the study period. Moreover, we find that there is a positive relationship between labor-intensive firms and carbon productivity but that firms with a larger market share tend to be less productive in terms of carbon use.
    Keywords: Carbon productivity, Decomposition, Firm dynamics, Firm-level data, Manufacturing
    JEL: D24 L60 Q54
    Date: 2022–12–13
    URL: http://d.repec.org/n?u=RePEc:rif:wpaper:99&r=eff
  5. By: Dieppe, Alistair; Matsuoka, Hideaki
    Abstract: This paper investigates how the sector-specific source or the changing sectoral composition of labor productivity has contributed to Ø-convergence, using a newly constructed eightsector database. The main findings are twofold. First, both within and sectoral reallocation have become important drivers of Ø-convergence in labor productivity. Second, agricultural productivity growth has been a significant contributor to Ø-convergence, whereas catch-up in other sectors has only contributed a small amount to convergence. The strong growth of the agriculture sector has been the most important driver of aggregate productivity convergence even though agricultural productivity itself in low-income countries is not converging to that in advanced economies.
    Keywords: Labor productivity,Shift-share decomposition,Ø-decomposition,New sectoral database
    JEL: O1 O11 O4
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:zbw:bofitp:bdp2022_004&r=eff
  6. By: Lopez, Rigoberto A.
    Keywords: Production Economics
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:ags:assa23:316831&r=eff
  7. By: POSTI, LOKESH; KHOLIYA, MAMTA; POSTI, AKHILESH KUMAR
    Abstract: The study investigates the differential impact of various sources of finance on informal firm performance. In the informal sector, where access to finance is limited, we investigate how productivity varies with different sources of finance. Given the data limitations, a pseudo-panel data design was used by combining the three only available, independent cross-sectional surveys conducted by the National Sample Survey Office between 1999-2000 and 2015-16. Using formal and informal credit as two different sources of finance and total factor productivity (TFP) as the primary measure of firm performance, we find a positive relationship among them across all major industries; however, the impact of formal finance was higher than informal credit. Our results stand robust against alternative performance measures. Additionally, to address endogeneity concerns, dynamic panel data analysis was adopted. Obtained findings convey essential policy implications for intensification of financial inclusion and financial literacy.
    Keywords: Informal Sector, Finance, Credit, Total Factor Productivity, Pseudo Panel, India
    JEL: D2 L21 L25 M2 O14
    Date: 2022–12–07
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:115550&r=eff
  8. By: Kuosmanen, Natalia; Maczulskij, Terhi
    Abstract: Abstract Energy-intensive industry is one of the largest sources of greenhouse gas emissions in Finland: its share in the total emissions was 23 percent in 2020. During the last 20 years, industrial emissions decreased from 18 million tons to 11 million tons, or on average approximately 2 percent per year. Which characteristics explain the evolution of emissions? Does the structural change in manufacturing sector and the renewal of companies affect the reduction of greenhouse gas emissions, and thus the mitigation of climate change? To answer these questions, we analyze the carbon productivity growth and the impacts of its components. Based on our results, continuing manufacturing firms were the main drivers of carbon productivity growth of the manufacturing sector in the period 2000–2019. The entry of new firms and exit of unproductive firms (creative destruction) is part of structural change of industries. Its effect on carbon productivity growth was, however, negative. This suggests that some of the most efficient companies in terms of the use of greenhouse gas emissions, for some reason, were unprofitable and exited the market. In addition, the allocation of greenhouse gas emissions across manufacturing firms seems to be inefficient. Its impact on carbon productivity growth was negative. It means that emissions were allocated towards the most polluting companies and the reduction of emissions was due to companies with low emissions. Accordingly, there is a positive relationship between labour productivity and carbon productivity, whereas firm’s competitiveness is negatively associated with carbon productivity growth.
    Keywords: Carbon productivity, Greenhouse gas emissions, Manufacturing, Structural change
    JEL: D24 L60 Q54
    Date: 2022–12–13
    URL: http://d.repec.org/n?u=RePEc:rif:briefs:117&r=eff
  9. By: Riadh Ben Jelili (LEGO - Laboratoire d'Economie et de Gestion de l'Ouest - UBS - Université de Bretagne Sud - UBO - Université de Brest - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO - Université de Brest - UBL - Université Bretagne Loire - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])
    Abstract: Without claiming to be a comprehensive treatment of all relevant issues related to the firm productivity analysis, this note aims to investigate some areas of inquiry in this field where firm level data are most valuable, and to survey the more recent econometric evidence for Arab countries.
    Date: 2022–11–05
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03840600&r=eff
  10. By: António Afonso; Gabriel Baquero Fraga
    Abstract: We assess the public spending efficiency of 20 Latin American countries over the period of 2000-2019, computing Data Envelopment Analysis efficiency scores. For the Public Sector Performance composite indicator, we use the annual data of socio-economic indicators, and for the input measure we consider Total Public Spending as a percentage of GDP, by spending category. The results show that public spending during the period under study increased, but that overall governments were not efficient, as on average they could have used 27% less spending to achieve the same levels of performance. On the other hand, governments could have increased their performance by 18% whilst maintaining the same level of spending. The most-efficient countries were Chile, Guatemala, Panama, and Paraguay, with the least efficient being Bolivia, Venezuela, Nicaragua, Suriname, and Brazil.
    Keywords: government efficiency, Data Envelopment Analysis, government spending, Latin America
    JEL: H11 C13 C14 H50
    Date: 2022
    URL: http://d.repec.org/n?u=RePEc:ces:ceswps:_10096&r=eff
  11. By: Upalat Korwatanasakul (Waseda University, Japan); Tran Thi Hue (Department of Global Human Studies, Faculty of Literature, Kobe Women’s University, Japan)
    Abstract: This study describes the status of global value chains (GVCs) in Viet Nam and examines the roles of GVC participation and technology in enhancing labour productivity in manufacturing firms. The estimation method is a panel fixed-effect regression employing unique firm-level data matching the Vietnam Technology and Competitiveness Survey and Vietnam Enterprise Survey, 2009–2018. The findings show the positive effect of backward GVC participation when considering firm GVC participation status (i.e. whether they engage with backward linkages). However, when accounting for GVC participation degree (i.e. GVC participation index), the results show a stark contrast, revealing the negative effect of backward GVC participation on labour productivity. The results, therefore, partly reject the learning-to-learn hypothesis. On the other hand, regardless of GVC indicators, forward GVC participation positively impacts labour productivity, confirming the views of learning-by-exporting and learning-by-supplying. The findings also suggest the significance of research and development, digital technology, and foreign investment in enhancing labour productivity. Therefore, policies promoting forward GVC participation should be the priority, while policies to promote backward GVC participation should be well designed and accompanied by policies that ensure technology transfer and domestic technology development to avoid the trap of a subordinate role.
    Keywords: Global value chain participation; Labour productivity; Learning by-exporting; Learning-to-learn; Viet Nam
    JEL: F13 F14 F16 O19 O24
    Date: 2022–10–28
    URL: http://d.repec.org/n?u=RePEc:era:wpaper:dp-2022-34&r=eff
  12. By: Andrea Caggese; Ozan Guler; Mike Mariathasan; Klaas Mulier
    Abstract: This paper investigates the effect of firing costs on total factor productivity (TFP) and resource allocation. Exploiting heterogeneous changes in firing costs across employee types in Belgium, we find that increasing firing costs reduce firm-level TFP. Firms facing a net increase in firing costs reduce hiring and firing, increase hours worked per employee, adjust the composition of their workforce away from employee types whose firing costs have increased, and rely more on outsourced employees. Instead, we find no evidence of capital-intensive technology adoption. The decline in TFP is smaller for firms with better access to credit.
    Keywords: Firing costs, employment protection, productivity, misallocation
    JEL: E22 E23 E24
    Date: 2022–11
    URL: http://d.repec.org/n?u=RePEc:upf:upfgen:1853&r=eff
  13. By: Emmanuel Dhyne (: Economics and Research Department, NBB and UMons); Cédric Duprez (Economics and Research Department, NBB)
    Abstract: This paper studies how outsourcing of services activities affects TFP at the firm level. Using the universe of buyer-supplier relationships in Belgium, we first document several new empirical facts about how firms engage in the outsourcing of supporting activities. We show that virtually all firms source from at least one services supplier, but there is substantial heterogeneity in the services sourcing of firms. Geographic proximity plays a key role for the matching of services suppliers and customers as firms mostly connect with services suppliers at a distance of no more than 35 km. Finally, the extensive margin goes a long way to explaining both the aggregate trend and the firmlevel fluctuations in services outsourcing growth. Based on these findings, we develop a model with endogenous choice of the set of tasks produced in-house. Consistent with the model, we estimate the probability of a supplier-buyer relationship and how this affects the productivity of the buyer. We find that productivity gains from outsourcing of services activities may be substantial. Reducing local trade costs might lead to significant productivity gains. Reductions of variable trade costs by 10 or 50% lead respectively to average productivity gains of 3% and 7%. On the other hand, a 25% reduction in the probability of a transaction, due for example to a permanent increase in unconditional fixed costs, would lead to an average 1.3% TFP decline at the firm level. Reducing the costs associated with the sourcing of services can be achieved in many ways, ranging from digitalization to reducing congestion or removing cultural barriers that may bring local discontinuities in the organisation of the production network. This is true for Belgium but also in the European Single Market context.
    Keywords: Outsourcing, Services, Productivity.
    JEL: D22 D23 L14 L23 L25
    Date: 2022–11
    URL: http://d.repec.org/n?u=RePEc:nbb:reswpp:202210-426&r=eff
  14. By: Osti, Davide
    Abstract: with this piece of evidence, I try to she light upon the e ects of xed and variable costs on revenues for a rm operating in the sector of leathing and milling in the neighbourhood of Bologna, on the Tus- can - Emilian Appennines, through the estimation of a linear bivariate simultaneous equation model where variable and xed costs explain revenues; with a sample of eleven years of annual data, I nd that a marginal increase in variable costs of 1 euro, keeping the xed costs constants, leads to higher revenues up to 1.155 euro; I further estimate a cobb douglas production function, in order to nd out whether the returns to scale are increasing, constant or decreasing; I nd support for the hypothesis of slightly increasing returns to scale with the base- line cobb douglas transformed in logarithms (with capital and labour only), while multiplicatively including an additional regressor for raw materials purchases, I nd evidence for slightly decreasing returns to scale
    Keywords: rm behaviour, production functions, returns to scale, cobb douglas, stochastic frontier model, non linear least squares, production sets, convex cones
    JEL: C13 C32 D22 D24 L23 L25 L62
    Date: 2021–11–20
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:115629&r=eff
  15. By: KAJITANI Kai; CHEN Kuang-hui; MITSUNAMI Kohei
    Abstract: This study empirically examines the impact of investments in manufacturing firms by industrial-guided funds (IGFs), which have been established in large numbers since 2015 and are considered to play a crucial role in the implementation of China’s industrial policy since “China Manufacturing 2025,†on the output, including sales, profit margins, fixed asset value, and R&D of these firms. In particular, the following methods were employed during the analysis. First, we compiled a list of over 3,000 funds established until 2018 from the private placement database provided by zero2IPO, combined it with data on manufacturing firms from Orbis provided by Bureau van Dijk, and extracted from them the subsidiaries and sub-subsidiaries of government-sponsored funds. We then identified the timing of the funds’ investments in these companies. Then, we performed a difference-in-difference matching analysis using the firms that had received the investment as the treatment group and the remaining firms as the control group. We analyzed total sales, the number of employees, fixed assets, labor productivity, R&D expenditures/total sales, debt ratio, and return on equity. Our analysis revealed that although investments by IGFs increased fixed assets and equity capital significantly, the other variables did not change significantly. And significant change also did not exist in the ratio of R&D expenditures to sales. These results indicate that although the investment by IGFs increased the assets of the target firms, it did not have the expected effect on R&D capacity and productivity improvement.
    Date: 2022–12
    URL: http://d.repec.org/n?u=RePEc:eti:dpaper:22110&r=eff
  16. By: Jagjit S. Chadha (National Institute of Economic and Social Research); Issam Samiri (National Institute of Economic and Social Research)
    Keywords: Productivity, Macroeconomics, Real Interest Rates, Investment
    JEL: E22 E24 E32 E44 E51 E62 O16 O42 O47
    Date: 2022–12
    URL: http://d.repec.org/n?u=RePEc:anj:wpaper:030&r=eff
  17. By: Stephen K. Dimnwobi (NnamdiAzikiwe University, Awka, Nigeria); Kingsley I. Okere (Gregory University, Uturu, Nigeria); Favour C. Onuoha (Evangel University Akaeze, Nigeria); Chukwunonso Ekesiobi (Igbariam, Nigeria)
    Abstract: Agricultural productivity remains pivotal to the sustenance of the economies and livelihoods of Sub-Saharan Africa (SSA) countries. Given the emerging threat of energy and environmental uncertainties globally, this study makes a foray into understanding the link among energy poverty, environmental degradation and agricultural productivity in 35 SSA nations in particular, and the nature of their impacts across the sub-region constituents namely; the Central, Eastern, Western and Southern sub-regional blocs in general. To begin, our identified variables comprised of the following: Energy Poverty Index, derived using the principal component analysis, agricultural value added as a share of GDP served as a measure of agricultural productivity and ecological footprint to represent environmental degradation. Subsequently, the instrumental variable generalized method of moment (IV†GMM) technique was implemented for the aggregate SSA model, while the IV-two stage least square technique was adopted for the sub-regional estimations for the Central, East, West and South African blocs respectively. Major findings from the SSA model revealed that whereas the index of energy poverty has a significant positive influence, ecological footprint exhibited an inverse and significant impact on agricultural productivity, while the Central, East, West and South African models yielded mixed results given regional disparities in economic development, regional variations in agricultural productivity and an imbalance of available resources. Policy recommendations were suggested to, among other things, transform the energy, environmental and agricultural fortunes of the region.
    Keywords: Agricultural Productivity, SSA; Energy Poverty, Environmental Degradation, Africa’s sub-region
    Date: 2022–01
    URL: http://d.repec.org/n?u=RePEc:exs:wpaper:22/096&r=eff
  18. By: Edward Lazear; Kathryn L. Shaw; Grant E. Hayes; James M. Jedras
    Abstract: Wages have been spreading out across workers over time – or in other words, the 90th/50th wage ratio has risen over time. A key question is, has the productivity distribution also spread out across worker skill levels over time? Using our calculations of productivity by skill level for the U.S., we show that the distributions of both wages and productivity have spread out over time, as the right tail lengthens for both. We add OECD countries, showing that the wage-productivity correlation exists, such that gains in aggregate productivity, or GDP per person, have resulted in higher wages for workers at the top and bottom of the wage distribution. However, across countries, those workers in the upper income ranks have seen their wages rise the most over time. The most likely international factor explaining these wage increases is the skill-biased technological change of the digital revolution. The new AI revolution that has just begun seems to be having a similar skill-biased effects on wages. But this current AI, called “supervised learning,” is relatively similar to past technological change. The AI of the distant future will be “unsupervised learning,” and it could eventually have an effect on the jobs of the most highly skilled.
    JEL: J00 J30 M50
    Date: 2022–12
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:30734&r=eff
  19. By: Alexandre, Fernando (University of Minho); Chaves, Miguel (University of Minho); Portela, Miguel (University of Minho)
    Abstract: This paper investigates the effect of awarding a second investment grant to the same firm. We implement a Regression Discontinuity Design strategy using a very rich firm-level administrative database, which allows us to link applications to grants and their scores to firms' performance. Overall, our results show a positive and significant impact of an investment grant booster shot on firms' labour productivity. This effect is significantly larger than the effect of a single grant. A more granular analysis shows a strong impact of awarding a second grant to small-sized firms. However, we found no effect on micro, medium and large-sized firms. Our results suggest that the characteristics of the targeted firms, namely firm size, matter for the effectiveness of awarding a second grant to the same firm.
    Keywords: industrial policy, investment grants, multiple treatments, productivity
    JEL: D22 H25 L25 L52
    Date: 2022–12
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp15779&r=eff
  20. By: Salazar, Lina; Palacios, Ana Claudia; Selvaraj, Michael; Montenegro, Frank
    Abstract: This study combines three rounds of surveys with remote sensing to measure long-term impacts of a randomized irrigation program in the Dominican Republic. Specifically, Landsat 7 and Landsat 8 satellite images are used to measure the causal effects of the program on agricultural productivity, measured through vegetation indices (NDVI and OSAVI). To this end, 377 plots were analyzed (129 treated and 248 controls) for the period from 2011 to 2019. Following a Differencein-Differences (DD) and Event study methodology, the results confirmed that program beneficiaries have higher vegetation indices, and therefore experienced a higher productivity throughout the post-treatment period. Also, there is some evidence of spillover effects to neighboring farmers. Furthermore, the Event Study model shows that productivity impacts are obtained in the third year after the adoption takes place. These findings suggest that adoption of irrigation technologies can be a long and complex process that requires time to generate productivity impacts. In a more general sense, this study reveals the great potential that exists in combining field data with remote sensing information to assess long-term impacts of agricultural programs on agricultural productivity.
    Keywords: Irrigation;Remote Sensing;Impact Evaluation;Agriculture
    JEL: Q00
    Date: 2021–09
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:11607&r=eff
  21. By: David Van Dijcke
    Abstract: It is well-known that production functions are potentially misspecified when revenue is used as a proxy for output. In this paper, I formalize and strengthen this common knowledge by showing that neither the production function nor Hicks-neutral productivity can be identified when revenue is used as a proxy for physical output. This result holds under the standard assumptions used in the literature for a large class of production functions, including all commonly used parametric forms. Among the prevalent approaches to address this issue, I show that only those which impose assumptions on the underlying demand system can possibly identify the production function.
    Date: 2022–12
    URL: http://d.repec.org/n?u=RePEc:arx:papers:2212.04620&r=eff
  22. By: Bayoumi, Tamim; Barkema, Jelle
    Abstract: The IT revolution, underway since around 1980, has featured mediocre growth and rising geographic, educational, and generational inequality. This stands in stark contrast to the broad prosperity and convergence experienced in the 1950s and 1960s. We attribute this change to a swivel in the leading edge of productivity growth away from manufacturing largely present in towns to information technology mainly housed in “superstar” cities. Using a spatial model, we show how this can explain: rising prosperity and rapid housing inflation in “superstar” cities; falling relative wages in towns and the countryside; mediocre aggregate productivity due to increasing misallocation of labor; the loss of manufacturing jobs, especially in cities; and falling migration.
    Date: 2022–12–09
    URL: http://d.repec.org/n?u=RePEc:osf:socarx:8u6an&r=eff

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