nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2023‒09‒04
seven papers chosen by
Angelo Zago, Università degli Studi di Verona

  1. Distortions, Producer Dynamics, and Aggregate Productivity: A General Equilibrium Analysis By Stephen Ayerst; Loren Brandt; Diego Restuccia
  2. Population Aging, Retirement, and Aggregate Productivity By Klaus Gründler; Niklas Potrafke
  3. Digitalisation in European regions: Unravelling the impact of relatedness and complexity on digital technology adoption and productivity growth By Stefan Apostol; Eduardo Hernández-Rodríguez
  4. Management, Performance And Pay By Natália P. Monteiro; Odd Rune Straume
  5. Diversify or not? The link between global sourcing of ICT goods and firm performance By Schiersch, Alexander; Bertschek, Irene; Niebel, Thomas
  6. Corporate taxes, productivity, and business dynamism By Colciago, Andrea; Lewis, Vivien; Matyska, Branka
  7. Driving Resource Efficiency and Sustainable Consumption: Technological Innovations in Circular Economy Strategies and Industrial Symbiosis By Asuamah Yeboah, Samuel

  1. By: Stephen Ayerst; Loren Brandt; Diego Restuccia
    Abstract: The expansion in farm size is an important contributor to agricultural productivity in developed countries where more productive farms are larger, but in less developed economies the allocation of factor inputs to more productive farms is hindered. How do distortions to factor-input allocation affect farm dynamics and agricultural productivity? We develop a model of heterogeneous farms making cropping choices and investing in productivity improvements. We calibrate the model using detailed farm-level panel data from Vietnam, exploiting regional differences in agricultural institutions and outcomes. We focus on south Vietnam and quantify the effect of higher measured distortions in the North on farm choices and agricultural productivity. We find that the higher distortions in north Vietnam reduce agricultural productivity by 47%, accounting for 70% of the observed 2.5-fold difference between regions. Moreover, two-thirds of the productivity loss is driven by farms' choice of lower productivity crops and reductions in productivity-enhancing investment, which more than doubles the productivity loss from static factor misallocation.
    Keywords: Farm dynamics, productivity, size, distortions, misallocation, Vietnam.
    JEL: O11 O14 O4
    Date: 2023–08–18
  2. By: Klaus Gründler; Niklas Potrafke
    Abstract: Most industrialized countries today are facing historical demographic changes, paring increasing retirement with a declining labor force. We study the consequences of an increasing pensioner-worker ratio in a macroeconomic framework, which suggests a negative effect on total factor productivity. Using newly collected longitudinal data on pensioners, we quantify this effect by exploiting variation in the pre-determined component of retirement. We find that a 10-point increase in the pensioner-worker ratio decreases factor productivity by 5-6%. The effect is stronger when production is labor intensive and automation potential is low. Economic aging also impedes the creation of innovation at the technological frontier.
    Keywords: aging, retirement, factor productivity, secular stagnation, demographic transition
    JEL: C23 C26 D24 J11 J14 O40
    Date: 2023
  3. By: Stefan Apostol; Eduardo Hernández-Rodríguez
    Abstract: Digitalisation has become a clear policy objective. Regions want to digitalise their economies to benefit from the digital world. This paper provides empirical evidence on how the adoption of new digital web technologies is shaped by previous regional digital capabilities. The analysis is based upon an economic complexity and relatedness framework using novel data on digital web technologies’ adoption for 278 European NUTS-2 regions between years 2000-2022. Results show that regions tend to adopt new digital web technologies when they already master related digital capabilities. This paper also shows how digital complexity is associated with labour productivity gains at the regional level. Conclusions shed light on how regions are adopting digital web technologies and serve as a tool for policymakers.
    Keywords: Digitalisation; digital web technologies; relatedness; economic complexity; productivity; European regions
    JEL: L86 O14 O33 R11
    Date: 2023–08
  4. By: Natália P. Monteiro (NIPE/Center for Research in Economics and Management, University of Minho, Portugal); Odd Rune Straume (NIPE/Center for Research in Economics and Management, University of Minho, Portugal; and Department of Economics, University of Bergen, Norway)
    Abstract: We use rich Portuguese data to analyse the relationship between the use of structured management practices and worker pay in a large representative sample of firms. We find that management practices are significantly associated with both higher average wages and higher within-firm wage dispersion.The positive relationship between management practices and average pay is present throughout the wage distribution and for all occupational skill groups, but is stronger for workers higher up in the wage distribution and in higher-skilled occupations. These results are driven by management practices related to incentives, and are also mainly driven by small and medium-sized firms.
    Keywords: Management practices, wages, labour productivity
    JEL: D22 J31 M11 M54
    Date: 2023
  5. By: Schiersch, Alexander; Bertschek, Irene; Niebel, Thomas
    Abstract: Our paper contributes to the discussion about Europe's digital sovereignty. We analyze the relationship between firm performance and the diversification of sourcing countries for imported ICT goods. The analysis is based on administrative data for 3888 German manufacturing firms that imported ICT goods in the years 2010 and 2014. We find that firms that diversify the sourcing of ICT goods across multiple countries perform better than similar firms with a less diversified sourcing structure. This result holds for value added as well as for gross operational surplus as performance measures and for two different indicators of diversification.
    Keywords: ICT goods imports, global sourcing, digital sovereignty, firm performance
    JEL: F14 F23 L14 L23 D24
    Date: 2023
  6. By: Colciago, Andrea; Lewis, Vivien; Matyska, Branka
    Abstract: We identify the effects of corporate income tax shocks on key US macroeconomic aggregates. In response to a corporate income tax cut, we find that: (i) labor productivity increases; (ii) entry increases with delay; (iii) exit increases; (iv) total labor increases by more than production labor. To rationalize these empirical findings, we build a New Keynesian model with idiosyncratic firm productivity, and entry and exit. Our model features productivity gains due to selection and cleansing along the entry and exit margins. Models with homogeneous firms fail to account for the selection and cleansing process and produce counterfactual results.
    Keywords: corporate taxation, productivity, firm entry and exit
    JEL: E62 E32 H25
    Date: 2023
  7. By: Asuamah Yeboah, Samuel
    Abstract: This paper explores the role of technological innovations in advancing resource efficiency through circular economy strategies and industrial symbiosis. It highlights key innovations such as advanced recycling techniques, digital platforms for resource exchange, and product lifecycle management systems that enable resource conservation, waste reduction, and efficient material use. Industrial symbiosis networks leverage technology and innovation to facilitate resource sharing among companies, transforming waste from one industry into valuable inputs for another. This paper discusses the policy implications, identifies directions for future research, and emphasizes the need for collaboration, regulatory frameworks, and education to promote sustainable technology adoption. By embracing these innovations, societies can transition towards a circular economy, minimizing environmental impacts and enhancing resource efficiency.
    Keywords: Technological innovations, Circular economy, Resource efficiency, Advanced recycling techniques, Digital platforms, Product lifecycle management, Industrial symbiosis, Policy implications
    JEL: O32 Q53
    Date: 2023–06–05

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