nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2024‒01‒29
seven papers chosen by

  1. Pakistan and the rest: A tale of dismal productivity growth, misallocation, and missing transformation By Ahmed Pirzada; Aadil Nakhoda; Saihan Mohammad; Sarah Javaid
  2. Laggards v Leaders: Productivity and Innovation Catchup By Peter Claeys; Juan Jung; Gonzalo Gómez-Bengoechea
  3. Stagnant Wages in the Face of Rising Labor Productivity: The Potential Role of Industrial Robots By Prettner, Klaus
  5. The effect of applied research institutes on invention: evidence from the Fraunhofer centres in Europe By Llanos Paredes, Pedro
  6. Do National Well-Being Scores Capture Nations’ Ecological Resilience? Evidence for 124 Countries By Heinz Welsch
  7. The role of state policy in fostering health information exchange in the United States. By Bronsoler, Ari; Doyle, Joseph; Schmit, Cason; Van Reenen, John

  1. By: Ahmed Pirzada; Aadil Nakhoda; Saihan Mohammad; Sarah Javaid
    Date: 2024–01–11
  2. By: Peter Claeys (Universidad Pontificia Comillas); Juan Jung; Gonzalo Gómez-Bengoechea
    Abstract: The decision to innovate or to adopt existing technologies is driven by productivity levels. Large productive incumbents may have an advantage over new entrants and laggards and lead innovation, yet depending on the type of technology, the latter may catch up by pursuing more advanced technologies. Different technologies can therefore widen or shrink the distribution of productivity across firms (Benhabib et al., 2021). Using a novel dataset of around 60, 000 Spanish firms from different industries between 2017-2019, we show that investment in a particular technological innovation – online sales – is indeed pursued by the sector’s most productive and largest firms, yet laggard firms do try to catch up by investing more in new technologies, despite starting at lower productivity levels. This suggests that costly innovation and easy adoption may actually curb overall productivity growth as more firms’ free ride on innovation efforts by the leaders in each sector.
    Keywords: Innovation, adoption, diffusion, Probit, productivity, ICT
    JEL: L O
    Date: 2024
  3. By: Prettner, Klaus
    Abstract: Over the past decades, labor productivity and per capita GDP have increased steadily, while real wages for most workers have remained stagnant. This development challenges conventional economic insights according to which the remuneration of a production factor is determined by its productivity. Augmenting an otherwise standard production function with industrial robots as a substitute for workers allows to reconcile the two trends. If workers are compensated according to their marginal product, wages may decrease when robot use intensifies, whereas output and measured labor productivity both increase. Using data on labor input, physical capital input, and industrial robot use in the United States, I show that a sizable part of the observed wedge between wages and labor productivity can be explained using such a framework.
    Keywords: automation; productivity; wage growth; inequality
    Date: 2023–12
  4. By: Zhemkova, Alexandra (Жемкова, Александра) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The paper assesses the impact of the COVID-19 spread and measures of government support on the firms' productivity dynamics, its sectoral and regional heterogeneity. The work is structured as follows: the first section presents an analysis of the impact of the COVID-19 shock on various sectors of the Russian economy, examines the dynamics of firms' performance during the COVID-19, its industry and regional features, and systematizes a list of government measures to support enterprises during the COVID-19. The second section provides a literature review assessing the impact of supply and demand shocks, as well as state support measures on firms' performance, and discusses the basis for analyzing various aspects of firms' productivity. The third section presents the empirical strategy and the results of the empirical assessment of the impact of the COVID-19 shock and the support measures on the productivity of firms, provides within-firm and between-firm effects of COVID-19, its selection and reallocation effects. At the end of the work, the main conclusions of the study and recommendations are presented.
    Keywords: firm, productivity, labor productivity, covariance, TFP, covid-19, coronavirus, government support
    Date: 2022–11–10
  5. By: Llanos Paredes, Pedro
    Abstract: This study examines the impact of the Fraunhofer Society, Europe’s largest network of applied research institutes, on patent applications. A difference-in-differences strategy was employed exploiting the establishment of five new Fraunhofer centres in the 2000s. The panel includes 65, 963 European applicants (both firms and independent inventors) between 1980 and 2019. The results show that establishing a centre increases patent output by at least 13%, robust to using applicants of cities that established a centre by the end of the 2010s as an alternative control group. The effect is driven by an increase in applicants’ productivity and not by agglomeration dynamics.
    Keywords: European Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 860887; OUP deal
    JEL: R14 J01 J1
    Date: 2023–10–13
  6. By: Heinz Welsch (University of Oldenburg, Department of Economics)
    Abstract: Resilience is the ability of an entity to manage a destabilizing shock or rise in pressure. The recently published State Resilience Index (SRI) includes ecological resilience along with several other “pillars†of state resilience. Given that indicators of subjective well-being (SWB) are increasingly accepted as a measure of national performance and as a standard for evaluating public policy, this paper investigates whether national SWB scores capture the ecological resilience dimension of national performance. Regression analysis of data for 124 countries reveals that SWB is significantly positively related to the ecological pillar of state resilience as well as some of its sub-pillars, but not others. In multivariate regressions, significant sub-pillars of ecological resilience are agricultural productivity, low levels of pollution, and freshwater availability, but not ecosystem health, long-term climate stability and biodiversity. The evidence is taken to suggest that SWB captures the more tangible aspects of the state of the environment rather than latent ecological threats whose full consequences will mainly be felt in the future. To capture latent ecological threats, SWB-based performance measures will therefore have to be complemented by more forward-looking indicators of ecological resilience.
    Keywords: ecological resilience; subjective well-being; national performance; environmental threat; forward-looking
    Date: 2024–01
  7. By: Bronsoler, Ari; Doyle, Joseph; Schmit, Cason; Van Reenen, John
    Abstract: It is widely agreed that health information sharing holds enormous potential to improve health care productivity. Although the adoption of electronic health records in the United States over the past 15 years has been impressive, the use of data - and subsequent improvements in health care productivity - has been disappointing. This article considers the role that state policy plays in the adoption and use of health information exchange (HIE) across providers. The authors built a novel database of state laws from 2000 through 2019 that tracks 12 dimensions of policies that may facilitate HIE usage. The dimensions fall along four categories: clarifying HIE governance, strengthening financial stability, specifying the uses and users of an HIE, and protecting the underlying data. The authors find that regulations related to privacy protections and HIE financial viability have substantial effects on information sharing. The category that has the strongest relationship with health information sharing is related to data protection. In states that add a dimension making the protection of data less costly, HIE usage increases by 18%. Within the category of data-protection measures, one stands out: enacting legislation that has patients participate by default leads to a 16% increase in usage. Adding a dimension for each of the other three categories leads to a 4% increase in HIE usage, although only the relationship with financial sustainability is measured precisely enough to be statistically significant. In particular, states that set up the ability to charge participant fees and authorize the HIE to request state, federal, and private funding achieve greater HIE. These results point to policy levers that can catalyze the use of digital tools to improve health and lower health care costs.
    Keywords: health technology
    JEL: J50 J1
    Date: 2022–12–21

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