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on Efficiency and Productivity |
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Issue of 2024‒07‒22
eleven papers chosen by |
| By: | Angelino, Pierluigi; Czarnitzki, Dirk; Volckaert, Astrid |
| Abstract: | The Flemish government launched its Spearhead Cluster (SHC) policy in 2017. The aim is to boost strategic sectors by setting up cluster initiatives which coordinate collaborative R&D initiatives. In this paper, we analyze whether becoming a member of such a cluster initiative has an impact on the Total Factor Productivity (TFP) of the firm. We exploit firm-level data between 2013 and 2020 to estimate TFP and apply a difference-in-differences approach to assess the programs' treatment effects. We find that becoming a member of a cluster has an average positive impact on firmlevel TFP of between 1 to 4.4 percent, depending on the econometric specification. These results are the first to provide an insight into the impact of the Flemish SHC policy on productivity. |
| Keywords: | cluster associations, cluster policy, innovation policy, total factor productivity, conditional difference-in-difference |
| JEL: | D24 L25 L52 L53 O25 O38 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300010&r= |
| By: | Laura Magazzini (Sant'Anna School of Advanced Studies); Sara Amoroso (DIW Berlin); Randolph Luca Bruno (University College London) |
| Date: | 2022–11–03 |
| URL: | https://d.repec.org/n?u=RePEc:boc:econ22:03&r= |
| By: | Dirk Pilat (The Productivity Institute) |
| Keywords: | Climate change, net zero, environmentally-adjusted productivity measurement |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:anj:ppaper:032&r= |
| By: | Fotis, Panagiotis; Polemis, Michael |
| Abstract: | Explicit collusion, or cartel behavior, involves coordinated efforts among firms within a market to restrict competition for their mutual benefit. Recidivism in this context occurs when cartel members, previously fined for such activities, establish a new cartel in the future. This paper examines 111 cartel cases from various markets and periods in the US to assess the impact of recidivism on productivity growth. We define a recidivist as a repeat offender with at least two fines. Investigating the causality between cartel recidivism and total factor productivity (TFP) growth is crucial for several reasons. First, understanding this relationship helps policymakers and regulators design more effective anti-cartel enforcement strategies. Second, examining the causality between cartel recidivism and TFP growth provides insights into the broader economic impacts of anti-competitive practices. Ultimately, such investigations help in creating a more efficient and equitable economy, where market forces drive productivity improvements and sustainable economic growth. Our econometric findings drawn from OLS and quantile regression analysis indicate a negative relationship between recidivism and productivity growth. The rationale is that recidivism undermines the effectiveness of anti-cartel enforcement, which consequently hampers productivity growth in the affected markets. |
| Keywords: | Cartels; Recidivism; Competition Policy; Anti-Cartel Enforcement; TFP |
| JEL: | D24 K21 L41 |
| Date: | 2024–07–04 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121386&r= |
| By: | Parisa Ghasemi (University of Coimbra, Faculty of Economics); Paulino Teixeira (University of Coimbra, Centre for Business and Economics and Faculty of Economics); Carlos Carreira (University of Coimbra, Centre for Business and Economics and Faculty of Economics) |
| Abstract: | In this study, we investigate the impact of the share of the foreign labor force on the labor productivity of firms operating in Portugal between 2010 and 2019, drawing on data from two main sources: linked employer-employee data from Quadros de Pessoal and firm-level balance sheet data from SCIE-Sistema de Contas Integradas das Empresas. The empirical analysis, conducted using Fixed Effects Two-Stage Least Squares, shows that immigrants do not contribute to the productivity of firms in which they are employed. We further investigate whether the productivity response to increased immigrant labor varies across different subsamples. Notably, low-productivity firms experience adverse effects when the share of immigrants rises, whereas smaller firms benefit from their presence. Furthermore, our analysis shows a positive and statistically significant impact on labor productivity from foreign-born workers with 5 to 9 years of formal education. This finding suggests that this particular demographic brings valuable skills and contributions to the workforce, enhancing overall productivity levels. |
| Keywords: | Firms, Immigration, Low skilled Immigrants, Productivity |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:gmf:papers:2024-01&r= |
| By: | Matthew Polisson; John K. -H. Quah |
| Abstract: | This note explains the equivalence between approximate rationalizability and approximate cost-rationalizability within the context of consumer demand. In connection with these results, we interpret Afriat's (1973) critical cost-efficiency index (CCEI) as a measure of approximate rationalizability through cost inefficiency, in the sense that an agent is spending more money than is required to achieve her utility targets. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.10136&r= |
| By: | Keiko Ito (Graduate School of Social Sciences, Chiba University); Masahiro Endoh (Faculty of Business and Commerce, Keio University); Naoto Jinji (Graduate School of Economics, Kyoto University); Toshiyuki Matsuura (Keio Economic Observatory, Keio University); Toshihiro Okubo (Faculty of Economics, Keio University); Akira Sasahara (Faculty of Economics, Keio University) |
| Abstract: | This study is the first to comprehensively investigate international trade at the firm-level using Japan fs customs data for the 2014-2020 period. We first decompose international trade into the intensive and extensive margin and show that the intensive margin accounts for around 30% and 40% of the variation in partner country-specific exports and imports, respectively. We next find a substantial concentration of trading firms: in 2017, the top 10% of exporters accounted for 96.6% of all exports, while the top 10% of importers were responsible for 94.6% of all imports. Finally, we match the customs data with other firm-level datasets and estimate the performance premia of exporting firms. Our findings indicate that exporting firms outperform non-exporting firms in all aspects we consider: sales, value added, the number of employees, the capital-labor ratio, productivity, and wages. Interestingly, the exporter premia for value added, labor productivity, and total factor productivity decreased between 2014 and 2016 and then increased until 2019, whereas the exporter premium for the average wage steadily increased. |
| Keywords: | Japan fs international trade, customs data, intensive and extensive margin of trade, exporter premia |
| JEL: | F10 F14 L25 |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:keo:dpaper:2024-017&r= |
| By: | Sangmin Aum; Yongseok Shin |
| Abstract: | When explaining the declining labor income share in advanced economies, the macro literature finds that the elasticity of substitution between capital and labor is greater than one. However, the vast majority of micro-level estimates shows that capital and labor are complements (elasticity less than one). Using firm- and establishment-level data from Korea, we divide capital into equipment and software, as they may interact with labor in different ways. Our estimation shows that equipment and labor are complements (elasticity 0.6), consistent with other micro-level estimates, but software and labor are substitutes (1.6), a novel finding that helps reconcile the macro vs. micro-literature elasticity discord. As the quality of software improves, labor shares fall within firms because of factor substitution and endogenously rising markups. In addition, production reallocates toward firms that use software more intensively, as they become effectively more productive. Because in the data these firms have higher markups and lower labor shares, the reallocation further raises the aggregate markup and reduces the aggregate labor share. The rise of software accounts for two-thirds of the labor share decline in Korea between 1990 and 2018. The factor substitution and the markup channels are equally important. On the other hand, the falling equipment price plays a minor role, because the factor substitution and the markup channels offset each other. |
| JEL: | D22 D24 D33 E22 E25 L11 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32591&r= |
| By: | Qianying Jin (College of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing, 211106, China.); Kristiaan Kerstens (Univ. Lille, CNRS, IESEG School of Management, UMR 9221 - LEM - Lille Économie Management, F-59000, Lille, France); Ignace Van de Woestyne (KULeuven, Research Centre for Operations Research and Statistics (ORSTAT), Brussels Campus, Warmoesberg 26, B-1000 Brussels, Belgium); Zhongbao Zhou (School of Business Administration, Hunan University, Changsha, 410082, China.) |
| Abstract: | Mathematical programming-based methods are widely used to generate separating boundaries in two-group classification problems. Nonlinear separating boundaries may have better classification performance than linear separating boundaries, but these require a pre-specification of a nonlinear functional form. This contribution proposes a novel pairwise-frontier-based classification (PFC) method to approximate nonlinear separating boundaries, without predetermining a nonlinear functional form. It consists of two steps that explicitly consider and focus on overlap. The first step is to identify the overlap. Importantly, this contribution proposes to construct frontiers based on background knowledge of classification, thus ensuring that their intersection (i.e., overlap) is not increased by blindly applying commonly used axioms. Depending on the axioms applied, pairwise frontiers can be either convex or nonconvex. The second step minimizes identified overlaps by allowing training observations to be misclassified, but all training observations that have been correctly classified must remain correctly classified. The PFC method with hard frontiers is then extended to the one with soft frontiers. The applicability of the proposed PFC methods is illustrated by simulation studies and real-life data sets. The results show that the proposed method is competitive with some well-established classifiers in the literature and even performs better with unbalanced data sets. |
| Keywords: | Data Envelopment Analysis; Frontier; Nonconvex; Convex; Two-group Classification |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ies:wpaper:e202415&r= |
| By: | Sahar Amidi (Université d'Orléans); Rezgar Feizi (University of Luxembourg) |
| Abstract: | This paper investigates how various factors affect pollution levels in Europe’s manufacturing industry. The paper explores how productivity, expenditure share, trade cost, and environmental regulations affect pollution levels in Europe’s manufacturing industry. The World Input-Output Database provides data on global and local pollution for each industrial sector solely for the period ranging from 1995 to 2009. We use a general equilibrium model and quantitative trade model that considers pollution as a byproduct of production. The study aims to examine the effectiveness of regulations and control for the primary causes of environmental pollution (the main causes). Our empirical results reveal that air pollution emissions from EU manufacturing decreased by 33.21 percent despite an 85.44 percent increase in real manufacturing output. This outcome could provide evidence for the role of reducing the pollution contamination of manufacturing. The study finds that most of the decrease in emissions can be ascribed to changes in environmental regulations, rather than changes in expenditure share, trade cost, and productivity. Increasing environmental regulations by 20 percent can eliminate emissions intensity. After increasing environmental regulations by 20%, the emission of global pollutants such as methane decreased by 17.27% in 2009. |
| Keywords: | Environmental account and accounting, environmental taxes, general equilibrium model, productivity, quantitative model, technological innovation, trade cost |
| JEL: | Q |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:inf:wpaper:2024.10&r= |
| By: | Vaishali Garga; Giovanni P. Olivei; J. Christina Wang |
| Abstract: | Wage inflation remains higher than it was before the onset of the COVID-19 pandemic, raising concerns that it could hinder progress toward a return of price inflation to the Federal Reserve’s 2 percent target. The impact of wage inflation on price inflation, however, cannot be considered independently of the behavior of productivity and firms’ markups. In that context, there are scenarios in which wage inflation could stay above trend for a few more quarters without contributing to higher price inflation. |
| Keywords: | wage inflation; productivity |
| JEL: | E24 E31 E39 |
| Date: | 2024–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbcq:98463&r= |