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on Efficiency and Productivity |
| By: | António Afonso; Ana Patricia Montes; José M. Domínguez |
| Abstract: | In this paper, we estimate the potential tax burden in a panel data set comprising OECD countries over the period 2000-2021. To this end, we use non-parametric and parametric techniques: Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA). In this way, it will be possible for us to identify which countries are close to their potential tax capacity and which are far from it. Moreover, we can determine whether they may sustain an increase (decrease) in their actual tax burden depending on whether the tax effort ratio is lower or higher relatively to other similar countries in the sample. Non-parametric and parametric results coincide rather closely on the positioning of the countries vis-à-vis the production possibility frontier and on their relative distances to the frontier. Efficient countries most of the times are: Belgium, Colombia, Finland, France, Italy, Latvia, Slovak Republic, and Sweden. |
| Keywords: | OECD, tax burden, tax efficiency, Stochastic Frontier Analysis, Data Envelopment Analysis |
| JEL: | C14 C23 H20 H21 H30 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11333 |
| By: | MORITA, Hiroshi |
| Abstract: | Investigating the productivity of public capital is a long-standing issue in one strand of macroeconomic literature. This study develops a new approach to estimate the output elasticity of public capital using a vector autoregressive (VAR) model with identification restrictions derived from a theoretical model. Our empirical analysis of 22 OECD countries for the period 1960–2019 reveals that public capital accumulation has a positive effect on GDP in both the short- and longrun horizons in all countries, supporting both demand-stimulating and growthenhancing effects. Furthermore, the estimated output elasticity of public capital lies within a reasonable range, between 0 and 0.5, and, as in the literature, shows substantial differences across countries. Therefore, the proposed methodology is valid for studying public capital productivity. |
| Keywords: | Public capital, Hierarchical panel VAR model, Max share identification |
| JEL: | E62 H54 C32 C33 |
| Date: | 2024–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-141 |
| By: | Otaviano Canuto |
| Abstract: | The Brazilian economy is stuck in a so-called middle-income trap—growth that stalled long before Brazil caught up with the living standards of the highly industrialized countries. After exhibiting a stellar performance in the decades before the 1980s, the economy has since been unable to sustain growth for long periods. The predicament can be summarized using a medical analogy: Brazil has been suffering from both productivity anemia and public sector bloat. On the one hand, it hasn’t enjoyed the sort of productivity growth expected of economies at this stage of development— the harvesting of easy efficiency gains ranging from improved business organization to rapid diffusion of imported technology. On the other hand, the appetite for expanding public spending has become increasingly incompatible with limited productivity gains, particularly since the spending has not delivered on the accompanying hopes for socioeconomic mobility. * A preliminary version of this text appeared at Milken Institute Review, October 23, 2023 |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pb_40_23 |
| By: | Kauhanen, Antti; DeVaro, Jed |
| Abstract: | Abstract This brief examines the economic impacts of skilled immigration on firms, innovation, and labour markets. Research shows that skilled immigration generally has positive effects on firm performance, productivity, and innovation. Immigrant inventors play a crucial role in innovation, with evidence showing they produce a disproportionate share of patents and have positive spillover effects on native collaborators. Contrary to common fears, most studies find that skilled immigration does not negatively impact native workers’ wages or employment on average. In fact, it can benefit natives with complementary skills. The availability of skilled immigrant labour also influences firms’ location decisions, with restrictions on immigration leading to increased offshoring of jobs. While the fiscal impacts of immigration are debated, traditional accounting methods suggest a positive fiscal impact for highly educated immigrants. However, these estimates often fail to account for indirect effects like productivity gains and innovation. Overall, the evidence indicates that skilled immigration is a valuable tool for addressing productivity challenges and innovation needs, particularly in countries facing declining working-age populations. |
| Keywords: | Productivity, Innovations |
| JEL: | J61 J31 D24 |
| Date: | 2024–10–28 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:140 |
| By: | Crescenzi, Riccardo; Ganau, Roberto |
| Abstract: | This paper looks at inward foreign direct investment (FDI) and regional labour productivity in the aftermath of the Great Recession, exploring two FDI-induced effects. The first effect is linked with a capacity of FDI per se to trigger short-term productivity gains in response to a global shock. The second effect is associated with the degree of industrial diversification of these investment flows. The results suggest that it is not the amount of foreign investment received per se that matters for productivity recovery but its composition. A low degree of FDI diversification helped regions to gain productivity after the shock. The effect is stronger in regions with an industrial profile concentrated in a limited number of sectors, particularly in services. FDI can support regional recovery, but in the short run, it does so by matching and reinforcing existing regional specialisation profiles and to the benefit of services-oriented regions. |
| Keywords: | inward FDI; industrial profile; regional growth; European Union |
| JEL: | F20 R11 R12 |
| Date: | 2024–10–23 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125406 |
| By: | Nonnis, Alberto; Roth, Felix; Bounfour, Ahmed |
| Abstract: | In this article, we highlight important differences in capital investment and capital stock in intangible assets between France and Germany, which we attribute to potential measurement issues between the two countries. Using data from the latest EUKLEMS/INTANProd release for the period between 1995 and 2020, we identify investment in software and databases, along with investment in organizational capital, as key drivers of these differences. Investment in software appears to be four times higher in France than in Germany, while organizational capital is about two and a half times larger in France. Given the comparable economic growth patterns of these two countries over recent decades, we believe these measurement discrepancies could have significant implications for understanding both past growth trends and future growth perspectives. |
| Keywords: | Intangible capital, Labour Productivity, Germany, France, EU |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:uhhhdp:18 |
| By: | Hennessy, David; Lapan, Harvey |
| Abstract: | The typical firm produces for sale a plural number of distinct product lines. This paper characterizes the composition of a firm’s optimal production vector as a function of cost and revenue function attributes. The approach taken applies mathematical group theory and revealed preference arguments to exploit controlled asymmetries in the production environment. Assuming some symmetry on the cost function, our central result shows that all optimal production vectors must satisfy a dominance relation on permutations of the firm’s revenue function. When the revenue function is linear in outputs, then the set of admissible output vectors has linear bounds up to transformations. If these transformations are also linear, then convex analysis can be applied to characterize the set of admissible solutions. When the group of symmetries decomposes into a direct product group with index K in N, then the characterization problem separates into κ problems of smaller dimension. The central result may be strengthened when the cost function is assumed to be quasiconvex. |
| Date: | 2024–11–04 |
| URL: | https://d.repec.org/n?u=RePEc:isu:genstf:202411041948040000 |
| By: | Zhou, Alex (Department of Economics, University of Warwick,); Mahadeshwar, Ruchi (Department of Economics, Brown University,) |
| Abstract: | Despite its recognized inefficiency, the persistence of income hiding between spouses remains largely unaddressed in the literature. Our study suggests that one cause of persistency is that this behavior may provide strategic benefits, particularly by affecting labor supply decisions and overall household income. Using a field experiment involving low-income workers in Southeast Asia, we estimate the effects of randomly disclosing spousal income on productivity in a standardized work task. Our findings indicate that income disclosure significantly affects labor productivity compared to a nondisclosure scenario, in which spouses can conceal any income generated. The effects exhibit notable gender differences: when income is disclosed to their spouses, women decrease productivity, while men increase productivity. We introduce a two-stage game model and further empirical tests to demonstrate that these gender differences arise from disparities in bargaining power, with men holding significantly more bargaining power than women. Overall, this study sheds light on the unintended consequences of financial inclusion or pay transparency policies on both productivity and household inequality. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1525 |
| By: | Ana Maria de Paula Morais; Silvinha Vasconcelos; Marcelo Resende |
| Abstract: | The Brazilian government started to implement, mainly from the 2000s onwards, mechanisms to stimulate the supply and demand for higher education in Brazil. Especially the offer of private higher education has shown strong growth in recent years as a result of systematic public policies, which has increased competition in this market. In this expansion scenario, it remains to be seen how the competitive market environment is configured in terms of market power. Therefore, this article intends to estimate the market power of Brazilian higher education institutions - HEIs from an alternative use of the stochastic frontier model, as proposed by Kumbhakar et. al (2012), for the period 2010 to 2019. This method is adopted because it solves the impasse of the lack of information on marginal costs, which prevents the application of other models for estimating market power. The results pointed to the presence of positive and significant market power of Brazilian HEIs, which may imply anti-competitive behavior. |
| Keywords: | higher education market, market power, stochastic frontier |
| JEL: | I22 L10 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11370 |