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on Efficiency and Productivity |
| By: | Kiyoyasu TANAKA |
| Abstract: | Cross-border mergers and acquisitions (M&A) are a prominent mode of foreign direct investment. However, there remains mixed and inconclusive evidence for the impact of foreign acquisition on acquired domestic firms. This paper contributes to the literature by employing a staggered difference-in-differences approach to address the timing variation in foreign acquisitions and constructing a novel panel dataset on Japanese firms that precisely captures the post-acquisition period for acquired firms. The results show statistically insignificant estimates for the aggregate effects of foreign acquisition on the post-acquisition productivity, suggesting neither productivity gains nor adverse effects for acquired firms. Even after accounting for general acquisition effects, foreign ownership changes have no influence on post-acquisition productivity. By contrast, canonical two-way fixed effects regressions yield significantly positive estimates, highlighting the need for methodological refinement in the literature to address heterogeneous treatment effects of foreign acquisition. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:25085 |
| By: | Nils H. Lehr |
| Abstract: | This paper provides evidence that rising misallocation in the R&D sector contributed to the recent slowdown in U.S. productivity growth. I develop a growth accounting framework allowing for misallocation of R&D resources across firms captured by wedges between their marginal cost and benefits of R&D. I show that R&D wedges can be measured from R&D returns and document large and persistent differences in R&D returns across US-listed firms. Combining data and model, I estimate that frictions reduced productivity growth by 18% over 1975–2014 and that rising misallocation in the R&D sector accounts for 25% of the growth slowdown. |
| Keywords: | R&D; productivity growth; growth slowdown |
| Date: | 2025–09–12 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/183 |
| By: | Maria D. Tito |
| Abstract: | Over the past decade, the relationship between remote work and productivity has drawn increasing attention from researchers, especially after the unprecedented shift to remote work following the COVID-19 pandemic. A growing body of literature suggests that remote work enhances productivity by offering employees greater autonomy, reducing commute times, and minimizing workplace distractions. |
| Date: | 2025–08–25 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:2025-08-25 |
| By: | Basihos, S. |
| Abstract: | Since the mid-1990s computing revolution, advanced economies have shown several striking regularities. After a decade-long boom, labor productivity growth has slowed, falling below its historical trend. Meanwhile, the labor share has declined sharply, and capital efficiency has decreased. This paper argues that these developments are not isolated but reflect a common structural change, with one possible driver being the faster obsolescence of capital in use due to the rapid advances of the computing revolution. Evidence from U.S. data suggests a significant rise in the capital obsolescence rate. To interpret these dynamics, I draw on an endogenous growth model of the U.S. economy. The model shows that while accelerated capital replacement initially boosts productivity, it ultimately leads to less effective use of resources under labor–capital complementarity, because labor skill creation lags behind the rapid introduction of new capital. As a result, the long-run outcomes under this regime are slower productivity growth, a lower labor share, and reduced capital efficiency. The quantitative model outputs are largely consistent with recent trends observed in advanced economies. |
| Keywords: | Obsolescence, Productivity Growth, Labor Share |
| JEL: | E20 O40 |
| Date: | 2025–05–12 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camjip:2522 |
| By: | Ariel Akerman; Jacob Moscona; Heitor S. Pellegrina; Karthik Sastry |
| Abstract: | Can public R&D investment in developing countries drive productivity growth? We study this question in the context of Brazilian agriculture and the Empresa Brasileira de Pesquisa Agropecuária (Embrapa), a public research corporation established in 1973 to develop locally suitable science and technology. First, we show that Embrapa redirected research toward prioritized staple crops and local ecological conditions, and increased research productivity, especially in remote and research-scarce regions. Second, exploiting the staggered rollout of research centers alongside heterogeneous local exposure to Embrapa’s technology development, we find that Embrapa significantly increased agricultural output, driven both by higher productivity and expanded input use. Combined with a model, these estimates imply that public R&D investment increased national agricultural productivity by 110% with a benefit-cost ratio of 17. The decentralized structure, in which research labs were spread across many ecological zones instead of in a single hub, explains a large share of these benefits. |
| JEL: | O13 O25 O3 O38 O4 O54 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34213 |
| By: | Marwân-Al-Qays Bousmah (INED - Institut national d'études démographiques, Ceped - UMR 196 - Centre Population et Développement - IRD - Institut de Recherche pour le Développement - INSERM - Institut National de la Santé et de la Recherche Médicale - UPCité - Université Paris Cité - Université Sorbonne Paris Nord, IC Migrations - Institut Convergences Migrations - French Collaborative Institute on Migration [Aubervilliers]); Mohammad Abu-Zaineh (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, Doha Institute for Graduate Studies); Simon Jean-Baptiste Combes (UCL - University College of London [London]); Bruno Ventelou (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Background: Has the quest for efficiency in OECD health systems impacted the social gradient of health? We examined the cross-dynamics of the health system equity-efficiency nexus among OECD countries in the past two decades. Methods: We used a three-step methodology based on annual macro-level data from 36 OECD countries for the period 2004–2021. First, we estimated the efficiency of health systems using a stochastic frontier analysis. We then assessed the equity of health systems using simple measures of income-related inequality in self-assessed health. Lastly, we estimated the dynamic relationship between health system efficiency and equity using a panel Granger causality analysis. We also stratified the analysis by type of health system: viz. publicly- vs. privately-dominated health service provision. Findings: We find evidence for a bidirectional causality between health system efficiency and equity. An increase in health system efficiency leads to an increase in socioeconomic inequalities in health; a result particularly salient in countries with predominantly private health service provision. Interestingly, decreases in socio-economic inequalities in health are likely to lead to higher health system efficiency, especially in countries where the health system relies predominantly on public provision. Interpretation: The pursuit of efficiency gains in OECD health systems has not been a precondition for socioeconomic equity in health. Adverse effects of efficiency-seeking interventions on health equity are particularly apparent in the private provision of healthcare. However, addressing health inequalities provides a plausible route to enhance efficiency. |
| Keywords: | Reverse causality, Granger causality, Stochastic frontier analysis, Health system, Equity-efficiency tradeoff |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05235233 |
| By: | Manuela Magalhâes (Universidad de Málaga); Jesús Rodríguez-López (Universidad Pablo de Olavide) |
| Abstract: | Spanish aggregate productivity was negatively correlated with the business cycle from 2000 to 2014, but this correlation later turned positive between 2015 and 2019. In this paper, we ask if this change is related to financial restrictions and firm creation and destruction in Spain. Using firm- level administrative data, we reach the following conclusions. First, during the 2000–07 expansion, low-productivity firms with access to financial resources were able to continue operating; in turn, this led to a crowding-out of financial resources, and forced high-productivity but financially vulnerable firms to close. We find that on average exiting firms were significantly larger and more productive than entering firms, a situation that entailed productivity losses in this period. Second, following the tightening of credit conditions after 2008, we find a more efficient selection at both exit and entry margins: exiting firms were less productive than entering firms. Both findings help explain, at least in part, the change in the productivity-GDP correlation. Finally, in a counterfactual exercise we quantify the effects of type-I selection errors, i.e., the closure of productive but financially vulnerable firms: had market selection not presented type-I errors, relative total factor productivity at the exit margin would have been 3% to 6.5% higher, while gains in relative labor productivity would have ranged between 27% and 46%. |
| Keywords: | Firm exit and entry, business cycle, cleansing effects, miss-selection, firm survival. |
| JEL: | E23 E32 E44 G32 L11 L25 L60 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pab:wpaper:25.02 |
| By: | Basihos, S. |
| Abstract: | This study investigates the role of firm-specific productivity shocks from mergers and acquisitions (M&A) in explaining aggregate fluctuations. I isolate these shocks by estimating a covariate-adjusted latent factor model on U.S. public firm data (1978–2023) under an event study approach. M&A activity generates significant short-run fluctuations in firm productivity, typically characterized by an initial decline, a rebound to a higher level, and eventual stabilization. A firm-size-weighted average of these shocks explains roughly one-fifth of variations in U.S. economic growth. This result is robust across multiple empirical validations and is not driven by merger waves or prevailing macroeconomic conditions. |
| Keywords: | Aggregate Fluctuations, Granularity, Mergers and Acquisitions, Productivity |
| JEL: | D22 E32 G34 |
| Date: | 2025–08–18 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camjip:2523 |
| By: | Adamopoulos, Tasso |
| Abstract: | This working paper quantifies the role of current land quality and geographic conditions as well as projected future climate change for agricultural productivity differences across and within Latin American and Caribbean (LAC) countries. It combines geospatial data on potential yields by crop and grid-cell, with a spatial accounting framework. If LAC countries produced their crops in the locations, they produce them with potential yields rather than actual, the 18 percent aggregate yield deficit relative to the richest countries would be reversed to an 18 percent surplus. While there are considerable cross-country and within-country heterogeneity, overall LAC countries have favorable natural land productivity. With improved input application and cultivation practices most LAC countries can double agricultural productivity, with substantial structural change implications. Climate change will reduce average yields in most LAC countries, but because of its heterogeneous effects across regions, there is more scope for yield gains from the spatial reallocation of production than under current conditions. |
| Keywords: | Agricultura, Ambiente, Cambio climático, Productividad, Recursos naturales, Sector productivo, |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dbl:dblwop:2520 |
| By: | Vladimir Pokrovskii |
| Abstract: | Considering the production processes, it was noted that the use of various equipment leads to an increase in output -- the phenomenon that is usually described as the substitution of labor with capital. The proposed theory of substitution is based on the assumption that not the quantity of capital (production equipment) does substitute labor, but rather its ability to operate similar to the workers. This is the true content of the substitution of labor by capital. To formulate a correct mechanism of substitution requires considering three factors of production: the amount of production equipment (capital $K$), human activity (labor $L$), and the substitutive capacity of equipment (substitutive work $P$). The technological properties of production equipment are characterized by the technological coefficients $\overline \lambda$ and $\overline \varepsilon$, indicating the amount of labor and energy required to engaged with a unit of equipment. The production function can assume various forms, none of which coincide with the popular Cobb-Douglas expression, which seems to be erroneous in its core. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.05386 |
| By: | Lléo-Bono, A. |
| Abstract: | Understanding the drivers of prosocial behavior in collaborative work settings, particularly under conditions of unequal productivity, is essential for effective team management. This paper explores how collaborative behavior is influenced by two factors: workers’ social value orientation and the origins of productivity differences – whether they are exogenous or arise from endogenous effort-based factors that may trigger an entitlement effect. I develop a theoretical model that accurately measures efficient coworker matching considering their altruism and inequality aversion levels required for optimal work collaboration in the presence of a productivity gap. Their salaries are tied to their productivity level, and equilibria are unaffected by belief variations. The role of social preferences and the entitlement effect are tested through an online experiment. Results indicate that both factors significantly increase collaboration among higher-productivity workers, while workers with lower productivity due to exerting less effort and those with higher degrees of altruism reduce their collaboration choices when there is a large payoff gap. Additionally, I demonstrate that the entitlement effect can create preference inconsistencies between lower-productivity individuals’ revealed preferences and their actual behavior. These findings highlight the importance of considering the origins of productivity inequalities to design collaborative environments that enhance team performance. By understanding the nuances of social values and work context, managers can better predict collaboration tendencies and encourage effective teamwork. |
| Keywords: | Collaboration, Entitlement Effect, Social Value Orientation, Online Experiment |
| JEL: | A13 D91 L21 M54 |
| Date: | 2025–04–22 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camjip:2521 |