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on Efficiency and Productivity |
| By: | Joonkyo Hong, Davide Luparello |
| Abstract: | New exporters often adopt new technology, which may reorganize production rather than lift output uniformly, so efficiency gains can land unevenly across inputs. We examine such gains across worker types in Colombian manufacturing, 1981–1991. We develop a model of exporters that measures how efficiently firms use each input and grounds a comparison of new exporters with non-exporters matched on export likelihood. We find that export entry raises the plant-level efficiency of unskilled labor by about 9.4% per year, with no detectable change for skilled labor, implying a 2% annual rise in total factor productivity. We estimate that the two worker types are complements. Exporters thus produce more with relatively less unskilled labor, raising skill intensity. |
| Keywords: | exporting; factor-biased technical change; production-function estimation; skill intensity. |
| JEL: | D24 F14 O33 J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp26279 |
| By: | Englmaier, Florian; Galdón Sánchez, José Enrique; Gil, Ricard; Kaiser, Michael; Strandt, Helene |
| Abstract: | This paper examines how management practices affect firm productivity over the business cycle. Using Spanish plant-level survey data and unsupervised machine learning, we identify a “structured†management style positively correlated with performance before the 2008 financial crisis. Interestingly, this correlation turns negative during the crisis and positive again in the post-2013 recovery. Our evidence suggests structured firms focus on long-run profitability and innovation, prioritizing intangible investments. This strategy leads to higher short-run adjustment costs, evidenced by more fixed assets and lower employee turnover, making them less resilient during a severe downturn. |
| Keywords: | Culture; Productivity |
| JEL: | M12 D22 C38 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20749 |
| By: | Dan Andrews; Andrea Garnero; Sara Holttinen |
| Abstract: | Restraint clauses that prevent workers from joining or starting a competing firm – commonly known as non-compete clauses – are traditionally justified to protect legitimate business interests. Yet, such clauses may suppress job mobility, business dynamism and competition, with adverse consequences for productivity growth. This paper presents the first harmonised cross-country evidence on the link between non-compete clauses and productivity performance. Merging novel data on industry-country-level prevalence of non-compete clauses with firm-level data from Orbis, we find that a higher non-compete prevalence is associated with weaker productivity enhancing labour-reallocation and slower knowledge diffusion. The estimates translate into meaningful aggregate productivity losses (1.9% for a 10 percentage point increase in non-compete incidence). While the economic “bite” of non-competes on productivity seems larger in countries where firms have greater freedom to deploy them, it remains negative in countries where non-competes are more tightly regulated. This underscores the idea that non-compete clause can exert “chilling effects” even when they are unlikely to be upheld by courts, raising questions about whether current regulatory frameworks are fit for purpose. |
| Keywords: | Job mobility, Misallocation, Non-compete clauses, Productivity growth |
| JEL: | J24 J41 J62 |
| Date: | 2026–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:oec:ecoaaa:1873-en |
| By: | Charles S. Gascon; Violeta A. Gutkowski; Rehann Silvanus |
| Abstract: | Survey data show how firms across the Fed’s Eighth District are using AI to boost efficiency and expand capacity—plus what’s holding back nonadopters. |
| Keywords: | survey data; technology adoption; artificial intelligence (AI); Federal Reserve District, 8th |
| Date: | 2026–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:103542 |
| By: | Sadun, Raffaella; Schuh, Rachel; Hartley, Jonathan; Van Reenen, John; Bloom, Nicholas |
| Abstract: | We show better-managed firms are more dynamic in plant acquisitions, disposals, openings and closings in U.S. Census and international data. Better-managed firms also birth better-managed plants and improve the performance of the plants they acquire. To explain these findings we build a model with two key elements. First, management is a combination of firm-level management ability (e.g. CEO quality), which can be transferred to all plants, and plant-level management practices, which can be changed through intangible investment (e.g. consulting or training). Second, management both raises productivity and also reduces the operational costs of dynamism: buying, selling, opening and closing plants. We structurally estimate the model on Census microdata, fitting our key dynamic moments, and then use it to establish three additional results. First, mergers and acquisitions raise economy-wide management and productivity by reallocating plants to firms with higher management ability. Banning M&A would depress GDP and management by about 15%. Second, greater product market competition improves both management and productivity by reallocating away from badly managed plants. Finally, management practices account for about 20% of the cross-country productivity differences with the US. |
| Keywords: | Management; Mergers and acquisitions; Productivity; Competition |
| JEL: | L2 M2 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20602 |
| By: | Doraszelski, Ulrich; Li, Lixiong |
| Abstract: | We advance the proxy variable approach to production function estimation. We show that the invertibility assumption at its heart is testable. We characterize what goes wrong if invertibility fails and what can still be done. We show that rethinking how the estimation procedure is implemented either eliminates or mitigates the bias that arises if invertibility fails. In particular, a simple change to the first step of the estimation procedure provides a first-order bias correction for the GMM estimator in the second step. Furthermore, a modification of the moment condition in the second step ensures Neyman orthogonality and enhances efficiency and robustness by rendering the asymptotic distribution of the GMM estimator invariant to estimation noise from the first step. |
| Keywords: | Production function estimation; Invertibility; Imperfect competition; Demand |
| JEL: | D24 L10 O3 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20373 |
| By: | León-Ledesma, Miguel |
| Abstract: | I provide an overview of the process of structural transformation (ST) in a broad range of Asian economies. After briefly discussing theories of ST, I describe the process of transformation in Asia and compare it to other countries focusing on standard measures as well as other important aspects of the process of economic transformation. I then focus on the potential role of ST for productivity growth and productivity catch-up using more disaggregated data. Finally, I ask whether premature de-industrialization has been a feature of ST in Asian economies. The main findings of this overview are as follows: i) Asia has followed a pattern of ST that is consistent with other economies in the world, but where the gradient of contraction in agriculture and expansion in services with development is larger; ii) ST has broadly had a positive effect on productivity growth driven by workers moving out of agriculture; iii) agriculture is the sector that displays the largest productivity gaps with the US and services the lowest implying, mechanically, that large productivity gains can be achieved with workers moving from agriculture to services; iv) there is no evidence of premature de-industrialization in Asia and, if anything, industrial value added shares have not decreased at higher levels of development as in other countries. |
| Keywords: | Asia |
| JEL: | O11 O14 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20600 |
| By: | Michael G Pollitt |
| Keywords: | DEA, SFA, COLS, frontier, efficiency, benchmarking |
| JEL: | L94 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:enp:wpaper:eprg2612 |
| By: | Marine Kohler (LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay); Natalia Costa I Coromina (Energy Impact Partners); Pascal da Costa (LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay); Peter Fox Penner (Energy Impact Partners); François Cluzel (LGI - Laboratoire Génie Industriel - CentraleSupélec - Université Paris-Saclay) |
| Abstract: | In a context of insufficient global regulation, a substantial proportion of firms set voluntary greenhouse gas emissions reduction targets. This study draws on a new dataset of about 1, 000 GHG Protocol-compliant assessments from a thousand Europe and US-based small and medium enterprises and mid-sized firms between 2019 and 2024 to investigate how emissions metrics compare across as companies grow and consolidate their productivity. Moving beyond the conflicting environmental Kuznets curve evidence and the traditional focus on large enterprises, we uncover a new, untheorized link between emissions and firm productivity. Using competing polynomial and threshold regression models, and addressing endogeneity, selection bias and omitted variable bias by relying on Granger causality, Hausman instruments, poststratification, Oster sensitivity tests and split sample testing, we establish that contrary to the classic inverted U shape of the EKC, corporate emissions and emissions intensities do not show a clear turning point but instead stabilize once over a critical threshold in revenue per employee. We find raising productivity can halve per revenue intensities despite simultaneous fourfold and twofold surges in absolute and per-employee emissions. This structural influence of financial productivity challenges the fairness of corporate net-zero targets that assume comparable baseline intensities across firms. |
| Keywords: | Corporate Net-Zero targets, Threshold approach, Environmental Kuznets curve, Corporate climate performance |
| Date: | 2026–06–09 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05170003 |
| By: | Castillo-Martinez, Laura |
| Abstract: | Following a sudden stop, real exchange rates adjust through a nominal depreciation, lower domestic prices, or both. This paper studies how the nature of that adjustment shapes the productivity response. Using Spanish manufacturing microdata, it shows that, in a currency union, cleansing through firm exit is stronger than under a floating regime, with aggregate productivity rising despite weaker firm-level performance. A small open economy DSGE model with firm dynamics, endogenous markups, and nominal rigidities rationalizes this finding. The model identifies three channels through which a sudden stop affects productivity: pro-competitive, cost, and demand. While only the first operates under a floating regime, all three are active in a currency union. Quantitatively, the model explains about 60% of the exit-driven contribution to productivity growth in Spain’s 2010–13 episode. Cross-country evidence confirms that the fall in productivity during sudden stops is systematically larger when exchange rates are more flexible. |
| Keywords: | Sudden stops; Exchange rate policy; Productivity; Firm dynamics |
| JEL: | D24 L11 L25 E52 F32 F41 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20555 |
| By: | Arianto A. Patunru |
| Abstract: | Services are increasingly embedded in manufacturing production and exports, but their role in developing-country manufacturing remains under-examined. This paper studies servicification in Indonesian manufacturing by combining OECD TiVA evidence on services embodied in manufacturing exports with plant-level data from Indonesia’s Survei Industri for 1985–2014. The macro evidence shows that services account for a substantial share of manufacturing export value added, reinforcing the importance of producer services for manufacturing competitiveness. The plant-level analysis focuses on purchased industrial services, a narrow but ob-servable measure of input servicification. Industrial-service use is limited but persis-tent: most plants report no such purchases, while user firms tend to be larger, more import-intensive, more foreign-owned, and more export-oriented. Fixed-effects re-gressions show that the continuous service-input share is positively associated with gross output per worker, while its relationship with value added per worker is weaker. The extensive margin is more robust: plants that purchase industrial ser-vices have higher subsequent labour productivity, especially in gross-output terms. Results for exporting firms are positive but less robust. The findings suggest that servicification is not only a macro value-chain phenomenon but also a plant-level feature associated with manufacturing performance. |
| Keywords: | servicification, manufacturing, services, global value chains, Indonesia, pro-ductivity, exports |
| JEL: | F14 F61 L60 L80 O14 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:pas:papers:2026-04 |
| By: | Klein, Alexander; León-Ledesma, Miguel; Crafts, Nicholas |
| Abstract: | This paper examines long-run unconditional convergence of labour productivity in manufacturing across 48 contiguous U.S. states. We construct a detailed panel data set of state-industry pairs with over 120 industries covering the period 1880-2007. The remarkable finding is a rapid rate of unconditional β-convergence: 7.6% per year in the period 1880-2007, and about 6.5% in each period 1880-1940 and 1958-2007. We also find a steep rise in unconditional convergence from 5.5% in 1930-1940 to 10.6% in 1940-1947 and 9.4% in 1947-1958, followed by a considerable drop thereafter. In the years 1958-2007, the rate of convergence in ICT industries (8.3%) is higher than in 1st-Industrial-Revolution (6.3%) or 2nd-Industrial-Revolution (7.0%) industries. We interpret our results as a process of technological catch up between initially laggard Southern manufacturing and manufacturing industries in the North. |
| JEL: | O47 N11 N12 R11 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20488 |
| By: | Yang Yu; Martin Fleming; Lucy Hampton; Christophe Combemale; Neil Thompson |
| Abstract: | The adoption of artificial intelligence (AI) by large enterprises is an important potential source of aggregate productivity improvement and labor market impact. We study AI adoption of S&P 500 firms over the period 2016 to 2025, estimating adoption at the enterprise level. While generative AI tools are useful for personal and professional applications, our focus is on the deep integration of AI in the business processes of large enterprises which are bellwethers for firm adoption more broadly. We develop a novel measure to assess deep AI adoption (and distinguish it from AI hype) that is based on SEC 10-K filings, where laws and regulations ``prohibit companies from making materially false or misleading statements." In 2025, 11% of S&P 500 enterprises had AI deeply integrated into their business processes, and a further 10% were using AI in the production of goods and delivery of services. AI adoption has more than quadrupled from 5% in 2022 with slowly accelerating adoption among non-technology firms but very aggressive adoption in the technology sector which accounts for two-thirds of deeply integrated enterprise adoption. Firm profitability shows a "J-curve" as firms move from no adoption to deep adoption, but we observe no differences in capex or productivity. Among technology firms, but not others, AI adoption is higher for firms with more employees and higher values of Tobin's q. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.08920 |
| By: | Gazzani, Andrea; Martinez, Joseba; Natoli, Filippo; Surico, Paolo |
| Abstract: | We study the macroeconomic effects of government-funded and privately funded innovation on postwar U.S. productivity and economic growth. Using newly digitized data that allow us to distinguish innovations by funding source and ownership, we document systematic differences in how public and private innovation translate into aggregate outcomes. Government-funded but privately owned patents—though accounting for only about 2% of total patenting—explain roughly 20% of medium-term fluctuations in total factor productivity and GDP growth and are associated with strong spillovers to business-sector R&D and investment. Privately funded patents also contribute to aggregate fluctuations, but with smaller effects, while publicly owned patents display muted average impacts despite being disproportionately represented among highly disruptive innovations, particularly in health and biotechnology. Across federal agencies, innovations funded by the NIH and NSF exhibit the strongest links to subsequent productivity growth, and research institutes and universities outperform for-profit firms in converting public funding into aggregate gains. Taken together, our results highlight how the institutional design of public support for innovation shapes medium-term productivity dynamics and plays a central role in sustaining U.S. economic growth. |
| JEL: | E32 E22 O41 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20788 |