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on Efficiency and Productivity |
| By: | Ricardo Marto; Matthew McCollum |
| Abstract: | Industries with unusually strong productivity growth, at times coinciding with new technologies, have seen relative declines in producer price inflation. |
| Keywords: | productivity growth; producer prices; inflation |
| Date: | 2026–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:103830 |
| By: | Eken, Adnan; Yalçın, Cihan; Yazıcı, Didem |
| Abstract: | It is a widely accepted view in the literature that foreign direct investments contribute to overall economic performance by financing the current account deficit in a healthy channel and increasing total factor productivity in host countries through technology transfer. In this study, basic balance sheet ratios of foreign owned companies are compared with those of domestic ones operating in Turkish manufacturing industry for the period of 2009-2023. In addition, the determinants of profit margins (an indicator of firm performance) of foreign owned companies are tested using the dynamic panel method. Moreover, export share and its interactions with companies’ foreign owned shares (CFS), scale and age groups are included as independent variables in the regressions. The results revealed that there is a positive relationship between export shares and profit margins. This positive relationship is more visible for younger, relatively smaller and firms with higher CFS. Therefore, increase in the activities of these company groups might contribute to the sustainability of the external balance in Türkiye. |
| Keywords: | Foreign direct investments, firm characteristics, profitability, dynamic panel |
| JEL: | C23 D22 F21 L25 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126430 |
| By: | Nava Ashraf (STICERD and Department of Economics, LSE); Oriana Bandiera (STICERD and Department of Economics, LSE); Víctor Quintas-Martínez (Amazon); Virginia Minni (University of Chicago, Booth School of Business, CEPR, IZA, and J-PAL and NBER) |
| Abstract: | We ask whether the gendered division of work affects firm productivity across the spectrum of economic development. Personnel records of over 100, 000 individuals hired by a global firm that operates in 100 countries reveal that the performance of female employees is higher where women are underrepresented in the candidate pool. This implies productivity gains from hiring more women, but realizing them would require increasing women’s pay relative to men. The findings highlight how unequal gender norms in local labor markets create an equity-efficiency trade-off inside the firm, particularly in low-income countries with conservative gender norms. |
| JEL: | O12 O15 M5 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-124 |
| By: | Christopher J. Neely |
| Abstract: | Economic research shows differences in capital, skills, productivity, and economic and political institutions play important roles in shaping the variation of output and income across countries. |
| Keywords: | per capita income; capital; skills; productivity; economic institutions; political institutions; output; income |
| Date: | 2026–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:103883 |
| By: | Ziyao Wang |
| Abstract: | I estimate firm-level capital-, labor-, and material-augmenting productivity for Chinese manufacturing, 1998--2008, and the effect of state-owned enterprise (SOE) privatization on each. Results show technological change is strongly biased toward capital and labor. Private firms operate above SOEs on capital and labor, but below on materials. Privatization raises labor-augmenting productivity right after the transition, a front-loaded gain that fades on the full panel but persists among 1998 incumbents. It leaves capital-augmenting productivity no higher and modestly lowers materials. The SOE sector's catch-up runs through restructuring of the plants the state kept, with exit of overstaffed plants adding to the labor gain. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.08729 |
| By: | Albrecht Glitz; Adrian Lerche; Lukas Mergele |
| Abstract: | Economic espionage is a pervasive global phenomenon. We study how knowledge acquired through this clandestine activity affects firms' economic performance. Exploiting historical data from East Germany that trace the flow of scientific-technical information from its sources in the West to its recipients in the East, we show that economic espionage increased firms' productivity and reshaped their production structure and input choices. We further find that the resulting technical change was labor-augmenting and that the associated productivity gains propagated through the production network via input-output linkages. In the long run, firms receiving larger inflows of espionage information were significantly more likely to survive the transition to a market economy following German reunification. |
| Keywords: | Espionage, Knowledge Flows, Firm Adjustments, Productivity |
| JEL: | L2 N4 O3 P2 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26255 |
| By: | Coyle, Diane; Nguyen, Nghi; Poquiz, John Lourenze; Riley, Rebecca |
| Abstract: | This paper provides early evidence that AI adoption by firms is linked to management practices in unique ways. Using panel data from the UK Management and Expectations Survey (MES), we find that firms with higher baseline management scores are significantly more likely to adopt AI. This relationship is specific to AI: the same management practices show no relationship with the adoption of other technologies such as robotics, specialized equipment, or specialized software. We also find that management capabilities related to performance measurement appear strongly related to AI adoption. These results suggest that organisational complementarities are specific to different technologies, with implications for policies to encourage AI adoption by firms. |
| Keywords: | AI; technology adoption; management practices; technology diffusion; organisational capital; decentralisation; ICT |
| JEL: | D24 L23 O31 O33 |
| Date: | 2026–09–28 |
| URL: | https://d.repec.org/n?u=RePEc:eoe:escoed:escoe-dp-2026-13 |
| By: | Holzheu, Kerstin (Sciences Po, Paris); Muñoz-Morales, Juan (IÉSEG School of Management) |
| Abstract: | Life-cycle wage growth varies substantially across countries. We examine the role of the firm productivity distribution by introducing a random-search model that disentangles firm heterogeneity, on-the-job learning, and labor-market frictions. Estimates for Brazil, Colombia, and the United States reveal two distinct disadvantages: a long left tail of low-paying firms in Brazil and a highly compressed firm ladder in Colombia. Counterfactuals show that equating each country's firm distribution to that of the United States closes most of the cross-country gap in life-cycle wage growth: Brazil's wage growth rises from 73 to 103 percent of the U.S. value, and Colombia's from 52 to 115 percent. These results are robust to alternative distributional assumptions, education residualization, and external discipline on the productivity tail. |
| Keywords: | labor markets, income profiles, developing countries |
| JEL: | J24 J31 J63 J64 E24 O11 O12 O15 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18970 |
| By: | Alex Blumenfeld; Jonathon Hazell; Chen Lian; Andreas Schaab |
| Abstract: | We measure how artificial intelligence (AI) affects the economy through its impact on software engineering productivity. We use information from financial markets to develop a forward-looking measure that is available in real time. We estimate the sensitivity of each firm’s stock return to an AI stock market index, and how this sensitivity depends on the share of firm payroll in software engineering. We use a model to map this cross-sectional relationship into software engineering productivity gains. From November 2022 to December 2025, AI increased the market’s expected present value of software engineering productivity by the equivalent of a permanent 32.6% productivity increase. The corresponding effect on the level of GDP is 3.6% in the baseline and 6.5% when higher software engineering productivity also raises R&D productivity. By mid-2026, amid rapid progress in coding agents, the effect of AI on productivity and GDP had more than doubled relative to the end of 2025. |
| JEL: | E22 G12 O33 O47 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35793 |
| By: | Rouvinen, Petri |
| Abstract: | Abstract This review synthesizes the latest scholarly evidence on intangible capital. Drawing on 60 recent studies across macro, meso, and micro levels (anchored by firm-level data from Finland, broader Europe, the US, and Asia) it demonstrates that intangible investments have emerged as the preeminent engine of economic growth, competitiveness, and productivity. The literature yields three critical imperatives for public policy. First, the measurement and statistical tracking of intangibles require a fundamental overhaul; at present, a swath of these investments remains invisible in official data and absent from corporate balance sheets. Second, policymakers must broaden their horizons beyond narrow research and development (R&D) subsidies. Modern innovation policy must embrace the full spectrum of intangible assets – spanning software, data, organizational capital, management capabilities, and brand equity –, while capitalizing on the vital synergies between them. Third, the scalable nature of intangible capital demands a synchronized approach to competition policy, innovation strategy, and corporate finance. Authorities must strike a delicate balance: cultivating the incentives and finance necessary to fuel intangible investments, while simultaneously preventing harmful market concentration and fostering broad diffusion of knowledge. |
| Keywords: | Intangible investments, Productivity, Innovation policy |
| JEL: | E22 O34 O47 D24 G32 |
| Date: | 2026–10–06 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:148 |
| By: | Lillian Derr; Mark A. Wynne |
| Abstract: | There has been incredible stability in the rate of improvement in U.S. living standards over time. As first documented by Stanford economist Charles Jones, living standards, measured by GDP per capita, have risen at a pretty constant rate of about 2 percent per year in the U.S. for more than 150 years. |
| Date: | 2026–09–29 |
| URL: | https://d.repec.org/n?u=RePEc:fip:d00001:103846 |
| By: | Maria Cristina Barbieri G\'oes; Saverio Barabuffi |
| Abstract: | This paper investigates spatial productivity convergence across Chinese provinces during structural transformation, examining how a shift in auonomous demand composition reshaped regional productivity dynamics. Using Panel Structural Vector Autoregressive modelling and province level data from 2001 to 2021, we analyse eastern, central, ad western regions across two sub-periods through the augmented Kaldor-Verdoorn law. A post-2011 spatial reversal emerges: inland regions exhibit stronger Verdoorn coefficients, while fiscal multipliers converge across coastal and inland areas, validating China's redistributive fiscal policies in narrowing regional productivity gaps. The Kaldor-Verdoorn coefficient remains robust throughout, while export effects on productivity collapse and government expenditure effects strenghten. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.37051 |
| By: | Goraya, Sampreet Singh (House of Sustainable Society (HoSS)); Srhoj, Stjepan (University of Split); Zrnc, Jurica (Croatian National Bank) |
| Abstract: | This paper studies how government demand affects the labor share of income. Winning a procurement contract lowers a firm’s labor share. The decline is driven by higher revenue per worker with limited pass-through to wages, and these revenue productivity gains reflect rising firm-level markups rather than improvements in physical efficiency. The effects are strongest for firms winning contracts as the only bidder. Evidence from bids, award prices, and political connections points to limited competition in procurement as the driving force. Government demand thus shapes the division of income between firm owners and workers, with implications for inequality. |
| Keywords: | public procurement; market power; labor share; competition; political connections |
| JEL: | D24 D43 H57 L11 L22 |
| Date: | 2026–09–28 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:hamisu:2026_005 |
| By: | Pablo D. Azar |
| Abstract: | Economic growth depends on combining existing inputs into new inventions. However, these combinations are not always physically feasible. One important example is dark silicon, where power and cooling limits prevent all the transistors on a chip from operating at once. I develop a growth model motivated by these limitations and establish conditions for a unique balanced growth path where electronic miniaturization and power efficiency grow at the same rate. When power-efficiency research becomes harder, both total research employment and productivity growth fall on the new balanced growth path. With gradual adjustment of research employment, I construct a local equilibrium transition in which more researchers temporarily coexist with slower productivity growth. This Eroom’s law result holds for small shocks in a two-dimensional design space with sufficiently similar industry constraints. |
| Keywords: | miniaturization; power efficiency; directed innovation; economic growth |
| JEL: | O31 O33 O41 |
| Date: | 2026–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:103886 |
| By: | Nazlı Karamollaoğlu (MEF Universtiy, Turkey); Federico Trionfetti (Aix-MarseilleUniversity, CNRS, EHESS, CentraleMarseille, AMSE., 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, AMU - Aix Marseille Université) |
| Abstract: | Following the intensification of the conflict in Syria in 2012, the number of Syrian refugees in Turkey has reached to 3.7 million as of 2021, according to the Turkish Directorate General for Migration Management. Syrian refugees have become an important source of informal employment, as almost 2 million Syrians are of working age. Therefore, this large flow of immigrants has had major impacts on the dynamics of the labor market through the abundance of largely unskilled labor. This paper provides evidence on the impact of this massive refugee inflow, resulting from the changes in labor markets, on firm-level total sales and domestic sales using a comprehensive firm-level data and city-level immigration density measures. Our results suggest that firms in cities with greater immigrant penetration saw increasing sales, mostly in labour-intensive firms. |
| Keywords: | F14, F22 Syrian Refugees, Capital Intensity, Firm Heterogeneity |
| Date: | 2026–06–20 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05768489 |
| By: | Francesco Filippucci; Peter Gal; Katharina Laengle; Matthias Schief; Muhammed A. Yildirim (Center for International Development at Harvard University) |
| Abstract: | This paper provides estimates of expected per capita real income gains from AI over the next decade in OECD and G20 economies. It relies on a multi-country, multi-sector general equilibrium model to incorporate the role of international trade and considers different scenarios regarding AI adoption paths and AI capabilities. In our central scenario, AI-driven productivity gains vary widely across countries and are expected to raise per capita real income growth by 0.1–0.95 percentage points annually. The model’s dynamics reveal a key insight: while countries lagging in AI adoption can gain from cheaper, AI-intensive imports generated by global diffusion, maintaining competitiveness – especially in highly AI-exposed sectors – ultimately requires strong domestic AI adoption. As a further channel, the paper quantifies the welfare effects generated by international knowledge spillovers boosting AI adoption of countries with relatively lower AI adoption. |
| Keywords: | Artificial Intelligence, International trade, Productivity, Technology adoption |
| JEL: | C6 E1 F1 O3 O4 O5 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:glh:wpfacu:272 |
| By: | Artuc, Erhan; Constantinescu Neagu, Ileana Cristina; Taglioni, Daria |
| Abstract: | How can middle-income economies convert trade openness and productivity-enhancing reforms into higher real income and welfare? This paper develops a quantitative trade model with input-output linkages and labor market frictions to assess the impact of trade and productivity reforms on real income, wages, trade, and production. Thailand and ASEAN provide a useful case because the region spans economies with very different approaches to growth: some deeply embedded in Asian manufacturing value chains, others focused on commodities, export-led industrializers, and countries pursuing more selective integration. This variation allows assessing when openness yields large welfare gains, when productivity reforms matter more, and when the two are complementary. The results show that openness gains depend on domestic capabilities, while productivity gains depend on access to inputs and markets. The policy implication is a twin agenda: reduce trade frictions in connectivity, customs, logistics, standards, certification, and regulatory recognition, while strengthening firm productivity, supplier capabilities, and manufacturing-related services in high-growth sectors and global value chains. |
| Date: | 2026–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11440 |