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on Technology and Industrial Dynamics |
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Issue of 2014‒03‒08
twelve papers chosen by Fulvio Castellacci Norwegian Institute of International Affairs (NUPI) |
| By: | Marcela Eslava (Universidad de Los Andes); John Haltiwanger (University of Maryland and NBER); Adriana Kugler (Georgetown University, NBER, and Department of Labor.); Maurice Kugler (UNDP) |
| Abstract: | We assess the impact, on workforce contract composition, employment adjustment dynamics and productivity, of a combination of changes in the Colombian labor legislation which increased firm’s ability of using contracts of a temporary nature, and posterior changes that increased the costs associated with longer term contracts. Until 1990, labor regulations in Colombia practically banned the possibility of using fixed-term contracts for horizons of less than one year (see, e.g. Kugler, 2004). The labor market component of a broad package of market reforms adopted at the beginning of the nineties opened the possibility of hiring under fixed term contracts of different types. Some of these contracts not only free employers of potential dismissal costs, but are also subject to reduced, or even zero, non-wage costs. Regulatory changes occurred in the decade that followed further increased incentives to use fixed term contracts. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0154&r=tid |
| By: | Justin R. Pierce; Peter K. Schott |
| Abstract: | This paper finds a link between the sharp drop in U.S. manufacturing employment beginning in 2001 and a change in U.S. trade policy that eliminated potential tariff increases on Chinese imports. Industries where the threat of tariff hikes declines the most experience more severe employment losses along with larger increases in the value of imports from China and the number of firms engaged in China-U.S. trade. These results are robust to other potential explanations of the employment loss, and we show that the U.S. employment trends differ from those in the EU, where there was no change in policy. |
| Keywords: | manufacturing, trade policy, uncertainty, offshoring, supply chains, employment, China, World Trade Organizations, PNTR |
| JEL: | F13 F16 J23 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4563&r=tid |
| By: | Susan N. Houseman (W.E. Upjohn Institute for Employment Research); Timothy J. Bartik (W.E. Upjohn Institute for Employment Research); Timothy J. Sturgeon (MIT) |
| Abstract: | Growth in U.S. manufacturing’s real value-added has exceeded that of aggregate GDP, except during recessions, leading many to conclude that the sector is healthy and that the 30 percent decline in manufacturing employment since 2000 is largely the consequence of automation. The robust growth in real manufacturing GDP, however, is driven by one industry segment: computers and electronic products. In most of manufacturing, real GDP growth has been weak or negative and productivity growth modest. The extraordinary real GDP growth in computer-related industries reflects prices for computers and semiconductors that, when adjusted for product quality improvements, are falling rapidly. Productivity growth in these industries, in turn, largely reflects product and process improvements from research and development, not automation. Although computer-related industries have driven growth in the manufacturing sector, production has shifted to Asia, and the U.S. trade deficit in these products has soared since the 1990s. The outsized effect computer-related industries have on manufacturing statistics also may distort economic relationships in the data and result in perverse research findings. Statistical agencies should take steps to assure that the influence that computer-related industries have on manufacturing-sector statistics is transparent to data users. |
| Keywords: | Manufacturing, computers, semiconductors, productivity, globalization, global value chains |
| JEL: | L60 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:14-209&r=tid |
| By: | Gehringer, Agnieszka; Martínez-Zarzoso, Inmaculada; Nowak-Lehmann Danzinger, Felicitas |
| Abstract: | This paper examines the development and drivers of total factor productivity (TFP) in the manufacturing sector for a panel of 17 EU countries over the period of 1995-2007. Recent panel data estimation techniques are used in a twofold approach. First, we estimate aggregated and sectoral TFP for 17 EU countries by means of the augmented mean group estimator to control for endogeneity, cross-section dependence and heterogeneous production technology. Second, we investigate the relative importance of the drivers of predicted TFP, namely Foreign Direct Investment (FDI), investment in Information and Communication Technologies (ICT), human capital, R&D, trade openness and rationalization efforts. The results confirm that rationalization, human capital and ICT are the main drivers of TFP. -- |
| Keywords: | sectoral TFP,heterogeneous production functions,common dynamic process,European Union |
| JEL: | C26 F43 O47 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:189&r=tid |
| By: | Foders, Federico; Vogelsang, Manuel Molina |
| Abstract: | The German economy has been outperforming other member countries of the European Union during the recent Great Recession and the still ongoing European debt crisis. What are the determinants of this outcome? This paper sets out to empirically analyze the trade and technology specialization and the price/cost performance of the German economy over the period 1990 - 2011. Furthermore, we apply the unit value approach to determine whether the competitiveness of German manufacturing products is related to price or quality advantage. Also, we estimate the degree of vertical specialization characterizing the German export sector in order to assess the role global value chains play in strengthening Germany's position in manufacturing. All indicators are calculated for Germany, the Republic of Korea, the People's Republic of China, Japan and the United States. Our results confirm that Germany is specialized in medium-range technology products and show that quality is the main driver of Germany's international success, that price and cost advantage determines competitiveness in some product groups and that R&D efforts have contributed to develop and maintain German competitiveness in manufactured products. -- |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkpb:69&r=tid |
| By: | Sami Gharbi; Jean-Michel Sahut; Frédéric Teulon |
| Abstract: | This paper examines the link between research and development (R&D) and idiosyncratic volatility for a panel of large French quoted companies. We investigate whether the intensity of R&D investment makes the firm’s stocks riskier. We suggest that R&D activities generate information asymmetry and uncertainty about the firm’s future cash flows and make its idiosyncratic volatility higher. Our results show that R&D investment intensity should be considered as a determinant of the idiosyncratic volatility and that R&D increases the riskiness of the firm. |
| Keywords: | R&D, volatility, asymmetric information, risk, CAPM. |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-120&r=tid |
| By: | Sadaf Bashir; Uwe Matzat; Bert Sadowski |
| Abstract: | This paper analyzes processes and effects of ICT enabled innovation in the Dutch design sector. Although the adoption of Information and Communication Technologies (ICT) is considered as vital in the design sector, little is known about whether and how ICTs affect the firm performance of small and medium-sized companies (SMEs) in the industry. In introducing a conceptual distinction between ICT supporting the information processing and communication, the paper first examines the determinants of ICT adoption. Next, we analyze the effects of ICT adoption on product and process innovation as well as on firm performance, focusing on the mediating role of the innovation processes. The analyses rest on survey data of a sample of 189 Dutch companies in the Web, Graphic, and Industrial Design Sector in the Netherlands. The results indicate that information processing role of ICT supports the exploitation and communication role facilitates the exploration in organizational learning. The exploitation enables process innovation while exploration enables product innovation. Lastly, Information processing technologies and product innovation are important determinants of superior firm performance. |
| Keywords: | ICT, design, innovation |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ein:tuecis:1401&r=tid |
| By: | Tor Eriksson (Department of Economics and Business, Aarhus University, Denmark); Zhihua Qin (Renmin University, China,); Wenjing Wang (Department of Economics and Business, Aarhus University, Denmark) |
| Abstract: | This paper examines the relationship between employee turnover, HRM practices and innovation in Chinese firms in five high technology sectors. We estimate hurdle negative binomial models for count data on survey data allowing for analyses of the extensive as well as intensive margins of firms’ innovation activities. Innovation is measured both by the number of ongoing projects and new commercialized products. The results show that higher R&D employee turnover is associated with a higher probability of being innovative, but decreases the intensity of innovation activities in innovating firms. Innovating firms are more likely to have adopted high performance HRM practices, and the impact of employee turnover varies with the number of HRM practices implemented by the firm. |
| Keywords: | Innovation, HRM Practices, Employee Turnover |
| JEL: | L22 M50 O31 |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2014-09&r=tid |
| By: | Poschke, Markus (McGill University) |
| Abstract: | How and why does the firm size distribution differ across countries? Using two datasets covering more than 30 countries, this paper documents that several features of the firm size distribution are strongly associated with income per capita: the entrepreneurship rate and the fraction of small firms fall with per capita income across countries, while average firm employment, the median and higher percentiles of the firm size distribution, and the dispersion and skewness of employment all rise with per capita income. The paper broadens existing evidence on the first three facts to cover more countries and newly introduces the last three to the literature. It then proposes a simple theory of skill-biased change in entrepreneurial technology motivated by recent microeconomic literature that fits with the evidence. For this, it introduces two additional features into an otherwise standard occupational choice, heterogeneous firm model a la Lucas (1978): technological change does not benefit all potential entrepreneurs equally, and there is a positive relationship between an individual's potential payoffs in working and in entrepreneurship. If some firms consistently benefit more from technological progress than others, they stay closer to the frontier, while others fall behind. Because wages rise for all workers, marginal entrepreneurs exit and become workers. Quantitatively, the model fits both the U.S. time series experience and cross-country patterns well. |
| Keywords: | occupational choice, entrepreneurship, firm size, skill-biased technical change |
| JEL: | E24 J24 L11 L26 O30 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7991&r=tid |
| By: | Kizuku Takao (Graduate School of Economics, Osaka University) |
| Abstract: | Tax changes are often announced before the implementations and are not permanent but only temporary. R&D firms will optimally adjust their investment decision to a tax schedule accordingly. This paper analyzes how anticipated and temporary tax changes dynamically affect the innovation activities. For the purpose, we consider adjustment costs for the investment process and allow firms to make a forward looking investment decision in the framework of an R&D-based endogenous growth model. Calibrating the model with U.S. data, we obtain new insights on how to design the corporate taxation policy. A dividend tax cut is not an effective policy instrument irrespective of how it is implemented. On the other hand, a capital gains tax cut and a rise of the R&D tax credit rate are an effective policy instrument irrespective of how they are implemented. However, the implementation lags of these tax changes worsen the effectiveness of them. |
| Keywords: | Fiscal policy, R&D, Economic growth |
| JEL: | E62 O32 O41 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1410&r=tid |
| By: | Sumon K. Bhaumik; Ying Zhou |
| Abstract: | Business groups, which are ubiquitous in emerging market economies, balance the advantages of characteristics such as internal capital markets with the disadvantages such as inefficient internal distribution of resources and suppression of technological and other forms of innovativeness. In this paper, we examine, in the Indian context, whether business group affiliation provides an advantage over unaffiliated (or private independent) firms with respect to technological progress, which lies at the heart of wider economic growth and prosperity. Our results suggest that while business group affiliation did provide an advantage over private independent firms at the start of the sample period (2000), this advantage was more than offset by the turn of the century. We discuss the implications of our results for economic growth rates in emerging market economies. |
| Keywords: | Business groups; Technological progress; India |
| JEL: | D24 L21 L22 O12 |
| Date: | 2014–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wdi:papers:2014-1066&r=tid |
| By: | Daron Acemoglu; Francisco A. Gallego; James A. Robinson |
| Abstract: | In this paper we revisit the relationship between institutions, human capital and development. We argue that empirical models that treat institutions and human capital as exogenous are misspecified both because of the usual omitted variable bias problems and because of differential measurement error in these variables, and that this misspecification is at the root of the very large returns of human capital, about 4 to 5 times greater than that implied by micro (Mincerian) estimates, found in some of the previous literature. Using cross-country and cross-regional regressions, we show that when we focus on historically-determined differences in human capital and control for the effect of institutions, the impact of institutions on long-run development is robust, while the estimates of the effect of human capital are much diminished and become consistent with micro estimates. Using historical and cross-country regression evidence, we also show that there is no support for the view that differences in the human capital endowments of early European colonists have been a major factor in the subsequent institutional development of these polities. |
| Keywords: | Economic Development, Institutions, Human Capital |
| JEL: | I25 P16 O10 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:449&r=tid |