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on Technology and Industrial Dynamics |
| By: | Jing Cai; Adam Szeidl |
| Abstract: | We organized business associations for the owner-managers of young Chinese firms to study the effect of business networks on firm performance. We randomized 2,820 firms into small groups whose managers held monthly meetings for one year, and into a “no-meetings” control group. We find that: (1) The meetings increased firm revenue by 8.1 percent, and also significantly increased profit, factors, inputs, the number of partners, borrowing, and a management score; (2) These effects persisted one year after the conclusion of the meetings; and (3) Firms randomized to have better peers exhibited higher growth. We exploit additional interventions to document concrete channels. (4) Managers shared exogenous business-relevant information, particularly when they were not competitors, showing that the meetings facilitated learning from peers. (5) Managers created more business partnerships in the regular than in other one-time meetings, showing that the meetings improved supplier-client matching. |
| Date: | 2017–11–21 |
| URL: | http://d.repec.org/n?u=RePEc:ceu:econwp:2018_3&r=tid |
| By: | Kun Jiang; Wolfgang Keller; Larry D. Qiu; William Ridley |
| Abstract: | This paper studies international joint ventures, where foreign direct investment is performed by a foreign and a domestic firm that together set up a new firm, the joint venture. Employing administrative data on all international joint ventures in China from 1998 to 2007—roughly a quarter of all international joint ventures in the world—we find, first, that Chinese firms chosen to be partners of foreign investors tend to be larger, more productive, and more likely subsidized than other Chinese firms. Second, there is substantial international technology transfer not only to the joint venture itself but also to the Chinese joint venture partner firm. Third, with technology spillovers typically outweighing negative competition effects, joint ventures generate net positive externalities to other Chinese firms in the same industry. Joint venture externalities are large, perhaps twice the size of wholly-owned FDI spillovers, and it is R&D-intensive firms, including the joint ventures themselves, that benefit most from these externalities. Furthermore, the positive external joint venture effect is larger if the foreign firm is from the U.S. rather than from Japan or Hong Kong, Macau, and Taiwan, while this effect is virtually absent in broad sectors that include economic activities for which China’s FDI policy has prohibited joint ventures. |
| Keywords: | international joint ventures, partner selection, technology spillovers, foreign direct investment, competition effects |
| JEL: | F14 F23 O34 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7065&r=tid |
| By: | Ana Fontoura Gouveia; Christian Osterhold |
| Abstract: | Productivity growth is slowing down among OECD countries, coupled with increased misallocation of resources. A recent strand of literature focuses on the role of non-viable firms (“zombie firms”) to explain these developments. Using a rich firm-level dataset for one of the OECD countries with the largest drop in barriers to firm exit and restructure, we assess the role of zombies on firm dynamics, both in the extensive and intensive margins. We confirm the results on the high prevalence of zombie firms, significantly less productive than their healthy counterparts and thus dragging aggregate productivity down. Moreover, while we find evidence of positive selection within zombies, with the most productive restructuring and the least productive exiting, we also show that the zombies' productivity threshold for exit is much lower than that of nonzombies, allowing them to stay in the market, distorting competition and sinking resources. Zombie prevalence curbs the growth of viable firms, in particular the most productive, harming the intra-sectoral resource reallocation. We show that a reduction in exit and restructuring barriers promotes a more effective exit channel and fosters the restructuring of the most productive. These results highlight the role of public policy in addressing zombies' prevalence, fostering a more efficient resource allocation and enabling productivity growth. |
| Keywords: | Firm Dynamics, Insolvency Frameworks, Labor Productivity, Resource Allocation, Zombie Firms |
| JEL: | D24 E22 E24 G33 J24 L25 |
| Date: | 2018–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaac:13-en&r=tid |
| By: | Michael Anyadike-Danes; Carl Magnus Bjuggren; Michel Dumont; Sandra Gottschalk; Werner Hölzl (WIFO); Dan Johansson; Mika Maliranta; Anja Myrann; Kristian Nielsen; Guanyu Zheng |
| Abstract: | This paper addresses three simple questions: how should the contribution of high-growth firms to job creation be measured? how much does this contribution vary across countries? to what extent does the cross-country variation depend on variation in the proportion of high-growth firms in the business population? The first is a methodological question which we answer using a more highly articulated version of the standard job creation and destruction accounts. The other two are empirical questions which we answer using a purpose-built data set assembled from national firm-level sources and covering nine countries, spanning the ten three year periods from 2000-2003 to 2009-2012. The basic principle governing the development of the accounting framework is the choice of appropriate comparators. Firstly, when measuring contributions to job creation, we should focus on just job creating firms, otherwise we are summing over contributions from firms with positive, zero, and negative job creation numbers. Secondly, because we know growth depends in part on size, the "natural" comparison for high-growth firms is with job creation by similar-sized firms which simply did not grow as fast as high-growth firms. However, we also show how the measurement framework can be further extended to include, for example, a consistent measure of the contribution of small job creating firms. On the empirical side, we find that the high-growth firm share of job creation by large job creating firms varies across countries by a factor of 2, from around one third to two thirds. A relatively small proportion of this cross-country variation is accounted for by variations in the influence of high-growth firms on job creation. On average high-growth firms generated between three or four times as many jobs as large non-high-growth job creating firms, but this ratio is relatively similar across countries. The bulk of the cross-country variation in high-growth firm contribution to job creation is accounted for by the relative abundance (or rarity) of high-growth firms. Moreover, we also show that the measurement of abundance depends upon the choice of measurement framework: the "winner" of a cross-national high-growth firm "beauty contest" on one measure will not necessarily be the winner on another. |
| Keywords: | high-growth firms, firm growth, job creation |
| Date: | 2018–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2018:i:563&r=tid |
| By: | Delautre, Guillaume. |
| Abstract: | The information and communications technology (ICT) manufacturing sector is one of the key employers worldwide and has undergone dramatic evolutions in the last decades. These evolutions stem from massive reconfigurations in the industry (vertical disintegration, specialization, outsourcing and relocation of production to cheaper countries) which began in the early 1980s leading to a deep transformation in the international division of labour. This paper investigates the evolutions of the supply chain in the sector since 2000 and discusses the impact of these evolutions in terms of distribution of the value added across firms and across countries. During this period, most of the production activities have migrated to East Asia and particularly China, and firms in developed economies have specialized in more strategic activities such as design, development or marketing. Data show large relocations of jobs across countries which have not been accompanied yet by an equivalent change in the distribution of value added. This apparent paradox is largely explained by the vertical specialization of firms and countries as shown by different products case-studies. Hence, economic development depends more on the position in the value than on the simple participation to it. The opportunities and conditions for economic upgrading in the ICT value chain are discussed through the two examples of Taiwanese contract manufacturers and Chinese mobile phone companies. We show that the high modularity of the sector lowers the entry barriers for newcomers but might also turn out to be a disadvantage for less technologically capable firms in the longer term. |
| Keywords: | information technology, manufacturing, value chains, labour mobility, relocation of industry, trend, case study, Asia, China, Taiwan, China |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:994948593302676&r=tid |
| By: | Chiara Criscuolo; Jonathan Timmis |
| Abstract: | This paper uses “centrality” metrics to reflect the changing structure of Global Value Chains (GVCs), contrasting central hubs and peripheral countries and sectors, and examine how these changes impact firm productivity. Using cross-country firm-level data from ORBIS, the paper finds that changing position within GVCs can play a role in the catch up of firms, but the results are heterogeneous across firms and countries. Firstly, becoming more central is associated with faster productivity growth of smaller firms, nonfrontier businesses, and of firms in smaller economies and in post-2004 EU member countries. And these correlations weaken with firm size and with proximity to the frontier, such that when one ignores firm heterogeneity and only considers average effects, there is no correlation for the average firms in the data. Secondly, the (centrality weighted) average productivity of buyers matters for the productivity of firms in our data overall, however this is particularly true for firms in large economies, for non-frontier and for smaller firms. The policy environment, such as flexible labour markets, better access to finance, stronger contract enforcement and simplified export procedures, appears to be important in translating the changing structure of GVCs into faster productivity growth of these non-frontier firms. |
| Keywords: | centrality, firms, global value chains, network analysis, Productivity |
| JEL: | D22 F12 F14 L25 |
| Date: | 2018–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaac:14-en&r=tid |
| By: | Bruno Smichowski; Cédric Durand (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique); Steven Knauss (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This article explores the variety of socioeconomic outcomes from global value chains (GVCs) participation through a crosscountry analysis. In order to bridge the methodological and theoretical gap between GVCs critical insights and recent uses of the framework by international institutions, it proposes a novel definition of trade in GVCs and elaborates new indicators of GVC participation and value capture. Using these indicators and data from the Trade in Value added database it presents new descriptive statistics. Through principal component and cluster analyses it identifies three distinctive development patterns related to various degrees and modes of GVC participation: social upgrading mirage, reproduction of the core, and unequal growth. It finally discusses the complementarity of these patterns and explains why the results obtained challenge the narrative that GVC participation per se is a recipe for development. |
| Date: | 2018–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cepnwp:hal-01817426&r=tid |
| By: | Angela Köppl (WIFO); Stefan Schleicher (WIFO) |
| Abstract: | One of the lessons learned from the German effort under the heading of Energiewende is the insight that simply shifting to renewables and recommending improving energy efficiency is not sufficient to lower greenhouse gas emissions. Combined with the expected radical change of technologies this requires a more profound understanding of our energy systems. Therefore, in contrast to most conventional approaches we propose a deepened structural analysis that covers the full energy value chain from the required functionalities for mechanical, thermal and specific electric energy services via application and transformation technologies up to primary energy. This deepened structural approach opens and substantially enhances our understanding of policy designs that are compatible with the Paris Agreement and Sustainable Development Goals. We discover the essential role of four energy grids, namely for electricity, heat, gas, and information as the key for integrating all components of a newly structured energy system. Consequently, we conclude that policy strategies focusing on individual components of an energy system as simply shifting to renewables may from a comprehensive perspective on sustainability in the worst case even turn out as counterproductive. |
| Keywords: | Sustainable energy systems, Energy value chain, Energy grids |
| Date: | 2018–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2018:i:566&r=tid |
| By: | Poole, Jennifer (Asian Development Bank Institute); Santos-Paulino, Amelia (Asian Development Bank Institute); Sokolova, Maria (Asian Development Bank Institute); DiCaprio, Alisa (Asian Development Bank Institute) |
| Abstract: | Market-oriented reforms, such as liberalizing trade and encouraging foreign direct investment, can generate large efficiency gains for a country. However, there is also concern that lower-skilled workers are increasingly being replaced by technology and that more globalized markets are harming employment opportunities. We investigate these issues by exploring household surveys from Viet Nam, combined with information on the task content of occupations, industrial exposure to international trade, and access to technology across the country. We assess the extent to which exposure to foreign markets and access to digital technologies affect the demand for different types of skills, by exploiting the fact that provinces vary in the degree of access to digital technologies and industries vary in the degree of exposure to foreign markets. We also extend much of the literature to consider the interplay between trade and technology on labor demand. On its own, technological change does not appear to be a main driver of the demand for skill in Viet Nam. Increased trade, rather, does expand employment opportunities across both skilled and unskilled workers. Consistent with classic trade theory, the increase is stronger for manual and routine tasks, shifting the composition of the labor force toward lower-skilled workers. However, the increase in manual and routine employment opportunities in response to the trade shock is smaller in areas of the country with access to digital technologies, providing suggestive evidence of the routine-biased nature of technology. From a policy standpoint, our work contributes to an understanding of job requirements and job security in an increasingly technology-driven and integrated world economy. Our research also offers insights for other lesser developing countries that face similar challenges. |
| Keywords: | Viet Nam; trade; information technology; skills |
| JEL: | F16 J24 O33 |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0770&r=tid |
| By: | Fukao, Kyoji (Asian Development Bank Institute); Paul, Saumik (Asian Development Bank Institute) |
| Abstract: | We show that σ-convergence in regional productivity growth can be approximated by σ-convergence in sectoral productivity growth and σ-convergence in structural transformation-led productivity growth. Applying this framework to Japanese prefecture-level data from 1874 to 2008, we find support for substantial convergence effects of structural transformation in the post-WWII years. |
| Keywords: | structural transformation; labor productivity; regional convergence; Japan |
| JEL: | O10 O40 |
| Date: | 2018–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0833&r=tid |
| By: | Michael Fritsch; Martin Obschonka; Michael Wyrwich |
| Abstract: | There is a research gap with respect to understanding the role of entrepreneurial culture and tradition for actual start-up behaviour. We combine historical self-employment data (entrepreneurial tradition) with a psycho- logical measure for entrepreneurial attitudes (entrepreneurial culture). The results reveal a positive relationship between the historical level of self- employment in a region and the presence of people with an entrepreneurial personality structure today. Our measure for a regional culture of entrepreneurship is positively related not only to the level of new business formation but also the amount of innovation activity. |
| Keywords: | Entrepreneurship, self-employment, new business formation, personality traits, culture, innovation |
| JEL: | L26 N94 O11 O30 R11 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1824&r=tid |
| By: | Lukas Schlogl (King’s College London); Andy Sumner (King’s College London) |
| Abstract: | Employment generation is crucial to spreading the benefits of economic growth broadly and to reducing global poverty. And yet, emerging economies face a contemporary challenge to traditional pathways to employment generation: automation, digitalization, and labor-saving technologies. 1.8 billion jobs—or two-thirds of the current labor force of developing countries—are estimated to be susceptible to automation from today’s technological standpoint. Cumulative advances in industrial automation and labor-saving technologies could further exacerbate this trend. Or will they? In this paper we: (i) discuss the literature on automation; and in doing so (ii) discuss definitions and determinants of automation in the context of theories of economic development; (iii) assess the empirical estimates of employment-related impacts of automation; (iv) characterize the potential public policy responses to automation; and (v) highlight areas for further exploration in terms of employment and economic development strategies in developing countries. In an adaption of the Lewis model of economic development, the paper uses a simple framework in which the potential for automation creates “unlimited supplies of artificial labor” particularly in the agricultural and industrial sectors due to technological feasibility. This is likely to create a push force for labor to move into the service sector, leading to a bloating of service-sector employment and wage stagnation but not to mass unemployment, at least in the short-to-medium term. |
| Date: | 2018–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:cgd:wpaper:487&r=tid |