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on Efficiency and Productivity |
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Issue of 2023‒07‒31
sixteen papers chosen by |
| By: | Martin Borowiecki; Federico Giovannelli; Jens Høj |
| Abstract: | This paper provides evidence on the impact of digitalisation on productivity in Slovenia during the COVID-19 crisis. The pandemic affected overall labour productivity negatively. Nonetheless, results show that firms that were more ICT-intensive before the pandemic experienced a smaller decline in their labour productivity growth compared to their less ICT-intensive peers in the same 2-digit level sector. This resilience effect was strongest for firms that are integrated in global value chains. A second finding is that COVID-19 resulted in productivity-enhancing reallocation of labour to ICT-intensive firms, reflecting that these firms registered higher employment growth relative to their less ICT-intensive peers during the pandemic. A third finding is that high levels of state ownership in a sector was associated with less productivity-enhancing reallocation. This suggests that state-owned enterprises retained workers that could be redirected to more productive firms. Together, these findings highlight the potential of digitalisation to support resilience and stronger productivity growth, although labour market rigidities and state ownership hamper the positive impact of digitalisation. |
| Keywords: | digitalisation, labour reallocation, productivity |
| JEL: | D24 E22 E24 O33 |
| Date: | 2023–07–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1766-en&r=eff |
| By: | Natália Barbosa; Ana Paula Faria (Department of Economics and NIPE, University of Minho; Department of Economics and NIPE, University of Minho,) |
| Abstract: | Productivity disparities in the European regions tend to persist. In order to understand the underlying sources of this phenomenon we assess the importance of science and regional innovation modes on firms’ productivity growth on a sample of 150, 712 firms across 161 NUTSII European regions, over the period 2012-2017. We find that science is a major source of firms’ productivity growth, and it has been particularly important to firms located in Southern Europe and, to less extent, in Eastern EU regions, indicating that a science-push convergence process is at work in the EU peripheral regions. Our findings also show that the fast-growing productivity firms are those who benefit more from external knowledge and innovation. Growth by imitation seems to be a viable strategy restricted to the slow-growing productivity firms. These results help to conciliate contentious evidence regarding firms’ benefits from spillovers, namely from scientific knowledge. |
| Keywords: | Territorial innovation patterns, Firm productivity, Europe, Quantile regression |
| JEL: | O33 O38 L25 R11 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0175&r=eff |
| By: | Dong, Qi |
| Keywords: | Productivity Analysis, Labor and Human Capital, Agribusiness |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335875&r=eff |
| By: | Bloem, Jeffrey R. |
| Keywords: | International Development, International Development, Research Methods/Statistical Methods |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335506&r=eff |
| By: | FUKAO Kyoji; INUI Tomohiko; KIM Young Gak; KWON Hyeog Ug; ZHANG Hongyong |
| Abstract: | We estimate and compare firm-level TFP growth rates in China, Korea, and Japan over the period 1995-2018 by using East Asia listed Companies (EALC) databases. When we estimate TFP growth rate, we apply information on industry-specific deflators from the Japan Industrial Productivity (JIP), Korea Industrial Productivity (KIP), and China Industrial Productivity (CIP) databases with respect to prices of output and input services, respectively. The results show that the TFP growth rate in the manufacturing sector during the 2000s has been steady in Japan and China, while it has been sluggish in Korea. In the non-manufacturing sector, TFP growth rate is positive for Japan and Korea, although the rate is low, while the TFP growth rate is negative for China. TFP dynamic analysis in Japan, Korea, and China show that within-firm effect effects play a significant role in TFP growth rate fluctuations in the manufacturing sector of Japan and Korea. A large decline in within-firm effect effects is observed in Korean manufacturing sector. In addition to the within-firm effect, the entry effect plays a significant role with respect to TFP growth rate improvement in the Chinese manufacturing sector. |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:23022&r=eff |
| By: | Anna Bernard; Rahim Lila; Joana Silva (Católica School of Business and Economics, Universidade Católica Portuguesa; Charles Rivers Associate; Católica School of Business and Economics, Universidade Católica Portuguesa) |
| Abstract: | R&D tax credits, by stimulating private sector innovation, can play a key role in promoting employment and firm performance. This paper examines the program impact on the trajectory of firms in terms of technology adoption, firm performance and workforce composition, and the extent to which it depends on the size of the targeted firms. It uses rich longitudinal micro-data on innovation, firms and their workers. Combining matching with a staggered adoption differences-in-differences, we show that tax credits increase investment in R&D-related activities while funds are being received, but not thereafter. Productivity and efficiency (but not employment) increase in large firms. These effects are driven by structural changes, both in terms of the increased share of skilled individuals within the firm (keeping the overall employment level constant) and enhanced technological adoption. In contrast, small firms mostly respond by increasing employment and production scale. Our results suggest that an important trade-off: R&D tax credit programs that target large firms are likely to lead to efficiency and productivity gains, but limited effects on employment of supported firms. In contrast, R&D tax credit programs that mostly benefit small firms may lead to employment gains in supported firms, but limited effects on structural changes in productivity and efficiency. |
| Keywords: | R&D tax credits, Innovation, SIFIDE, Matching, Differences-in-Differences |
| JEL: | O31 O38 H25 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0176&r=eff |
| By: | Ke, Yue; Sloggy, Matthew R. |
| Keywords: | Production Economics, Productivity Analysis, Labor and Human Capital |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335677&r=eff |
| By: | Rutledge, Zachariah; Richards, Timothy J. |
| Keywords: | Health Economics and Policy, Labor and Human Capital, Production Economics |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335436&r=eff |
| By: | Inês Teixeira; Aurora Teixeira; Luís Santos (Faculdade de Economia, Universidade do Porto & KU Leuven; CEF.UP, Faculdade de Economia, Universidade do Porto & INESC TEC; Faculdade de Economia, Universidade do Porto) |
| Abstract: | The present study analyses the impact of subsidies to Research and Development (R&D), more specifically, the impact of QREN (Quadro de Referência Estratégico Nacional)’s Sistema de Incentivos à Investigação e Desenvolvimento Tecnológico nas Empresa (SI I&DT QREN), on the performance of firms. A relatively wide range of studies explores the relationship between subsidies to R&D and firms’ performance. Nevertheless, no consensus has been reached. Furthermore, the literature that analyses the impact of R&D subsidies in non-market-centred and moderate innovative economies like Portugal is quite scarce and limited. The information used in this empirical study concerns the period between 2008-2017, and it was collected from the Operational Competitiveness Programme (COMPETE) included in QREN and complemented with economic and financial data gathered from the Annual System of Iberian Balances (SABI) database. We compared the performance of firms that in 2014 succeeded in obtaining subsidies to R&D with similar firms that did not receive subsidies. Resorting to information on a set of relevant variables in the period before obtaining the subsidy (2008-2013), we established a trustable comparison group using the Propensity Score Matching (PSM). Then, based on the Average Treatment Effect on the Treated (ATT), we compared firms that received subsidies with those that did not use outcome variables of 2017 (three years after the subsidy), most notably employment, labour productivity, operational results, and exports. Results show that firms that received a public subsidy to R&D three years after receiving the subsidy have higher employment levels and export propensity than those that did not. Notwithstanding, no statistically significant differences were encountered in terms of labour productivity or overall financial performance. |
| Keywords: | R&D subsidies; firms’ performance; propensity score matching; Portugal |
| JEL: | C31 L25 O32 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:mde:wpaper:0173&r=eff |
| By: | Lee, Hanbin; Sumner, Daniel A. |
| Keywords: | Marketing, Productivity Analysis, Agribusiness |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335563&r=eff |
| By: | Christoph Gortz (Department of Economics, University of Birmingham); Konstantinos Theodoridis (Business School, Cardiff University); Christoph Thoenissen (Department of Economics, University of Sheffield) |
| Abstract: | We estimate a novel empirical (state-space) model to study the effects of international and domes- tic technology trend shocks on the UK economy. We jointly identify anticipated and unanticipated domestic and international technological innovations arising from changes in total factor productivity (TFP) and investment specific technology (IST). The long-run restrictions used to jointly identify the structural trends in the data are informed by a standard two-country structural model. Our results point to large and persistent swings in productivity. International non-stationary TFP and IST shocks explain about 30% and 24% of the variance of UK GDP, respectively. UK-specific TFP and IST shocks are somewhat less important, but still a relevant factor. Notably, it is the anticipated components of these international and domestic productivity shocks, rather than their unanticipated counterparts, which account for the bulk of the volatility in the data. We dissect the historical role of different shocks as drivers of UK labor productivity growth. We find that a decline in the contribution of international IST shocks, combined with weak domestic TFP growth, can explain the widely documented slowdown in UK labor productivity after the financial crisis. A standard two-country model implies widely-used restrictions on the relative price of investment which we find to be inconsistent with our empirical evidence that relies on a minimum of structure. We show that a two-sector version of this model with adjustment cost in investment and costly sectoral labor reallocation can capture the empirical dynamics. |
| Keywords: | International Transmission of Productivity Shocks, Total Factor Productivity, Investment Specific Technology, Small Open Economy Dynamics, News Shocks, State Space Model |
| JEL: | E32 E3 F41 F44 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:shf:wpaper:2023015&r=eff |
| By: | Li, Yi |
| Keywords: | Environmental Economics and Policy, Research Methods/Statistical Methods, International Development |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335609&r=eff |
| By: | Thomas Dohmke (GitHub); Marco Iansiti (Harvard Business School and Keystone.AI); Greg Richards (Keystone.AI) |
| Abstract: | This study examines the impact of GitHub Copilot on a large sample of Copilot users (n=934, 533). The analysis shows that users on average accept nearly 30% of the suggested code, leading to increased productivity. Furthermore, our research demonstrates that the acceptance rate rises over time and is particularly high among less experienced developers, providing them with substantial benefits. Additionally, our estimations indicate that the adoption of generative AI productivity tools could potentially contribute to a $1.5 trillion increase in global GDP by 2030. Moreover, our investigation sheds light on the diverse contributors in the generative AI landscape, including major technology companies, startups, academia, and individual developers. The findings suggest that the driving force behind generative AI software innovation lies within the open-source ecosystem, particularly in the United States. Remarkably, a majority of repositories on GitHub are led by individual developers. As more developers embrace these tools and acquire proficiency in the art of prompting with generative AI, it becomes evident that this novel approach to software development has forged a unique inextricable link between humans and artificial intelligence. This symbiotic relationship has the potential to shape the construction of the world's software for future generations. |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2306.15033&r=eff |
| By: | Timothy DESTEFANO; ITO Keiko; Richard KNELLER; Jonathan TIMMIS |
| Abstract: | Within modern economies firms are embedded in often complex supply chains, creating strong interdependencies between firms. But what happens when these supply chains are disrupted, what changes does this bring about? We answer these questions, focusing on what happens when connections between companies exogenously break because of the unexpected death of the CEO within one of the firms. We rely on detailed data from the TSR which provides firm-level measures of start and exit dates of CEOs along with buyer-supplier linkages. This data is matched to detailed statistics on Japanese firms which enables us to identify the effects of such leadership changes on supplier networks and subsequent performance. We find that such deaths promote the churning of suppliers but not of customers of the firm and therefore that these shocks propagate towards upstream firms through the supply chain. There is also evidence that this affects the short-term performance of indirectly affected firms as the shock propagates backwards along the supply chain. |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:23049&r=eff |
| By: | Puerto, Sergio |
| Keywords: | International Development, Productivity Analysis, Research Methods/Statistical Methods |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea22:335821&r=eff |
| By: | Luis García; Luigi Giamboni; Mauro Vigani |
| Abstract: | In 2016, the Council of the European Union called on all euro area Member States to set up an NPB. NPBs consist of sectoral institutions aiming to foster debate on matters related to productivity and competitiveness. Six years after the adoption of the Council recommendation on the establishment of NPBs, the network of NPBs is now well established, although still incomplete. NPBs publish regular reports, thus contributing to evidence-based policymaking. Existing literature on NPBs, such as the two progress reports published by the European Commission, has mostly analysed their institutional set-up. This paper, while also reviewing the NPBs’ institutional characteristics and aspects to improve, in addition summarises the main findings of their annual reports, an area that has to date, received less attention. The topics discussed reflect a key challenge for EU economies, namely that of maintaining satisfactory rates of productivity growth, which is key not only to improve living standards sustainably and to foster real convergence, but also to address macrofinancial imbalances and more recently, to ease possible temporary tensions between addressing climate change and economic growth. |
| JEL: | E02 E60 O32 O40 O43 |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:euf:dispap:185&r=eff |