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on Efficiency and Productivity |
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Issue of 2024‒03‒11
nine papers chosen by |
| By: | De Monte, Enrico |
| Abstract: | This paper investigates the evolution of aggregate productivity and markups among French manufacturing firms between 1994 and 2016, by focusing on the role of reallocation with respect to both aggregate measures. Firm-level productivity and markups are estimated based on a gross output translog production function using popular estimation methods. I find an aggregate productivity growth of about 34% over the whole period while aggregate markups are found to remain relatively stable. As a key finding the study shows that over time reallocation of sales shares affects differently aggregate productivity and markups: Before 2000 both aggregate productivity and markups are importantly driven by reallocation effects; Post-2000, instead, the contribution of reallocation to aggregate productivity becomes negligible, inducing a slowdown in aggregate productivity growth, while I measure persistent reallocation of sales shares from lower to higher markup firms. Policy relevant implications of these dynamics are discussed. |
| Keywords: | productivity decomposition, production function estimation, business dynamism, market power, entry and exit |
| JEL: | C13 D21 D24 L16 L60 O47 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:283014&r=eff |
| By: | Antonia Lopez Villavicencio; Ivan Ledezma |
| Abstract: | We study how global value chain participation causally affects productivity at the firm level. We utilize an extensive dataset encompassing firms from countries of different income levels over the period 2006-2021, together with matching approaches to control for endogeneity. Our primary finding underscores that the simultaneous coordination of importing and exporting activities within a single firm leads to an increase in labor productivity. Positive effects on TFP are significant only within the subgroup of firms in the less developed countries and those operating in low-tech industries. Increased capital intensity appears as a plausible explanation of labor productivity gains. We also find higher innovation propensity, quality enhancements, and labor-cost reductions for two-way traders as channels through which GVC participation influences firms' technical change. The lower responsiveness of TFP in advanced countries can be explained by the different nature of technical change for firms operating closer to the world technology frontier. |
| Keywords: | Global value chains, productivity, firm, development, endogeneity |
| JEL: | C31 D24 F14 F15 O5 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2024-4&r=eff |
| By: | Francesca D'Auria; Christophe Planas; Rafal Raciborski; Alessandro Rossi; Anna Thum-Thysen |
| Abstract: | The EU’s Commonly Agreed Methodology (EUCAM) is used by the European Commission to estimate potential output and the output gap in order to appraise the productive capacity and the cyclical position of the EU economies. This paper assesses the robustness of the decomposition between trend and cyclical total factor productivity, two quantities involved in EUCAM which are notoriously difficult to disentangle in real-time. In 2010 EUCAM was extended to incorporate additional information about capacity utilisation in this detrending. The robustness of the trend-cycle decomposition of total factor productivity is assessed with respect to variations in the prior distribution of model parameters, in the set of indicators used to proxy capacity utilisation, and in the assumption of cyclical symmetry. The analysis shows that EUCAM is reasonably robust to the departures in model assumptions examined. |
| JEL: | C52 E32 D24 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:euf:dispap:198&r=eff |
| By: | Arntz, Melanie; Genz, Sabrina; Gregory, Terry; Lehmer, Florian; Zierahn-Weilage, Ulrich |
| Abstract: | This paper examines the extent to which aggregate-level de-routinization can be attributed to firm-level technology adoption during the most recent technological expansion. We use administrative data and a novel firm survey to distinguish frontier technologies from older technologies. We find that adopters of frontier technologies contribute substantially to deroutinization. However, this is driven only by a subset of these firms: large adopters replace routine jobs and less routine-intensive adopters experience faster growth. These scale and composition effects reflect firms' readiness to adopt and implement frontier technologies. Our results suggest that an acceleration of technology adoption would be associated with faster de-routinization and an increase in between-firm heterogeneity. |
| Keywords: | technology, automation, tasks, capital-labor substitution, decomposition |
| JEL: | J21 J23 J24 O33 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:283011&r=eff |
| By: | James Manley (Department of Economics, Towson University) |
| Abstract: | As women comprise a larger share of land managers, it is important to discern factors that limit their success. Using nationally representative data from Cambodia we compare factors associated with productivity among female headed households as opposed to male headed households. OLS regressions show that household size, education, vocational training, land area, an index of non-agricultural capital, and the income share from agriculture are positively related to all types of agricultural revenue. However, when we use a Blinder-Oaxaca decomposition to separately consider revenue from crop production and rice production (as opposed to animal husbandry) we see that after the primacy of land access, the years of education are the next most important, and that differences between endowments explain all of the difference between male and female-headed households. We conclude that there are high returns to investment in education for girls and women in Cambodian agriculture. |
| Keywords: | Cambodia, education, Blinder-Oaxaca decomposition, agricultural productivity, FAO, 50x2030. |
| JEL: | Q12 J16 J31 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:tow:wpaper:2024-03&r=eff |
| By: | Christophe J. Godlewski (LARGE - Laboratoire de Recherche en Gestion et Economie - UNISTRA - Université de Strasbourg); Hong Nhung Le (LARGE - Laboratoire de Recherche en Gestion et Economie - UNISTRA - Université de Strasbourg) |
| Abstract: | We investigate the impact of family ties on the performance of family firms in East Asia. To measure family ties, we used both objective and subjective indicators from the World Value Survey. Our findings indicate that family firms that are nurtured in a society with strong family ties tend to have better performance compared to family firms that operate in a culture with weak family ties. Furthermore, family firms that have strong familial relationships are more likely to gain a competitive advantage over nonfamily firms. Conversely, family firms with weak ties tend to underperform nonfamily firms. Our results are robust across various measures of firm performance, classifications of family firm, considerations of heteroskedasticity and endogeneity, and different econometric methods. |
| Date: | 2024–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04435944&r=eff |
| By: | Russell Cooper; John C. Haltiwanger; Jonathan Willis |
| Abstract: | This paper studies competing sources of declining dynamism. Evidence shows that an important component of this decline is accounted for by the reduction in the response of employment to shocks in US establishments. Using a plant level dynamic optimization problem as a framework for analysis, four potential reasons for this decline are studied: (i) a change in exogenous processes for profits, (ii) an increase in impatience, (iii) increased market power and (iv) increasing adjustment costs. We identify and quantity the contribution of each of these factors building on a simulated method of moments estimation of our structural model. Our results indicate that the reduction in responsiveness largely reflects increased costs of employment adjustment. Changes in market power, as captured by changes in the curvature of the revenue, function play a minimal role. But, in the presence of rising adjustment costs, measured sales-weighted markups using the recently popular indirect production approach rise substantially, along with rising dispersion and skewness of such measured markups. |
| JEL: | E20 J63 L23 O44 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32130&r=eff |
| By: | Antea Barišić; Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | In recent decades, the development of novel technologies has intensified due to globalisation, prompting countries to enhance competitiveness through innovation. These technologies have significantly improved global welfare, particularly in sectors like healthcare, where they have facilitated tasks and boosted productivity, for example playing a crucial role in combating the COVID-19 pandemic. However, certain technologies, such as robots, can negatively impact employment by replacing workers and tasks. Additionally, the emergence of artificial intelligence as digital assets not only replaces specific tasks but also introduces complexities that may displace employees who are unable to adapt. While the existing literature extensively explores the heterogeneous effects of these technologies on labour markets, studies of their impact on migrant workers remain scarce. This paper presents pioneering evidence on the effects of various novel technologies on migrant employment in the European Union. The analysis covers 18 EU member states from 2005 to 2019 focusing on the impact of novel innovations, robot adoption, three types of digital assets, and total factor productivity, on migrant employment. The key findings reveal that innovations measured by the number of granted patents increase both the number and proportion of migrant workers relative to the overall workforce. While robots do replace jobs, their impact on native workers surpasses that of migrant workers, resulting in a higher share of migrant workers following robot adoption. Total factor productivity positively influences migrant workers, while the effects of digital assets are heterogeneous. Moreover, the impacts of these technologies on migrant workers vary significantly across different occupation types and educational levels. |
| Keywords: | Robot adoption, digitalisation, novel innovation, migrant workers |
| JEL: | O33 F22 D24 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:241&r=eff |
| By: | Steven Fries (Peterson Institute for International Economics) |
| Abstract: | Decarbonization policies exhibit clear sequencing patterns within sectors and countries as well as across them. This paper explains these sequences using a Solow-Swan growth model with two distinguishing features. One is a variable elasticity of substitution production function with both fossil fuel–based and low carbon inputs. The second is a choice of decarbonization policy: a carbon price or low carbon investment subsidy. Their policy costs have significant macroeconomic impacts. One cost arises from a short-run tradeoff between decarbonizing productive activities and maintaining the level of output. There is also a second-round policy cost associated with the policy choice between a low carbon subsidy or a carbon price that varies with progress in decarbonization. The modeling shows how these policy costs can be managed by the observed policy sequence of a low carbon investment subsidy before a carbon price and initial use of this decarbonization policy in sectors where low carbon inputs are stronger substitutes for the incumbents. These macroeconomic explanations of observed decarbonization policy sequences complement others based on microeconomic considerations of efficiency in imperfect markets, distributional fairness, and economic interests in change. |
| Keywords: | aggregate productivity, climate change, climate policy, energy and growth, sustainable growth, technological change |
| JEL: | O33 O44 Q43 Q54 Q58 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp23-12&r=eff |