The Evolution and Impact of Infrastructure in Middle-Income Countries: Anything Special?

We examine the evolution of infrastructure, and the impact of infrastructure investment, in middle-income countries (MICs). We document how different types of infrastructure stocks, as well as infrastructure investment, vary with the level of development and growth performance. We then use the two-stage approach of Corsetti, Meier, and Müller (2012) to identify exogenous public investment shocks and investigate the macroeconomic impact of these shocks. We find that the provision of infrastructure varies across development stages; there is a focus on basic infrastructure, such as transport, water, and sanitation, during early stages, and an emphasis on “advanced” infrastructure, such as power and especially information and communication technology, in later stages. Better-performing MICs tend to invest more on infrastructure. They also have more information and communication technology infrastructure. Finally, we find a more significant and sustained impact of exogenous public investment shocks on output in MICs than in low-income countries.     

R&D Efforts,Total Factor Productivity,and the Energy Intensity in China

ABSTRACT

This paper first measures the levels and growths of regional TFP in China using a panel dataset of China’s 30 provinces from 1978–2014. It then estimates the effects of R&D on regional TFP and its growth further explores the impact of TFP on China’s energy intensity. We find no evidence that R&D has innovation and spillover effects on TFP and its growth in China’s provinces. Nevertheless, R&D can promote growth in regional TFP by helping to absorb new technologies embodied in FDI and foreign trade. The results indicate that TFP plays a significant role in the decline of China’s energy intensity.     

Reverse innovation and firm value in emerging markets: Evidence from China

Reverse innovation (RI) patents, which apply to intellectual property that is created in an emerging country but patented in a developed country, are better representatives of innovation value than domestic patents in emerging economies. We argue that RI patents contribute to firm value by proxying for the private value of innovation, generating product market value, and signalling firms’ capabilities. Using a sample of Chinese-listed companies, we find RI patents positively relate to firms’ short- and long-term market value. This effect is stronger for firms with high innovative intensity and managerial ability. We also explore the mechanisms behind the relationship between RI and firm value. We demonstrate that, in addition to the domestic patent functions of creating value and capturing innovation rent, RI patents can further leverage firm value by signalling firm quality to customers and investors in developed markets, a function that is unique to RI patents.     

Green credit regulation,induced R&D and green productivity: Revisiting the Porter Hypothesis

This paper investigates the causal effect of green credit regulation policy on green productivity and revisits the Porter hypothesis. By separating R&D into environmentally induced R&D and production R&D, we find that green credit regulation policy significantly improves green total factor productivity (GTFP) growth rather than input-output TFP. We further show that environmentally induced R&D is the driver of GTFP, while production R&D significantly improves the input-output TFP. Finally, our estimations indicate that internal financing intermediation is used to finance environmental R&D projects due to the high cost of environmental innovation.     

External technology dependence and manufacturing TFP: Evidence from China

It remains an open question whether the reduction of external technology dependence (ETD) on foreign countries can improve the total factor productivity (TFP) of China's manufacturing industry. This paper uses the data of China's manufacturing industry from 2000 to 2016, to study the impact of ETD on TFP. Empirical results show that a 1% decrease in ETD could induce a 1% increase in TFP. As the TFP gap between China and the frontier countries shrinks, the indigenous innovation gains increasing importance. One can find that the effect of ETD on TFP in technology-intensive industries is stronger than that of other industries. Moreover, this study finds that the influence of ETD on TFP shows a significant threshold effect. Further, this paper uses the ratio of patents granted to represent the innovation capacity, and verifies its moderating role in the effect of ETD on TFP.     

中国银行业结构性全要素生产率增长研究

在深化银行业供给侧结构性改革背景下,如何科学评价银行业的结构性全要素生产率(TFP)增长具有重要意义。区别于早期针对个体样本的技术性TFP增长研究,本文通过构建并分解加总的Luenberger生产率指标对我国银行业以及不同类型银行的结构性TFP增长及来源进行有效评价。结果显示,研究期间,我国银行业的结构性TFP增长表现良好,其中,整体技术进步是主要驱动力;进一步分解发现,制度创新改善和加总的个体技术进步推动了银行业结构性TFP增长。在整体效率变化方面,加总的个体技术效率变化和结构效率变化都有待提高,其中,范围效率变化是抑制结构效率改善的主要因素。考虑不同类型银行,制度创新变化对所有类型银行的结构性TFP增长都影响显著,加总的个体技术变化对股份制和地区性银行的结构性TFP增长贡献更突出;加总的个体技术效率变化、结构效率变化、范围效率变化和规模效率变化对不同类型银行的结构性TFP增长作用有限。     

中国改革开放以来的全要素生产率变动及其分解(1978～2006年)——基于省际面板数据的Malmquist指数分析

本文在省际面板数据基础上运用DEA分析中的Malmquist指数方法测算并分解了我国改革开放以来的TFP变动。结果发现:就TFP变动模式而言,1978～2006年间TFP每年以接近3%的速度增长,TFP增长率波动呈现收敛态势,近年未现明显下滑趋势;就TFP增长的构成而言,技术效率变化与技术进步间存在替代关系,1980年代技术进步和技术效率变化交替起主导作用,1990年代以来TFP增长主要由技术进步推动;就地区特征而言,东部和内陆资源丰富省份TFP增长较快,而中部省份的TFP增长较慢。     

What is the net effect of financial liberalization on bank productivity? A decomposition analysis of bank total factor productivity growth

We employ a unique framework to quantify the net effect of financial liberalization on banks’ total factor productivity (TFP) growth through a decomposition analysis of two effects: a positive direct effect of financial liberalization on bank TFP growth; and a negative indirect effect operating through a higher propensity to systemic banking crisis. The empirical decomposition is based on a sample of 1530 banks operating in 88 countries over the period 1999–2011. We find that the net effect of financial liberalization on bank TFP growth is positive: the direct positive effect outweighs the negative one. An important policy implication flows from these findings.     

金融自由化与中国的全要素生产率：理论分析与经验证据

提高投资效率、优化资本配置和促进技术创新等也是全要素生产率的基本源泉。金融自由化使金融中介上述三大潜能得以充释放,因而也能提高全要素生产率。本文对中国金融自由化的过程和进展进行了定量分析,并以政府干预、人力资本、对外开放度等为控制变量,就金融自由化对全要素生产率的影响问题进行了实证分析。研究发现,中国金融自由化对全要素生产率的增长的促进作用,效果显著且具有统计意义。金融自由化也因此成为推动宏观经济集约式增长的积极因素。     

Indian bank efficiency and productivity changes with undesirable outputs: A disaggregated approach

The objective of this study is to examine technical efficiency and productivity growth in the Indian banking sector over the period from 2004 to 2011. We apply an innovative methodological approach introduced by Chen et al. (2011) and Barros et al. (2012), who use a weighted Russell directional distance model to measure technical inefficiency. We further modify and extend that model to measure TFP change with NPLs. We find that the inefficiency levels are significantly different among the three ownership structure of banks in India. Foreign banks have strong market position in India and they pull the production frontier in a more efficient direction. SPBs and domestic private banks show considerably higher inefficiency. We conclude that the restructuring policy applied in the late 1990s and early 2000s by the Indian government has not had a long-lasting effect.     

银行业竞争、创新资源配置和企业创新产出——基于中国工业企业的经验证据

本文利用城市级商业银行分支机构数据,结合中国工业企业数据和企业专利数据,实证分析银行业竞争对中国企业创新产出的影响。研究发现,竞争性的银行业市场结构显著促进了企业创新产出,对非国有企业和中小企业尤为显著。进一步地,本文基于资源配置角度,从新进入企业和在位企业双重视角探讨银行业竞争影响企业创新产出的作用途径。检验发现,银行业竞争提高条件下,更多的高效率企业进入创新部门,更多的高效率在位企业增加创新投入,且上述影响在非国有企业和中小企业中更为明显。本文检验结果显示,银行业竞争能提高银行对高效率企业的信贷支持,优化企业之间创新资源配置,并通过引导高效率非国有企业和中小企业增加创新投入而推动整体层面的创新产出。本文拓展了银行业竞争对企业创新的微观影响研究,为制定基于创新驱动的金融发展政策提供新思路。     

Labor Rights,Venture Capital,and Firm Performance

We investigate the role of labor unions in the performance of venture capital (VC)‐backed firms. Using a large sample of initial public offering firms from 1983 to 2013, we find that VC‐backed firms in highly unionized industries have lower Tobin's Q and are less likely to survive. This effect is robust to endogeneity concerns and to controlling for industry and firm characteristics. The findings suggest that strong labor rights impede innovative firms’ performance and survival, thereby adversely affecting innovation, economic growth, and employment.     

Managerial liability and corporate innovation: Evidence from a legal shock

Despite a longstanding debate over the pros and cons of imposing legal liability on directors and officers (D&Os), there is limited evidence on how D&O liability affects corporate innovation. We study this question by exploiting Nevada's 2001 corporate law change that dramatically lowered D&O legal liability and helped Nevada become the second most popular state for out-of-state incorporations. We find that firms incorporated in Nevada exhibit an increase in innovation outputs relative to matched control firms after the law change, particularly firms facing higher litigation risk or operating in more innovative industries. The results are driven mainly by exchange-listed firms that are subject to better governance than over-the-counter (OTC) listed firms. Lower D&O liability also enables firms to pursue more risky, but potentially more rewarding, explorative innovation. Therefore, although holding D&Os liable may be desirable overall, it also entails a cost by discouraging innovation in some firms. Our study has implications for how the litigation environment may influence sustainable growth via innovation.     

The Landscape of Economic Growth: Do Middle-Income Countries Differ?

We review the growth experience of middle-income countries. Economic factors associated with growth appear to differ between middle-income and other countries. The efficiency of the financial system is importantly related to the growth rate in low- and middle-income countries, but appears to matter less as one moves up the income scale. Demographic variables also matter importantly in low-income countries. In middle-income countries, in contrast, measures of the financial system no longer appear to matter as importantly, as if inefficiencies in banking and financial systems are no longer as binding a constraint as at earlier stages of financial development; nor are demographic variables as important as before. At this point, other variables gain a growing role: these include whether the country experiences a banking or currency crisis, the extent of non-foreign direct investment capital inflows, and government debt as a share of gross domestic product.     

Stock market liberalization and innovation

We investigate the effect of stock market liberalization on technological innovation. Using a sample of 20 economies that experience stock market liberalization, we find that these economies exhibit a higher level of innovation output after liberalization and that this effect is disproportionately stronger in more innovative industries. The relaxation of financial constraints, enhanced risk sharing between domestic and foreign investors, and improved corporate governance are three plausible channels that allow stock market liberalization to promote innovation. Finally, we show that technological innovation is a mechanism through which stock market liberalization affects productivity growth and therefore economic growth. Our paper provides new insights into the real effects of stock market liberalization on productivity growth and the economy.     

Vulnerability to climate change: Are innovative countries in a better position?

The impact of climate change on organizations and economies remains one of the most significant yet underestimated threats. Although the consequences of climate change have started to gain attention among policy makers, international business research on this issue is lagging behind. Drawing from the knowledge and innovation literatures, we explore the impact of a country’s degree of innovation on its vulnerability to climate change. Using a longitudinal sample of 73 countries for the years of 1998–2013, we examine the impact of innovation, openness to trade, and regulatory quality on a country’s vulnerability to climate change. We find that R&D expenditures as a percentage of GDP (innovation input), openness to trade, and regulatory quality decrease a country’s vulnerability to climate change. We also find that openness to trade moderates the effect of patenting rates (innovation output) on a country’s vulnerability to climate change.     

收入差异下的住房财富效应分化——基于283个地级市数据和CHFS家庭微观数据的实证分析

本文将收入分配结构因素纳入LC-PIH模型,试图从收入分层角度寻找我国住房市场弱财富效应的根源。基于283个地级市的面板数据和CHFS家庭微观调查数据的实证研究表明:房价对消费的影响具有门限特征,中等收入城市的住房财富效应最为明显;收入作用下的家庭住房财富效应也呈现倒U形。总体上,我国住房财富效应较弱源于收入的结构性差异,中等收入群体比重偏低可能导致房价上涨对消费的促进作用被低收入阶层和高收入阶层的挤出作用抵消。     

When does leverage hurt productivity growth? A firm-level analysis

In the wake of the global financial crisis, several macroeconomic contributions have highlighted the risks of excessive credit expansion. In particular, too much finance can have a negative impact on growth. We examine the microeconomic foundations of this argument, positing a non-monotonic relationship between leverage and firm-level productivity growth in the spirit of the trade-off theory of capital structure. A threshold regression model estimated on a sample of Central and Eastern European countries confirms that TFP growth increases with leverage until the latter reaches a critical threshold beyond which leverage lowers TFP growth. This estimate can provide guidance to firms and policy makers on identifying “excessive” leverage. We find similar non-monotonic relationships between leverage and proxies for firm value. Our results are a first step in bridging the gap between the literature on optimal capital structure and the wider macro literature on the finance-growth nexus.     

Total Factor Productivity Growth in U.S. Commercial Banking for 1935–1991: A Latent Variable Approach Using the Kalman Filter

This paper studies total factor productivity (TFP) in U.S. commercial banking for 1935–1991. TFP can contain a procyclical bias when some input factors are not freely variable, causing their shadow and market prices to differ. We correct this bias in TFP by decomposing it into its latent stochastic trend and cyclical components by employing the Kalman filter. Using the FDIC's annual aggregate data on U.S. insured commercial banks, we report that the stochastic trend has been positive during 1935–1991, with an average annual growth rate of 2.27%, and that it exhibits a decaying time path. We attribute the positive TFP growth to technical change.     

Innovation capacities in advanced economies: Relative performance of small open economies

This paper offers an empirical examination of the determinants of a nation's ability to produce commercially viable innovations, measured as Patents Granted across a sample of 23 advanced economies. The approach employed is based on estimating National Innovative Capacity that focuses on the long-run ability of economies to produce and/or commercialise innovative technologies, in the spirit of Furman et al. (2002). The time period of our analysis covers 1993 to 2005 and employs panel estimation.Motivated by differences in the rate of innovation between economies with different economic structures we examine the Small Open Economies (SOEs) in our country sample to assess whether there is a significant difference between the determinants of Innovative Capacity in SOEs and the other larger developed economies.We find that advanced SOEs and larger economies do not differ substantially in their determinants of producing innovative technologies and, notwithstanding the limitations of Patents as measures of innovative activity, we conclude that policy choice and variation plays a key role in determining the productivity of R&D, when measured as patenting activity.