Drivers of the real effective exchange rates in high and upper‐middle income countries

This paper revisits the nexus between real effective exchange rate (REER) and total factor productivity (TFP) by controlling for trade openness, financial development and natural resources rents. We use a sample of 60 high‐income and upper‐middle income countries over the period 1995–2015 and employ the GMM estimation framework. Our results advance the empirical knowledge on the drivers of REER by providing robust evidence that the impact of TFP is not uniform across different country clusters. We find that in high‐income countries, increasing productivity causes the REER to depreciate hence becoming more trade competitive while the opposite is true for upper‐middle income countries. Furthermore, financial development and natural resources rents have no meaningful impact in the case of upper‐middle income countries but retain a significant effect in high‐income countries. Trade openness plays a key role in explaining the variation in REER in both country clusters.     

Firm productivity and importing: Evidence from Chinese manufacturing firms

This paper investigates various aspects of the relationship between firm productivity and importing for a large sample of Chinese firms between 2002 and 2006 making a distinction between the origin, variety, skill and technology content of imports. Employing a random effects probit model and a propensity score matching with difference‐in‐differences (PSM–DID) approach and treating imports as endogenous in our measure of total factor productivity (TFP) (De Loecker 2007), we test the self‐selection and learning‐by‐doing hypotheses. Our results show evidence of a bi‐directional causal relationship between importing and productivity. Although importing firms tend to be more productive before entering the import market, once they start importing firms experience significant productivity gains for up to two years following entry. We also find evidence of learning effects following the decision to import, which is stronger when import starters source their products from high‐income economies, import a wider variety of products and import products with a higher skill and technology content. A number of robustness checks confirm the learning effects of importing on TFP growth.     

Endowments,Specialization, and Policy

The paper explores the relationship between industry shares in production and their determinants including factor endowments, technology, and government policies, in a GDP–function framework. We use a new international panel dataset on production and trade compiled by the World Bank. As an intermediate step we calculate Hicks‐neutral productivity indices that vary across industries, time, and countries. We find that own‐TFP is robustly associated with industry shares across time and countries and that, after correcting for these productivity differences, output shares are related to factor endowments (Rybczynski effects) in a plausible way. Once Rybczynski effects are controlled for, we find little evidence of demand‐side policies (import tariffs) affecting the allocation of resources; we find, however, more role for supply‐side policies as the relative size of capital‐intensive industries is positively associated with infrastructure–capital endowments.     

企业生产率和企业"走出去"对外直接投资:基于企业层面数据的实证研究

随着中国走出去的战略实施,我国企业的对外直接投资也日益增长。通过采用浙江省制造业企业生产和对外直接投资的企业层面数据,在准确衡量"走出去"企业的全要素生产率的基础上,本文考察了企业生产率及其直接对外投资的关系。在控制了回归分析可能的内生性及其他影响因素后,我们发现:第一,生产率越高的企业对外直接投资的概率越大;第二,生产率越高的企业对外直接投资的量越大;第三,目的国的收入水平高低对企业投资与否的决定没有显著的影响。此外,行业的资本密集程度对企业的生存环境没有显著的影响。所以,本文的发现为我国企业的对外直接投资提供了微观层面的经验证据,一定程度上弥补了这方面研究的空白。     

INTERNATIONAL TFP DYNAMICS AND HUMAN CAPITAL STOCKS: A PANEL DATA ANALYSIS, 1960–2003

This paper adopts fixed‐effect panel methodologies to obtain TFP values for a sample of 76 countries from 1960 through 2003. Our results are robust to the use of different estimators (LSDV, Kiviet‐corrected LSDV, and GMM). They show that TFP dynamics are characterized by a process of conditional convergence where most countries do not catch up with the U.S., and where human capital plays an important role in technology adoption, as suggested by Nelson and Phelps in 1966. Such a role is robust to the inclusion of controls for the quality of institutions in a country. Further, our results imply a plausible link between stages of development and returns to different levels of education. Finally, we calculate the minimum human capital level necessary to generate catch‐up and find that virtually all countries are above that level—a result that again emphasizes the importance of human capital in technology diffusion.     

Learning from exporting in China

Do exports increase the firm's productivity causally? Focusing on the matched information of highly disaggregated transaction and firm‐level data from 2000 to 2006 in China, we construct a new measure of firm‐specific demand shock as an instrument for firm exports, based on the GDP growth rate of destination countries. We find that a one percentage point expansion in exports raises firm total factor productivity (estimated by the Olley–Pakes method) by approximately 0.224 percentage points on average. Moreover, we find that exports to high‐income countries, more processing exports and scope expansion about variety contribute to the learning effect.     

Services liberalization and productivity of manufacturing firms

Employing a unique database of Ukrainian firms in 2001–07, we use the external push for liberalization in the services sector as a source of exogenous variation to identify the effect of services liberalization on total factor productivity (TFP) of manufacturing firms. The results indicate that a standard deviation increase in services liberalization within a firm is associated with a 9.2 percent increase in TFP. The effect is stronger for firms with high productivity, bringing about a reallocation of resources within an industry. Industry‐level results show that the effect of reallocation on industry productivity is almost as strong as the within‐firm effect. The dynamic interaction of services liberalization and TFP through the investment channel reinforces the effect. The effect is robust to different estimation methods and to different sub‐samples of the data. In particular, it is more pronounced for domestic and small firms.     

Does international openness affect the productivity of local firms?

This paper examines how international openness can change firm productivity in south‐eastern Europe (SEE), a crucial question for middle‐income countries. Using firm‐level data for six transition economies over the 1995–2002 period, we identify whether foreign ownership and propensity to trade with more advanced countries can bring about higher learning effects. We find that: (i) foreign ownership has helped restructure and enhance the productivity of local firms in four out of six countries; (ii) exporting to advanced markets has a larger impact on productivity growth in four countries, especially when the firm's absorptive capacity is taken into account; (iii) in contrast, exporting to the less competitive markets of the former Yugoslavia seems to negatively affect productivity growth in three countries; and (iv) learning effects from importing are similar to those from exporting. Our results suggest that trade liberalization is not uniformly beneficial. Regional composition of trade flows and absorptive capacity of local firms matter. Thus, trade liberalization within the SEE region may not provide a substitute for a general trade liberalization which includes access to the more competitive markets of countries belonging to the Organization for Economic Co‐operation and Development.     

Intermediation costs and capital flows

In this paper, we modify the standard neoclassical model by incorporating financial intermediation in order to deliver returns consistent with the observation that capital primarily flows to middle income countries. We build a static contracting framework where costly intermediation together with an adverse selection problem have quantitatively important effects on capital flows. When intermediation costs are ignored, the model behaves like the neoclassical model in terms of capital returns. However, when intermediation costs are considered, returns to capital in middle income countries could exceed those in poor and rich countries—high costs of intermediation cause poor countries to concentrate their investments in projects with low returns, while the standard neoclassical effect lowers returns in capital-rich countries. When we embed the return function from the static analysis in a two-country dynamic model, there is capital outflow from a poor country that removes capital controls and becomes open. Even though the closed economy dominates in terms of capital employed in production, it is the open economy that dominates in terms of income, consumption and welfare.     

Misallocation and aggregate productivity across time and space

Productivity is at the core of the large differences in income per capita across countries. What accounts for international productivity differences? I discuss cross‐country differences in the allocation of inputs across heterogeneous production units—misallocation—as a potential factor in accounting for aggregate productivity. Policies and institutions generating misallocation are prevalent in poor and developing countries and may also be responsible for differences in the selection of operating producers and technology used, contributing substantially to aggregate productivity differences across countries.     

Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach

This paper uses the panel data of energy consumption and GDP for 82 countries from 1972 to 2002. Based on the income levels defined by the World Bank, the data are divided into four categories: low income group, lower middle income group, upper middle income group, and high income group. We employ the GMM-SYS approach for the estimation of the panel VAR model in each of the four groups. Afterwards, the causal relationship between energy consumption and economic growth is tested and ascertained. We discover: (a) in the low income group, there exists no causal relationship between energy consumption and economic growth; (b) in the middle income groups (lower and upper middle income groups), economic growth leads energy consumption positively; (c) in the high income group countries, economic growth leads energy consumption negatively. After further in-depth analysis of energy related data, the results indicate that, in the high income group, there is a great environmental improvement as a result of more efficient energy use and reduction in the release of CO₂. However, in the upper middle income group countries, after the energy crisis, the energy efficiency declines and the release of CO₂ rises. Since there is no evidence indicating that energy consumption leads economic growth in any of the four income groups, a stronger energy conservation policy should be pursued in all countries.     

高管团队职能背景与企业创新绩效 ——"精力"与"资源"的中介作用

依据高阶梯队理论、注意力基础观和资源基础观,通过引入“精力”层面的创新注意力和“资源”层面的研发投入两种创新投入,构建“高管特征-投入决策-创新绩效”研究框架,实证检验高管团队职能背景对企业创新绩效的影响及其作用机制。对我国沪深A股上市的398家技术密集型企业2013-2016年数据进行分析,研究结果显示,高管团队职能背景异质性不利于提升企业创新绩效,3种职能背景中只有“产出型”高管对创新绩效有正向影响,创新注意力和R&D 投入在高管团队职能背景对创新绩效的关系中起到双中介作用和交互作用。     

Complexity and technological change: knowledge interactions and firm level total factor productivity

The analysis of social interactions as drivers of economic dynamics represents a growing field within the economics of complexity. Social interactions are a specific form of interdependence whereby the changes in the behavior of other agents affect utility functions for households and production functions for producers. In this paper, we apply the general concept of social interactions to the area of the economics of innovation and we articulate the view that knowledge interactions play a central role in the generation of new technological knowledge so that innovation becomes the emergent property of a system, rather than the product of individual actions. In particular, we articulate and test the hypothesis that different layers of knowledge interactions play a crucial role in determining the rate of technological change that each firm is able to introduce. The paper presents an empirical analysis of firm level total factor productivity (TFP) for a sample of 7,020 Italian manufacturing companies observed during the years 1996–2005. This will enable us to identify the distinctive role of regional, inter-industrial and localized intra-industrial knowledge interactions as distinctive and significant determinants, together with internal research and innovation efforts, of changes in firm level TFP.     

THE IMPACT OF DOMESTIC AND FOREIGN COMPETITION ON SECTORAL GROWTH: A CROSS‐COUNTRY ANALYSIS

This paper examines the impact of competition on the total factor productivity (TFP) of 21 manufacturing sectors in eighteen OECD countries over the period of time 1990–2006. We assume that the source of TFP growth can be either domestic or foreign innovation or technology transfer from the technological frontier. Trade openness, R&D, and human capital can have two effects: a direct effect on TFP (e.g., through innovation) and an indirect effect depending on the productivity gap between a given country and the technological frontier. We find that tougher domestic competition is always associated with higher sectoral productivity. Both import and export penetrations are positively associated with an increase of TFP. However, the channels through which higher TFP is materialized are different: export penetration works through level effect, while import penetration acts mainly when conditional on the level of technological development. The economical magnitude of the effect is not trivial.     

Service Deregulation,Competition, and the Performance of French and Italian Firms

This article reports estimates of the impact of service regulation reform on the productivity of French and Italian firms in retail, transports and professional services over the period 1998–2007. We implement a two‐stage least squares estimation: the first‐stage instruments mark‐ups, a financial measure of rents, with barriers to entry and the second stage estimates the impact of instrumented mark‐ups on total factor productivity (TFP), a real measure of firm efficiency. We find that entry barriers lower firm productivity by raising mark‐ups and rents. These estimates imply that, if French and Italian regulators had adopted the OECD best practices in terms of entry barriers, firms in these sectors would have increased their TFP level by five percentage points. We do not find any robust evidence of a non‐linear relation between mark‐up and productivity.     

Country governance,corruption, and the likelihood of firms’ innovation

Using a sample of firms from the World Bank Enterprise Survey for the period 2006–2016 in emerging and developing countries, we find that corruption has a negative impact on the likelihood of innovations, thus supporting the “sanding-the-wheels” hypothesis. Our empirical results also show that corruption at the firm level, in the manufacturing industry, and in regions with the worst governance or that are more corrupt has a significant negative effect on innovation. In addition, country governance plays a particularly important role in innovative activity for corrupt firms. The policy implication is that the government or authority should strengthen the positive role of government effectiveness, rule of law, regulatory quality, and control of corruption in order to improve firms’ innovation within an environment of corruption.     

Can social spending cushion the inequality effect of globalization?

This paper examines whether social spending cushions the effect of globalization on within‐country inequality. Using information on disposable and market income inequality and data on overall social spending, and health and education spending from the ILO and the World Bank/WHO, we analyze whether social spending moderates the association between economic globalization and inequality. The results confirm that economic globalization—especially economic flows—associates with higher income inequality, an effect driven by non‐OECD countries. Health spending is strongly associated with lower inequality, but we find no robust evidence that any kind of social spending negatively moderates the association between economic globalization and inequality.     

Escaping the Middle‐Income Trap in Southeast Asia: Micro Evidence on Innovation,Productivity, and Globalization

Microdata studies on innovation, productivity, and globalization are relatively new to the Southeast Asian region. Evidence from microdata studies in middle‐income countries provide valuable evidence for policymaking aimed at graduating these countries to high‐income status. Globalization via trade and foreign direct investment should continue to be important development strategies. A more nuanced approach focusing on exporters and potential exporters, especially SMEs, are likely to be needed. The extent of foreign participation is also likely to have important implications for technological spillovers.     

Export revenue and quality: Firm‐level evidence from developing countries

I combine firm‐level export data from eight low‐income and middle‐income countries to test the relation between export price and export revenue. Across‐firm estimations show a strong positive association between export price and export revenue. Within‐firm estimations show that firms generate larger export revenue from their high‐price products. The positive correlation between export price and export revenue is strong for manufactures, weak for primary commodities, and nonexistent for extractables. Results are robust to using an alternative quality measure and controlling for exporters’ market power.     

ARE THERE PRODUCTIVITY SPILLOVERS FROM FOREIGN DIRECT INVESTMENT IN CHINA?

We review previous literature on productivity spillovers of foreign direct investment (FDI) in China and conduct our own analysis using a firm‐level data set from a World Bank survey. We find that the evidence of FDI spillovers on the productivity of Chinese domestic firms is mixed, with many positive results largely due to aggregation bias or failure to control for endogeneity of FDI. Attempting over 6000 specifications that take into account forward and backward linkages, we fail to find evidence of systematic positive productivity spillovers from FDI in China.