Productivity and technical change: the case of Taiwan

This paper analyses productivity growth in 16 of Taiwan's manufacturing industries during the period 1978–1992. The non-parametric Data Envelopment Analysis approach is used to compute Malmquist productivity indexes. These are decomposed into efficiency change and technical change. The latter is further decomposed into an output bias, an input bias and a magnitude component. In addition, the direction of input bias is identified. Empirical results indicate that the sector's TFP increased at a rate of 2.89% per annum, which could be ascribed to a technical progress (2.56%) and an efficiency improvement (0.33%).     

Biased Technical Change and the Malmquist Productivity Index

The Malmquist productivity index has many attractive features. One is that it can be epxressed as the product of a technical efficiency change index and a technical change index. In this paper we express the technical change index as the product of a magnitude index and a bias index. We then express the bias index as the product of an output bias index and an input bias index, and we state conditions under which each bias index makes no contribution to productivity change.     

Elasticity of substitution and the stagnation of Italian productivity

The aim of this paper is to investigate the roots of the stagnation in the Italian total factor productivity (TFP). The analysis focuses on the specific pattern of technical progress in determining the dynamics of the TFP. This analysis cannot be done with Cobb-Douglas technology, but requires the employment of a constant elasticity of substitution (CES) production function that allows distinguishing between the direction and the bias of technical progress. We employ a CES specification embodying both labor- and capital-augmenting technical change, with a σ less than 1. We obtain three main results. (1) There seems to have been a structural break around the mid-1990s in the direction and bias of technological change; (2) The first half of the sample features a labor-augmenting technical change and a capital bias; and (3) In the second part of the sample, both these characteristics seem to disappear, and the evolution of factor endowments assumes a key role. This fact may be seen as one of the potential causes of the stagnation in Italian productivity.     

Dynamic productivity growth and its determinants in the Indonesian food and beverages industry

ABSTRACT

This research investigates dynamic productivity growth and its determinants in the Indonesian food and beverages industry decomposing dynamic productivity growth into the contributions of dynamic technical inefficiency change, dynamic technical change, and dynamic scale inefficiency change. The empirical application employs unbalanced panel data of 44 subsectors in the Indonesian food and beverages industry over 1990–2014. To estimate dynamic productivity growth, this research uses a Luenberger indicator accounting for the presence of adjustment costs. The results show that dynamic productivity growth exhibits a decreasing trend. Dynamic technical inefficiency change and dynamic scale inefficiency change contribute positively to dynamic productivity growth, while dynamic technical change contributes negatively. Dynamic productivity growth is affected by the change in industrial concentration, the growth rate of capital intensity, the growth rate of exports, the growth rate of foreign direct investment, and location.     

Biased Technical Change and the Aggregate Production Function

This paper offers a classical model of biased technical change in the MarxRicardo tradition as a framework for theoretical and applied studies of growth. The observable data it generates would appear to an unsuspecting economist to be well-described by a neoclassical model with a static Cobb-Douglas production function, when in fact this production function describes only the technological history of the economy. The CobbDouglas form results from the capital-using, labour-saving bias of technical change. The model's trajectory in wage-profit space will lie along the displaced image of the neoclassical factor price frontier, in contradiction to marginal productivity theory. The Solow residual can be reinterpreted by the classical theory as a measure of the size of this displacement.     

The Impact of Technical Change and Profit on Investment in Australian Manufacturing

This paper combines W.E.G. Salter's analysis of capital-embodied technical change with Kalecki's analysis of financing investment from retained profits to provide a Post Keynesian model of investment with process innovation, which is applied to data from Australian manufacturing industries. The approach to process innovation taken in this study is to identify new capital stock introduced through physical investment, which results in the older vintage stock being decommissioned as technologically obsolete. In the estimated model, the profit factor is used as a measure of the ability to invest, and the rate of labour productivity growth factor reveals the inducement to invest as this rate acts as a proxy for technical change in the Kaleckian investment-ordering model. The two factors combine to explain the accumulation process, both level and variability, and its link to technical change. In conclusion, this paper demonstrates that investment, incorporating technical change, enables industries to become sustainable into the uncertain future with varying states of investment instability.

…technical progress cannot be regarded as automatic and independent of accumulation. (Salter, 1966, p. 72)     

Inflation and the finance–growth nexus

This paper re-investigates whether there exist inflation thresholds in the finance–growth linkage. By applying the Caner and Hansen's (2004) instrumental-variable threshold regression approach to the dataset of Levine et al. (2000), we find strong evidence of a nonlinear inflation threshold in the relationship, below which financial development exerts a significantly positive effect on economic growth, while, above which, the growth effect of finance appears to be insignificant. Furthermore, we also find a positive and significant relationship between finance and productivity for inflation rates below the threshold level, but no such relationship is detected for inflation rates above the critical level. This result suggests that finance influences growth mainly through the productivity channel.     

Technological Change in Australian Manufacturing

In the modern era, the extent and character of technical change features prominently in discussions of productivity growth and movements in the competitiveness of manufacturing. While technical change is pervasive in modern manufacturing, it occurs unevenly. In this study, technical change is estimated by fitting dual cost functions for each of 38 sectors of Australian manufacturing over the 32 year period, 1968–69 to 1999–2000. The estimates show that technical change is heavily labour-saving in all industries, but that the overall rate of change, as measured by a rate of cost diminution, and the degree of bias towards saving labour, rather than capital or material, varies substantially across industries.     

Aggregate Productivity in the Post-war British Coal Industry

An econometric model, using OLS regression, of aggregate productivity in the post-war British coal industry is given. Some of the methods used by Weisskopf et al. (1983), in their ‘social model’ of aggregate productivity in the US economy are drawn upon; however all ‘social’ variables included in this coal productivity model are found not to be significant. The results suggest that pit closures have been an important source of aggregate productivity growth throughout the period; this does not imply, however, that ‘unproductive’, or ‘uneconomic’, pits are intrinsically so, rather their status as such may be the result of a ‘political’ process. Average colliery size and the industry's capital stock were also found to be important explanatory variables. Attention was paid to the effects of the national miners' strikes during the period; these effects were found to be structurally insignificant.     

The productivity debate of East Asia revisited: a stochastic frontier approach

This paper applies a stochastic frontier production model to the data from Penn World Table's 49 countries over the period 1965 to 1990, to decompose total factor productivity growth into technical change and technical efficiency change. Empirical results show East Asian countries led the world in productivity growth, mainly because their technical efficiency gain was so much faster than that of other countries. East Asian countries also registered rapid technical change, which was comparable to that of the G6 countries after the late 1980s. The results provide evidence that negate the hypothesis that East Asian growth was mostly input-driven and unsustainable.     

Productivity growth and biased technical change in French higher education

This paper analyses the nature of technical change in the French labour market. Data Envelopment Analysis (DEA) is adopted to investigate productivity change in a sample of higher education leavers over the period 1999 and 2004. In a first step, the Luenberger Productivity Indicator (LPI) is used to estimate and to decompose productivity change. Following LPI, a better productivity is found for the workers in Paris and the well-qualified occupations in France. In analysing the nature of the technical change by the concept of parallel neutrality, technical progress seems to have influenced all professions. In particular, biased inputs of human capital component benefit more for the well qualified professions with an upper increase of the efficiency scores for executives and teachers. Furthermore, some evidences show the key role of “learning by doing” in the worker's adaptation to technical change. Policy implications are then derived from our results.     

An empirical investigation of causality between producers' price and consumers' price indices in Australia in frequency domain

The paper examines Granger-causality between the producers' and the consumers' price using Australian data within the frequency domain framework. For long run relation, the Johansen and Juselius (1990) maximum likelihood approach to cointegration was utilized. The test is also supplemented by the Breitung and Candelon (2006) and Lemmens et al. (2008) method. The quarterly data for the study covers 1969q3 to 2010q4. The findings suggest that consumers' price Granger-causes producers' price at an intermediate level of frequencies reflecting medium-run cycles, whereas producers' price does not Granger-cause consumers' price at any level of frequencies. Our study shows that consumers' price is a leading indicator of producers' price. Given that producers' price is used in making various macroeconomic indicators in real terms, the findings should help the Australian policymakers to gain control over the factors that affect consumers' price. The major contribution of the paper is to demonstrate unidirectional causality from consumers' price to the producers' price. Specifically, results show that consumers' price in Australian may have a significant predictive content in how the producers' price evolve. Furthermore, the application of the Breitung and Candelon (2006) and Lemmens et al. (2008) methodology in testing the Granger-causality in frequency domain is also relatively new.     

Energy Consumption and Carbon Emission Based Industrial Productivity in China: A Sustainable Development Analysis

The paper investigates the determinants of productivity growth in China. It also analyses the sustainability of the country's industrial growth by estimating sectoral productivity, accounting for energy usage and emission since the market‐oriented reforms launched in the late 1970s. The empirical analysis indicates that productivity is the most significant driver of growth. The substantial productivity improvement of China's industry is mainly attributable to high‐tech light industrial sectors. Heavy industry lags behind in terms of productivity and overall technical change.     

Disaggregation of sectors in social accounting matrices using a customized Wolsky method: a comment on its estimation bias

Barrera–Lozano et al. (2015) suggest an approach to disaggregate SAM matrices using a customized method based on Wolsky (1984). Starting from an aggregated sector, they propose the extraction of a branch instead of its partition. This study compares these two methods based on the magnitude of their estimation bias of the disaggregated technical coefficient matrix. From simulations of the disaggregated Leontief matrix, this work calculates linkages and multipliers for common sectors derived from using either the Wolsky (1984) sectoral disaggregation or the Barrera–Lozano et al. (2015) sectoral extraction. Results show that both approaches provide biased estimators, with the last one showing a significantly higher bias, especially in cases of incomplete information. This comparison suggests the need of additional research to provide bias corrections for input–output disaggregation methodologies.     

Older siblings' contributions to young child's cognitive skills

This work finds that older siblings as well as early parenting influence young children's cognitive skills directly or indirectly, for example, Mathematics, and English. Our findings challenge a pervasive view in the economical literatures that early parenting plays a dominant role in explaining child development. In economics, early environmental conditions are important to demonstrate the evolution of adolescent and adult cognitive skills (Cunha and Heckman, 2007, Knudsen et al., 2006), and it establishes causal impacts of early parental inputs and other environmental factors on cognitive and non-cognitive skills (Borghans et al., 2006, Cunha et al., 2010, Heckman et al., 2006b). Early parenting as well as older siblings should explain a diverse array of academic and social outcomes, for example, Mathematics, English, maritage and pregnancy. In fact, older siblings' characteristics are as important, if not more important, than as parenting for child development. Our analysis addresses the problems of measurement error, imperfect proxies, and reverse causality that plague conventional approach in psychology. We find that older brother contributes much more than older sister to child's mathematical achievement, while older sister contributes much more to child's English achievement. Our evidence is consistent with psychology literature, for example, Hetherington (1988), Jenkins (1992), Zukow-Goldring (1995), Marshall et al. (1997), Maynard (2002), and Brody et al. (2003) for siblings' direct contributions to child development, Bronfenbrenner (1977), East (1998), Whiteman and Buchanan (2002), and Brody et al. (2003) for siblings' indirect contributions, and Reiss et al. (2000), Feinberg and Hetherington (2001), and Kowal et al. (2002) for parental differential treatment.     

Technical change and the measurement of productivity in an input-output model

This paper examines the relationship between technical change and partial and total factor productivity measurement in an n-sector input-output economy. The level of productivity is shown to increase if there is technical change and constant final demands. However, the aggregate level of productivity can fall if there is technical change and if final demands alter. The relationship between technical change and productivity is complicated and counterintuitive results can occur. When the rate of growth of productivity is analyzed, it is found that productivity growth can decline when there is technical change and accelerating technical change, even if final demands are constant. Implications for intranational and international productivity comparisons are discussed.     

Technological change,efficiency gains and capital accumulation in labour productivity growth and convergence: an application to the Spanish regions

The main objective of this article is to analyse labour productivity growth and convergence in the Spanish regions between 1965 and 1995, decomposing total factor productivity gains into technological progress and efficiency change by means of Malmquist productivity indices. On the basis of this decomposition, labour productivity growth is broken down into components attributable to technological change (shifts in the frontier), efficiency gains (movements toward the frontier) and capital accumulation (movements along the frontier). The approach followed in this study is based on work initiated by Färe et al., where a link between the economic growth and convergence literature and the production frontier approach was established. Furthermore, in the spirit of Quah's approach, the evolution of the whole distribution is considered. Thus, the analysis of the dynamics of the entire distribution of labour productivity and the factors behind it – technological progress, efficiency gains and capital accumulation – combine both approaches, yielding new insights into the process of productivity growth and convergence experienced by the Spanish regions over the last 30 years.     

我国高等教育生产率增长、技术进步与效率变化

本文运用Malmquist指数对2003—2008年我国31个省、市、自治区高等教育的生产率变化情况进行分析,然后将其分解为技术进步与效率变化分析生产率变化的动力来源以及各地区的差异,并进一步对高等教育规模扩张与技术进步之间的关系进行研究。研究结果表明:我国高等教育生产率指数显示波动性上升趋势,且主要动力来源于技术进步;高等教育生产率的增长呈现出较大的地区差异性;高等教育的规模扩张与技术进步之间存在显著的负相关关系,当前的技术水平显然不能满足高校的需求。最后针对高等教育生产率变动的特征对高等教育的未来发展提出几点政策建议。     

Research and development and labour productivity: do high-tech firms exhibit labour- or capital-saving technical change?

Employment and output in the advanced technology sectors have generally exhibited above-average growth for more than two decades. While this industry accounts for a relatively small share of total employment, the majority of private sector research and development (R&D) expenditures in the US is concentrated within seven sub-sectors. However, little attention has been paid as to whether high-tech productivity exhibits Hicksian capital or labour ‘savings’ bias or tendency to displace either factor input over time. Biased technical change can occur as economies transition between growth regimes. An augmented production function is employed to analyse the additional impact of R&D activity on firm-level labour productivity. A panel data set comprised of high-tech firms located across the advanced economies, China and India from 1990 to 2013 is used in the analysis. Labour-saving technical change was present across the advanced technology sectors and most countries. The expanded models of labour productivity that used fixed effects with lagged regressors confirmed the prior results as well as finding that R&D per employee, relative R&D intensity and firm market share contribute to firm-level labour productivity growth across countries and sectors. Additional support was found for diminishing returns to scale but not for R&D spillover effects.     

How enterprise strategies are related to innovation and productivity change: an empirical study of Japanese manufacturing firms

This study analyzes the total factor productivity of 1067 Japanese manufacturing firms. In production estimation, we employ the directional distance function and Luenberger productivity indicator. Research and development strategy survey data are used to analyze the determinant factors related to improvements in innovation and productivity. Our results indicate that increasing technology and knowledge through a ‘black box’ process is related to an increase in productivity. Furthermore, the protection and management of production knowledge and expertise is a valid method of increasing global technical change.