Economic growth and multi-tasking by state-owned enterprises: An analytic framework and empirical study based on Chinese provincial data

By preventing large-scale unemployment during China's economic transition, state-owned enterprises (SOEs) helped maintain social stability, which supported the development of non-state sectors through a positive externality. Yet this burden reduced the productive efficiency of SOEs. Using a simple framework with two sectors, our paper decomposes the conflicting contributions of SOEs (lower efficiency but enhanced stability) to regional economic growth during 1992–2007. We find that productive efficiency in the state sector was lower than in other sectors and identify a significant positive externality that supported non-state sectors. Since these two effects offset each other, the contribution of SOEs to economic growth in China during our sample time frame was not significantly different from that of non-state enterprises.     

Sectoral bubbles,misallocation, and endogenous growth

Stock price bubbles are often on productive assets and occur in a sector of the economy. In addition, their occurrence is often accompanied by credit booms. Incorporating these features, we provide a two-sector endogenous growth model with credit-driven stock price bubbles. Bubbles have a credit easing effect in that they relax collateral constraints and improve investment efficiency. Sectoral bubbles also have a capital reallocation effect in the sense that bubbles in a sector attract more capital to be reallocated to that sector. Their impact on economic growth depends on the interplay between these two effects. Bubbles may misallocate resources across sectors and reduce welfare.     

A Fuzzy clustering approach to the key sectors of the Spanish economy

The search for key sectors in an economy has been and still is one of the more recurrent themes in input–output analysis. When using clustering techniques, sectors can only belong to a group, having a particular performance. But, actually, the same sector could be important from different perspectives at the same time, to a different degree. So, a fuzzy clustering approach is needed. In this work we propose a multidimensional approach to classify the productive sectors of the Spanish input–output table for 1995, based on three groups of variables: those related to their productive integration, others measuring their specific weight in the economy and finally some showing their economic dynamic. We also incorporate into the analysis the technological level, which being a categorical variable presents special methodological problems. All these questions are tackled applying a robust and fuzzy clustering analysis, which gives as a result a classification of sectors illustrating the role that each one plays in the Spanish economy.     

Sustainable procurement in Malaysian organizations: Practices,barriers and opportunities

The purpose of this study is to uncover the extent of sustainable procurement practices amongst procurement directors/managers employed in public and private sector organizations in Malaysia, a developing country where socialization is underpinned by religious beliefs. The results showed there is a significant variation in the adoption of sustainable procurement across the sectors with the private sector registering significantly higher levels of SP practices than their public counterparts. Lack of awareness posed the most significant barrier to sustainable procurement implementation regardless of organizations or sectors whilst improved working conditions, an organization׳s/council׳s/public image, and organizational efficiency and transparency provided optimal opportunities for implementing sustainable procurement practices. Finally this study identified the two new factors of religion and sense of humanity as influencing an employee׳s engagement in sustainable procurement practices.     

Formal sector job growth and women’s labor sector participation : The case of Mexico

This paper looks at the effects of demand and supply on the determinants of labor sector (school, home work, informal, and formal) participation between Torreon and Tijuana, Mexico for married and single women. Comparisons between the two cities are used to capture differences in labor demand. Torreon is a traditional city with an agri-industrial base and Tijuana is a border city with large export processing (maquiladora) and tourism sectors, both of which demand female labor. Factors influencing labor supply include both individual and household characteristics. Married women, given the strong cultural tradition of working in the home, do not significantly increase their paid labor participation with higher labor demand or changing characteristics of the household. Personal characteristics have the greatest impact on labor sector participation. Single women do, however, increase their formal sector participation with additional employment opportunities and respond to household needs by moving in and out of the paid labor market. Results indicate that increases in labor demand in Mexico from the NAFTA could expand formal sector labor force participation of single women.     

The effects of financial liberalization on productivity: Evidence from India’s manufacturing sector

Using a panel of India’s registered manufacturing firms and both economy-wide and firm-level financial data, we investigate the effects of India’s financial liberalization on the productivity of its manufacturing sector in the 1990s and 2000s. Our dynamic panel analysis shows that the series of financial liberalization policies/measures, at both the macro and micro levels, significantly enhanced the productivity of the manufacturing sector. Total factor productivity increased for all firms, including those owned by the state government, with greater gains for the firms in the private and foreign sectors. Our results suggest that policies favoring financial liberalization should be pursued further in order for India to foster higher economic growth.     

Multi-criteria analysis of economic complexity transition in emerging economies: The case of Paraguay

Like many emerging economies, the productive structure of the Paraguayan economy is not complex. It relies extensively on low value-added activities in the primary sector such as agriculture and cattle ranching. These activities have a lower return in terms of economic and social benefits than other potential productive activities and do not contribute to increasing capability accumulation. In this paper we present a tool to support the identification of strategic sectors and products which if taken advantage of, could leverage development through the accumulation of productive capabilities. Our guiding question is: Which productive sectors should be promoted to foster economic development in Paraguay through a transition towards a more complex economy? To answer this question, we use concepts from the Economic Complexity theory to identify new products and cluster them based on the Product Space methodology for the determination of potential products and combine it with the Analytic Hierarchy Process (AHP) for multicriteria analysis considering multiple criteria. In doing so, our proposed methodology contributes to both the Economic Complexity and the AHP literature. Through this combination, we tackle the multiplicity of juxtaposed criteria, which should be considered at the prioritization stage in the crafting of economic restructuring measures according to the country's capabilities. Our evaluation showed that the combination of the approaches is useful, and for Paraguay's case, it helped identify sectors, which, if promoted by policymakers, could help boost economic development through complexity and capability accumulation.     

Simultaneous search with heterogeneous firms and ex post competition

In this paper we study the allocation of workers over high and low productivity firms in a labor market with coordination frictions. Specifically, we consider a search model where workers can apply to high and or low productivity firms. Firms that compete for the same candidate can increase their wage offers as often as they like. We show that if workers apply to two jobs, there is a unique symmetric equilibrium where workers mix between sending both applications to the high and sending both to the low productivity sector. But, efficiency requires that they apply to both sectors because a higher matching rate in the high-productivity sector can then be realized with fewer applications (and consequently fewer coordination frictions) if workers always accept the offer of the most productive firm. However, in the market the worker's payoff is determined by how much the firm with the second highest productivity is willing to bid. This is what prevents them from applying to both sectors. For many configurations, the equilibrium outcomes are the same under directed and random search so our results are not driven by random search. We discuss the effects of increasing the number of applications and show that our results can easily be generalized to N-firms.     

The Economic Impacts of Newly Irrigated Areas in the Ebro Valley

This paper uses regional input-output tables to analyse the long-term impact resulting from the implementation of the newly irrigated areas provided for under the terms of the Ebro Basin Hydrological Plan. We have described the whole process by way of two consecutive stages. In the first, where the final demand is fixed, we use a demand-driven input-output model and we incorporate technical change through the reduction of the coefficients. In the second, the output of all sectors increases, with the increases in the vector of output being proportional to the forward linkages vector of the Agriculture sector. In this stage, our objective is to obtain a final demand vector that ensures that the agricultural value added increases to a prescribed value of v 1 *. Whilst the results demonstrate the positive effects of the transformation, they also reveal effects of a very different character in each sector. Thus, the Agriculture, Livestock and Agri-food industry sectors show significant increases in their gross outputs caused by the forward effects, whilst the Energy, Metal and Chemicals sectors reduce their outputs. These results shed light on the contradictory nature of the processes of development and technical change.     

Business dynamics statistics of High Tech industries

Modern market economies are characterized by the reallocation of resources from less productive, less valuable activities to more productive, more valuable ones. Businesses in the High Tech sector play a particularly important role in this reallocation by introducing new products and services that impact the entire economy. In this paper we describe an extension to the Census Bureau's Business Dynamics Statistics that tracks job creation, job destruction, startups, and exits by firm and establishment characteristics, including sector, firm age, and firm size in the High Tech sector. We preview the resulting statistics, showing the structural shifts in the High Tech sector over the past 30 years, including the surge of entry and young firm activity in the 1990s that reversed abruptly in the early‐2000s.     

Productivity insurance: The role of unemployment benefits in a multi-sector model

We construct a multi-sector search and matching model where the unemployed receives idiosyncratic productivity shocks that make working in certain sectors more productive than in the others. Agents must decide which sector to search in and face moving costs when leaving their current sector for another. In this environment, unemployment is associated with an additional risk: low future wages if mobility costs preclude search in the appropriate sector. This introduces a new role for unemployment benefits – productivity insurance while unemployed. For plausible parameterizations unemployment benefits increase per-worker productivity. In addition, the welfare-maximizing benefit level decreases as moving costs increase.     

Missing links in key sector analysis

In general terms, key sectors analysis aims at identifying and quantifying the economic impact of a sector in a given economy. For a sector, we mean here either an industry or a region, or even a cluster of them. Quite a few measures and methodologies of varied complexity have been proposed in the literature, from multiplier sums to extraction methods, but not without debate about their properties and information content. All of them, to our knowledge, focus exclusively on the interdependence effects that result from an input–output structure of the economy. By so doing the approach misses critical links beyond the interindustry ones. A productive sector's role is that of producing but also that of generating and distributing income among primary factors and households as a result of production. Thus, when measuring a sector's role, the income generating process should not be omitted if we want to elucidate the sector's true economic impact. A simple way to make the missing income links explicit is to use the SAM (Social Accounting Matrix) facility. Extending an extraction methodology to the SAM we compare lost output with and without the missing links. We observe that substantial differences in sectoral lost gross output arise but, even more important, we capture the implied shifting in the rank ordering of sectors.     

Conceptualizing and measuring “industry resilience”: Composite indicators for postshock industrial policy decision-making

Can resilience be a relevant concept for industrial policy? Resilience is usually described as the ability of a socioeconomic system to recover from unexpected shocks. While this concept has caught the attention of regional economics researchers seeking to understand the different patterns behind regional recovery after a disruption, it is increasingly recognized that resilience can have policy-relevant conceptual applications in many other regards. In this paper, we apply it to industries and define the “industry resilience” concept and measurements. Our contribution is twofold. Theoretically, we frame industry resilience as a useful conceptual framework for policy-making to support the selection of industrial policy targets that are more capable of recovering after unexpected shocks. In addition, industry resilience can mitigate government failures by supporting decision-makers in promoting both economically and socially sustainable structural change. Methodologically, building on post-2008 U.S. data, we develop two composite indicators (CIs) to separately analyze quantitative and qualitative postshock variations in sectoral employment. Such CIs support policy-makers in visualizing sectoral performances dynamically and multidimensionally and can be used to compare each sector both to other sectors and to its counterfactual. Our results highlight that sectors react heterogeneously to shocks. This points to the relevance of tailoring vertical industrial policies according to sector features and the aims of industrial policy initiatives.     

Patterns of university–industry interactions in Brazil: an exploratory analysis using the instrumental of graph theory

The article seeks to explore the evidence related to the sectoral patterns of structuring of the university–industry relations in Brazil, departing from the information extracted from the database of the Brazil Survey Research, with the analytical contribution of graph theory and its centrality measures. The empirical results allow us to identify some important constraints of the university–industry interactions in Brazil. In particular, we highlight the importance of locational aspects in conditioning the actions of universities as producers of science and technology for the productive sector and a tendency to relatively more intense interaction with less knowledge-intensive sectors, compared to so-called science based sectors.     

Identifying Linkages with a Cluster-based Methodology

Although many methods for studying linkages between economic sectors exist, most methods only analyse the linkages between a specific sector and all other sectors, or the effects of all sectors on the economy as a whole. Cluster analysis may be helpful to analyse which sectors are strongly connected to each other, when no specific sector is given in advance. The present article reviews how cluster analysis contributes to the analysis of intersectoral linkages. Furthermore, it describes several possible identification methods of these clusters. After selecting the best method, the article provides an index that can be used to compute the degree of similarity between clusters in different regions, countries, or time periods.     

Implementing Lean in aerospace—challenging the assumptions and understanding the challenges

Lean manufacturing appears to hold considerable promise for addressing a range of simultaneous, competitive demands including high levels of process and product quality, low cost and reductions in lead times. These requirements have been recognised within the aerospace sector and efforts are now well established to implement Lean practices. Lean manufacturing was initiated within the automotive sector. However, since the publication of the influential book, The Machine That Changed the World (Womack et al., 1990) there has been a range of documented cases of Lean implementation in a variety of sectors. Despite this evidence, the perception remains that Lean manufacturing is to some degree, an ‘automotive idea’ and difficult to transfer to other sectors especially when there are major differences between them. In this paper we discuss the key drivers for Lean in aerospace and examine the assumption that cross-sector transfer may be difficult. A Lean implementation case comparison examines how difficulties that arise may have more to do with individual plant context and management than with sector specific factors.     

Language usage,participation, employment and earnings: Evidence for foreigners in West Germany with multiple sources of selection

Language proficiency may not only affect the earnings of the individual, but the probability to participate in the labor market or becoming employed as well. It may also affect selection of people into economic sector and occupation. In this paper, the effects of language proficiency on earnings are analyzed for foreigners in Germany with joint consideration of up to four types of selection. The results show that language proficiency significantly increases participation and employment probability and affects occupational choice. When selection into economic sector and occupation is regarded, we do not find an impact of language ability on earnings thereby implying an indirect effect.     

GREENHOUSE GAS EMISSIONS AND ECONOMIC STRUCTURE IN URUGUAY

Using input–output analysis, we identify the key sectors in greenhouse gas (GHG) emissions of the Uruguayan economy. The responsibilities of each sector in terms of its emissions are decomposed into an own component, generated during the activities of the sector, and an indirect component, generated by the induced activities in other sectors. This has important implications for the design of mitigation polices, as the appropriate policy measures are contingent on the nature of the pollution. Technical improvements and best practices are effective only when applied to directly polluting sectors, while demand policies may be more appropriate for indirectly polluting sectors. In addition, we analyze pollution generated during the production of exports. The results show that demand policies are going to be effective in the Building, the Hotel and restaurants, and the Wholesale and retail trade; and repair of motor vehicles and motorcycles sectors. These policies complement GHG emissions’ mitigation policies in directly polluting sectors (mainly the Cattle farming and the transport-related sectors). Finally, methane and nitrous oxide emissions are mainly the consequence of production for exports, while carbon dioxide emissions are mainly driven by production for domestic consumption.     

An Applied General Equilibrium Model to Assess the Impact of National Tax Changes on a Regional Economy

This paper presents two versions of an applied general equilibrium model for the regional economy of Andalusia, Spain, that differ in the closure rule adopted to describe the behavior of the public sector. We use the model with to analyze the impact that the reform of the personal income tax (Act 40/98) implemented in Spain as a whole would have had on the Andalusian region in particular. The model is of the neoclassical variety and includes not only the productive sectors of the economy but also the foreign sector and the government, which are usually absent from theoretical general equilibrium models. Both versions of the model are calibrated by using a Social Accounting Matrix of Andalusia for 1995. The analysis shows that the reform is not self-financing, not even partially, despite governmental claims. It also indicates that there is a positive but smaller than anticipated economic stimulus. In welfare terms, we find that the category of Urban Salaried consumers is the one that benefits the most in real income terms.     

Over-education for the rich,under-education for the poor: A search-theoretic microfoundation

This paper studies the efficiency of educational choices in a two sector/two schooling level matching model of the labor market where a continuum of heterogenous workers allocates itself between sectors depending on their decision to invest in education. Individuals differ in working ability and schooling cost, the search market is segmented by education, and there is free entry of new firms in each sector. Self-selection in education causes composition effects in the distribution of skills across sectors. This in turn modifies the intensity of job creation, implying the private and social returns to schooling always differ. Provided that ability and schooling cost are not too positively correlated, agents with large schooling costs — the ‘poor’ — underinvest in education, while there is overinvestment among the low schooling cost individuals — the ‘rich’. We also show that education should be more taxed than subsidized when the Hosios condition holds.