Keynes's Z function, heterogeneous output and marginal productivity

Keynes was adamant that the assumption of homogeneous outputand capital in macroeconomic theory is inadmissable. His aggregatesupply or Z function is a generalisation of Marshall's ordinarysupply function to take account of heterogeneous output, andis an essential element of the principle of effective demand.The ‘linear Z curve’ controversy can be attributedto Keynes's desire to demonstrate how his general monetary theoryof value and output encompasses the special case of Classicaltheory, including the marginal productivity theorem. The infamoussecond footnote on pages 55–6 of The General Theory canthereby be fully resolved.     

Outsourcing and firm productivity: a production function approach

This paper is aimed at analyzing the relationship between outsourcing and productivity. Specifically, this paper deals with outsourcing at the firm level and focuses on the role of contracting out of manufacturing activities. I obtain new insights on this topic, mainly using a precise measure for outsourcing and analyzing differences across industries. Using an unbalanced panel of Spanish manufacturing firms, I estimate a production function depending on traditional inputs (labor, capital, and materials) and an index of production subcontracting. I find that for manufacturing as a whole, outsourcing intensity has a positive effect on productivity, showing an elasticity of output with respect to outsourcing around 0.15. When analyzing industry level results, I find that outsourcing intensity has a positive effect on productivity, mainly for firms belonging to light industries.     

The size of public employment: An empirical study

Previous empirical studies of government have focused primarily on aggregate financial measures of size. This analysis examines a different measure: the share of public employment in total employment. In empirical tests on OECD countries for 1970 and 1980, the level of public employment is shown to be a clear reflection of voter demand for public goods, electoral support for socialist parties, and political response to the problems of unemployment. In contrast, variables that measure characteristics of the political process, such as degree of government decentralization, strength of interest groups, and voter participation in elections, are not statistically significant.     

ICT and productivity: conclusions from the empirical literature

Innovation drives economic competitiveness and sustained long-term economic growth. Especially the emergence and intensive utilization of information and communication technologies (ICTs), which spawned the beginning of the digital economy two decades ago, heavily affected the opportunities and efficiency of how firms produce and provide goods and services. We provide an overview of the empirical literature on ICT and productivity and highlight the main results and methodological differences. The majority of studies indicates that the productivity effect of ICT is indeed positive and significant. However, methodological approaches of how to appropriately estimate the ICT effect matter. While aggregate and sectoral growth accounting exercises suggest stronger differences of the ICT effect between US and Europe, firm-level analyses suggest no significant country differences. Moreover, we shed light on the notion of ICT being a General Propose Technology (GPT) enabling further innovations. Most of the GPT evidence on ICT is found for the US, while evidence for European countries is harder to come by. However, more theoretical and empirical research is needed to better understand spillovers and externalities of ICT and how these technologies transform our economies.     

Money balances as factor inputs: An empirical evidence based on translog specification

This is a first attempt to analyze the way money balances (under both definitions) interact with the primary factors in Greek technology. Using a two-output, three-input translog cost specification, we reject the traditional functions as being inappropriate in explaining the production process. It is found that money balances are substitutes for labor and complements to capital services, while value-added is not produced by the primary inputs exclusively. A number of policy implications have emerged and are stated.     

An empirical analysis of incentive regulation and the allocation of inputs in the US telecommunications industry

A translog cost function is estimated to examine whether carriers use an efficient combination of inputs in the telecommunications industry. Special attention is given to the role of rate regulation reform in an increasingly competitive business environment. Findings suggest that telecommunications carriers facing price-cap regulation do use an efficient mix of labor and capital. In contrast, the condition for cost minimizing use of inputs is not met for telecommunications carriers facing rate-of-return. The superior factor input use allocation by carriers facing price-cap regulation compared to carriers facing rate-of-return regulation is interpreted as suggesting that incentive regulation plays an important role in promoting efficient use of inputs even in a competitive business environment.     

Labor scarcity and the turning point in the Chinese rural sectors: empirical evidences from a frontier production function study

The purpose of this study is to examine whether overemployment has existed in the Chinese agricultural sector since 2000. The moment when overemployment ceases to exist is called the ‘turning point.’ After the turning point, an economy would be classified as entering the developed stage. Since the later half of the 2000s, many studies have analyzed the turning point of the Chinese economy. However, these studies have not reached a consensus as to the existence of overemployment. Varieties of data sources for the empirical studies have affected the discrepancies of these results. This study uses the flow data (e.g., the days of work and the daily wage) rather than stock. From our estimation results, we confirm that the Chinese agricultural sector has been increasing its production efficiency. In addition, our study indicates that overemployment is decreasing in almost all provinces and some regions have achieved a turning point.     

Intellectual capital: An empirical study of ITRI

Intellectual capital (IC) could provide a new instrument for observing organizational hidden value. While most intellectual capital studies are either theoretical or exploratory, some western research facilities are publishing annual reports based on intellectual capital. Nevertheless, Asian empirical studies are much rarer than western ones, let alone conducting comparison among them. Industrial Technology Research Institute (ITRI), founded in 1973, is a non-profit national R&D organization, aiming to develop Taiwan industrial technologies. This paper firstly attempts to associate the components of the intellectual capital, namely, human capital, structural capital and relational capital with the value/performance of ITRI. Secondly, we find intellectual capital highly relevant to the value creation process and warrant strategic accumulation for R&D organizations.     

Energy intake and productivity of Guatemalan sugarcane cutters: An empirical test of the efficiency wage hypothesis part II

This paper examines additional evidence of an empirical test of the productivity-consumption relation of the efficiency wage hypothesis. A cross-sectional analysis showed sharply diminishing productivity returns to higher levels of daily energy intake of Guatemalan sugarcane cutters. No positive and consistent energy supplementation effect on the daily supply of work units could be demonstrated in a time-series analysis. Energy supplementation did not have a delayed impact on worker productivity. It is concluded that increased energy availability may not necessarily result in increased productivity of rural workers who are moderately energy deficient.     

Energy intake and productivity of Guatemalan sugarcane cutters: An empirical test of the efficiency wage hypothesis part I

This study represents an empirical test of the productivity consumption relation of the efficiency wage hypothesis, which is briefly discussed here. The research setting and design of the study are described. An energy supplementation program was generally effective in raising the daily energy intake and energy expenditure levels of Guatemalan sugarcane workers who were moderately energy deficient. Increased energy availability did not result in increased energy expenditure at work, or in an increased supply of work units. The results do not provide evidence of a strong productive-energy intake relationship among these workers.     

Interest rates and the fisher effect in India: An empirical study

This study throws light on the importance of adjustment lags, variability of inflation, changes in real income, etc. in the empirical estimation of Fisher hypothesis. Variability of inflation has a significant negative impact on both short- and long-term interest rates in a developing economy like India. The ‘Philips Curve Effect’ has not been operative in a developing country.     

中国企业的需求导向创新实证研究

This paper analyzes the interrelationship among competition, market size and innovation by using the data from total 37 industries in China within a simultaneous equations model. It finds that: (1) Competition and innovation are mutually-enhanced, and this is the consequence of the long-run Darwinian effect in competitive market; (2) Market size and innovation are also positively correlated, because firms’ innovation is essentially demand-oriented (market-oriented), and innovation impelling technological progress will finally increase market size; (3) Between competition and market size, the effect of competition on market size is ambiguous, while the reverse is significantly positive. The policy implication of this paper is as follows: under the condition that China has especially huge market size and market demand, the industry policy of intensifying competition can stimulate firms’ persistent demand-oriented innovation.      

Diffusion of mobile telephony in India: An empirical study

Diffusion of new technology is an important driver of economic growth. In this paper, diffusion of mobile telephony in India is studied. There is a vast diffusion potential in this country which needs to be exploited efficiently and in a rational way. This paper investigates the social, technological, economical and political (STEP) factors that have influenced the diffusion process of mobile telephony especially the diffusion speed. The epidemic model, which is widely employed in the diffusion studies of mobile telephony, is used for the study. The data is fitted into logistic, gompertz, and bass models by nonlinear least squares and it is found that gompertz model best describes the diffusion process of mobile telephony in India. The study reveals that competition and government intervention played a significant role in accelerating the diffusion speed of mobile telephony by making the technology affordable. It is found that mobile telephony is a substitute for fixed line telephony in India. The findings will be useful in taking managerial decisions with respect to factors in forecasting and controlling the diffusion process of emerging technologies.     

Geopolitics and international organizations: An empirical study on IMF facilities

There is growing awareness that the distribution of IMF facilities may not be influenced only by the economic needs of borrowers. This paper focuses on the fact that the IMF may favour geopolitically important countries in the distribution of IMF loans, differentiating between concessional and non-concessional facilities. To carry out the empirical analysis, we construct a new database that compiles a wide array of proxies for geopolitical importance for 107 IMF countries over 1990–2003, focusing on emerging and developing economies. We use a factor analysis to capture the common underlying characteristic of countries' geopolitical importance as well as a potential analysis since we also want to account for the geographical situation of the loan recipients. While controlling for economic and political determinants, our results show that geopolitical factors influence notably lending decisions when loans are non-concessional, whereas results are less robust and in opposite direction for concessional loans. This study provides empirical support to the view that geopolitical considerations are an important factor in shaping IMF lending decisions, potentially affecting the institution's effectiveness and credibility.     

Contests where there is variation in the marginal productivity of effort

Summary. We provide a characterization of participants' behavior in a contest or tournament where the marginal productivity of effort varies across contestants and individual productivity is private information. We then consider the optimal design of such a contest. We first analyze contestant behavior for the usual type of contest, where the highest output wins. Abilities need not be independently distributed. We demonstrate that there is a unique symmetric equilibrium output function, that output is increasing in ability, and that marginal effort is increasing in ability, while effort decreases when the cost of effort increases. Next we consider the case where the highest output need not win, with independently distributed abilities. We analyze the contest designer's decisions in choosing contest rules optimal from her perspective. We show that the output produced, probability of winning, and contest designer's expected revenue are generally increasing in contestants' ability. We examine the relationship between the marginal cost of producing output and marginal utility per dollar of the net award for winning. Received: July 30, 1998; revised version: August 7, 2000     

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.     

R&D and productivity in Danish firms: some empirical evidence

The aim of the paper is to examine the relationship between R&D capital and productivity using microdata for Danish manufacturing firms. The influence of factors such as ownership, innovative characteristics and source of funding accounted for. The return to accumulated R&D capital is estimated to be in the neighbourhood of 9–12%, whereas the short-run effect of R&D is insignificant. Furthermore, the direct influence from foreign ownership, source of funding accounted for, innovative characteristics and ownership dispersion on productivity are analysed. However, none of the factors seem to have an impact on firm productivity. The same is the case for the indirect influence coming from interaction with accumulated R&D capital.     

Technological progress and market growth: An empirical study based on the quality-ladder approach

This paper develops an extended version of the quality-adder model by allowing for heterogeneous markets. Based on this model, it presents an empirical analysis of innovation-based growth at the market level using a technometric measurement concept. It can be shown that a growth-promoting effect due to technological progress in a particular single year is observed after between 2 and up to 7 years. This is true not only for highly innovative markets but also for those in which fewer R&D resources are invested.     

Policy variables affecting marginal level of low carbon employment：an empirical study based on provincial data of China

Low Carbon Employment is an inevitable choice for the purpose of ＂energy-saving and emission reduction＂ and ＂promoting employment＂. By Multi-variable Linear Backward Regression method, this study presents an empirical analysis of the emplovment impact of policy variables indexes that involves economic pull, industry upgrading, population development, technical inputs and so on. The paper demonstrates that wide range offactors will affect low carbon employment, that industry upgrading will affect how carbon employment remarkably, that to increase years of people education will notably improve low carbon employment level of secondary vocational-technical labor, and that to raise technical inputs will significantly enhance college students＇ low carbon employment.     

An empirical study of outbound tourism demand in the UK

A general to specific methodology is used to construct UK demand for outbound tourism models to twelve destinations. A tourism destination preference index is introduced to take into account social, cultural and psychological influences on tourists' decisions concerning their overseas holiday destinations. The tests support the existence of a cointegration relationship for each of 11 UK overseas holiday destinations. The corresponding error correction models are estimated. The empirical results show that the long-run income elasticities for all destinations range from 1.70 to 3.90 with an average of 2.367. The lowest and highest short-run income elasticities are 1.05 and 3.78 respectively, with an average of 2.216. The estimates of the income elasticities imply that overseas holidays are highly income elastic while the own-price elasticities suggest that the demand for UK outbound tourism is relatively own-price inelastic. In terms of the significance of substitution prices in the regression equations, Ireland is the favourite substitute destination for UK outbound tourists. Ex post forecasts over a period of six years are generated from the ECM models and the results compared with those of a naive model, an AR(1) model, an ARMA(p,q) model, and a VAR model. The forecasting performance criteria show that the ECM model has the best overall forecasting performance for UK outbound tourism.