The Speed and Stability of Price Adjustment in Australian Manufacturing*

A model of industry speed of price adjustment is derived from firm pricing behaviour. The model is applied to quarterly two‐digit Australian manufacturing data for the period 1985 (Q3) to 2002 (Q3). The results suggest that the industry speed of price adjustment is positively related to the average size of large firms within the industry and is negatively related to industry concentration. We also find that import share has a role in attenuating the effects of industry concentration and that growth in a moving average of real gross domestic product reduces the speed of price adjustment. Calculated industry speeds of price adjustment are both stable across the period of examination and small, suggesting that manufacturing prices are sticky.     

The Impact Of Technology Adoption On Firm Productivity *

In this paper an attempt is made to theoretically and empirically explore the impact of technology adoption on firm output and productivity. The theory is based upon a modified Cobb Douglas production function with capital, labour and technology adoption as arguments. Three versions of the model with varying degrees of endogeneity are developed and then tested upon a data set relating to the adoption of five different process technologies by 217 firms in the UK engineering industry over the period 1981–1990. All the results indicate that technology adoption has a positive impact on output and productivity.     

Entry, Exit and Productivity: Empirical Results for German Manufacturing Industries

Abstract. From a model by Hopenhayn, three hypotheses can be derived: (H1) Firms that exit in year t were less productive in t− 1 than firms that continue to produce in t. (H2) Firms that enter in year t are less productive than incumbent firms in year t. (H3) Surviving firms from an entry cohort were more productive than non-surviving firms from this cohort in the start year. This paper uses unique newly available panel datasets for all manufacturing plants from Germany (1995–2002) to test these hypotheses. All three hypotheses are supported empirically for West and East Germany.     

DYNAMICS OF PRODUCTIVITY AND COST OF LABOUR IN ITALIAN MANUFACTURING FIRMS

This paper studies the impact of size on labour cost and productivity for Italian manufacturing firms. The distributions of both labour cost and productivity display a wide support, even when disaggregated by sector of industrial activity. Further, both labour cost and productivity, when considered alone, are growing with the size of the firm. We investigate this relationship on a new set of data and we are able to show that once productivity differences among firms have been accounted for, size still retains a positive effect on cost of labour in most of the sectors considered.     

Convergence in Structure and Productivity in European Manufacturing?

Abstract. We find fast convergence in productivity for 99 three‐digit European industries over the 1985–98 period. Half of any productivity gap is closed on average in about 10–15 years. We explicitly formulate the steady‐state assumptions for structural convergence to hold. Convergence in industrial structure is much slower than productivity catch‐up with a half‐life of around 50 years, a stylized fact which cannot easily be explained by the existing models of trade and growth.     

Invariance of conditional maximum utility

The consumer benefit in a discrete choice model is often measured by maximum utility. We characterize the conditional (on the chosen alternative) and the unconditional distribution of maximum utility. We show that among a wide class of distributions (independent with convex supports) of error terms, the Type I extreme-value distribution is the unique distribution which ensures that all the conditional distributions of maximum utility coincide. Moreover, we show that for i.i.d. (with convex support) error terms, the invariance of conditional expected maximum utility characterizes the multinomial logit model.     

Too much of a good thing? Why altruism can harm the environment?

Success of eco-labeling schemes, broadly defined, varies among products and across countries. Based on a simple theoretical framework, we show that the nature of environmental attributes among products (i.e., private versus public) and the consumer type (i.e., egoist versus altruist) shape the overall performance of such schemes. In addition, we demonstrate that altruistic consumers exhibiting a too high willingness to pay for the eco-labeled product can inadvertently prevent egoistic consumers from purchasing it, leading to a sub-optimal outcome in terms of environmental performance. Several policy and managerial implications are drawn.     

Markets and the non‐monotonic relation between productivity and establishment size

Abstract A model of monopolistic competition is presented in which the relation between the productivity and input size of producers is non‐monotonic and bell‐shaped. The model predicts that markets matter and the average size of the producers is directly scaled by the size of the market. An indirect effect increases the cutoff productivity, making the bell narrower in larger markets or when the transportation cost falls. Empirical evidence from the concrete industry and a few other 4‐digit industries supports the model’s predictions. The bell‐shaped relation has especially important implications on how size distributions are formed across localized versus globalized market industries.     

企业生产率、国外市场知识与企业出口额

本文运用企业异质性贸易理论,利用分行业上市企业的面板数据,将企业规模作为控制变量,研究了企业生产率、国外市场知识与中国企业出口额的关系。结果显示:企业生产率和国外市场知识对企业出口额的影响显著为正,影响效果存在行业差异;作为控制变量的企业规模,对企业出口额的影响存在不确定性,或正向相关或负向相关或呈U形关系。     

EQUILIBRIUM SELECTION IN THE YANO MODEL OF PRICE LEADERSHIP

Abstract. A number of studies have provided a theoretical explanation for the fact that the technologically superior firm becomes a price leader in a duopoly market for a homogeneous product. While previous studies show that the state in which the technologically superior firm becomes a price leader is a Nash equilibrium (superior leader equilibrium), they do not eliminate the possibility that the state in which the technologically inferior firm becomes a price leader is also a Nash equilibrium (inferior leader equilibrium). We demonstrate that an inferior leader equilibrium can be eliminated by the iterative elimination of weakly dominated strategies.     

Minimum Wages and Firm Productivity: Evidence from Vietnamese Manufacturing Firms

ABSTRACT

This paper empirically examines the minimum-wage impact on firm productivity. Using a detailed Vietnamese firm-level dataset from 2010 through 2015, the regression results suggest that firms raise their labor productivity, total factor productivity, capital intensity and revenue in response to increased minimum wage standards. Firms that pay their workers below the minimum wage react more positively in raising their labor productivity than high-wage firms. Minimum wages has had a more pronounced impact on firms’ labor productivity, total factor productivity and capital intensity since the uniform wage rate was introduced for both domestic private and foreign-invested enterprises in 2012.     

The effect of crises on firm exit and the moderating effect of firm size

The liability of smallness assumption suggests that smaller firms face higher exit risks. However, does it apply during crises? We show that during downturns size reduces firms’ exit risk by less; the hazard rate increases more rapidly in size.     

THE DECISION TO HIRE MANAGERS IN MIXED MARKETS UNDER BERTRAND COMPETITION*

This paper analyses the decisions of firms as to whether or not to hire managers when there is a public firm competing with a private firm in the product market. It is shown that under Bertrand competition with heterogeneous goods both firms hire managers. This is in contrast with the result obtained under Cournot competition, where only the private firm hires a manager. Moreover, welfare is lower if both firms hire managers than if neither firm does. In contrast, under Cournot competition welfare is greater if both firms hire managers.     

Natural Resources and Missing Inputs in International Productivity Comparisons*

Standard theory for cross-country productivity comparisons assumes all countries use the same factor inputs in production. This assumption is violated when including natural resources, such as oil, gas and gold, because countries do not extract the full set of resources. In this paper we propose a solution by viewing it as a “missing goods” problem and assigning missing inputs a reservation price equal to the world resource price. We show that this has a substantial impact on relative productivity levels for countries heavily reliant on natural resources for generating their income. Under our new productivity measure, resource-rich countries are no longer uncommonly productive.     

Intergenerational Politics, Fiscal Policy and Productivity

A political–economic theory of fiscal policy is presented in which tax policy preferences are derived from a conflict of interest between individuals of different ages. Policy formation is fully rational in that an individual's beliefs regarding future policies are consistent with state-contingent policy outcomes. The overlapping generations friction that prevents the young from transacting with future members of society implies that young policymakers strategically manipulate the policy preferences of the yet unborn to lower their own expected old-age tax burden. A comparison of the original equilibrium to one induced by the “constitutional commitment” of fiscal policy isolates the strategic component of tax rates and demonstrates that aggregate labor productivity is biased as a result of the conflict.Journal of Economic LiteratureClassification Numbers: E62, H30, O40.     

Productivity Dispersion and Measurement Error

Several reasons have been put forward to explain the high dispersion of productivity across establishments: quality of management, different input usage and market distortions, to name but a few. Although it is acknowledged that a sizable portion of productivity dispersion may also be due to measurement error, little research has been devoted to identifying how much they contribute. We outline a novel procedure for identifying the role of measurement error in explaining the empirical dispersion of productivity across establishments. The starting point of our framework is the errors-in-variable model consisting of a measurement equation and a structural equation for latent productivity. We estimate the variance of the measurement error and subsequently estimate the variance of the latent productivity variable, which is not contaminated by measurement error. Using Norwegian data on the manufacture of food products, we find that about one percent of the measured dispersion stems from measurement error.     

制造业企业出口和生产率的关系——新新贸易理论框架下对中国工业企业的微观分析

在新新贸易理论的框架下,对中国规模以上工业企业从总体和分行业两个方面检验中国工业企业出口对生产率增长的影响,发现出口同企业全要素生产率增长显著负相关.造成出口效应不显著的原因除了中国尚不完善的市场体系外,还与中国出口贸易中加工贸易比重过高、加工环节大都处于劳动密集型而且技术含量不高的水平、加工过程短、增值率不高有关.因此,中国如果减少加工贸易的出口,便可以在不影响生产率增长的基础上降低外部需求.     

R&D,productivity, and exports: Plant-level evidence from Indonesia

This study examines the relation between productivity and exports in Indonesian manufacturing firms by taking account the endogenous choice of R&D. We first examine the determinants of R&D activity and find that exporting activity contributes positively to plants' R&D activity, while multinational corporate do not have a higher R&D propensity. The simultaneous estimates on the interrelation of R&D, productivity, and export show that R&D has a positive impact on both productivity and exports, suggesting the importance of R&D to Indonesian economic growth. It suggests also a two-way causality between productivity and exports, implying the coexistence of self-selection and learning-by-exporting effects in Indonesian manufacturing sector.