Productivity and efficiency change and shareholder value: evidence from the Spanish banking sector

Productivity change and shareholder value have been analysed in the banking sector in the last few years, although it should be noted that these two important aspects have been studied separately. In this regard, the main contribution of our study is to link these two lines of research by verifying whether those banks characterized by higher levels of efficiency and productivity change have a higher shareholder value. To measure changes in efficiency and productivity we use the Malmquist nonparametric technique, which is calculated from Data Envelopment Analysis (DEA) linear programming approach. The Malmquist total factor productivity index enables separation of the ‘catching up’ effect, i.e. changes over time in technical efficiency, from ‘technological change’, i.e. the shift of best practice frontier over time due to technological progress. Our results for a sample of listed Spanish banks in the period 2000 to 2004 confirm that those banks with higher efficiency and productivity changes have a higher shareholder value, even after controlling for the impact of traditional measures of performance, such as return on assets.     

Democratization is the driving force for technological and economic change

The purpose of this paper is to analyze the relationship between democratization and technological innovation. In primis, the paper shows, through economic history, that democratization is an antecedent process (cause) to technological and economic change (effect). In particular, the primary finding is that democratization is a driving force for technological change: most free countries, measured with liberal, participatory, and constitutional democracy indices, have a higher level of technology than less free and more autocratic countries. In fact, “democracy richness” generates a higher rate of technological innovation with fruitful effects for the wellbeing and wealth of nations. These findings and predictions lead to the conclusion that policy makers need to be cognizant of positive associations between democratization and technological innovation paths in order to support the modern economic growth and future technological progress of countries.     

Technological change and China's regional disparities — A calibrated equilibrium analysis

We in this paper assess the impacts of technological change on China's regional disparities using a general equilibrium model of multiple regions and multiple sectors. We use the most recent available Chinese interregional data to calibrate the model parameters for 1987 and 2000. We then assess the impacts of neutral, biased, and aggregate technological changes on China's regional disparity by conducting counterfactual experiments. The results generally suggest that China's overall technological change between 1987 and 2000 has increased China's regional disparities. The results also suggest that neutral technological change reduces China's regional disparities while biased technological change increases disparities and the influences of the latter outweigh those of the former and the net effects of technological changes on regional disparities are increasing.     

Computerization and immigration: Theory and evidence from the United States

Recent technological changes have been characterized as “routine-substituting” because they reduce demand for routine tasks and increase demand for analytical and service tasks. Little is known about how these changes have impacted immigration, or task specialization between immigrants and native-born individuals. In this paper, we show that such technological progress has attracted immigrants who increasingly specialize in manual-service occupations. We also suggest that openness to immigration attenuated the job and wage polarization faced by native-born from technological changes. We explain these facts with a model of technological progress and endogenous immigration. Simulations show that unskilled immigration attenuates the drop in routine employment proceeding from technological change, enhances skill upgrading for native-born and raises economy-wide productivity and welfare.     

Product cycles,innovation cycles,and regional economic change

The effects of technological change below the level of national and sectoral aggregations are frequently overlooked. This paper reviews the regional economic changes that result from technological change at both the firm level and in the individual plant. The related concepts of product cycles and innovation cycles provide a perspective for assessing regional and local effects. Government policies related to innovation are examined in the light of regional economic implications.     

Technological progress and income inequality

Summary This paper examines the effects of Hicks-neutral, Harrod-neutral, and Solow-neutral technological improvements on the distribution of income in an overlapping generations economy with endogenous labor supply and a bequest motive. Income inequality in this model is generated by a stochastic process representing random variations in intergenerational transfers and pure luck. The comparative dynamics analysis trace the effects of the aforementioned technological changes in each and every period after they occur. These effects depend on the nature of the technological change and on the elasticity of substitution.We thank Carl Davidson, James Foster, and two anonymous referees for their useful comments.     

Total factor productivity and the measurement of technological change

Abstract.  TFP is interpreted in the literature in different, mutually contradictory ways. Changes in TFP are shown to measure not technological change, only the super‐normal returns to investing in such change – returns that exceed the full opportunity cost of the activity. Thus, in the limit, technological change can proceed with unchanged TFP. Measuring the effects of technological change instead requires counterfactual estimates. Reasons why changes in TFP are imperfect measures of super normal returns are also studied – reasons connected with the timing of output responses, the treatment of R&D in the national accounts, the omission of resource inputs, and two types of aggregation.     

Income,taxes and employer pension contributions

This paper empirically examines the effects of a change in foreign trade regime on productivity growth. Based on a Generalized Leontief factor demand function system, total factor productivity growth (TFPG) rates are calculated for the Turkish rubber industry during a substantial trade liberalization in the 1980s: TFPG was significantly higher following trade liberalization. Technological change was the major contributor to this growth. When a panel data estimation technique is used to explain technological change, the effects of trade liberalization become clearer: a one percentage point increase in the protection level led to more than a one percentage point (1.27) decline in the technological change rate.     

Malmquist indices of productivity change in Portuguese banking: The deregulation period

This paper will evaluate productivity change in Portuguese banking using the Malmquist productivity index. The results show that between 1990 and 1997, banks in Portugal witnessed increased productivity and strong technological progress. Both small and large banks experienced higher productivity and technological change scores, while mid-sized institutions are putting more effort into catching-up policies. Rural banks have experienced strong productivity growth and are catching up with the best practices but lower levels of technological change. Urban banks show higher productivity growth and technological change levels. Government-owned banks have experienced lower levels of productivity change. Finally, the asset per employee ratio shows a positive correlation with the productivity scores, suggesting that this simple index is a good proxy for productivity.     

Trade,Wages, and Specific Factors*

In this paper, we use a multisector specific‐factors model with sector‐specific capital and two mobile factors, skilled and unskilled labor, to examine the effects of trade, technology, and factor endowments on the skill premium in US manufacturing industries. Based on this model and data for the US manufacturing sector from 1958–96, we calculate changes in the skill premium and then carry out a decomposition to identify the changes caused by product price changes (trade), technological progress, labor, and capital endowment changes. The decomposition reveals that trade effects, working through product price changes, caused the skill premium to increase moderately. Changes in capital endowments (new investments) had a positive effect on the skill premium, with the strongest impact during the 1980s, while the effect of technological change on the skill premium varied over time. Finally, changes in relative labor endowments had a negative effect on the skill premium.     

Localized technological change and factor markets: constraints and inducements to innovation

The recent advances in the economics of innovation and the analysis of how composition effects influence the introduction of technological change in a global economy, characterized by the variety of production functions in use and different local factor markets, provide new strength to the induced innovation approach. Developing the localized technological change approach, it is argued that because there are irreversibilities, limited knowledge and local learning, the introduction of new technologies is induced by the disequilibrium conditions brought about in each system by all changes in relative factor prices. The direction of technological change in terms of its specific form of bias and how it is introduced and adopted, however, reflects the specific conditions of local factor markets. Well-defined long-term technological paths emerge in each region and they depend on the selection process in product markets. The more rigid and idiosyncratic, the endowment of production factors and the system of relative prices are, the more specific the technological path of each region is likely to be. The divide between the microeconomic and the macroeconomic models of induced technological change is reconciled.     

Job Polarization and Task‐Biased Technological Change: Evidence from Sweden, 1975–2005

In this paper, we show that between 1975 and 2005, Sweden exhibited a pattern of job polarization with expansions of the highest‐ and lowest‐paid jobs compared to middle‐wage jobs. The most popular explanation for such a pattern is the hypothesis of task‐biased technological change, where technological progress reduces the demand for routine middle‐wage jobs but increases the demand for non‐routine jobs located at the tails of the job–wage distribution. However, our estimates do not support this explanation for the 1970s and 1980s. Stronger evidence for task‐biased technological change, albeit not conclusive, is found for the 1990s and 2000s. In particular, there is both a statistically and economically significant growth of non‐routine jobs and a decline of routine jobs. However, results for wages are mixed; while task‐biased technological change cannot explain changes in between‐occupation wage differentials, it does have considerable explanatory power for changes in within‐occupation wage differentials.     

Labor productivity and technology heterogeneity

This paper investigates the role of technology club heterogeneity in economic growth and convergence. To do so, we break up labor productivity change into three factors – efficiency, technological, and capital–labor ratio changes – while distinguishing the impact of technology club heterogeneity respectively. This allows us to observe what is happening within and between clubs; as well as between the world and club technologies. Our labor productivity decomposition is nonparametric in nature and thus overcomes the issue of specifying functional forms for the club technologies. Our results reveal the existence of technology heterogeneity and divergence: the world technology is defined by advanced and rich countries; there exists intra-convergence phenomena (mostly due to capital–labor ratio change), but inter-convergences (owning to capital–labor ratio and technological changes) are not found. Finally, we argue that follower and marginalized countries have adopted imitating strategies, but with respect to different dimensions, namely technological change or capital–labor ratio.     

A profile of the human fears of technological change

Workers often express a great deal of concern over managerial policies and tactics in introducing technological change. This article summarizes 11 concerns that workers in the telecommunications industry expressed about the changes they were experiencing. Many of these concerns arise from misunderstandings and miscommunications of managerial policies and are based on beliefs and expectations rather than fact and accurate information. It is argued that management should be concerned with these issues when implementing technological changes. Ideally, policies relating to the implementation of technological changes might be based on employee input and involvement. At a minimum, managers have an obligation to clarify policies regarding technological change so that rumors and false expectations do not dominate.     

The Dynamics of Technological Unemployment*

This article compares the short‐ and long‐run effects of technological progress on employment. It presents a simple model of frictional unemployment capturing the negative creative destruction effects of technological change on employment. In the long run, faster technological change accelerates job obsolescence, which reduces the equilibrium level of employment. But it is also shown to have short‐run positive and potentially important effects on employment. This tends to partially reconcile the ‘‘Schumpeterian'’ view of the effects of technological change on labor markets with facts such as the response of most OECD unemployment rates to the 1970s productivity slowdown.     

Marxism,Neoclassical Economics and the Length of the Working Day

Real business cycle models purport to explain the business cycle as the result of technological change. This paper shows that the commonly used measure of technological change, the Solow residual, does not capture changes in the technology of the production function. The model used in this paper is within the framework of models described in Hansen & Sargent (1990, 1991). Technological change is modeled as a change in the value of one of the 'deep' technology parameters in the production function. The Solow residual is incapable of capturing the effects of this sort of technological change. There is no consistent relationship between the direction and size of a technological change and the sign and size of the Solow residual. The Solow residual often moves in the wrong direction, e.g. a negative technological shock causes a positive residual. Even when the Solow residual has the right sign, its size is not consistent with the size of the technological shock, e.g. a larger positive change in technology does not necessarily cause a larger positive Solow residual.     

An approach to the construction of indexes of technological change and of technological sophistication : The case of agricultural tractors

Two indicators of the output of technological innovation have been developed for the case of agricultural tractors. The tractor is a multicharacteristic product, and a fundamental problem in measuring its technological sophistication or technological change is to determine the relative weights of different characteristics. These relative weights have been approximated by the coefficients of a regression of tractor price with respect to tractor technical characteristics. The indicators developed allow one to measure technical change over time or the relative technical sophistication of different tractor models or tractor firms at a given moment. These indicators can be applied only to multicharacteristic products with easily quantifiable characteristics. However, products that satisfy these requirements account for a very large share of the market for industrial goods. These indicators can be useful in assessing the efficiency of R&D, in analyzing the influence of technological innovation on patterns of trade, and in determining the contribution of changes in the quality of capital goods employed to increases in industrial productivity.     

Network technologies,communication externalities and total factor productivity

The main aim of this paper is to determine the factors which enhance or temper firms’ private incentives to use communications technologies that are characterised by network externalities and allow firms to influence their rate of technological change or total factor productivity (TFP). As regards the impact of the network effect on TFP, we find that when the externality parameter is low, a slightly negative effect appears, but this effect is reversed when the externality is higher. This relationship is valid regardless of the number of firms. Our result is particularly interesting because it offers a possible explanation for the Solow productivity paradox. We conclude that, in addition to the degree of network effects, market structure, consumer preferences and the number of users also have a very important influence on TFP and technological change.     

Changes in job security and their causes: An empirical analysis for France, 1982-2002

In this paper, we analyze the changes in the risks of involuntary job loss in France between 1982 and 2002. We find that these risks are higher in the 1990s than they were in the 1980s. We develop an econometric analysis to separate the effects of institutional changes from the effects of new technologies. Our estimates show that the rise in job loss rates is significantly more pronounced in industries that have the largest share of R&D workers and the largest rate of new technologies’ users. These findings suggest that technological changes contribute to decreasing the incentive to keep workers for long period of time and to increasing job insecurity.     

基于CD-ESDA模型的中国产业用水增长质量的时空格局分析

产业用水增长质量评价应该耦合水资源约束、经济增长、技术进步与结构变动等因素。在构建中国31个省、市、自治区产业用水变化的全要素分解模型的基础上,基于经济学中的边际思想,计算了1997—2007年中国各地区产业用水规模边际、技术边际与结构边际,并对其进行了时空分异分析。然后计算出中国各地区1997—2007年产业用水增长质量指数,以此来评价产业用水增长质量状况。最后运用空间自相关分析探讨中国产业用水增长质量的空间关联模式。结果表明:研究期内,中国产业用水增长质量总体和局部都呈现提高的态势,与各地区经济发展状况相吻合,产业用水增长质量的空间自相关显著,区域空间差异明显,有很大的提升空间。