Market competition,differences in technology,and productivity improvement: An empirical analysis based on Japanese manufacturing firm data

In this paper we examine empirically the effect of market competition on firm productivity improvements using data drawn from the Japanese manufacturing sector. We find that a non-linear relationship between competition and productivity growth induced by R&D activity as suggested by Aghion et al. (2005) holds for Japanese manufacturing firms. We also show that greater market competition widens technology differences across firms, and firms facing more intense competition are more productive than other firms. Our empirical results imply that productivity improvement through R&D activity depends on not only a competitive environment but also technological differences between firms.     

R&D and patenting activities of foreign firms in China: The case of Japan

This study investigates the research and development (R&D) and patenting activities of foreign firms in China. Utilizing a panel dataset of Japanese affiliates during the period 2001–2007, we first examine the determinants of R&D activity and find that local market-oriented firms place more emphasis on R&D, whereas process export-oriented firms are less likely to conduct R&D. Affiliates within a large business group that has more affiliates have a higher propensity to undertake R&D. Using only firms with positive R&D expenditures, we next estimate the patent production function. Results indicate that the patent elasticity of R&D for Japanese affiliates is high, suggesting that they are more productive on patent production than other firms. Moreover, local market-oriented firms do need more patents to protect their products, whereas scientific firms demonstrate a lower willingness to register patents in China.     

市场分割与制造业企业全要素生产率

市场分割拖累了宏观经济发展,而微观层面的系统分析仍然缺乏。本文利用1998-2007年的中国工业企业数据库,系统地考察了市场分割对企业生产效率造成的影响,发现市场分割显著地降低了工业企业的全要素生产率。样本期间,市场分割程度降低了45%,贡献了约16%的企业全要素生产率的增长。我们还研究了这种负向影响产生的渠道,发现市场分割主要通过抑制规模经济效应、降低研发投入、过度保护国企和增加寻租行为等渠道对企业全要素生产率产生负面影响。     

Reform of state‐owned enterprises and productivity growth in China

Using firm‐level data from a Chinese industrial survey covering 1999 to 2007, the paper analyses the impact of state‐owned enterprise (SOE) reforms on productivity growth in manufacturing. The results indicate that: (1) aggregate productivity of manufacturing increased rapidly, with an average annual growth rate of 10.6 per cent. Although the aggregate productivity of SOEs was lower than in other types of enterprises, their growth rate was the fastest. (2) The productivity growth due to SOE reform was mainly contributed by the improvements in resource allocation, rather than the growth of firm productivity. (3) The between‐firm effect and the impact of new firms contributed most to the total productivity growth, while the contribution from the exiting of firms was relatively small.     

R & D decisions under alternative regulatory constraints

IV. Summary and Conclusions The purpose of this paper has been to extend the range of consequences implied by government regulation of privately owned firms. The analytical framework of Section II concentrated on deriving the implications of alternative degrees of regulation on the firm's research and development (R&D) decisions. The analysis implies that managers of stringently regulated firms have greater incentive to neglect such activities related to the search for and production of valuable market information which increases owners' wealth. Among other things, this implies that firms subject to more restrictive regulatory climates are more likely to commit fewer expenditures to R&D activities.Empirical evidence from the electric power industry was presented in Section III. The results indicate that the interfirm differences in R&D expenditures in this industry can be explained to a large extent by the variability of governmentally imposed regulatory constraints. After controlling for other determinants of R&D behavior, the evidence reveals that electric power firms subject to the most restrictive regulatory constraints do significantly (at the 5 percent level and better) less R&D than firms operating under the weakest regulatory constraints.This paper is based on the author's master's thesis, submitted to George Washington University in May 1976. I gratefully acknowledge the helpful comments and suggestions of Louis DeAlessi and Robert Goldfarb.     

Liberalisation, FDI, and productivity spillovers--an analysis of Indian manufacturing firms

The objective of the intensification of reforms in India's trade,technology and industry policies in 1991 was to make Indianindustry competitive. In the light of these attempted changes,the present paper tested two hypotheses, namely (a) whetherliberalisation has improved the productivity of local firms;and (b) whether the spillovers from technology transfer haveincreased in the liberal regime. To test these, techniques frompanel data and stochastic production frontier were employedon 487 firms belonging to 24 three-digit manufacturing industriesfor the period 1989–90 to 1996–97. The results showedthat after liberalisation, the productivity of Indian industry,especially the foreign owned firms, has improved. The econometricresults suggested that only ‘scientific’ non-FDIfirms have benefited from the liberalisation. For the ‘non-scientific’firms, the impact is found to be productivity depressing. Withrespect to spillovers, only those domestic firms, which investedin R&D to decode the spilled knowledge, could benefit.     

战略资产获取与中国OFDI企业的“自我选择”效应——基于中国制造业上市公司的分析

文章基于2005-2014年中国制造业上市公司数据,利用面板多元排序离散被解释变量模型,对中国战略资产获取型OFDI企业的“自我选择”效应进行实证检验。除了验证传统理论中企业基于生产率的“自我选择”效应外,检验结果还发现：中国战略资产获取型OFDI企业规模更大、多为非国有企业、多位于沿海开放城市、创新能力更强、更注重品牌塑造、长期偿债能力更强、增长速度较慢。在此基础上,更进一步考察发现：中国OFDI企业的“自我选择”效应存在着区域间和行业间的差异;通过引入金融危机虚拟变量,文章证明中国OFDI企业的“自我选择”效应在金融危机前后存在着“经济结构变动”情况。     

Higher productivity in importing German manufacturing firms: self-selection, learning from importing, or both?

This paper uses a newly available comprehensive panel data set for manufacturing enterprises from 2001 to 2005 to document the first empirical results on the relationship between imports and productivity for Germany, a leading actor on the world market for goods. Furthermore, for the first time the direction of causality in this relationship is investigated systematically by testing for self-selection of more productive firms into importing, and for productivity-enhancing effects of imports (‘learning-by-importing’). We find a positive link between importing and productivity. From an empirical model with fixed enterprise effects that controls for firm size, industry, and unobservable firm heterogeneity we see that the premia for trading internationally are about the same in West and East Germany. Compared to firms that do not trade at all two-way traders do have the highest premia, followed by firms that only export, while firms that only import have the smallest estimated premia. We find evidence for a positive impact of productivity on importing, pointing to self-selection of more productive enterprises into imports, but no clear evidence for the effect of importing on productivity due to learning-by-importing.     

Openness and total factor productivity in Swedish manufacturing, 1980–1995

Openness and Total Factor Productivity in Swedish Manufacturing, 1980–1995. — This paper studies the effect of openness on total factor productivity (TFP) growth. Using industry-level data for Swedish manufacturing from 1980 to 1995, the paper shows that integrated industries tend to be more engaged in R&D and have more entry and exit activity than other industries. The results show that domestic R&D intensity does not contribute to the TFP growth rate. Instead, openness to international markets, which helps facilitate technology spillovers, is an important factor. There is also some evidence that producers exiting the market are less productive, implying that such exits will increase the average productivity of the industry.     

Debt,R&D investment and technological progress: A panel study of Japanese manufacturing firms' behavior during the 1990s

Based on a panel data set of Japanese manufacturing firms in research-intensive industries, we investigate quantitatively the extent to which outstanding debt affected firms' R&D activities during the 1990s. We find that massive amounts of outstanding debt had a significant, negative effect on R&D investment during that time. We also find that R&D expenditures were closely linked to firm-level total factor productivity growth over the same period. In fact, a ten-percentage-point increase in the debt–asset ratio lowered the rate of firm-level total factor productivity growth by 0.26 percentage points between 1999 and 2001, because it reduced R&D activities. J. Japanese Int. Economies 21 (4) (2007) 403–423.     

R&;D,trade, and productivity growth in korean manufacturing

This paper investigates the effects of both R&D spillovers and trade patterns on productivity in Korean manufacturing, using industry-level data. The results show that domestic and foreign R&D capital stocks played an important R&D in improving the total factor productivity of Korean manufacturing. Moreover, productivity is higher in export industries and the more open industries, and the effects of foreign R&D capital are stronger in the industries with large import shares or large intra-industry trade shares. JEL no. F10, O32, O47.     

Strategic R&D Location in European Manufacturing Industries

We empirically test a model of foreign research and development (R&D) investments that takes into account strategic interaction in R&D location decisions by multinational firms in the context of R&D cross-investments, R&D spillovers and foreign technology sourcing strategies. We find support for most of the predictions of the model in an empirical analysis of the location of patented innovations by the largest European manufacturing firms in 22 ISIC industries during 1996–1997. For technology leaders in Europe, foreign R&D ratios respond positively to host country product market competition, while technology laggards avoid these locations. Foreign R&D by technology laggards increases more strongly with the efficiency of (reverse) international technology transfer while leaders are attracted more strongly to countries with better intellectual property rights (IPRs) protection. Foreign R&D of both technology leaders and technology laggards increases with the size of the local knowledge pool and the size of manufacturing operations in the host country. JEL no.  D21, F23, L16     

Global outsourcing or foreign direct investment: Why apple chose outsourcing for the iPod

A simple model is presented, where a firm's productivity is endogenized by its R&D investment. It shows that the most productive firms may prefer international outsourcing to foreign direct investment (FDI) in industries with a high innovation share. The high innovation share motivates the firms to economize on organizational cost in order to save resources for R&D investment, making outsourcing preferable to FDI because the former incurs a smaller organizational cost. This model helps explain why Apple Inc., belonging to the electronics industry, which has a particularly high innovation share, launched its innovative iPod through international outsourcing instead of FDI.     

The transition from imitation to innovation: An enquiry into China's evolving institutions and firm capabilities

How is the Chinese economy making the transition from imitation to innovation as the source of sustained long-term growth? We address this question using the evolutionary approach to growth in which institutions support technical advance and enterprises develop capabilities to learn and innovate. Growth is seen as a series of disequilibria in which obstacles to innovation such as outdated institutions and weak incentive systems can cause growth to slow. We review existing literatures on institutions and firm behavior in China and compare these findings with those of our survey of Chinese firms in 2006. Industry and firm studies in the literature show how productivity is rising because of firm entry and exit rather than the adoption of new technologies. A striking feature both of the studies in the literature and our survey is the increasing competitive pressures on firms that encourage learning. Our survey of privately owned small and medium enterprises in five high-tech industries in Zhejiang province found a market-based innovation system and evidence of much process and some product innovations. These enterprises respond to growing product competition and demanding customers with intensive internal learning, investment in R&D and a variety of international and research linkages.     

Does the high- and new-technology enterprise program promote innovative performance? Evidence from Chinese firms

This study evaluates the unique high- and new-technology enterprise (HNTE) program implemented in China. The program grants a reduced corporate income tax rate to certificated HNTEs. Based on a sample of Chinese listed firms during 2006–2016, we investigate the impact of HNTE certification on firms' R&D intensity and productivity using a combination of the propensity score matching approach and difference-in-differences estimator. The results confirm the overall effectiveness of the program in promoting innovative performance among Chinese listed firms in terms of both R&D intensity and productivity. Such effects are persistent over the valid certification period. However, the overall effects mask substantial heterogeneity across different types of certification users. Positive effects are mainly driven by repeatedly certificated firms, while no significant effects are found for firms acquiring their HNTE certificate for the first time. By distinguishing one-time and highly qualified certifications, we reveal the potential existence of fraudulent HNTEs. These results imply that the effectiveness of government programs in supporting innovation could be improved through a more thorough policy design and implementation.     

R&D subsidies and business R&D: Evidence from high-tech manufacturing firms in Jiangsu

We investigate how R&D subsidies affect business R&D investments using cross-section data of high-tech manufacturing firms in Jiangsu province of China. Our estimations based on propensity score matching suggest that public subsidies positively influence business R&D investments. Further classifying firms into different groups by size, financial constraints, and ownership, we find that the stimulation effect is more significant and stronger for smaller firms, more financially constrained firms, and private-owned firms. The heterogeneity of policy effects with respect to export status, Relative Comparative Advantage index, region, and industry are also discussed.     

Analysis of Productivity Differences among Foreign and Domestic Firms: Evidence from Germany

This paper presents differences in firm-level total factor productivity (TFP) across 22 manufacturing and 17 service industries in Germany over the period 1995–2004. It is an attempt to study whether and to what extent foreign multinational enterprises (MNEs) are more productive relative to German firms. As well as distinguishing between foreign and domestic firms, we also distinguish between German MNEs and domestic firms that do not have any foreign presence. Controlling for endogeneity through semi-parametric techniques, our findings indicate considerable heterogeneity in firm performance across types of firms. The foreign/domestic distinction is not as clear cut as has been suggested elsewhere; multinationality is important in explaining productivity differences rather than foreignness. JEL no. D24, F21, F23     

Tax Loss Carryovers in a Competitive Environment*

The fact that incumbent firms can immediately deduct research and development (R&D) investments from taxable income is generally believed to give them a strategic advantage over new firms that cannot deduct the investment cost, but instead generate a net operating tax loss carryover. Using an analytical model, we show that this conventional wisdom need not hold in a competitive environment. We examine operating and investment decisions in a duopolistic industry in which an initial investment in R&D yields an immediate tax benefit for one firm, but creates a net operating loss carryover for the other firm. If both firms invest in R&D, the firm with the net operating loss carryover makes more aggressive capital investment decisions following successful R&D. This may deter the incumbent firm from investing in R&D despite the lower aftertax costs of this investment. Changing the tax loss carryover rules would thus not only affects start‐up or loss firms, but would also affect the investment decisions of profitable firms in the same industry.     

Understanding the productivity effect of M&A in Japan: An empirical analysis of the electronics industry from 1989 to 1998

This study examines the effect of mergers and acquisitions (M&A) on productivity. According to the literature, the effect of a merger or acquisition on an acquiring firm's productivity is small. We examine the extent to which self-selection of M&A contributes to the weak M&A effect. Using data on Japanese electronics firms from 1989 to 1998, our empirical analysis shows that without controlling for the self-selection of M&A, M&A have a weak or insignificant effect on total factor productivity (TFP), as suggested in the literature. However, controlling for self-selection reveals a positive and large effect on productivity. We find a negative correlation between M&A decisions and TFP caused by self-selection, which makes the M&A effect appear negligible when it is not controlled for. These results suggest that M&A served as an effective device for improving the productivity of the electronics firms in our sample.     

生产率影响差异及企业出口竞争力——基于不同所有制企业的实证分析

运用中国工业企业的微观数据,本文研究了不同所有制企业生产率对企业出口竞争力的影响。研究发现,所有制是影响企业出口竞争力的重要因素,国有企业的出口竞争力明显小于私营企业、外资企业和港澳台企业。进一步研究表明,生产率对不同所有制企业出口竞争力的影响存在显著差异。生产率对国有企业获得出口竞争力有负向影响,但私营企业、外资企业和港澳台企业的生产率水平越高,其进入出口市场的竞争力越强。