Internal agglomeration and productivity: Evidence from microdata

Research Summary: We study how internal agglomeration—geographic clustering of business establishments owned by the same parent company—influences establishment productivity. Using Census microdata on the population of U.S. hotels from 1987-2007, we find that doubling the intensity of internal agglomeration is associated with a productivity increase of about 2% in pre-existing establishments. We consider several mechanisms that may be driving the productivity effect and find evidence consistent with the idea that an economically meaningful component of the productivity effect is due to knowledge transfer between internally agglomerated establishments. We replicate our main findings with Census microdata on the full population of U.S. restaurants from 1987-2007, suggesting that the internal agglomeration effects we document may generalize broadly to other industries with multi-unit firms. Managerial Summary: Internal agglomeration is the geographic clustering of business establishments owned by the same parent company. This paper uses detailed Census data on hotels and restaurants to show how internal agglomeration influences performance. Interestingly, knowledge sharing between owned establishments in the same metropolitan area appears to be a key driver of the internal agglomeration effect.     

Rising real wages,mechanization and growing advantage of large farms: Evidence from Indonesia

This paper examines dynamic patterns of land use, capital investments and wages in agriculture using farm panel data from Indonesia. The empirical analysis shows that with an increase in real wages that prevailed in both agricultural and non-agricultural sectors in rural areas, relatively larger farmers increased the size of operational farm land by renting in land as well as used more hired-in machines through machine rental and/or service providers, which induces the substitution of labor by machines. Machines and land are complementary and, consistently, the inverse farm size-productivity relationship tends to be reversed among relatively large holders. The results support growing (diminishing) advantage of large (small) farms in the presence of rapidly rising real wages and have food security policy implications to many Asian countries where real wages are rapidly rising and small farms are predominant.     

Ultra-fast broadband access and productivity: Evidence from Italian firms

We study the impact of ultra-fast broadband (UFB) infrastructures on the total factor productivity (TFP) and labor productivity of firms. We use unique balanced panel data for the 2013–2019 period on incorporated firms in Italy. Using the geographical location of the firms, we merge firm-level data with municipality-level information on the diffusion of UFB, which started in 2015. We derive consistent firm-level TFP estimates by adopting a version of the Ackerberg et al.’s (2015) method, which also accounts for firm fixed effects. We then assess the impact of UFB on productivity and deal with the endogeneity of UFB by exploiting the physical distance between each municipality and the closest optical packet backbone node. Our results show an overall positive impact of UFB on productivity. Services companies benefit the most from advanced broadband technologies, as do firms located in the North-West and South of Italy. We further decompose the impact of full-fiber networks from mixed copper-fiber connections and find that the former significantly contribute to enhancing firm productivity. Finally, by exploiting Labor Force Survey data, we provide suggestive evidence that productivity increases from UFB might be related to structural changes at the workforce level.     

Housing Quality and the Structure Tax: Evidence from Microdata

In a previous study [13] I showed theoretically that housing quality will rise when the structure tax rate falls if capital is a noninferior input. This result was supported empirically with aggregate SMSA-level data. The present study reports empirical confirmation with microdata more appropriate for the theoretical hypothesis.     

Information,branding, certification,and consumer willingness to pay for high-iron pearl millet: Evidence from experimental auctions in Maharashtra,India

In this paper we use hedonic testing methods adopted from food science literature and the Becker-DeGroot-Marschak mechanism adopted from economic valuation literature to estimate consumer demand for biofortified high-iron pearl millet (HIPM) in Maharashtra, India. Unlike biofortification with provitamin A, biofortification with minerals, such as iron and zinc, does not change the color or the appearance of the biofortified crop. Therefore, we test the impact of both nutrition information, and branding and certification, as well as the nature of the brand and of the certifying authority (state level versus international), on consumer demand for HIPM. We find that even in the absence of nutrition information, consumers assign a small but significant premium to the HIPM variety relative to the local variety. This is consistent with consumers’ more favorable rating of the sensory characteristics of the high-iron variety. Nutrition information on the health benefits of HIPM increases this premium substantially, and regression analysis reveals that consumers prefer international branding and international certification authority to their state-level counterparts.     

Unravelling the food literacy puzzle: Evidence from Italy

Food literacy – i.e. the ability to collect, understand, process, and use relevant information to navigate the food system – is a key concept inspiring food policies across the World. While scholars agree in discussing the interplay between individual food literacy skills and the health, social, environmental, political, cultural, and economic aspects of food consumption, evidence on the extent and consequences of limited food literacy is scattered. This paper tries to shed light on this issue, proposing a measurement approach to assess the food literacy skills of a representative sample of the Italian population. The research findings suggest that problematic food literacy is prevailing: elderly, people with low education, and those suffering from financial deprivation are more likely to show limited food literacy. Inadequate food literacy concurs in producing impaired health status. Integrated policy interventions are needed to improve individual food literacy skills and to support the establishment of a just and sustainable food system.     

Contribution of productivity and firm size to value-added: Evidence from Vietnam

A new indexing method is developed to decompose the contributions of productivity, prices and firm size to a firm's value-added. The method introduces an error term into the decomposition equation to capture measurement biases which are caused by using the deflator instead of the observed price and all other sorts of measurement error. An application of the method is given using private small and medium manufacturing firm level data in Vietnam from 1996 and 2001. The error index decomposition method provides a comparison of performance of all firms to the hypothetical representative firm. The analysis allows firms and policy makers to realize the key factors contributing to the success or failure of a firm and suggest strategies to improve firm economic performance.     

Delegation,Ownership Concentration and R&D Spending: Evidence From Italy

We use data from the Italian manufacturing industry to document a positive correlation between delegation and R&D. This result is robust to controlling for the determinants of R&D such as human capital, capital intensity and sectoral or regional effects. We further investigate the determinants of delegation and find that ownership concentration is significantly related to delegation. Among large firms with a dispersed ownership structure, larger ownership concentration implies less delegation, whereas the opposite emerges with more concentrated ownership. Differences between the Northern and Southern regions in terms of firms' propensity to delegate decisions and engage in R&D also emerge.     

An economic analysis of deferred examination system: Evidence from a policy reform in Japan

We investigate how a deferred patent examination system promotes ex-ante screening of patent applications, which reduces both the number of granted patents and the use of economic resources for examinations, without reducing the return from R&D. Based on a real option theory, we develop a model of examination request behaviors. Exploiting the responses of Japanese firms to recent policy reform, we find that the shortening of the allowable period for an examination request significantly increases both eventual and early requests, controlling for the blocking use of a pending patent application. This effect is stronger in technology areas with higher uncertainty. These results support the importance of uncertainty for an applicant and of ex-ante screening.     

A theory-based evaluation of food waste policy: Evidence from Italy

Italy recently reformed its food waste policy by introducing innovative measures, such as the possibility of donating food after the best-before date (BBD) and a significant simplification of the bureaucracy of donations. These measures are advocated by food waste specialists and are thought to increase donations almost automatically. The article performs a theory-based evaluation using the method of realist synthesis to investigate the two measures, test their implicit assumptions, and provide a more complete picture of how the policy works. The results highlight the marginal importance of bureaucratic procedures in the cost structure of donations, the diverse responses of different donors and food rescue organisations, and the importance of considering the capacity and preferences of charities when an increase in donations is expected. Further, the analysis uncovers severe reputational risks that limit both the supply of and demand for food past the BBD, despite legal provisions promoting its donation.     

Exploring the relationship between farm size and productivity: Evidence from the Australian grains industry

The effect of farm size on productivity remains to be one of the longest standing debates in the agricultural development literature. In this paper, we use farm level data for the Australian grains industry from 1989 to 2004 to investigate the relationship between farm size and total factor productivity and its potential determinants. We show that a positive farm-size productivity relationship could be linked to farmer capital choice. In particular, the productivity advantage of larger farms is likely to diminish as farms use contract services to replace self–owned capital, suggesting that the hire of capital services (hereafter ‘capital outsourcing’) may lift the productivity level of small farms compared to their larger counterparts.     

Effects of broadband availability on total factor productivity in service sector firms: Evidence from Ireland

While broadband is widely believed to augment productivity, there is little firm-level evidence of a generalised causal effect. In this paper we examine whether the introduction of digital subscriber line (DSL) broadband services increased firms' productivity in nine sub-sectors within the services and distribution sector in Ireland from 2006 to 2012. Firm-level panel data on firms' characteristics are linked to spatial information on the rollout of DSL. While we do not find significant productivity effects in the services sectors taken together, we do find positive and significant effects on firm's total factor productivity in Information & Communication and Administrative & Support Services.     

Agglomeration and social return to R&D: Evidence from French plant productivity changes

This paper investigates the effect of inter-firm and intra-firm spillovers on the productivity of firms, using French data. The Luenberger Productivity Indicator (LPI) is used to estimate the productivity and to break it down into several components (e.g. efficiency, biased technical progress, scales effects, etc.). Using this approach, negative productivity changes are found due to the unfavourable economic situation over 2000-2002. Diverse forms of intra- and inter-firm externalities are then investigated through a Maximum Likelihood Random Effect (MLRE) model. Spillover effects due to spatial agglomeration - influencing Total Factor Productivity (TFP) and its correspondent components, technological and efficiency changes, are found.     

The impact of agricultural policy distortions on the productivity gap: Evidence from rice production

This article explores how production and trade policy distortions affected rice productivity in 33 rice-producing countries. A rice-productivity index is constructed, and a model linking the productivity gap with policy distortions is presented. After controlling for the differences in infrastructure, access to inputs and equipment, openness, and human capital, this article shows that high levels of rice subsidies and protection in rich countries combined with taxation of rice farming in poor countries widened the gap in rice productivity between rich and poor rice countries.     

Strategic orientations,incentive plan adoptions,and firm performance: evidence from electric utility firms

This study examines the performance implications of the fit between strategic orientations and incentive plan characteristics. Research hypotheses are based on a framework that draws upon managerial discretion and agency theories to identify the links between firm strategy, managerial motivation and control, managerial risk-bearing, and incentive plan characteristics. A pooled cross-sectional, time series research design is used to test hypotheses in a sample of 50 electric utility firms. Consistent with theory, results indicate that annual bonus plans that use cash incentives and accounting measures of performance lead to better performance among firms with Defender strategic orientations. In contrast, firms with Prospector strategic orientations realize performance benefits when they adopt stock-based incentive plans and use market measures to evaluate managerial performance. © 1997 John Wiley & Sons, Ltd.     

Economic growth,telecommunications development and productivity growth of the telecommunications sector: Evidence around the world

This paper studies the relationships between economic growth, telecommunications development and productivity growth of the telecommunications sector in different countries and regions of the world. In particular, this study assesses the impact of mobile telecommunications on economic growth and telecommunications productivity. The results indicate that there is a bidirectional relationship between real gross domestic product (GDP) and telecommunications development (as measured by teledensity) for European and high-income countries. However, when the impact of mobile telecommunications development on economic growth is measured separately, the bi-directional relationship is no longer restricted to European and high-income countries. This study also finds that countries in the upper-middle income group have achieved a higher average total factor productivity (TFP) growth than other countries. Countries with competition and privatization in telecommunications have achieved a higher TFP growth than those without competition and privatization. The diffusion of mobile telecommunications services is found to be a significant factor that has improved the TFP growth of the telecommunications sector in Central and Eastern Europe (CEE).     

Restructuring, productivity and workplace relations: evidence from the textile industry

This study analyses the nature of productivity improvements in the textile industry by focusing on the interplay between micro-electronic technologies and changes in work practices at two hosiery plants and a cotton spinning mill. The findings highlight the uneven impact of technological change on workplace relations and patterns of occupational segregation.     

Tax Limits and Housing Markets: Some Evidence at the State Level

Property tax limitations, as well as other tax and expenditure restrictions on state and local governments in the United States, date back to the late 19th century. A surge in property tax limitation legislation occurred in the late 1970s and early 1980s, and its effects on government revenue, school financing and educational quality have been studied extensively. However, there is surprisingly little literature on how property tax limits affect housing markets. For the first time, we examine the impacts of property tax limitations on housing growth, in addition to their impacts on housing prices. Using state‐level data over 23 years, we find that property tax limits increase housing prices (indexes) by approximately 2%. Property tax limits appear to have little impact on the growth in the housing stock, but education spending limits reduce the number of building permits by over 6%. Our indirect evidence suggests that the number of housing units may grow when property tax limits are accompanied by increases in other own‐source revenues to state government.     

Top management team incentive heterogeneity,strategic investment behavior,and performance: A contingency theory of incentive alignment

Research summary : We develop and test a contingency theory of the influence of top management team (TMT) performance‐contingent incentives on manager–shareholder interest alignment. Our results support our theory by showing that although TMTs engage in significantly higher levels of acquisition investment when their average incentive levels increase, investors' responses to those large investments are generally negative. More importantly, however, we further find that within‐TMT incentive heterogeneity conditions that effect, such that investors evaluate TMTs' large acquisition investments more positively as the variance in those top managers' incentive values increases. Thus, within‐TMT incentive heterogeneity appears to increase manager–shareholder interest alignment, in the context of large acquisition investments. Managerial summary : We find that as the average value of TMTs' incentives increase, relative to their total pay, they invest more in acquisitions and investors' respond negatively to the announcement of those deals. However, we further show that investors respond more positively to acquisitions announced by TMTs whose members' incentive values vary (some TMT members hold higher incentives and others hold lower). Results imply that when TMT members hold differing incentives levels, they approach investments from divergent perspectives, scrutinize those investments more heavily, and make better decisions, relative to TMTs with similar incentives. They also suggest that boards seeking tighter manager–shareholder interest alignment may benefit from introducing variance into TMT members' incentive structures, as doing so appears to create divergent preferences that can improve team decision making. Copyright © 2016 John Wiley & Sons, Ltd.