International Comparisons of Levels of Capital Input and Multi-Factor Productivity

Abstract. The paper uses a method by Christensen et al. to construct cross-country comparisons of the levels of capital input, capital and labour productivity and multi-factor productivity. These results are used to decompose international differences in gross domestic product per capita into differences in labour utilization, information and communication technology (ICT) and non-ICT capital intensity and multi-factor productivity for seven Organisation for Economic Co-operation and Development countries. We provide Monte Carlo estimates to examine the effects of measurement errors in the base data, and these simulations showed that boundaries for the resulting indicators can be important.     

Of Yeast and Mushrooms: Patterns of Industry-Level Productivity Growth

Abstract. In this paper we analyse labour productivity growth in the United States, four European countries (France, Germany, the Netherlands and United Kingdom), Australia and Canada between 1987 and 2003 from an industry perspective. Rather than analysing broad industry groups, we compare the pattern of growth in all industries through Harberger diagrams. We introduce new summary measures, which indicate the pervasiveness of growth patterns. These indicators show that investment in both information and communication technology (ICT) and non-ICT capital is fairly balanced or 'yeasty', driven by overall macro-economic conditions. However, growth of total factor productivity (TFP) is much more localized or 'mushroom-like'. In particular we find a clear distinction between countries in continental Europe, in which TFP is decelerating after 1995 and becoming more localized, and Anglo-Saxon countries in which TFP growth is accelerating and becoming more broad-based, especially after 2000. The increased breadth of Anglo-Saxon TFP growth is consistent with delayed effects of intangible investments that are complementary to ICT investments.     

Sources of the German Productivity Demise: Tracing the Effects of Industry-Level Information and Communication Technology Investment

Abstract. While the United States experienced two successive labor productivity surges in 1995 and 2000, Germany's productivity declined dramatically during the same period. We examine the sources of Germany's productivity demise using the ifo industry growth accounting database that provides detailed industry-level investment information. While much attention has focused on the reduction in German labor hours, our data show that information and communication technology (ICT) investment in Germany was deeply lacking in the mid-1990s as compared with the United States. The transition to the new economy mitigated the German productivity slowdown, but did not reverse it. After 2000, we find that a recovery in Non-ICT investment was offset by a widespread collapse in German total factor productivity. Over half of the German industries (accounting for almost 50 per cent of German output) experienced negative total factor productivity growth. This second major difference between the United States and German industry performance explains Germany's secular departure from the technological frontier.     

The Impact Of Computer Prices On International Comparisons Of Labour Productivity

This paper analyses the international comparability of methods used to convert the value added of the office and computing machinery sector (OCM) into constant prices for nine OECD countries. It concludes that the variations which exist in the price indexes are largely due to differences in the methods countries use to capture changes in the quality of an industry's output over time. The paper evaluates the impact of these different OCM price indexes on the growth rate of labour productivity during the 1980s by conducting a sensitivity test where the US OCM index is substituted for each of the individual country indexes. This experiment causes the OCM labour productivity growth rate to change by over a factor of ten for several countries. This result suggests that international comparisons of labour productivity should not be made for the OCM sector using the official data, and that labour productivity comparisons of sectors OCM belongs to—non-electrical machinery and fabricated metal products and machinery—should be conducted cautiously, if at all.     

Sectoral Productivity in the United States: Recent Developments and the Role of IT

Abstract. This paper introduces new estimates of recent productivity developments in the United States, using an appropriate theoretical framework for aggregating industry multi-factor productivity (MFP) to sectors and the total economy. Our work sheds light on the sources of the continued strong performance of US productivity since 2000. We find that the major sectoral players in the late 1990s pickup were not contributors to the more recent surge in productivity. Rather, striking gains in MFP in the finance and business service sector, a resurgence in MFP growth in the industrial sector, and an end to drops elsewhere more than account for the aggregate acceleration in productivity in recent years. Further, some evidence is found for a link between IT intensity and the recent productivity acceleration.     

On the release of information by governments: Causes and consequences

The release of economic and social data by a government provides many benefits to its citizens on a number of different levels. Information has value in itself (for example, to facilitate a more efficient allocation of resources), but it could also perhaps be seen as a signal of the degree of political and institutional transparency. In order to evaluate the potential association between the release of information and the institutional and economic circumstances across countries, a new index is developed that has extensive coverage across countries (175) and time (1960–2000), and is based on the quantity of reported socio-economic data contained in the World Development Indicators and the International Finance Statistics databases. Using a series of Granger-causality regressions, the release of information by governments is shown to have a significant positive effect on the quality of the bureaucracy in the short run and, in the longer term, a significant effect on investment and financial sector development. In terms of reverse causality, the evidence shows that the degree of constraints on the executive branch of government and education both have a positive effect on the quantity of data released by governments.     

Intangible Investment and Changing Sources of Growth in Korea

We examine how intangible investments change the sources of growth in the Korean economy. After constructing a novel industry‐level data set on intangibles, we estimate the contribution of intangible‐intensive industries and other industries to aggregate productivity growth in 1981–2008. The contribution of intangible‐intensive industries to aggregate labour productivity growth has significantly increased, whereas that of other industries has substantially decreased. The increased contribution of intangible‐intensive industries is mainly associated with total factor productivity growth rather than with input growth. This suggests that innovations related to intangible investments in these industries might become a new key source of productivity growth in Korea.     

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.     

Lost Exceptionalism? Comparative Income and Productivity in Australia and the UK, 1861–1948*

Australia had one of the highest per capita incomes in the world in the late nineteenth century, although this exceptional position subsequently eroded over time. This paper compares national income and sectoral labour productivity in Australia and the UK between 1861 and 1948 to uncover the underlying sources of Australia's high income and the reasons for its subsequent relative decline. We find that the country's higher per capita income was due primarily to higher labour productivity, because labour force participation, although higher in Australia than in the USA, was lower than in the UK. Australia had a substantial labour productivity lead in agriculture throughout the period, due to the importance of high value-added, non-arable farming, and a smaller lead in industry before World War I. The early productivity lead in industry was largely based on the importance of mining, and disappeared as manufacturing became more important. There was little productivity difference in services. These results reaffirm the importance of Australia's successful exploitation of its natural resource endowments in explaining the country's high initial income.     

Are Co-integrated Stock Prices Consistent with the Efficient Market Hypothesis?

This paper responds to the unsatisfactory argument that there is no correspondence between co-integration and the efficient market hypothesis. A law of one co-integrating vector of prices is proposed for the exchange rate and domestic and overseas stock prices. Markets must therefore be efficient in long-run equilibrium because no arbitrage opportunities exist. However, arbitrage activity via the disequilibrium error correction allows above-average (risk-adjusted) returns to be earned in the short run. The elimination of these arbitrage opportunities means that stock market inefficiency in the short run ensures stock market efficiency in the long run.     

Productivity,innovation and convergence in Poland1

This paper provides evidence on factors driving productivity growth in the new EU member states, focusing on Polish manufacturing industries. The results obtained indicate that companies in Poland benefit significantly from transfer of technologies accumulated in more developed economies. No strong evidence is found on immediate technology transfer. The significant effect of domestic innovation activity is mainly due to its impact on the speed of convergence and is particularly strong in high‐tech industries, relatively privatized industries and industries initially further from the technological frontier.     

Comparisons of real output and productivity of Chinese and Indian manufacturing, 1980–2002

The principal objective of this paper is to compare the real output and labour productivity of Chinese and Indian manufacturing from 1980 to 2002. Using an industry-of-origin approach, purchasing power parities (PPPs) for the benchmark year 1985 are derived from the Chinese and Indian industrial censuses. In turn, the PPPs are used to convert Indian manufacturing GDP into Chinese yuan for direct comparisons. Secondary objectives are twofold: first, to set this direct comparison within the general context of the economic policy reform process followed in each country, and second, to compare and contrast the organisation and structure of both countries' manufacturing sectors. The analysis shows that since 1980, real value added and labour productivity growth for Chinese manufacturing has been well above Indian levels.     

The Impact of Telecommunication Technologies on Competition in Services and Goods Markets: Empirical Evidence

In this paper, we empirically show that a more intensive use and wider adoption of telecommunication technologies significantly increases the level of product market competition in services and goods markets. Our results are consistent with the view that the use of telecommunication technologies can lower the costs of entry and search. These findings are robust to various measures of competition and a wide range of specification checks.     

Escaping the Middle‐Income Trap in Southeast Asia: Micro Evidence on Innovation,Productivity, and Globalization

Microdata studies on innovation, productivity, and globalization are relatively new to the Southeast Asian region. Evidence from microdata studies in middle‐income countries provide valuable evidence for policymaking aimed at graduating these countries to high‐income status. Globalization via trade and foreign direct investment should continue to be important development strategies. A more nuanced approach focusing on exporters and potential exporters, especially SMEs, are likely to be needed. The extent of foreign participation is also likely to have important implications for technological spillovers.     

文化货物贸易与文化服务贸易决定因素差异的实证研究

因文化货物贸易与文化服务贸易具备不同特性及两者之间存在着替代性,从而导致两者在一国贸易中的国际竞争力表现有所不同。笔者借助加拿大颁布的文化贸易统计数据,分别对文化货物贸易与文化服务贸易的决定因素进行了考察,结果表明:经济规模与人口变量对上述两类贸易的影响基本是相反的;地理距离对两类贸易都形成了贸易成本,但对文化服务贸易所形成的贸易成本更大;文化距离对两类贸易的进、出口影响是不一致的;双边信息网络覆盖程度对双边文化货物进、出口有促进作用,但对双边文化服务贸易并无明显影响。     

Productivity Trends in Advanced Countries between 1890 and 2012

In order to examine productivity waves and convergence processes, we study productivity trends, trend breaks, and levels for 13 advanced countries between 1890 and 2012. We highlight two productivity waves, a big one following the second industrial revolution and a smaller one following the ICT revolution. The convergence process has been erratic, halted by inappropriate institutions, technology shocks, financial crises, and above all wars, which led to major productivity level leaps, downwards for countries experiencing war on their soil, and upwards for other countries. Productivity trend breaks have been identified following wars, global financial crises, global supply shocks, and major policy changes. The upward trend break for the U.S. in the mid‐1990s has been confirmed, as has the downward trend break for the euro area in the same period.     

Export Growth,Capacity Utilization,and Productivity Growth: Evidence from the Canadian Manufacturing Plants

Aggregate labor and multifactor productivity growth slowed substantially post‐2000 in the Canadian manufacturing sector. To examine the source of the decline, this paper proposes a decomposition method that delves deeper into the two micro‐components of aggregate productivity growth: a within‐plant component and a between‐plant component. The decomposition builds on earlier work by Jorgenson and his collaborators that decomposes aggregate productivity growth into its industry components, but applies it to the plant level and introduces non‐neoclassical features of the plant‐level economic environment. It finds that the preponderance of the aggregate labor and multifactor productivity growth slowdown is due to the pro‐cyclical nature of productivity growth arising from capacity utilization. Almost all of the aggregate productivity growth slowdown is driven by exporters, as exporters experienced large declines in labor productivity growth in the post‐2000 period as a result of large declines in their capacity utilization.     

Goods and Services Tax Effects on Goods and Services Included in the Consumer Price Index Basket*

This paper quantifies the magnitude and duration of the goods and services tax (GST) effect on the quarterly growth rate of the 11 groups of the consumer price index (CPI) in Australia using the Box and Tiao intervention analysis. It was found that prices did not increase significantly before or after the introduction of GST, beyond what could have been expected on the basis of the discernible systematic pattern of fluctuation in the data. Furthermore, the varying one-off effect of GST on prices was significant in seven out of 11 CPI groups; the effect was found insignificant for the other four CPI groups.     

Political versus economic institutions in the growth process

After a decade of research on the relationship between institutions and growth, there is no consensus about the exact way in which these two variables interact. In this paper we re-examine the role that institutions play in the growth process using data for developed and developing economies over the period 1975–2005. Our results indicate that the data is best described by an econometric model with two growth regimes. Political institutions are the key determinant of which regime an economy belongs to, while economic institutions have a direct impact on growth rates within each regime. These findings support the hypothesis that political institutions are one of the deep causes of growth, setting the stage in which economic institutions and standard covariates operate.