Research Productivity in Business Economics: An Investigation of Austrian,German and Swiss Universities

Abstract. We draw on a new and comprehensive dataset that collects the research output of business economists employed by Austrian, German and Swiss universities. We compute research rankings of departments and identify the leading departments in selected subdisciplines. Moreover, we investigate how institutional design and individual characteristics affect research productivity and draw some conclusions for the training of junior scientists.     

PERSPECTIVE ON PRODUCTIVITY RESEARCH*

Radical changes, up and down, have taken place in the estimates of growth in total factor productivity in the U.S. made by different economists, or by the same economists at different times. If such estimates provide “some sort of measure of our ignorance,” as Abramovitz once put it, we seemed to be a lot less ignorant in 1927 (when Cobb and Douglas published their famous paper), or in 1967 (when Jorgenson and Griliches published theirs), than we were in the years between (when Schmookler, Abramovitz, Kendrick, and Denison completed their studies), or than we are today (when we have, or will soon have, revised estimates by Denison and by Kendrick, and new estimates by Christensen and Jorgenson). Viewed in this perspective, many questions may be raised about the significance of the current estimates that something like a third or more of the rate of increase in U.S. national output is “due” to increase in productivity, as well as about the concepts, data, and methods that underlie the estimates. A list of particular subjects worth considering for research is given and each is briefly discussed.     

INTELLIGENT MACHINE TECHNOLOGY AND PRODUCTIVITY GROWTH

This paper provides preliminary estimates of the productivity impact of intelligent machine technology (IMT) and the rate of return to IMT research and development (R&D) over the next two decades. The paper adapts economists’ traditional productivity growth model to enable the use of industrial experts’ forecasts of a few key parameters of the model to form the estimates of productivity growth and rate of return. Respondents – from a sample of firms operating in IMT development and applications in the automotive, aerospace, and capital construction industries – anticipate that IMT will generate substantial productivity growth over the next two decades, and the estimated social rates of return to IMT R&D are substantial.     

Pluralism and heterodoxy in economic methodology

Economists work within models that are simplified depictions of reality. An argument for a pluralistic understanding of economics is that different approaches lend insight by looking at different phenomena from different viewpoints. While all economists can benefit from taking a pluralistic approach to understanding economics, Austrian school economists must be more pluralistic in their understanding and presentation of ideas than mainstream economists if they want their ideas to have an impact on mainstream economics. Despite the argument for a pluralistic understanding of economics, in research, as in other activities, specialization increases productivity. While Austrian school economists can benefit from taking a pluralistic approach to understanding economics, they are likely to be most productive in their research by specializing in the development of Austrian school methods and ideas.     

What Determines Research Output of Academic Economists?

This paper looks at the characteristics that explain research productivity in a cross section of academic economists. From a sample of 150 economists, we obtained data on a range of human capital variables, teaching loads and research funding. The results suggest that human capital variables, particularly the grade of honours and the nature and location of the PhD., are especially important in explaining a quality-weighted research output measure. Teaching loads are also significant. In particular, we find that a 10 per cent increase in the number of teaching hours may reduce research output by as much as 20 per cent, whereas a 10 per cent increase in the number of grants held per year may raise output per year by as much as 15 per cent.     

Happiness of economists

We study the importance of economists’ professional situation towards their life satisfaction based on a unique survey of mostly academic economists. On average, economists report to be highly happy with life. Satisfaction is positively related to spending more time on doing research. The lack of a tenured position decreases satisfaction. However, the extent to which the uncertainty created by the tenure system affects satisfaction varies with the contract terms. The effect is stronger if the contract expires in the near future or cannot be extended. Publication success has no effect if it is controlled for academic rank and the contract duration. The finding suggests that publications are rather a means to an end, for example, to acquire a tenured position. While the perceived level of external pressure also has no impact, the perceived change of pressure in recent years is positively related to economists’ life satisfaction. An explanation is that economists have accepted a high level of pressure when entering academia but are not willing to cope with the recent increase.     

The Determinants of UK Business Cycles

This paper considers the causes of post-war UK business cycles. Using an extended stochastic growth model we construct estimates of productivity and preference shocks both of which are highly persistent, volatile and potentially capable of explaining UK business cycles. We find the productivity term is the dominant explanation of UK output fluctuations but our estimated preference shift is crucial in understanding employment movements. A variety of Granger causality tests establish whether these productivity and preference terms are unpredictable and so can be potentially considered as the cause of UK business cycles or whether they are themselves Granger caused by other variables.     

IS IT HARDER TO SOAR WITH EAGLES WHEN YOU WORK WITH TURKEYS?*

Lucas (1988) modelled the productivity of workers as being a function not only of their own human capital but the human capital of the people with whom they work. Using individual data, this paper investigates whether there are such human‐capital externalities. In particular, we look at the research output of academic economists, and ask whether research‐output productivity is affected not just by individual human‐capital factors, and institutional and funding factors, but additionally by productivity of those in the same academic department. Our findings are also of relevance to the literature on peer‐group effects and the ‘Bell Curve’ debate.     

ASSESSING THE VALUE OF ECONOMICS RESEARCH: THE CASE OF THE BIAS IN THE CONSUMER PRICE INDEX

Economists provide sometimes contradictory information about economic systems that contribute to policy design. How does one value this type of knowledge? A political‐economic game is presented that allows for reinforcing and contradictory research messages. Policy makers are assumed to follow a Bayesian decision theory process and the model is tested with quantitative estimates of the value of research on the degree of bias in the Consumer Price Index. Most economists agree that a bias exists, but published estimates vary widely. A blue‐ribbon panel of economists recommended revisions to how the index is calculated, and the Bureau of Labor Statistics subsequently made revisions that differed from their original plans, but how much influence did the panel really have on the revisions? (JEL Z00)     

INNOVATION AND EXPORT PERFORMANCE: ADJUSTMENT AND REMAINING DIFFERENCES IN EAST AND WEST GERMAN MANUFACTURING

Abstract

The economic situation in Germany 16 years after reunification is marked by the fading out of the adjustment process between East and West. This paper refers to this context analyzing the export behavior comparing firms in West and East Germany. Our estimates confirm a strong relationship between innovations and export performance as well as structural differences between East and West German firms. East German firms are less likely to export than firms in the West. Besides, West German medium technology firms are comparable in their export behavior to high tech firms while East German firms are more similar to the low technology sector. Labor productivity turns out to be more important in East Germany. We interpret these findings as a specialization of West German firms towards technologically-driven high-quality markets, whereas East German companies are faced with higher sunk costs and seem to operate more often in less dynamic, price-sensitive markets.     

OUTPUT RISK ASPECTS OF GENETICALLY MODIFIED CROP TECHNOLOGY IN SOUTH AFRICA

In this paper, it is argued that investments in information and communication technologies (ICT) are closely linked to complementary innovations and are most productive in firms with experience from earlier innovations. In the empirical analysis based on firm-level panel data covering the period 1994–1999, system GMM estimates for an extended production function framework reveal significant productivity effects of ICT in the German service sector. Moreover, there is strong support for the hypothesis that experience gained from past process innovations makes ICT capital more productive but does not affect the productivity of other capital goods.     

The relationship between business diversification and productivity: considering the impact of process innovation at different corporate life cycles

This paper investigates the link between a firm's process innovation (PI) and its segment productivity at different life cycles. The results show that business diversification is negatively associated with a firm's productivity, and further reveal that a firm's PI moderates the above relationship. In addition, the corporate life cycle literature builds blocks for this study to explain that the involvement of administrative costs varies across life cycles when diversified firms get mature and bigger. Our empirical evidence indicates that the potential costs of a complex organisational structure contingent on business diversification at a firm's mature life cycle could be alleviated by the conduct of process innovation. As process innovation at different life cycles may alter managerial incentive that leads to different firm performance, the managerial implication is that diversified firms should appropriately engage in process innovation to prevent unfavourable liability from the development of their businesses.     

Dynamic adjustment and long-run equilibria: Panel data estimates for the East German states

The economic development in East Germany after unification shows both, success and failure. In the early nineties wages and productivity increased fast; later on catching up faded out. A central question from a policy viewpoint is whether this fading out indicates a reduction of the adjustment speed or an equilibrium gap. This points towards a stationarity analysis of differences between East and West Germany. Our paper presents panel data estimates for the East German states for wages, productivity, competitiveness and unemployment. The results reveal that the adjustment was fast, but the equilibrium gaps are large.     

Do Economists Have a Fatherland? How Global and National Efficiency Considerations Influence Economists’ Policy Judgements

This study evaluates whether economists support economic policies such as free trade because they deem them to be good for their home country or because they increase global welfare. In a telephone survey, 100 German economists were asked to judge different policy proposals dealing with immigration, military exports and climate policy. Our results show that the acceptance of the policy proposals is strongly influenced by national efficiency judgements. In contrast, global efficiency judgements exert no significant positive effect on policy proposal acceptance. These effects even hold for economists who self‐reported a global perspective in the assessment of the policy proposals. These judgements might be based on the potentially erroneous assumption that their policy judgements, taken from a national perspective, are consistent with global interests.     

国际技术扩散的度量、途径及阻碍:一个文献综述

全球大部分技术来源于少数发达国家,在经济全球化背景下,技术通过各种渠道在世界范围内的扩散,对各国的技术水平和经济发展产生了重要影响,国际技术扩散日益成为经济增长理论关注的核心问题之一。本文从三个方面对国际技术扩散的文献进行了梳理和总结,包括技术扩散度量的方式、技术扩散的途径及影响技术扩散的因素。相关研究文献表明,在数量上更精准地度量国际技术扩散已经取得了重要进展;通过国际贸易实现的技术扩散能够提高几乎所有国家的生产效率,但是与FD I流入相联系的技术扩散溢出效应却在发达国家和发展中国家之间呈现出显著的差异;一国的地理距离、技术差距、要素禀赋以及政治制度等若干因素为理解这一现象提供了解释。     

Minority positions in the German Council of Economic Experts: A political economic analysis

I study diversity in views expressed by economists regarding appropriate economic policies. The dataset is for voting by economists on the German Council of Economic Experts, over the period 1971–2011. The results show that the best predictor of minority voting is having been nominated by the trade unions, which results in being some 70 percentage points more likely to vote against the majority opinion. The voting pattern confirms that ideological identity through the channel of political appointment influences economists' voting behavior.     

Sources of productivity growth: an empirical analysis with German sectoral data

Many theoretical analyses of the sources of economic growth focus on knowledge spillovers and scale economies to explain growth endogenously. The contribution of this paper is to shed some light on these arguments by an empirical investigation based on a production function framework. Sectoral production functions are estimated with annual German data of 51 sectors from 1960–90. The estimates reveal that both a pure Solow growth model and a Solow model augmented with human capital cannot account for the observed productivity increases. The model should be extended by allowing for inter-industry spillovers and scale economies at the aggregate level, as well as for scale economies associated with human capital at the sectoral level. The business cycle affects observed productivity changes in the short run and in the long run.     

Contributions of German and American jesuits to economics: The last 100 years

This article focuses on the contributions of six economists schooled in the Jesuit tradition. Four are Jesuit priests: Heinrich Pesch and Oswald von Nell-Breuning who are German, and Bernard Dempsey and Joseph Becker who are American. Two others, Goetz Briefs and William Waters, are lay persons who are referred to as “Jesuits without collars.” Five have direct ties to one another. Von Nell Breuning was a student of Pesch, as was Briefs. Waters was a student of Briefs, and Dempsey was influenced by Pesch and von Nell-Breuning. All five are solidarist economists who think about economics and economic affairs in a distinct way which originates with Pesch. Today they would be called personalist economists. The distinctive work of these six Jesuits is barely visible in the ranks of academic economists. Their contributions should be highlighted before they are lost forever to those who sense there is something inadequate about mainstream economics.     

Contributions of German and American jesuits to economics: The last 100 years

This article focuses on the contributions of six economists schooled in the Jesuit tradition. Four are Jesuit priests: Heinrich Pesch and Oswald von Nell-Breuning who are German, and Bernard Dempsey and Joseph Becker who are American. Two others, Goetz Briefs and William Waters, are lay persons who are referred to as “Jesuits without collars.” Five have direct ties to one another. Von Nell Breuning was a student of Pesch, as was Briefs. Waters was a student of Briefs, and Dempsey was influenced by Pesch and von Nell-Breuning. All five are solidarist economists who think about economics and economic affairs in a distinct way which originates with Pesch. Today they would be called personalist economists. The distinctive work of these six Jesuits is barely visible in the ranks of academic economists. Their contributions should be highlighted before they are lost forever to those who sense there is something inadequate about mainstream economics.     

Estimated annual and lifetime labor productivity in the United States, 2016: implications for economic evaluations

Abstract

Background: Human-capital based lifetime productivity estimates are frequently used in cost-of-illness (COI) analyses and, less commonly, in cost-effectiveness analyses (CEAs). Previous US estimates assumed that labor productivity and real earnings both grow by 1% per year.

Objectives: This study presents estimates of annual and lifetime productivity for 2016 using data from the American Community Survey, the American Time Use Survey, and the Current Population Survey, and with varying assumptions about real earnings growth.

Methods: The sum of market productivity (gross annual personal labor earnings adjusted for employer-paid benefits) and the imputed value of non-market time spent in household, caring, and volunteer services was estimated. The present value of lifetime productivity at various ages was calculated for synthetic cohorts using annual productivity estimates, life tables, discount rates, and assumptions about future earnings growth rates.

Results: Mean annual productivity was $57,324 for US adults in 2016, including $36,935 in market and $20,389 in non-market productivity. Lifetime productivity at birth, using a 3% discount rate, is roughly $1.5 million if earnings grow by 1% per year and $1.2 million if future earnings growth averages 0.5% per year.

Conclusions: Inclusion of avoidable productivity losses in societal-perspective CEAs of health interventions is recommended in new US cost-effectiveness guidelines. However, estimates vary depending on whether analysts choose to estimate total productivity or just market productivity, and on assumptions made about growth in future productivity and earnings.