Entry costs and labor market dynamics

We study the cyclical dynamics of the value of a vacant position in labor markets characterized by search and matching frictions. We present a model of aggregate fluctuations in which firms face sunk costs to enter the production process. Our specification of sunk costs gives rise to a countercyclical value of a vacancy. We find that this overlooked object has important quantitative implications for the study of labor markets and business cycles. It affects the cyclical dynamics of the surplus division between workers and firms, and provides a better characterization of the movements in income shares over recessions and expansions. Understanding movements in the value of a vacant position helps to link the dynamics of income shares with recent volatility puzzles found in models of search and matching in labor markets.     

Entry costs and stock market participation over the life cycle

Several explanations for the observed limited stock market participation have been offered in the literature. One of the most promising is the presence of market frictions mostly in the form of fixed entry and/or transaction costs. Empirical studies point to a significant structural (state) dependence in the stock market entry decision, which is consistent with costs of this type. However, the magnitude of these costs is not yet known. This paper focuses on fixed stock market entry costs. I set up a structural estimation procedure which involves solving and simulating a life cycle intertemporal portfolio choice model augmented with a fixed stock market entry cost. Important features of household portfolio data (from the PSID) are matched to their simulated counterparts. Utilizing a Simulated Minimum Distance estimator, I estimate the coefficient of relative risk aversion, the discount factor and the stock market entry cost. Given the equity premium and the calibrated income process, I estimate a one-time entry cost of approximately two percent of the permanent component of the annual labor income. My estimated model matches the zero median holding as well as the hump-shaped age–participation profile observed in the data.     

Entry costs, industry structure, and cross-country income and TFP differences

Entry costs vary dramatically across countries. To assess their impact on cross-country differences in output and TFP, we construct a model with endogenous entry and operation decisions by firms. We calibrate the model to match the U.S. distribution of employment and firms by size. Higher entry costs lead to greater misallocation of productive factors and lower TFP and output. In the model, countries in the lowest decile of the entry costs distribution have 1.32 to 1.45 times higher TFP and 1.52 to 1.75 times higher output per worker than countries in the highest decile. As in the data, higher entry costs are associated with lower entry rates and business density.     

Entry, exit and business cycles in a general equilibrium model

This paper studies the role of entry and exit in the short run behavior of a general equilibrium model with industry dynamics. For tractability, and to preserve potential asymmetries in the impulse responses, I focus on the transition dynamics of the economy after shocks. Entry and exit are found to be insensitive to productivity shocks of reasonable magnitude. Moreover, the dynamics of GDP are insensitive to fluctuations in entry and exit rates, and any asymmetries are negligible. As an application of the model, the paper also asks whether firing costs may interact with entry and exit to affect transition dynamics after shocks, finding that they do not.     

Entry regulation and international trade

We use cross-country, cross-industry data to analyse the relationship between entry regulation and international trade. We find robust evidence that entry regulation discourages exports of industries with low natural barriers to entry. This implies that, in international markets, countries with heavy entry regulation have a comparative disadvantage in industries that are technologically easy to enter. Further analysis shows that the result is partly due to the negative impact of entry regulation on productivity.     

Wages and productivity: the role of labour market institutions in OECD countries

In the context of a monetary union, to keep a territorial equilibrium in terms of economic activity and employment, the relationship between real wages and productivity is crucial. In this paper, empirical evidence about the response of wages to productivity is obtained for 20 OECD countries and the role of labour market institutions to explain differences in this response is analysed.     

Financial deregulation and productivity growth in banking sector: empirical evidence from Bangladesh

This article examines the effects of regulatory reform on productivity growth in the Bangladesh banking industry. We use a unique balanced panel dataset comprising bank-level annual data from the early deregulation year (1984) to the most recent available period (2012) from major commercial banks in Bangladesh. Applying the Färe-Primont index, the paper provides estimates of productivity growth and identifies sources of total factor productivity (TFP) change. Empirical results show the sample banks have experienced positive TFP change after the financial deregulation. On average, TFP growth is higher in private banks than their public sector counterparts in the post-reform period. In addition, the decomposition analysis shows technological progress is the main driver of productivity change. Similar results are obtained by using the stochastic frontier analysis (SFA). Thus, empirical results remain robust irrespective of the methodology used. The regression analysis finds a positive technical change in the first stage of the reform program, i.e. during the transition period, as leading banks employ advanced technology to compete with potential new entrants. The result also shows that the banking industry still remains concentrated within the state-owned banks.     

Entry,exit and productivity growth: Spanish manufacturing during the eighties

This paper analyses the role played by both competitive pressure (increasing imports) and the restructuring of industries through entry and exit in productivity growth of Spanish manufacturing during the eighties, the key period of its accession to the EEC economy. A GMM panel estimation of the determinants of corrected Solow residual for 75 manufacturing during 1979-1990, shows that these forces accounted for 80% of productivity growth, playing an important role the displacement of inefficient firms by competitive entry.JEL Classification: D24, C33We are grateful to S. Bentolila, F. Bourguignon, T. Coelli, J. Dolado, A. de la Fuente, J. García, L. Rodríguez, J. Segura, X. Vives and an anonymous referee for useful comments on previous versions of this paper. All remaining errors are our own.     

Influence of market-level and inter-firm differences in costs on product positioning and pricing

The objective of this article is to study the impact of differentiation and firm positioning on firm’s pricing decisions in a horizontally differentiated competitive market. We build a parsimonious game-theoretic model and analyse simultaneous entry of firms. The effect of differentiation is modelled as an additional cost incurred by both firms based on the degree of differentiation between the firms. The cost of positioning is modelled as a market level cost affecting both firms whereby firms incur a cost if they want to position themselves away from the centre of distribution of consumers. Our analysis provides some surprising results, explains some conflicting empirical observations documented in previous research and may also be useful for further empirical research in this area by providing sharper predictions about the impact of various types of costs on market outcomes. For example, we find that if the cost of positioning is sufficiently high, then a firm with lower cost of differentiation charges a higher price in equilibrium, even when no differences in exogenous costs exist. We also find that under some circumstances the cost disadvantaged firm can enjoy higher price-cost margins compared to the cost leader thereby suggesting that higher costs could be a blessing in disguise.     

Local environmental regulation and plant-level productivity

This paper examines the impact of environmental regulation on the productivity of manufacturing plants in the United States. Establishment-level data from three Censuses of Manufactures are used to estimate 3-factor Cobb-Douglas production functions that include a measure of the stringency of environmental regulation faced by manufacturing plants. In contrast to previous studies, this paper examines effects on plants in all manufacturing industries, not just those in “dirty” industries. Further, this paper employs spatial-temporal variation in environmental compliance costs to identify effects, using a time-varying county-level index that is based on multiple years of establishment-level data from the Pollution Abatement Costs and Expenditures survey and the Annual Survey of Manufactures. Results suggest that, for the average manufacturing plant, there is no statistically significant effect on productivity of being in a county with higher environmental compliance costs. For the average plant, the main effect of environmental regulation may not be in the spatial and temporal dimensions.     

Quality of institutions and productivity of State-Invested Enterprises: International evidence from major telecom companies

The quality of institutions is at the core of the differences in the growth of income and productivity of nations. A growing body of evidence shows how this is also true at the firm level. After taking stock of earlier theoretical and empirical literature on the efficiency of state-owned versus private enterprises, while we consider ownership as the core internal governance mechanism of firms, we add quality of government as a determinant of the external institutional environment. To disentangle the effect of internal and external institutions on firms' productivity, we use different sets of ownership and institutional environment indicators.After having identified the top 350 private, state-invested (i.e. partially state-owned) and state-owned enterprises in the telecommunications industry in EU28 and in more than 60 other countries between 2007 and 2015, we empirically investigate models of firms' productivity augmented with ownership and quality of government. Our findings suggest that, after controlling for the regulatory and competitive conditions at the country level, on average, public ownership has a negative impact on firm-level TFP. This effect is however mitigated by high external institutional quality and even reversed in some countries with a particularly favourable institutional environment.     

Exact nonradial input, output, and productivity measurement

Summary. The use of measures originally suggested by Bennet, Bowley, and Hicks in the context of cost of living, welfare, and consumer surplus measurement to measure inputs, outputs, and productivity is examined. Suitably normalized versions of the Bennet-Bowley measures are shown to be exact and superlative measures of input, output, and productivity indicators. Received: April 2, 2001; revised version: August 8, 2001     

Indirect costs associated with metastatic breast cancer

Abstract

Objective:

To compare the indirect costs of productivity loss between metastatic breast cancer (MBC) and early stage breast cancer (EBC) patients, as well as their respective family members.

Methods:

The MarketScan® Health and Productivity Management database (2005–2009) was used. Adult BC patients eligible for employee benefits of sick leave and/or short-term disability were identified with ICD-9 codes. Difference in sick leave and short-term disability days was calculated between MBC patients and their propensity score matched EBC cohort and general population (controls) during a 12-month follow-up period. Generalized linear models were used to examine the impact of MBC on indirect costs to patients and their families.

Results:

A total of 139 MBC, 432 EBC, and 820 controls were eligible for sick leave and 432 MBC, 1552 EBC, and 4682 controls were eligible for short-term disability (not mutually exclusive). After matching, no statistical difference was found in sick leave days and the associated costs between MBC and EBC cohorts. However, MBC patients had significantly higher short-term disability costs than EBC patients and controls (MBC: $6166?±?$9194 vs EBC: $3690?±?$6673 vs Controls: $558?±?$2487, both p?<?0.001). MBC patients had more sick leave cost than controls ($2383?±?$5539 vs $1282?±?$2083, p?<?0.05). Controlling for covariates, MBC patients incurred 47% more short-term disability costs vs EBC patients (p?=?0.009). Older patients (p?=?0.002), non-HMO payers (p?<?0.05), or patients not receiving chemotherapy during follow-up (p?<?0.001) were associated with lower short-term disability costs. MBC patients’ families incurred 39.7% (p?=?0.06) higher indirect costs compared to EBC patients’ families after controlling for key covariates.

Conclusion:

Productivity loss and associated costs in MBC patients are substantially higher than EBC patients or the general population. These findings underscore the economic burden of MBC from a US societal perspective. Various treatment regimens should be evaluated to identify opportunities to reduce the disease burden from the societal perspective.     

Dualism and cross-country growth regressions

This paper develops empirical growth models suitable for dual economies, and studies the relationship between structural change and economic growth. Changes in the structure of employment will raise aggregate productivity when the marginal product of labor varies across sectors. The models in the paper incorporate this effect in a more flexible way than previous work. Estimates of the models imply sizeable marginal product differentials, and indicate that the reallocation of labor makes a significant contribution to the international variation in productivity growth.     

A reassessment of total factor productivity convergence: Evidence from cross-country analysis

This study revisits total factor productivity (TFP) convergence by employing the latest Lagrange multiplier and residual augmented least squares Lagrange multiplier unit root tests and Phillips and Sul panel club convergence technique. The study uses annual data for 44 developing and 29 developed countries covering the time-period 1970–2014. Our findings from these unit root tests support evidence of TFP convergence. Region-based results (Africa, Asia, and Latin America and the Caribbean) also confirm TFP convergence. Further, results derived from the Phillips and Sul test support evidence of TFP convergence, although the speed of convergence varies by region. The highest speed is noted in the Asia region, whereas, the lowest of speed productivity convergence is observed in the Africa region.     

Examining the association of smoking with work productivity and associated costs in Japan

Aims: Smoking is associated with significant health and economic burden globally, including an increased risk of many leading causes of mortality and significant impairments in work productivity. This burden is attenuated by successful tobacco cessation, including reduced risk of disease and improved productivity. The current study aimed to show the benefits of smoking cessation for workplace productivity and decreased costs associated with loss of work impairment.

Materials and methods: The data source was the 2011 Japan National Health and Wellness Survey (n?=?30,000). Respondents aged 20–64 were used in the analyses (n?=?23,738) and were categorized into: current smokers, former smokers, and never smokers. Generalized linear models controlling for demographics and health characteristics examined the relationship of smoking status with the Work Productivity and Activity Impairment questionnaire (WPAI-GH) endpoints, as well as estimated indirect costs.

Results: Current smokers reported the greatest overall work impairment, including absenteeism (i.e. work time missed) and presenteeism (i.e. impairment while at work); however, after controlling for covariates, there were no significant differences between former smokers and never smokers on overall work impairment. Current smokers and former smokers had greater activity impairment (i.e. impairment in daily activities) than never smokers. Current smokers reported the highest indirect costs (i.e. costs associated with work impairment); however, after controlling for covariates, there were no significant differences between former smokers and never smokers on indirect costs.

Limitations and conclusions: Smoking exerts a large health and economic burden; however, smoking cessation attenuates this burden. The current study provides important further evidence of this association, with former smokers appearing statistically indistinguishable from never smokers in terms of work productivity loss and associated indirect costs among a large representative sample of Japanese workers. This report highlights the workplace benefits of smoking cessation across productivity markers and cost-savings.     

论创业型雇员的进入行为与竞争政策

本文试图把市场进入问题的研究从产品市场延伸到劳动力市场,分析了存在雇员经理人进入威胁情况下企业雇佣行为的变化及其特点。雇员所面临的进入壁垒的降低可能会引致企业不雇佣或者少雇佣创业型人才,或者雇佣低水平的经理人,因而传统理论中降低进入壁垒会实现福利增进的结论,在本文所给定的理论框架中未必能够成立。由此,市场进入对于竞争政策的正确含义,应该在区分本企业的雇员进入和现有企业之外的竞争者进入这两种情况下得出。     

进入管制行业的集聚效应和社会福利——基于航空航天制造业的实证研究

基于省级和国家层面的宏观数据,分别构建了产业集聚和社会福利发展水平的综合评价指标体系,利用脱钩理论分析了我国航空航天制造产业的集聚效应及其与社会福利发展水平之间的关系。研究表明:航空航天制造业在东部地区发展迅猛;产业集聚的总体水平呈现下降趋势;集聚效应所带来的社会福利总体发展水平呈现下降的趋势,直接福利和间接福利并没有得到同步发展;产业集聚和社会福利发展水平多为同向变化,集聚福利脱钩指数呈现下降趋势;进入管制政策在一定程度上能够促进产业发展。     

R&D两面性、技术引进与浙江省高技术产业全要素生产率增长

基于DEA-Malmquist指数测算浙江省高技术产业全要素生产率,运用一阶差分模型和加权最小二乘法检验了R&D两面性、技术引进对浙江省高技术产业全要素生产率增长的影响。研究发现:1998-2012年,浙江省高技术产业全要素生产率整体低于全国平均水平,处于负增长状态;R&D创新能力对浙江省高技术产业全要素生产率促进作用不显著,而R&D吸收能力和技术引进抑制作用显著,其吸收能力未能与技术引进互为补充共同促进浙江省高技术产业全要素生产率增长。研究结果表明:以中小型高技术企业为主的浙江省高技术产业急需全面推进创新驱动发展战略,继续以自主R&D为主、技术引进为辅,持续加大R&D投入,增强R&D创新能力和吸收能力。     

An econometric model of potential output, productivity growth, and resource utilization

This paper specifies a macroeconometric model providing a simultaneous framework for estimating the natural rate of unemployment, the full-employment (FE) labor force and hours of work, the FE productivity growth rate, and the growth path of potential (FE) output during 1960–2000. The estimated output and unemployment gaps are consistent with Okun’s Law. Historical perspective is provided on the expansion of the nineties by comparing it with those of the three previous decades in terms of growth and utilization of potential output. Factors accounting for the growth of potential output, productivity and labor supply are identified and compared.