Estimating productivity and returns to scale in the US textile industry

In light of the textile industry's growing foreign competition, trade deficit and job loss, we estimate its productivity and efficiency for the period 1975–93 utilizing a variable elasticity of substitution production function. The results indicate that, despite job losses, the industry adjusted by increasing labor productivity and maintaining fairly stable profits. This performance does not warrant protectionist policies. However, with an elasticity of factor substitution less than one and decreasing, the impact of factor price increases could result in higher apparel prices and preference for cheaper imports. Furthermore, with an elasticity of capital output rapidly decreasing, significant technological improvements will be required to improve competitiveness since textile production is capital intensive. Recently revised rules on trade liberalization could increase competition in the industry. First version received: October 1999/Final version received: August 2000     

Technological progress and factor substitution in the U.S. Textile industry, 1949–1974

Using the translog dual cost function approach, we estimate the elasticity of substitution and the nature of technical change in the U.S. textile industry. A significant extension on the existing studies on this topic is the incorporation of learning by doing as a source of technical change. Our results confirm earlier findings of limited substitution possibilities between capital and labour and that factor argumenting technical change is labour saving and capital using in the Hicksian sense. But this augmentation takes placeboth due to time and learning and further that bias due to the two factors is in the opposite direction.     

S-Curve at the industry level: evidence from US–UK commodity trade

Backus et al. in (Am Econ Rev 84(1): 84–103, 1994) found that the cross-correlation function between terms of trade and trade balance resembles the letter S and labeled it the S-curve. Support for S-curve is rather weak in some cases, most notably US when aggregate trade data are used. Empirical regularities based on aggregate trade data may suffer from a potential bias stemming from aggregation. Indeed, by employing US bilateral trade data excellent support for the S-curve is recovered. The support, however, was rather weak at the level of US–UK bilateral trade. Suspecting aggregation bias again, we employ US–UK trade data at the industry level and find overwhelming support for the S-curve. Furthermore, commodity attributes play no role. Valuable comments of an anonymous referee are greatly appreciated. Any error, however, is ours.     

Does performance explain mutual fund flows in small markets? The case of Portugal

We study the performance reaction of investors in a specific small market context. Our sample includes all Portuguese open-end equity funds that invested in stocks issued by Portuguese companies in the period December 1993–June 2009. Instead of the convex flow–performance relationship usually documented for the US, we find an absence of reaction to past performance. We find no evidence to support the “smart money effect”, given that capital flows do not favour next period performance winners. We also document persistence of fund flows. Our results are consistent with the idea that large financial intermediaries have the capacity “to drive” their customers to funds with larger fees.     

The effects of public infrastructure on the cost structure of Spanish industries

This paper examines the impact of public infrastructures on the performance of Spanish private business at a disaggregated industry level. We use duality theory to recover the productivity effects of public capital by calculating the cost saving effects that are associated to public services. Using a translog cost function we present panel estimates for 14 Spanish industries during the period 1980–1991. Our results strongly suggest that public capital formation can be considered to be an instrument to improve competitiveness by reducing production costs. However, the results also indicate that there is a technologically induced labor saving effect through higher public investment. Furthermore, our estimates suggest that a distinction among industries is of importance because the effects of public infrastructures vary across industries considerably.     

Swedish CO<Subscript>2</Subscript> Emissions 1993–2006: An Application of Decomposition Analysis and Some Methodological Insights

This study undertakes a decomposition analysis to identify the drivers of carbon dioxide emissions change in the Swedish business and industry sectors 1993–2006. On aggregate, energy intensity decreased, but this does not seem to have been very important for reducing emissions. Rather, fuel substitution seems to have been more important, which is in line with findings from the decomposition literature on Sweden. However, at the sectoral level, we find no clear pattern of the effect of fuel substitution and energy intensity on emissions. We also draw some methodological conclusions: decomposition analysis should be undertaken at the most disaggregate level possible; assessing decomposition results by summing results over several time periods leads to biased results; and decomposition analysis should not be based only on some initial and final years of a long time period. Furthermore, we address the problem of double counting energy flows in decomposition analysis of aggregate effects when the energy sector is included, and point out potential problems related to output measured in monetary terms.     

The effect of environmental and social performance on the stock performance of european corporations

This paper examines the effect of sustainability performance of European corporations on their stock performance, measured as the average monthly stock return from 1996 to 2001. The econometric analysis is based on common empirical asset pricing models, particularly on the multifactor model according to Fama and French (1993, Journal of Financial Economics, 33:3–56). The consideration of sustainability performance is two-fold: The average sustainability performance of the industry in which a corporation operates and the relative sustainability performance of a corporation within a given industry. The main result is that the average environmental performance of the industry has a significantly positive influence on the stock performance. In contrast, the average social performance of the industry has a significantly negative influence. The variables of the relative environmental or social performance of a corporation within a given industry have no significant effect on the stock performance. As a by-product, the econometric analysis implies that some results of Fama and French (1993, 1996, The Journal of Finance, LI (1):55–84) regarding the risk factors of the multifactor model need not hold true for different observation periods, for different stock markets, and for the use of single stocks (instead of portfolios). An erratum to this article can be found at     

中国工业部门的能源替代研究——基于对ALLEN替代弹性模型的修正

To overcome the drawbacks in estimating the rate of input substitution in existing econometric models, our paper is first to estimate the absolute/net rate of input substitution of capital and labor for energy in China’s industrial sector. Based on trans-log cost function with constant elasticity of substitution and combined MES method with technology progress and output effect, our paper finds a significant substitution relationship between labor and energy and an uncertain substitution relationship between capital and energy with some complementary characteristics. Furthermore, technology progress and output effect are found to have enhanced the substitution of labor for energy in the past 30 years. Based on these empirical findings, constructive suggestions are made concerning the medium and long-term development strategy of energy in China’s industrial sector. __________ Translated from Shuliang jingji jishu jingji yanjiu 数量经济技术经济研究 (The Journal of Quantitative & Technical Economics), 2008, (5): 30–42     

The Zilcha criteria for dynamic inefficiency reconsidered

We reconsider necessary and sufficient conditions for dynamic inefficiency given in Zilcha (J Econ Theory 52:364–379, 1990, J Econ Theory 55:1–16, 1991) and a critique by Rangazas and Russell (2005). First, we show that the characterization given in Zilcha (1990) for nonstationary economies is correct and correct Zilcha’s proof. Second, using this insight, we complement Rangazas and Russell’s (Econ Theory 26:701–716, 2005) discussion of the counterexamples to Zilcha (J Econ Theory 55:1–16, 1991). Third, we discuss consequences of our results for applied tests of (in-)efficiency based on the Zilcha criteria. We would like to thank Itzhak Zilcha, and in particular Peter Rangazas and Steve Russell for detailed and very helpful comments.     

产业关联效应对纺织业外资区位选择影响的实证研究

本文通过投入产出表计算出纺织业的上下游关联最密切的行业,利用广义矩估计对2001～2009年中国省际纺织业面板数据的实证研究表明:纺织业下游的服装业通过产业支持效应促进了纺织业不同来源地外资的流入;上游的化学纤维制造业对纺织业不同来源地外资的流入影响不稳健;第三产业主要通过产业替代效应限制了港澳台投资的流入,而对其他来源地外资没有影响。     

Macroeconomic changes and mortality in Mexico

While previous studies examine how the business cycle affects mortality in developed countries, less is known about this relationship in developing countries. In this paper, we investigate whether the procyclical nature of mortality in developed countries found by Ruhm (Q J Econ 115(2):617–650, 2000) and others is also present in Mexico. We assemble a unique panel data set that contains state-level data on mortality rates by age and cause of death, GDP per capita, and socioeconomic status. We find that for Mexico total mortality rates are procyclical, with the largest impact on those aged 20–49. While these findings are similar to those in Ruhm (Q J Econ 115(2):617–650, 2000), the effects of business cycles on mortality rates differ for several specific causes of death. These results suggest that whereas total mortality may be procyclical in both developed and developing countries, significant differences may exist for some causes of death.     

Economic impact of ocean fish populations in the global fishery

Our goal in this paper is to estimate the total output in an economy that is currently dependent (at least partially) on current fisheries output. We therefore applied the Leontief technological coefficients at current production and then estimate total output supported throughout the economy at the current level of production. Estimates of gross revenue from capture fisheries suggest that the direct value of output for this sector is US $80–85 billion annually (Sumaila et al., Journal of Bioeconomics 9(1):39–51, 2007; Willmann et al., The Sunken Billions, World Bank, FAO, Washington DC, Rome, 2009). However, as a primary or a potential economic base industry, there are a vast number of secondary economic activities—from boat building to international transport—that are supported by world fisheries, yet these related activities are rarely considered when evaluating the economic impact of fisheries. This study applies an input–output methodology to estimate the total direct, indirect, and induced impact of marine capture fisheries on the world economy. While results suggest that there is a great deal of variation in fishing output multipliers between regions and countries, when we apply the output multipliers to the capture fisheries sector at the global level, we find that significant indirect and induced effects place the impact of this sector to world output nearly three times larger than the value of landings at first sale, at between US $80–85 billion annually (Sumaila et al., Journal of Bioeconomics 9(1):39–51, 2007; Willmann et al., The Sunken Billions, World Bank, FAO, Washington DC, Rome, 2009). However, as a primary or a potential economic base industry, there are a vast number of secondary economic activities—from boat building to international transport—that are supported by world fisheries, yet these related activities are rarely considered when evaluating the economic impact of fisheries. This study applies an input–output methodology to estimate the total direct, indirect, and induced impact of marine capture fisheries on the world economy. While results suggest that there is a great deal of variation in fishing output multipliers between regions and countries, when we apply the output multipliers to the capture fisheries sector at the global level, we find that significant indirect and induced effects place the impact of this sector to world output nearly three times larger than the value of landings at first sale, at between US 225 and 240 billion per year.     

The substitutability between parent company and foreign affiliate employment in Europe

This paper examines the substitution pattern between parent company and foreign affiliate employment of European multinationals. The data is drawn from the AMADEUS and BANKSCOPE firm-level databases and covers parent companies in 14 high-wage European countries (EUR14) and their affiliated companies in the wider Europe including locations in the low-wage Central and East European countries (CEEC) for the period 2000–2004. We find that the substitution elasticity between employment of the EUR14 parent companies and employment in their foreign affiliates in the CEEC is quite low. Furthermore, the substitution possibilities are higher between parent company and affiliate employment in other West European countries than those between parent company and affiliate employment in the CEEC. Finally, we find that the output change of the parent company and to a lesser extent that of the foreign affiliates is more important than changes in relative wages in determining the relative labour demand.     

Off-shoring and labor productivity: Evidence from China

This paper uses input-output tables to measure material off-shoring, service off-shoring and narrow sense material off-shoring on 33 industries by use of DJ index (Daveri and Jona-Lasinio, 2008), not FH index with “the same proportion assumption” (Feenstra and Hanson, 1996). It estimates the effects of the off-shoring on labor productivity by panel data model. Our results show that, the off-shoring is generally positively associated with labor productivity, and service off-shoring has more significant effect than the material off-shoring. There are some key aspects to be discussed in detail, including: (1) the heavy industry’s material off-shoring increases obviously and service off-shoring declines in recent years, and the former’s contribution to productivity growth is less than the latter; (2) the demand of chemical industry for service off-shoring significantly increases and its positive marginal effect on productivity growth is stronger than the material because of industry transformation and upgrading; and (3) the current intensive material off-shoring of textile, equipment manufacturing industries greatly contributes to productivity growth, while the positive effect from service off-shoring on labor productivity has initially boomed. In conclusion, we provide some suggestions for further development of China’s off-shoring.     

A competing risks analysis of firms’ exit

Firms may exit the market in several ways and each form of exit is likely to be caused by different factors (Schary in RAND J Econ 22:339–353, 1991). This paper explores the determinants of different exit routes. Using a sample of Spanish manufacturing firms for 1990–2000, we estimate a competing risks proportional hazards model to identify the factors leading firms to exit the market through (the mutually precluding events of) liquidation/bankruptcy and acquisition/merger. Our results show the existence of a sharp difference between the determinants of these two exit routes in terms of firm and industry characteristics.     

Potential output growth in several industrialised countries a comparison

In this paper, we present international comparisons of potential output growth among several economies—Canada, the euro area, France, Germany, Italy, Japan, the Netherlands, the United Kingdom, and the United States—for the period 1991–2004, for which we construct consistent and homogenous capital stock series. The main estimates rely on a structural approach where output of the whole economy is described by a Cobb–Douglas function and Total Factor Productivity (TFP) is estimated allowing for possible breaks in the deterministic trend. The results confirm that over the considered period the potential gross domestic product growth has been faster in the United States than in other studied countries, reflecting a combination of higher labour contribution and faster TFP growth. Overall, this paper might help to shed some light on cross-country differences in economic performance over the recent period.     

Precautionary motivation and consumption insurance: Empirical analysis of household consumption behavior in rural China

Based on a household survey in rural China, this paper discusses parameters such as precautionary motive, excess sensitivity, consumption insurance, and inter-temporal substitution in the household consumption function in rural China. The conclusions of the paper indicate that there is a significant precautionary motive in household consumption in rural China, but the function of consumption insurance is very limited, and the consumption is also excessively sensitive to the income change. Such parameters are different among consumers within different groups. __________ Translated from Zhongguo Nongcun Jingji 中国农村经济 (Chinese Rural Economy), 2006, (4): 12–19     

On a clear day you might see an environmental Kuznets curve

We shed some new light on the Environmental Kuznets curve (EKC) and show how it can be viewed as a particular form of equilibrium relationship, where technology and preference parameters determine the shape of the curve. In contrast to most of the literature on the EKC, we estimate a theoretically consistent model on long-run data (Swedish sulfur emission, covering the period 1900–2002). Furthermore, we test and date structural change. The model suggests four regimes, 1900–1918, 1919–1933, 1934–1967 and 1968–2002, generating four rather different patterns for pollution over time. The policy-conclusions are consonant with Pearce’s general view about the EKC: there is no theoretical presumption that it has an inverted U shape, nor should any country try to “grow out of the environmental problems” without analyzing the benefits and costs of so doing.     

Generalized method of moments and present value tests of the consumption-capital asset pricing model under transactions costs: evidence from the UK stock market

In this paper we test for the inclusion of the bid–ask spread in the consumption CAPM, in the UK stock market over the time period of 1980–2000. Two econometric models are used: first, Fisher’s (in J Appl Econometrics 9:S71–S94, 1994) asset pricing model is estimated by GMM. We obtain plausible values of all the structural parameters and transactions costs. We subsequently test the robustness of our results by extending the VAR approach proposed by Campbell and Shiller (in Rev Financ Stud 1:195–228, 1988). This is achieved with the inclusion of the normalised bid–ask spread as an independent variable in the pricing equation. Overall, the statistical tests are unable to reject the bid–ask spread as an independent explanatory variable in the C-CAPM. In addition, in the VAR specification we find that both the normalised and the absolute bid–ask spread is a significant predictor of the dividend to price ratio. The paper’s main conclusion is that transaction costs should be included in asset pricing models, as they possess independent explanatory power.      

An Empirical Analysis of the Effects on Firms’ Economic Performance of Implementing Environmental Management Systems

This paper investigates whether environmental management system (EMS) implementation influences a firm’s value added, one of the indices of economic performance. Because it is expected that EMS implementation increases a firm’s value added through an increase in demand and an improvement in productivity, a simple model to identify how these effects influence a firm’s value added is developed and is empirically investigated using panel data for Japanese manufacturing firms in the period 1996–2007. The main findings are as follows. For the full sample, EMS implementation increases a firm’s value added through an increase in demand and improvement in productivity. Among these firms, however, the positive effect of the implementation through an increase in demand mainly exists for export-oriented firms. At the industry level, the effects of EMS implementation vary among different industries. These results empirically prove that there are plural paths for EMS implementation to improve a firm’s economic performance.