Productivity Measurement in Manufacturing and the Expenditure Approach

This paper studies conversion factors based on the expenditure approach and evaluates the appropriateness for international comparisons of output levels in manufacturing. We apply a consistency check based on the insight that relative productivity levels should be invariant to the choice of base year. Consequently, convergence parameters and dispersion of productivity across countries should also be unaffected by this choice. The results are disappointing: relative measures of productivity depend heavily of the choice of base year and change systematically as the base years roll forward. The conclusion is insensitive to the applied method for developing conversion factors. The implication is that we cannot measure relative productivity levels in manufacturing across countries using the expenditure approach.     

Entrepreneurship,job creation and wage growth

This paper analyses the importance of entrepreneurs in terms of job creation and wage growth. Relying on unique data that cover all establishments, firms and individuals in the Danish private sector, we are able to distil a number of different subsets from the total set of new establishments—subsets which allow us to more precisely capture the “truly new” or “entrepreneurial” establishments than has been possible in previous studies. Using these data, we find that while new establishments in general account for one-third of the gross job creation in the economy, entrepreneurial establishments are responsible for around 25% of this, and thus only account for about 8% of total gross job creation in the economy. However, entrepreneurial establishments seem to generate more additional jobs than other new establishments in the years following entry. Finally, the jobs generated by entrepreneurial establishments are to a large extent low-wage jobs, as they are not found to contribute to the growth in average wages.     

Foreign Firms,Domestic Wages*

Three types of theories have been used to explain the wage premium in foreign firms: the theories of heterogeneous workers, heterogeneous learning, and heterogeneous firms. We set up a model that explicitly encompasses two of these theories, and that can illustrate the third. This unifying framework allows us to rigorously compare the predictions of the different theories. Thus, it is a useful tool for interpreting new and existing empirical evidence. We illustrate the usefulness of the model on matched employer?employee data, and we find considerable support for all three theories. In particular, the theory of heterogeneous workers can explain up to 75 percent of the premium.