Driver Of Productivity Growth Research Articles

Automatic detection of faults in industrial production of sandwich panels using Deep Learning techniques

Abstract The use of technologies like artificial intelligence can drive productivity growth, efficiency and innovation. The goal of this study is to develop an anomaly detection method for locating flaws on the surface of sandwich panels using YOLOv5. The proposed algorithm extracts information locally from an image through a prediction system that creates bounding boxes and determines whether the sandwich panel surface contains flaws. It attempts to reject or accept a product based on quality levels specified in the standard. To evaluate the proposed method, a comparison was made with a sandwich panel damage detection method based on a convolutional neural network and methods based on thresholding. The findings show that the proposed method, which is based on an object detector, is more accurate than the alternatives. The characteristics of the model, which can reject or accept a product according to the standard and limit allowable manufacturing flaws to obtain a quality product, also enable this system to improve industrial standards for producing sandwich panels while increasing speed.

Are pro‐productivity policies fit for purpose?

AbstractIn this paper we examine productivity trends, drivers of productivity growth and pro‐productivity policies across the G‐20 economies since 1970. While we find distinctly different productivity growth dynamics between G‐20 economies and over time, one common observation is a widely shared slowdown in labour productivity growth since the 2010s underpinned by lower (or even negative) total factor productivity growth. Moreover, the growth in capital per worker hour has also begun to level off. We develop a typology of pro‐productivity policies and argue that policies for investment and technological change need strengthening to support a revival of productivity growth. Such policies should include a balanced approach to stronger technological progress and more rapid diffusion; a strengthening of investment, especially in intangibles and public services; and greater attention for human capital. We also argue for stronger institutions and capabilities that allow for dynamic learning about pro‐productivity policies across countries and over time.

Does import competition drive productivity growth? Evidence from Hungary’s pre-accession import tariffs

This paper studies the effect of increased competition from imports on the productivity of firms. It proposes an empirical model that estimates productivity from sales revenue. The model addresses concerns associated with unobserved prices and demand conditions in revenue productivity. Unlike De Loecker (Econometrica 79(5):1407–1451, 2011), the model builds on recent evidence on the effect of exporting on firm-level prices by distinguishing between the export and domestic demand markets and integrating both in the supply function of firms. It applies this framework to study the effect that tariffs reduction on EU imports had on the efficiency of manufacturing firms in Hungary during the period 1996–2003, and finds that a 10-percentage point reduction in import tariffs on similar products manufactured by a firm raises the firm’s productivity by 1.40%. This is in contrast to 2.35% when revenue productivity is used. The proposed model provides a simple framework that improves productivity estimates from sales data.

Is Home-Host Cultural Distance a Risk? Evidence from Outward Foreign Direct Investment by Chinese Enterprises

Cultural distance is always regarded as a “risk” in the decision making of enterprises involved in the outward foreign direct investment (OFDI), however, investment is a powerful driver of productivity growth and increased innovation capacity of enterprises in both countries. Is cultural distance a “risk” ? Using Hofstede's indicators and the Kogut and Singh index (1988), this paper calculates the cultural distance based on six cultural dimensions and further examines the effect of cultural distance on the outward foreign direct investment by Chinese enterprises and its mediating effects on the role of other factors influencing the decisions of multinationals. The results indicate that there is a nonlinear effect of cultural distance and the mediating effect of cultural distance is negative.

North and South: A Regional Model of the UK

We set up a two-region model to study the policy challenge of bringing the North’s income up to the level of the South in the UK. The model focuses on labour costs as the driver of output gains through the international competitiveness channel; and on tax/regulative costs to entrepreneurs as the driver of productivity growth. The empirical results show that the regional model behaviour fits the regional UK data behaviour over the period of 1986Q1 and 2019Q4, using the demanding Indirect Inference method. We also carry out a Monte Carlo power test, which shows the empirical results we obtain are trustworthy and can provide us a reliable guide for policy reform. The results suggest that in response to tax cuts and labour market reforms GDP in the North increases almost twice as much as GDP in the South. Given that a broad programme of tax cuts and regulatory reform would more than pay for itself in the long run, it must be considered as a highly attractive political agenda.

Institutions and the productivity challenge for European regions

AbstractEurope has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been proposed to address this productivity ‘puzzle’. However, how the quality of local institutions influences labour productivity has been overlooked by the literature. This article addresses this gap by evaluating how institutional quality affects labour productivity growth and, particularly, its determinants at the regional level during the period 2003–2015. The results indicate that institutional quality influences regions’ labour productivity growth both directly—as improvements in institutional quality drive productivity growth—and indirectly—as the short- and long-run returns of human capital and innovation on labour productivity growth are affected by regional variations in institutional quality.

Labor productivity in the non-resource sectors of the Russian economy: What determines firm-level growth?

The study discusses underlying factors of labor productivity in firms of basic non-resource industries of the Russian economy and considers the role of innovation and investment activity, human capital development, competitive environment and government support. The data is based on the results of a survey of managers of 713 companies in basic non-resource industries (manufacturing, agriculture, transport, construction). We find high level of divergence of firm productivity at the industry level. We show that higherlevelof productivity is accompanied with investments in human capital, in fixed assets, as well as the use of digital technologies, but we do not find that higher productivity is accompanied by innovations and expenditures on research and development. We show that productivitygrowthis combined not only with investment, but also with innovative activity (process innovations) and R&D expenditures. The driver of productivity growth is the private sector: the increase in productivity is driven by firms serving the demand of private medium and large companies. Competitive environment is another factor: moderate competition with import (which acts as a stimulus for innovations of Russian companies) is a condition for the productivity growth.

The Impact of ICT on Labour Productivity – Europe vs. U.S.

Research background: The European economy has been experiencing declining productivity growth rates since the 1970s despite high investments in information and communication technologies (ICT). Investments in ICT are considered a key driver of productivity growth that serves as a basis for further improvements in living standards. However, despite the emergence of new technologies and industries, especially after 1995, European productivity growth has slowed and lagged behind the United States. The critical question is why? Purpose of the article: This article aims to examine the effects of ICT on the European labour market in the period when machines and systems such as artificial intelligence, new information technologies, the Internet of things, and other technologies are becoming increasingly interconnected and intertwined. Additionally, the article examines the key reasons why European productivity lags behind the U.S. and explains them. Methods: The panel regression method analyzes the productivity lag of selected European developed countries and emerging markets in 2007-2019. The article additionally makes a qualitative analysis of the benefits of new technologies on productivity in Europe compared to the U.S. Findings & Value added: The results of the econometric analysis applied in this article confirm the positive but insignificant impact of ICT investments on the labour productivity of the case of European developed countries in the post-Great Recession period. Thus, the article fills the gap in the research literature regarding the relationship between ICT investments and the labour productivity of selected European countries.

Total Factor Productivity of Listed Companies in Manufacturing Industry: Study Based on Three Major Coastal Economic Zones in China

Su, H., 2020. Total factor productivity of listed companies in manufacturing industry: Study based on three major coastal economic zones in China. In: Liu, X. and Zhao, L. (eds.), Today's Modern Coastal Society: Technical and Sociological Aspects of Coastal Research. Journal of Coastal Research, Special Issue No. 111, pp. 183–186. Coconut Creek (Florida), ISSN 0749-0208.As terrestrial resources become increasingly scarce, human activities extend farther into the ocean. Coastal areas are blessed with rich aquatic resources, as well as the advantage of convenient shipping traffic. The manufacturing industry is a comprehensive symbol of a country's economic strength. Therefore, the improvement of the efficiency of manufacturing industry in the most developed coastal areas is the key of economic operation. This paper uses the Malmquist-Data Envelopment Analysis (DEA) model to analyze the total factor productivity (TFP) of listed manufacturing firms in China's three major coastal economic zones from 2009 to 2018. The result shows that the efficiency of manufacturing industry in China's three major coastal economic zones has maintained a relatively high level, and the growth rate of TFP is on a steady growth trend. A gap occurs between the actual level of manufacturing output and the level of frontier output in the three major coastal economic zones. Therefore, improving technological efficiency is one of the main issues to be faced. In the coming year, technological progress, the introduction of advanced technologies, and institutional innovations will be the main drivers of productivity growth.

Revitalizing the race between technology and education: Investigating the growth strategy for the knowledge-based economy based on a CGE analysis

This study conducted quantitative policy experiments using a computable general equilibrium model to investigate how long-run economic growth can be achieved through the endogenous interactions between innovation and human capital accumulation. The analysis found that there are limits to driving productivity growth and enhancing growth potential when focusing solely on the expansion of technological innovation. However, our results suggest that promotion of the complementarity between technological innovation and human capital formation may alleviate the inequalities of wages and employment induced by skill-biased technological change, promoting balanced growth among industrial sectors with higher productivity improvement and scale effects. This study suggests that in order to spur long-run growth in knowledge-based economy, policymakers should establish educational infrastructure to support workers to move up the skill ladder and cope with rapid technological change.

Transatlantic Technologies: the Role of ICT in the Evolution of U.S. And European Productivity Growth

We examine the role of the ICT revolution in driving productivity growth behavior for the United States and an aggregate of ten Western European nations (the EU-10) from 1977 to 2015. We find that the standard growth accounting approach is deficient when it separates sources of growth between ICT capital deepening and TFP growth, because much of the effect of the ICT revolution was channeled through spillovers to TFP growth rather than being limited to the capital deepening pathway. Using industry-level data from EU KLEMS, we find that most of the 1995-2005 U.S. productivity growth revival was driven by ICT-intensive industries producing market services and computer hardware. In contrast the EU-10 experienced a 1995-2005 growth slowdown due to a paucity of ICT investment, a failure to capture the efficiency benefits of ICT, and performance shortfalls in specific industries including ICT production, finance-insurance, retail-wholesale, and agriculture. After 2005 both the U.S. and the EU-10 suffered a growth slowdown, indicating that the benefits of the ICT revolution were temporary rather than providing a new permanent era of faster productivity growth. This joint transatlantic post-2005 slowdown is consistent with the broader view that ongoing innovation has been less potent in boosting productivity growth compared to earlier decades of the postwar era. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Intangible capital and business productivity

The importance of intangible capital as a driver of productivity growth is recognised at both macroeconomic and microeconomic levels. However, in general, there is a lack of strong empirical evidence in the relevant literature on the connection between micro and macro approaches. This study integrates both perspectives to analyse how internal and external intangible capital influence the productivity of companies and, therefore, economic growth. A model is estimated in which the total factor productivity of companies is explained through their internal and external intangible capital. To this end, regional characteristics are considered in terms of technological endowment, human capital, and entrepreneurial capital. In addition, other agglomeration economies such as regional specialisation and regional productive diversity are also considered. In the empirical application, a panel of companies from the seventeen Spanish regions over the period 2006–2015 is used. The findings suggest that there is a positive effect of intangible capital on companies’ productivity and evidence of a spillover effect as a result of local intensities of intangibles.

The rise of the \u201cservice economy\u201d in the second half of the twentieth century and its energetic contingencies

The characteristic of the “service economy” is the rise to dominance of the service sector in terms of employment and value added shares. We track this rise during the second half of the twentieth century for the U.S., more precisely the period from 1970 to 2005. Following seminal work by Baumol (1967) the rise is often attributed to growing productivity differentials between the economic sectors. The causes of the productivity differentials are, however, controversial. Inspired by Georgescu-Roegen’s (1971) evolutionary approach to production theory, the present paper explores whether differences in the energetic features of the sectors’ production technologies contribute to the growing sectorial productivity differentials. For the data for our period of analysis it turns out that a close relationship indeed exists between the sectors’ incentives for substituting relatively cheap energy for ever more expensive labor and their labor productivity gains. In highly energy-dependent sectors an increasing energy/labor ratio has been driving productivity growth while this was not the case in the service sector. The paper closes with a short discussion of what the finding may imply for the future of the service economy.

The Productivity Puzzle: Restoring Economic Dynamism

US labor productivity has been stagnating since 2005 onward, averaging growth of only 1.3% a year since then, as opposed to 2.8% annual growth over the previous decade starting in 1995. The United States is not alone: According to McKinsey & Company data, labor productivity growth rates remain near historic lows in many other advanced economies. The slowdown in productivity growth in these economies is a problem — and a puzzle. The Productivity Puzzle: Restoring Economic Dynamism, edited by David E. Adler and Laurence B. Siegel, is an anthology of essays about this mysterious stagnation in productivity. It provides new policy solutions in addition to analyses of the problem. The book’s central innovation is that it is interdisciplinary. Traditional macroeconomics has trouble fully explaining the productivity puzzle because the sources of productivity growth often lie in a country’s specific economic practices and institutions. These institutional differences are better captured by political economists, historians, and social thinkers than by macroeconomists. But productivity also has macroeconomic components, including interest rate regimes and terms and amounts of trade, which are typically missing from political or institutional analyses. That is, neither the macroeconomic nor the institutional approach is adequate to fully capture all the drivers of productivity growth. As a result, the anthology consists of authors writing from multiple perspectives, not just mainstream economics or finance. The book offers analyses that investors may be unfamiliar with, including statistical debates about productivity measurement and the decline in US manufacturing employment, little-known interest rate mechanisms that might drive misallocations of the economy to lower productivity sectors, and institutional deficiencies in the US innovation “system” that make it hard for those in the United States to translate academic research into actual manufacturing processes as is done in Germany and Japan. Essays in the anthology explore whether the United States is still a start-up nation, implications for the economy of the rise of superstar firms, and finally, whether the United States is abandoning its commitment to free market competition. The increase in market concentration means that cellphone plans, internet service, and airline tickets are now more expensive in the United States than in Europe. Contributors to the book come from a variety of backgrounds and tend to have a global perspective. They include central bankers, political scientists who study innovation, financial economists, and the Nobel Laureate Edmund Phelps. The book consists in part of the proceedings from the landmark conference on productivity and dynamism, organized by the editors, that took place at the Museum of American Finance in New York in November 2017 and of which the CFA Institute Research Foundation was a sponsor, along with other firms and organizations. These proceedings have been augmented here by essays relevant to the topic, selected by the editors. These new analyses present innovation solutions to the problems the book discusses. Understanding the drivers of productivity stagnation and growth is vitally important for everyone, including investors. As Paul Krugman has said, “Productivity isn’t everything, but in the long run, it is almost everything.” We are thus very pleased to present The Productivity Puzzle: Restoring Economic Dynamism. We believe it is a substantial contribution to the literature on the sources of, and obstacles to, economic progress.

Criteria for determining the structural changes priorities in the economy

The article aims to identify scientifically reliable criteria for determining priority sectoral directions of structural policy in Ukraine, to reveal key issues of domestic industries’ compliance withthese criteria, and to outline the ways to eliminate structural deformations in the economy of Ukraine. The methodological basis of the article relies on the joint application of a set of common scientific methods (analysis, synthesis, induction, deduction) as well as mathematical methods of economic research based on the concepts of economic complexity, product space and opportunity gains. This allows to discover new growth opportunities for Ukraine based on its industrial capabilities, technological potential and foreign trade diversity. Three steps to carry out drastic structural transformation of Ukrainian economy are suggested: reduction of energy intensity; development of highly productive industries that have kept their production and export potential; innovative and technological modernization of economy. The first two steps represent the intermediate goals of structural policy, while the third one reflects the strategic goal of domestic economy transformation. For each step, the main criteria are substantiated to identify the most promising economic sectors to focus structural policy on. The article presents a comprehensive look into defining sectoral priorities of economic transformation policy based on available opportunities (resource, capital, technological, human facilities, etc.) and potential of different industries to accelerate economic growth. The concepts of economic complexity, product space and opportunity gains enabled identification of specific product groups that can act as drivers of productivity growth under effective and balanced governmental support. The results of investigation can be used to develop strategic inter-sectoral program of economic restructuring in Ukraine.

Modeling the Effects of Spatial Localization in Urban Agglomerations of Russia

The article examines the spatial balance in development of Russian cities based on Zipf’s law and the proposed grouping (quadrants) of urban districts for the differentiation of regulatory measures in population and gross agglomeration product. Selective measures of benefits support and risk reduction in regards to agglomeration by type of urban district are proposed. The analysis of the production structure has shown a significant role of large urban settlements in the production of gross agglomeration product and its share in the gross regional product. This applies to urban districts with a population of more than 250 thousand people: in 2016 their share in regional production was 53.2%, and the share of profit was 62.7% with the share of employment of about 25%. Accordingly, the level of wages in large urban districts is 25% higher than in other settlements of the Russian Federation, with double superiority in labor productivity. In addition, strong dependence of wages on labor productivity has been established, which equals 66.4% in large urban districts and 61.7% in other regions of the Russian Federation. Panel regression methods were used to identify agglomeration factors. The regression parameters indicate that to medium to large urban districts, the density of the territory infrastructure and the density of transactions serve as drivers of productivity growth and wages. These parameters are complex and determine the specifics and efficiency of production, forming an increase in the standard of living. Developed infrastructure and economic institutions give rise to economies of scale and ensure saturation of social and economic communications.

Trade in Developing East Asia: How It Has Changed and Why It Matters

East Asia, for long the epitome of successful engagement in trade, faces serious challenges: technological change that may threaten the very model of labor intensive industrialization and a backlash against globalization that may reduce access to important markets. A detailed analysis of the evolution of East Asia's trade and trade policy in goods and services leads to the conclusion that how East Asia copes with these global challenges will depend on how it addresses three more proximate national and regional challenges. The first is the emergence of one East Asian country, China, as a global trade giant—accounting for nearly one-seventh of global exports and one-tenth of global imports -- which is fundamentally altering the trading patterns and opportunities of its neighbors. The second is the asymmetric implementation of national reform -- remarkable openness to goods trade and investment coexists with relative restrictiveness of services policies -- which is affecting the evolution of comparative advantage and productivity in each country. The third is the divergence between the relatively shallow and fragmented agreements that regulate the region’s trade and investment and the growing importance of regional and global value chains as crucial drivers of productivity growth.

Direct and indirect effects of trade liberalization: Evidence from Chile

Production networks can amplify the effects of trade reforms on firms performance. In this article, I examine the effect of a reduction of foreign tariffs on the productivity of supplier industries of exporters. Using a panel of Chilean plants during a period of trade liberalization with the European Union, the United States, and the Republic of Korea, I show that the average reduction in the foreign tariff faced by downstream industries (1.1 percentage points) increases the productivity of intermediate input suppliers industries by 1.5 percent. The increase in productivity among supplier industries accounts for 22.5 percent of aggregate productivity gains. I find that tariff cuts induce firms to acquire new machinery and pay higher wages to skilled workers. The results are robust when I control for the change in domestic competition and the access to foreign inputs that could potentially drive productivity growth following output and input tariff elimination.

Investigating the total factor productivity changes in the top ICT companies worldwide

This study benchmarks the cross-layer productivity of information and communications technologies (ICT) for the period between 1996 and 2015. Our results display that layer 3 companies (platforms, e-commerce, content and software) are the drivers of productivity growth within the ICT industry in the recent years. In contrast, layer 2 companies (network operators) score lower in efficiency than the other layers and experience a continuous decline in average productivity since mid-2000s. We note that, the key financial performance indicators signal a slowdown in the ICT industry since 2011, after when average increase rates of revenues and total assets dropped significantly. The stagnation is severer for network operators, which have been the main investors of the networks on which ICT rises.

Reconciling Economic and Environmental Goals: Impact of Information Technology on Energy Productivity

Increasing energy productivity has been emphasized as an important means to reconcile the dual objectives of maintaining economic growth and reducing energy consumption. Employing a production function framework, we examine the impact of information technology (IT) on energy productivity. Using data from 60 industries in the United States over the period 1998-2014, we find that IT significantly contributes to increasing energy productivity in the U.S. economy, and is mainly driven by software rather than hardware. Separate analyses of economic and environmental performances reveal that IT’s positive contribution to energy productivity results from both increased output and reduced energy consumption. Further, we find strong complementarities between the two types of IT capital in not only increasing productivity but also reducing energy consumption. In particular, the intensive utilization of software appears to mitigate the negative environmental impact of hardware. Taken together, this study highlights the critical role of IT—software, in particular—as a catalyst for enhancing energy productivity, a necessary condition for sustainable economic growth, beyond its role as a driver of productivity growth, which has been the focus of prior literature. This research has important implications for research and practice.