Employment Growth Rates Research Articles

International Quality Certification and Business Performance of Indian Firms: Evidence from Enterprise Survey Data

This article analyses the difference in firm’s performance between enterprises with and without international quality certification. The study is based on a comprehensive survey of 9,281 Indian firms operating in different regions of the country, conducted under the World Bank’s Enterprise Survey. About 44.9 per cent of the firms have adopted international quality certification for enhancing the quality of their business processes. Chi-square statistics indicate that there is a significant difference in enterprise characteristics by international quality certification. Result of the analysis of variance indicates a significant difference in business performance with and without quality certification in terms of sales, employment growth rates and capacity utilization. Firms with international quality certification perceive comparatively less obstacles than those who are not having international quality certification. This study provides insights on differences in firms’ performance and business obstacles faced by them with or without international quality certification. This study can be helpful in designing policies for promoting certification and accreditation of product quality and processes across business enterprises in a focused manner.

High-impact minimum wages and heterogeneous regions

We estimate the effects of the introduction of and subsequent increases in a substantial minimum wage in Germany’s main construction industry on wage and employment growth rates. Using a regional dataset constructed from individual employment histories, we exploit the spatial dimension and border discontinuities of the regional data to account for spillovers between districts and unobserved heterogeneity at the local level. The results indicate that the minimum wage increased the wage growth rate for East Germany but did not have a significant impact on the West German equivalent. The estimated effect on the employment growth rate reveals a contraction in the east of about 1.2 percentage points for a one-standard-deviation increase in the minimum-wage bite, amounting to roughly one quarter of the overall decline in the growth rate. We observe no change for the West.

Tax decentralization, labour productivity, and employment in OECD countries

ABSTRACTTax decentralization should improve the efficiency of local governments and ultimately boost output growth. However, the empirical evidence is mixed. Decomposing output growth into labour productivity and employment growth, we show that the ultimate effect of fiscal decentralization on growth depends on which factor prevails, thus rendering the direct estimation of tax decentralization on growth ambiguous. Using an instrumental variable approach, with instruments based on institutional similarities and geographic distance, the empirical analysis on a sample of 20 OECD countries shows that the positive and significant effect of tax decentralization on the employment growth rate is offset by the reduction of labour productivity growth, resulting in the absence of any statistically significant effect on output growth.

Calendar effects in daily aggregate employment creation and destruction in Spain

In this paper, we discuss the time series properties of a novel daily series of aggregate employment creation and destruction as registered by the Social Security in Spain. We focus on the period of economic recovery after the 2012 Labour Market Reform. Our concern for high-frequency data is motivated by the recent upsurge of labour contracts of a very short duration, which seems to have exacerbated the spikes in employment flows over the calendar year. First, we identify calendar effects in job flows and single out the Monday effect: an overreaction in job creation at the beginning of the workweek. Then, we investigate the importance of calendar effects for aggregate employment dynamics. We find that the employment growth rate shows a systematic decrease by the end of each month, which is more pronounced during the second half of the year, and it intensifies as the economy moves further along the expansion period. Finally, we use the flow of contract records at the micro-level (several millions) to evaluate how the occupational structure determines employment spikes. Our findings indicate that short-term contracts are highly prevalent in occupations under stronger calendar effects. In particular, we show that temporary workers’ contracts are the most important source of the Monday effect.

Why Has Growth Not Trickled Down to the Poor? A Study of Nigeria

Despite impressive economic growth and major economic reform policies the search for poverty-reducing growth strategies remains a perennial question in many developing countries as poverty persists unabated. This motivates the current study to investigate empirically growth-poverty nexus in Nigeria spanning between the period 1970 and 2017. The paper attempted to answer the question: why has growth not trickled down to the poor? Time series econometrics were applied to test the cointegrating, short- and long-run dynamics among the variables. The results obtained revealed that growth trickled down to the poor only when high rates of employment growth accompanied high rates of economic growth. In addition to employment, the result also revealed that the form of capital formation, rather than its absolute value, appears to matter to the question of why has growth not trickle down to the poor. Thus, economic growth policies that promote an increase in income in conjunction with a high rates of employment growth are more effective in combating poverty than those that focus only on average income levels.  

Raising the Overtime Premium and Reducing the Standard Workweek: Short-Run Impacts on U.S. Manufacturing

A nine-factor input model is developed to estimate the monthly demand for employment, capital, and weekly hours per worker/workweek in U.S. Manufacturing. The labor inputs correspond to production and non-production workers disaggregated by overtime and non-overtime employment. Policy simulations are conducted to examine the short-run effects on the monthly growth rates for employment, labor earnings, capital usage, and the workweek from either a) raising the overtime premium to double-time, or b) reducing the standard workweek to 35 hours. Although the growth rate policy effects are heterogeneous across disaggregated labor input categories, on aver- age both policy changes exhibit negative effects on the growth rates of industry-wide employment, earnings, and non-labor input usage. The growth rate of the workweek is virtually unaffected by raising the overtime premium but is negatively impacted by reducing the standard work week.

Firm Beliefs and Long-Run Demand Effects in a Labor-Constrained Model of Growth and Distribution

One of the most debated questions in alternative macroeconomics regards whether demand policies have permanent or merely transitory effects. While Kaleckian ecoomists have argued that demand matters even in the long run, both economists operating within other Keynesian traditions (e.g. Skott, 1989) as well as Classical economists argue that in the long-run output growth is constrained by the so-called natural rate. This paper attempts to bridge the gap by analyzing the role of firm beliefs about the state of the economy in a labor-constrained growth and distribution model based on Kaldor (1956) and Goodwin (1967) but featuring an explicitly dynamic choice of capacity utilization. We show that: (i) the relevance of such beliefs generates an inefficiently low utilization rate and labor share in equilibrium; but (ii) the efficient utilization rate can be implemented through fiscal policy. Under exogenous technical change, (iii) the inefficiency does not affect the equilibrium employment rate and growth rate, but expansionary fiscal policy has positive level effects on both GDP and the labor share. However, (iv) with endogenous technical change a la Verdoorn (1949), fiscal policy has also temporary growth effects. Finally, (v) the fact that the choice of utilization responds to income shares has a stabilizing effect on growth cycles, even under exogenous technical change, that is analogous to factor substitution.

Market Regulation, Cycles and Growth in a Monetary Union

We build a two-country currency union DSGE model with endogenous growth to assess the role of cross-country differences in product and labor market regulations for long-term growth and for the adjustment to shocks. We show that with endogenous growth, there is no reason to expect real income convergence. Large shocks, through endogenous TFP movements, can lead to permanent changes of output and real exchange rates. Differences are exacerbated when member countries have different product and labor market regulations. Less regulated economies are likely to have higher trend growth and recover faster from negative shocks. Results are consistent with higher inflation, lower employment and disappointing TFP growth rates experienced in the less reform-friendly euro area members.

Market Regulation, Cycles and Growth in a Monetary Union

We build a two-country currency union DSGE model with endogenous growth to assess the role of cross-country differences in product and labor market regulations for long-term growth and for the adjustment to shocks. We show that with endogenous growth, there is no reason to expect real income convergence. Large shocks, through endogenous TFP movements, can lead to permanent changes of output and real exchange rates. Differences are exacerbated when member countries have different product and labor market regulations. Less regulated economies are likely to have higher trend growth and recover faster from negative shocks. Results are consistent with higher inflation, lower employment and disappointing TFP growth rates experienced in the less reform-friendly euro area members.

SWOT Analysis of Micro Entrepreneurship and Start-ups in Haryana

MSMEs (Micro, Small and Medium Enterprises) have been globally considered as an engine of economic growth and as key instruments for promoting equitable development in most of the economies of the world. The MSMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth. They not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, which in turn, reduces regional imbalances, assuring more equitable distribution of national income and wealth. Micro, Small and Medium Enterprises (MSME) and Start-ups play vital role in the process of development in India. It generates employment at low cost and helps the society to move on the path of prosperity & growth. As more than 65% of Indians live in villages and as there is little scope for establishment of Large-scale industries in these areas, MSME is an important aspect with regard to development of rural areas. Even though the State has huge potential for industrialization, especially for MSME sector, its potential has not been fully harnessed so far. Thus the present paper is an attempt towards finding out the Strengths, Weaknesses, Opportunities and Threats of MSMEs and Start-ups in the State of Haryana. The present study proposes interprets, analyse, and understand the challenges faced by the Micro entrepreneurs and their business in Haryana State. By virtue of so, the study will prove to be a panacea for Micro entrepreneurs and start-ups. The study further suggests them how to increase the innovativeness, decision making and diversification of their businesses in Haryana state.

Entrepreneurial Quality and Startup Growth in India

This study extends and applies the methodology proposed by Guzman and Stern (2015) to estimate and map the quality of entrepreneurship in India, using government census data for 1,542,555 registered micro, small, and medium enterprises (MSMEs), spanning all 29 states in India. To our knowledge, this is the first study of its kind to quantify and characterize the quality of entrepreneurship in India based on cohort growth outcomes and firm characteristics at the time of registration. Methodologically, we define two types of growth outcomes: attaining a “public” corporation status within a set timeframe after founding (5-years, 10-years, 15-years), and achieving a set annual employee growth rate. We find that a small set of firm characteristics established at founding predicted long-run growth outcomes. Firms’ cluster status at founding predicted 58 percent higher probability of going “public” within 10 years, the original purchase value of assets predicted 62 percent higher probability of going public and 66 percent higher probability of employee growth, and urban location predicted 35 percent lower probability of going public and 33 percent lower probability of employee growth. Using these results, we then estimate entrepreneurial quality based on the Entrepreneurial Quality Index (EQI) and the Regional Entrepreneurship Cohort Potential Index (RECPI). We find that spatial patterns of high-growth entrepreneurship in India followed similar coastal effects and university-hub effects as those documented in the United States. We conclude with directions for future research.

부산지역 기업성과 분석을 통한 지역 정책의 유효성 연구

Since SME (Small and Medium Enterprise) sector accounts for about 85% of Korean employment, creating jobs through SMEs is an important task. The growth of SMEs leads to the revitalization of the national economy by creating jobs and income in the local area. Therefore, it is important for government and related public institutions to support SMEs, which play an important role in the national economy, to build a competitive economy.BR The purpose of this study is to evaluate the effectiveness of the support program for the SMEs in the local area, especially in Busan. Therefore, we analyze the performance of companies and compared effectiveness between the beneficiaries in MOTIE (Ministry of trade, industry and energy) (Group A), TechnoPark (Group B) and other regional public institutions (Group C) and non-beneficiaries(comparison group, Group D). The results were represented by the average rate of sales growth rate and the average rate of employment growth according to the company size, the establishment of company research institutes, the average number of patents, the designation of venture company, the presence of Innobiz (Innovation Business) certification, and the number of R &D employee. The average sales growth rate and the average employment growth rate, which are the main indicators of the results of the validity analysis, as follows. As a result, the average sales growth rate of beneficiaries is 80.04%, which is higher than theBRaverage of non- beneficiaries - 26.2%. And the support effect of TechnoPark (Group B) is the highest, and the support effect of other regional public institutions is next. On the other hand, it is shown that dependency of the average employment growth rate on the company size is significant, and that the average employment number of both beneficiaries and non-beneficiaries increases, but the significance level is not significantly different at the 5%. Therefore, it is shown that the relationship of key indicators that improve the efficiency in the beneficiaries by the government support lead directly to the improvement of the performance of sales and employment.

The Differential Impact of the Federal Reserve Rate Hikes on National and Regional Employment Figures: Evidence from San Joaquin County

This study examines the relationship between Federal Reserve interest rate actions and the employment growth rate in one county within California’s San Joaquin Valley, an economically distressed rural area. Since 2016, the Federal Reserve implemented a series of interest rate hikes and a “quantitative tightening” process to reduce the size of its balance sheet. Our data show that this tightening did slow the rate of employment growth nationally, but the rate slowed more in California and still more in San Joaquin County. This vulnerable region paid a high price for the desired contraction of monetary policy.

Disparities Analysis of Employment - A Dynamic Shift Share Approached

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International Export Orientation and Firm’s Performance: Evidence from Enterprise Survey Data of India

ABSTRACTThis study aims at analyzing the performance of firms by international export orientation vis-à-vis domestic orientation, based on World Enterprise Survey Data of 9,281 firms of India. Simple statistical techniques such as chi-squared test, ANOVA, and regression model have been used to analyze the data with the help of SPSS version 20.0. Chi-square statistics indicate that there is significant difference in enterprise characteristics by business orientationdomestic versus export-oriented businesses. Result of the ANOVA indicates a significant difference in business performance between export versus domestic orientation of firms in terms of sales and employment growth rates. Export-oriented enterprises perceive comparatively fewer obstacles than domestic enterprises. Regression analysis indicates that enterprise characteristics, performance indicators, and business obstacles have influence on export orientation of the firms. This study provides insights on differences in firms’ performance across business orientations and factors affecting the internationalization of business. This study can be helpful in designing policies for promoting export-oriented enterprises in a focused manner.

THE RESILIENCE OF REGIONS TO ECONOMIC RECESSION: THE ANALYSIS OF EMPLOYMENT TRENDS

The aim of the paper is to identify the reactions of Polish regions to the negative macroeconomic shocks triggered by the global economic crisis dated for 2008–2010. In the course of the research, econometric forecasting and statistical hypothesis testing methods were used. The research was based on the analysis covering dynamics of increase in the employment using the indicator of employed persons in enterprise sector (as a fixed-based index of dynamics). The findings showed that the crisis of the end of the first decade of the 21st century had different course and impact on regional economies in Poland. Negative impact of the breakdown on regional labour markets prevailed, while positive outcome (a new, more dynamic growth rate of employment) was recorded in only one region.

Identification of Premature Deindustrialization and Its Acceleration in Indonesia (Period 1986-2015)

The increase of the manufacturing's share in GDP has reached its peak in the early 2000s while the growth rate of the manufacturing employment is relatively low. Both facts demonstrate that the process of industrialization has slowed down and an indication of deindustrialization in Indonesia. Deindustrialization that occurs in the countries with low GDP per capita is called premature deindustrialization. This study measures the rate of deindustrialization and identification of premature deindustrialization on period 1986- 2015. The result shows that the speed of deindustrialization varies between indicators and between islands. Descriptive analysis showed indication of premature deindustrialization in Indonesia. Keywords: Deindustrialization, Premature deindustrialization, Manufacturing, Indonesia JEL classification: L16, L50, L52, L60, O14, O25

Identification of Premature Deindustrialization and Its Acceleration in Indonesia (Period 1986-2015)

The increase of the manufacturing's share in GDP has reached its peak in the early 2000s while the growth rate of the manufacturing employment is relatively low. Both facts demonstrate that the process of industrialization has slowed down and an indication of deindustrialization in Indonesia. Deindustrialization that occurs in the countries with low GDP per capita is called premature deindustrialization. This study measures the rate of deindustrialization and identification of premature deindustrialization on period 1986- 2015. The result shows that the speed of deindustrialization varies between indicators and between islands. Descriptive analysis showed indication of premature deindustrialization in Indonesia. Keywords: Deindustrialization, Premature deindustrialization, Manufacturing, Indonesia JEL classification: L16, L50, L52, L60, O14, O25

How Do Foreign Firms Manage Their Exposure to United States Portfolio Flows?

From 1990 to 2013, US portfolio flows to foreign stocks and bonds nearly quadrupled. Across 44 countries, I show that non-US firms with stock returns that are more sensitive to these cross-border flows are more likely to sell stocks and bonds, but display lower investment and employment growth rates. Using large natural and industrial disasters, I document that after deadly disasters occur, firms that are more sensitive to US flows are less likely to tap capital markets and tend to cut their real behaviors at higher rates, as would be expected if capital flight could potentially spill over to the real economy.

Econometric Test on Growth-Unemployment Nexus in India

Generally, the economic growth boosts employment growth rate but empirical evidences do not support these views in all cases. In this paper, the author endeavors to relate growth with unemployment rate during 1991-2016 in India using regression models, Granger Causality test, Johansen Cointegration test and Vector Error Correction model. Impulse response functions were fitted for testing stationary. Unit circle was found out to check stability of the Vector Error Correction. Output gap is measured by deducting Hodrick-Prescott Filtered trend value from the actual output. Unemployment gap is measured by deducting natural growth rate of unemployment from the actual unemployment rate. The data on Indian unemployment rate, growth rate and GDP from 1991 to 2016 have been taken from the World Bank. The paper concludes that growth-unemployment nexus is significantly negative at 10% level. Their relation is not causal but is co-integrated at 10% level. VECM is stable and non-stationary where in one error correction process the speed of adjustment is high and significant. The relation between output gap and unemployment is negative and insignificant. They are not co-integrated and have no causality. The nexus between output gap and unemployment gap is significantly negative but the relation has no causality and co-integration. VAR model is a good fit where variables are related with previous periods. The relation between growth and unemployment gap is insignificantly negative and co-integrated where VECM is stable but non-stationary and one speed of adjustment is significantly fast and other is insignificantly slow in error correction process.