Growth In Real Value Research Articles

Rural Unorganised Manufacturing Enterprises in Assam: Some Aspects of Size, Structure, Growth, and Productivity in the Reform Era

The present study aims to analyse the performance of the rural unorganised manufacturing in Assam in terms of number of enterprises, employment and value added, structural changes, employment elasticity, and labour productivity, both at aggregated and disaggregated industry level. The analysis has brought out that the rural unorganised manufacturing in the state has been undergoing considerable structural change over the years; the share of household-based enterprises has been declining, while that of the establishments has been increasing. At the disaggregated industry level, however, the sector continues to be predominated by a set of agro-based industries such as food and beverages, textiles, and wood products. The sector has been decelerating over the years; the growth rate of output has been decelerating, while growth rate of enterprises and employment has been negative during 1994-95 to 2010-11, which is mainly due to sharp deceleration of the OAMEs segment, otherwise the establishments segment has achieved a relatively high growth. Across industry groups, except machinery and electrical, metal products, and transport and equipment, all other industry groups have registered negative growth in number of enterprises and employment, while most of the industry groups have achieved a relatively high growth in real value added. The implication is that growth in value added per worker has been quite high and the employment elasticity has been negative; only machinery and electrical, transport and equipment, and metal products have shown employment potentiality in the rural unorganised manufacturing in the state.

Structural change and transformation of growth regime in the Japanese economy

The purpose of this study is to empirically examine the relationship between structural change and economic growth in Japan during the past 40 years. Using growth in real value added and labour productivity as measurements of economic growth, we consider the structural change in value added as the structural change in output and that in capital and labour as the structural change in inputs. Specifically, we use the Japan Industrial Productivity database 2014 compiled by the Research Institute of Economy, Trade and Industry, and show (1) the pace of structural change in inputs and output, (2) the evolution of sectoral dispersion of economic performance, (3) the changing distribution of sectoral contribution to aggregate economic growth, and (4) empirical evidence of the relationship between structural change and economic growth. Our main conclusion is that since the 1990s, the Japanese growth regime has transformed from a regime with decreased heterogeneity and overall growth process to a regime with increased heterogeneity and an uneven growth process. In addition, there has been a positive impact of structural change in output on economic growth, although its magnitude has weakened since then.

Offshoring Bias in U.S. Manufacturing

In this paper, we show that the substitution of imported for domestically produced goods and services—often known as offshoring—can lead to overestimates of U.S. productivity growth and value added. We explore how the measurement of productivity and value added in manufacturing has been affected by the dramatic rise in imports of manufactured goods, which more than doubled from 1997 to 2007. We argue that, analogous to the widely discussed problem of outlet substitution bias in the literature on the Consumer Price Index, the price declines associated with the shift to low-cost foreign suppliers are generally not captured in existing price indexes. Just as the CPI fails to capture fully the lower prices for consumers due to the entry and expansion of big-box retailers like Wal-Mart, import price indexes and the intermediate input price indexes based on them do not capture the price drops associated with a shift to new low-cost suppliers in China and other developing countries. As a result, the real growth of imported inputs has been understated. And if input growth is understated, it follows that the growth in multifactor productivity and real value added in the manufacturing sector have been overstated. We estimate that average annual multifactor productivity growth in manufacturing was overstated by 0.1 to 0.2 percentage points and real value added growth by 0.2 to 0.5 percentage points from 1997 to 2007. Moreover, this bias may have accounted for a fifth to a half of the growth in real value added in manufacturing output excluding the computer and electronics industry.

Offshoring Bias in U.S. Manufacturing: Implications for Productivity and Value Added

The rapid growth of offshoring has sparked a contentious debate over its impact on the U.S. manufacturing sector, which has recorded steep employment declines yet strong output growth--a fact reconciled by the notable gains in manufacturing productivity. We maintain, however, that the dramatic acceleration of imports from developing countries has imparted a significant bias to the official statistics. In particular, the price declines associated with the shift to low-cost foreign suppliers are generally not captured in input cost and import price indexes. Although cost savings are a primary driver of the shift in sourcing to foreign suppliers, the price declines associated with offshoring are not systematically observed; this is the essence of the measurement problem. To gauge the magnitude of these discounts, we draw on a variety of evidence from import price microdata from the Bureau of Labor Statistics, industry case studies, and the business press. To assess the implications of offshoring bias for manufacturing productivity and value added, we implement the bias correction developed by Diewert and Nakamura (2009) to the input price index in a growth accounting framework, using a variety of assumptions about the magnitude of the discounts from offshoring. We find that from 1997 to 2007 average annual multifactor productivity growth in manufacturing was overstated by 0.1 to 0.2 percentage point and real value added growth by 0.2 to 0.5 percentage point. Furthermore, although the bias from offshoring represents a relatively small share of real value added growth in the computer and electronic products industry, it may have accounted for a fifth to a half of the growth in real value added in the rest of manufacturing.

Offshoring Bias in U.S. Manufacturing: Implications for Productivity and Value Added

The rapid growth of offshoring has sparked a contentious debate over its impact on the U.S. manufacturing sector, which has recorded steep employment declines yet strong output growth--a fact reconciled by the notable gains in manufacturing productivity. We maintain, however, that the dramatic acceleration of imports from developing countries has imparted a significant bias to the official statistics. In particular, the price declines associated with the shift to low-cost foreign suppliers are generally not captured in input cost and import price indexes. Although cost savings are a primary driver of the shift in sourcing to foreign suppliers, the price declines associated with offshoring are not systematically observed this is the essence of the measurement problem. To gauge the magnitude of these discounts, we draw on a variety of evidence from import price microdata from the Bureau of Labor Statistics, industry case studies, and the business press. To assess the implications of offshoring bias for manufacturing productivity and value added, we implement the bias correction developed by Diewert and Nakamura (2009) to the input price index in a growth accounting framework, using a variety of assumptions about the magnitude of the discounts from offshoring. We find that from 1997 to 2007 average annual multifactor productivity growth in manufacturing was overstated by 0.1 to 0.2 percentage point and real value added growth by 0.2 to 0.5 percentage point. Furthermore, although the bias from offshoring represents a relatively small share of real value added growth in the computer and electronic products industry, it may have accounted for a fifth to a half of the growth in real value added in the rest of manufacturing.

Terms of trade, real GDP, and real value added: A new look at New Zealand's growth performance

The conventional measure of real GDP underestimates the growth in real value added when the terms of trade improve. Thus, in New Zealand, where the terms of trade have been improving over the past 15 years, real GDP has underestimated the country's real growth performance by nearly 0.4% per year on average. Our analysis has a solid theoretical foundation, being based on the GDP‐function approach to modelling the production sector of an open economy.

A DECOMPOSITION OF GROWTH OF THE REAL WAGE RATE FOR SOUTH AFRICA: 1970–2000

This paper examines the potential trade-off between growth in employment and growth in wages. In order to assess the trade-off between employment growth and real wage growth, we make use of a simple decomposition model, following Mazumdar (2000), in which real wage growth is determined by growth in real value added, employment growth, a trend in the wage share of value added and a relative price effect.