Sector Productivity Research Articles

Growth and structural transformation – Options for Pakistan

Structural transformation, which signifies a shift towards high value-added production and an elevated standard of living, is a vital ingredient for inclusive growth. Pakistan’s pace of structural transformation has been amongst the slowest and lowest compared to other countries in Asia. Against this backdrop, the purpose of this paper is to quantify the economic benefits of accelerating the rate of transformation (trade and productivity-oriented) in Pakistan. This research explores this relationship using an Input-Output (IO) framework in conjunction with a global Computable General Equilibrium (CGE) model. This allows for the evaluation of the economy-wide impact of exogenous changes in the trade and productivity of critical sectors. The IO framework helps in identifying these key Pakistani sectors by providing backward, forward, and inter-sectoral linkages for each sector. The results of the IO framework show that the sectors with strong backward linkages in Pakistan are “Food, Beverages and Tobacco”, “Textiles and Textile Products”, “Leather and Footwear”, and “Construction”. Whereas “Agriculture”, “Mining and Quarrying”, and “Wholesale and Commission Trade” are the sectors with strong forward linkages. The estimated results from a global CGE Model demonstrate that structural transformation towards promising sectors (manufacturing and services) has a positive impact on the macro-economic variables as well as at the household level in Pakistan.

Development of Lead Crystal Glasses Using Ornamental Stone Waste

Purpose: The objective of this work was to develop and characterize lead crystal glasses from the use of silicate wastes from ornamental stones. Theoretical framework: Glass consumption has shown considerable growth for the economy. It is predominantly used for windows and facades in modern buildings, for many practical reasons, including thermal, energy, lighting and aesthetics. The state of Espírito Santo is one of the largest producers and exporters of ornamental stones in the country. This sector is responsible for generating a large amount of waste around the world. This waste is deposited daily in ornamental stone landfills and is rich in oxides that can be used as raw materials in the manufacture of glass. Brazil generates around 2.5 million tons of fine waste per year, with the state of Espírito Santo responsible for 2 million tons. Method/design/approach: The methodology used was melting/cooling using alumina crucibles. The maximum process temperature was 1500°C with a time of 3 hours. Glass was developed using granite and quartzite residue. After melting/cooling, the glasses were cooled by the inertia of the oven and unmolded for characterization. Results and conclusion: The results showed that the glasses developed with waste showed characteristics similar to commercial glasses of the same type. X-ray diffractions (XRD) showed complete vitrification of the glasses produced. There is technical feasibility for developing glass using ornamental stone waste. Research implications: Enable initiatives that aim to develop glass using ornamental stone waste, with the aim of promoting a significant reduction in effects on the environment without compromising the sector's production pace. Originality/value: Develop lead glass, of the crystal type, and certify its technological feasibility by comparing the results obtained with commercial lead crystal glass.

The empirical analysis of cereal production under the climate exchange and examining the effects of banks’ domestic credit on cereal production: Evidence from Turkey

In this study, it aims to examine the linkage among climate change, banks’ domestic credit and cereal production such as Turkey's CO2 emissions, average rainfall and average temperature in the period 1980-2019. In the study, firstly, the stationarity properties of the variables are examined by KPSS, ADF and Ng-Perron tests, and the presence of cointegration between the variables is investigated through the ARDL boundary test. Then, the long-run elasticities of the independent series are estimated by applying the ARDL model and the causality linkage among the series is detected through VECM method. Empirical findings show that there is cointegration among the variables and that in Turkey, banks’ domestic credit, CO2 emissions, average rainfall and increase in cereal production area increase cereal production, while average temperature increase reduces cereal production. At the same time, it is determined that there is a bidirectional causality between banks’ domestic credit, CO2 emissions, average rainfall and average temperature and grain production, while there exists a uni-directional causality extending from the grain production area to the grain production. Finally, as a result of the examinations, it is detected that there exists a mutual linkage between the financial sector and cereal production.

Structural change and sectoral interconnectedness in two resource-abundant economies

A historical overview of structural change is presented to motivate the calculation of sectoral factor productivities for Guyana and Suriname using a structural VAR and a novel resource-dominant identification strategy. The paper finds that the extractive sector lowers manufacturing output in Suriname, an oil-based and bauxite-based economy, which indicates first-order resource curse dynamics (FORD). Also, there are strong self-propagation effects of shocks to Suriname's extractive sector, underscoring its enclave-like structure and FORD effects. These results are instructive if not predictive for Guyana – a newly emerging oil economy. In contrast to Suriname, the dataset captures much of Guyana's gold and bauxite mining activities, and the article finds no evidence of FORD effects. Moreover, the empirical results indicate mixed evidence in favor of second-order resource curse dynamics (SORD) in Guyana, i.e., a shock to the non-tradable services sector increases and decreases manufacturing and agricultural output, respectively; while Suriname reports no SORD effects. Finally, manufacturing plays an outsized role in stimulating agricultural output in Guyana, but not Suriname. Manufacturing also reduces the services sector in both economies, indicating that structural change away from petty and non-tradable services is still possible even when manufacturing accounts for a small share of GDP.

Linkage, sectoral productivity, and employment spread

This study demonstrates how differences in the prefectural input–output (IO) multiplier and sectoral total factor productivity (TFP) translate into aggregate income differences across prefectures within a country. Furthermore, this study investigates the job creation generated from the IO multiplier and TFP relationship and considers expenditure in the high-income group.Our results show that aggregate multipliers substantially amplify average sectoral TFP by propagating through the IO network. However, as log TFP levels and multipliers are negatively correlated, sectors with high multipliers have below-average productivity levels, which reduces income per worker because key inputs to downstream sectors are expensive. The overall effect of the IO structure is dampened relative to the aggregate multiplier effect. For example, the commerce sector has large multipliers in many prefectures and is thus amplified through the IO network, but their TFPs are lower and do not significantly contribute to the increase in income. The TFPs of the information and communication equipment sector in certain prefectures are higher than those in Tokyo, but the benefits are not amplified well within the prefecture because their multipliers are low.Furthermore, sectors with high productivity generate fewer jobs than other sectors do. The sectors with a large influence on job creation in other sectors are not amplified well through the IO network because of the small multiplier. From the expenditure viewpoint, the high-income group increases their education consumption exponentially, but the multiplier is low and not widespread within the prefecture. The construction sector has a significant influence on job creation in other sectors. However, their economic activities do not spread widely within a prefecture, and the high-income group does not increase housing consumption in proportion to their income. Residents in prefectures with high multipliers tend to spend more money outside their residential prefectures, such as online shopping. Thus, expenditure outside residential prefectures reduces the effect of the multiplier that amplifies the average sectoral TFP and the difference in income across prefectures.This study contributes to the existing literature by providing an explicit understanding of these relationships. Our findings make people realize that promoting the industry alone is not enough to increase income and generate highly productive jobs. A spillover perspective is required.

What Affects Crop Production in Pakistan: The Role of Agriculture Employment, Machinery and Fertilizer Consumption

Labor abundant or under developing economies normally rely on their agriculture sector. The performance of agriculture sector depends on the production of cropping, livestock, fishery, and forestry sectors. The contribution of both cropping and livestock sectors in the agriculture production is almost 96.42 percent while the cropping sector contributes almost 33.85 percent during the fiscal year 20-2021 [Pakistan Economic Survey, 2020-2021]. The focus of this study is to investigate the factors which may influence the performance of crop production in Pakistan. For this purpose, bounds testing approach for the sample period from 1976 to 2022 is considered. The empirical results reveal that employment in agriculture sector, agriculture machinery, fertilizer consumption and urban population significantly boost the pace of crop production while the role of raw material imports is witnessed to be insignificant. The above reported results proposes that utilization of latest agriculture machinery, advanced fertilizers and high employability in agriculture sector may be encouraged to uplift the share of cropping sector in agriculture production in Pakistan.

Use of territory and financial valuation: the Cosan Group and the Brazilian sugar-energy sector

The structural changes that have occurred in contemporary capitalism, brought new conditions for the use of territory in Brazil. Consequently, it can be observed the insertion of new agents from the financial sphere, notably investment funds, corporate investors, and high net-worth individuals, who started to participate, directly and indirectly, in the productive processes in various sectors that take place in the Brazilian territory. This process was evaluated in this paper, through the empirical situation of Cosan Group, the main controller of the Brazilian sugar-energy sector (production of sugarcane and sugarcane derivatives). Our analysis was based on secondary data on the agricultural and agro-industrial production of this group, as well as the strategies and characteristics related to the financialization of the company (such as initial public offering, investor behaviour, among others) and financial issues, using information obtained from public and private databases. The analysis of the use of territory by the Cosan Group makes it possible to identify the transformations associated with the insertion of this agent into the current dynamics of financialization of the economy and the inherent territorial implication of this process. The strategies of the use of territory adopted by the Cosan Group, in the current context of financial accumulation, were mainly guided by the need for financial valuation, which occurred fundamentally through the mobilization of public funds and the territorial expansion of productive activities.

Analysis of Sectoral Environmental Product Declarations as a Data Source for Life Cycle Assessment

The life cycle assessment (LCA) methodology is becoming increasingly prevalent in the quantification of the environmental status in the building sector following new legislative frameworks. Countries need to quantify and assess their environmental impacts as a previous step to regulation and decision-making. In this context, based on a consensus with manufacturers, standardized national data sets are being developed, referred to as sectoral environmental product declarations (EPDs). This study assesses these EPDs with the aim of providing relevant information for global decision-making, focusing on their consistency and shortcomings. An assessment was carried out at both the national level, considering all sectoral EPDs and declared products, and at the international level, with three common building materials (brick, steel, and concrete). The results highlight the lack of traceability in the development and assessment of uncertainty, resulting in substantial discrepancies in reported impacts, especially in the later stages of the life cycle (up to 90% difference). Meanwhile, impacts such as global warming potential or total renewable and non-renewable primary energy use show homogeneous values in the cradle-to-gate stages, with differences generally being under 10%. The analysis of sectoral EPDs should act as a guideline for designing buildings with environmental sustainability criteria, as the last section of this study attempts to highlight.

Leveraging transparency to shift capital‐labour relations in garment sector production: A critical analysis of the design and structure of the Bangladesh Accord

Little attention has been given to examples of innovative structural designs in the private labour regulation of garment global production networks (GPNs). This article addresses this gap by examining the Accord on Fire and Building Safety in Bangladesh, analysing its contested structural features, namely: (1) a legally binding basis, (2) a labour‐balanced executive board, (3) corporate critical mass and (4) transparency of functions. The authors’ findings contribute to the understanding of emerging hybrid governance mechanisms, combining multi‐organizational cooperative action with traditional capital‐labour dynamics to influence labour regulation in GPNs in new and contradictory ways.

Communication Pattern between Regional Government and Local Government in Establishing Traditional Institution

Poverty alleviation is the government's effort to ensure the survival of the nation and state. One effort to maintain food security is to increase agricultural productivity in various sectors. In terms of agricultural management, Keujruen Blang is really needed as a Gampong traditional figure and institution whose function is to regulate and manage all problems related to the agricultural sector. Unfortunately, in Blang Geunang village, West Aceh, there is no Keujruen Blang, which has resulted in agricultural productivity decreasing and the community being below the poverty line. The aim of this research is to see the pattern of organizational communication relationships between regional governments and village governments in responding to the Keujruen Blang traditional institution as Goal-18 in the SDGs. This research method uses qualitative with a descriptive approach and uses purposive sampling technique. The research informants consisted of the Head of the Agriculture Service, the Head of the DPMG Service, the Aceh Traditional Council, the Head of Kaway XVI District, and the Village Head. The results show that communication patterns between regional governments regarding rice farming governance have not been optimally organized. This problem is due to the existence of inappropriate communication patterns between the regional government and the local government, which has an impact on the difficulty in establishing the legality of the Keujruen Blang traditional institution.

Bioeconomy Transition Pathways – Potential Impacts for the EU Bio‐based Chemicals Sector

SummaryThe European Commission's Green Deal sets out a bold vision to meet the challenges of biodiversity protection and net‐zero emissions, whilst forging a pathway for a circular model of competitive growth and job creation. To achieve these multiple challenges, the bioeconomy has a key role to play, particularly in the deployment of biomass in higher value‐added industrial applications. To support evidence‐based policy modelling, the EU H2020 funded project BioMonitor represents a first step toward both improving data transparency, particularly in bio‐industrial activities, and the creation of a single toolbox for the purpose of performing integrated modelling assessments of the bioeconomy. Comparing with a baseline, this study presents results from a series of medium to long‐term bio‐based industry focused transition narratives. In particular, the focus is on the EU bio‐based chemicals sector employing results from an economy‐wide simulation model from the toolbox, called MAGNET.Publicly backed fiscal support policies, costing between 0.22–0.25% of EU GDP by 2050, generate notable improvements in EU bio‐based chemical sector production and employment generation, as well as synergetic production increases in advanced generation biofuels. There is evidence of decarbonisation in the EU bio‐based chemicals sector, although more tangible improvements are achieved with the implementation of accompanying climate‐ and sustainable bio‐energy policies.

Utilization of Waste Hydrocarbon Gases

A variety of natural and anthropogenic sources of hydrocarbon gases make a significant contribution to the global emission of greenhouse gases. Reducing the anthropogenic emission of industrial hydrocarbon gases is impossible without new technologies that would allow their cost-effective utilization. The paper describes a number of new promising technologies based on autothermal gas-phase processes of partial oxidation and oxidative cracking of various hydrocarbons, such as associated petroleum gases, coalbed methane, refinery gases, and biogas, which open up prospects for a significant reduction in their flaring or emission into the atmosphere. Among the technologies under consideration are those involving their processing for subsequent use in the energy sector and low-tonnage production of various demanded chemicals.

A Sustainable Superhydrophobic and Photothermal Coatings for Anti-Icing Application on Concrete with a Simple Method for CNTs/SiO2 Modification

Ice formation on concrete surfaces significantly challenges productivity, economic growth, and safety in diverse industrial sectors. Superhydrophobic coatings represent an effective solution to delay ice formation, although their functionality deteriorates under repeated freeze–thaw cycles. To address this issue, carbon nanotubes (CNTs) are frequently employed due to their exceptional photothermal conversion and mechanical properties, which contribute to extending the sustainability of the superhydrophobic coatings. However, the chemical inertness of CNTs often necessitates complex reactions to modify their functionalization. In this study, we have invented a simple method involving the sequential growth of silica on the surface of CNTs and the hydrophobic modification of the silica surface to enhance CNT functionality. These CNTs/SiO2 functionalized nanoparticles were then incorporated into an epoxy resin using a simple spray technique, resulting in a superhydrophobic and photothermal coating on concrete. To fine-tune the coating’s properties, we explored the effects of varying the doping levels of the nanoparticles on the surface morphology, roughness, and wettability of the CNT/SiO2-EP coatings. The optimal level of hydrophobicity was achieved by doping the coatings with 300 mg of functionalized nanoparticles, yielding an impressive contact angle of 159.6°. The integration of functionalized nanoparticles into the epoxy matrix not only enhances hydrophobicity but also improves mechanical robustness and abrasion resistance by creating multiscale surface roughness. Additionally, the coating exhibits outstanding chemical stability even under extreme conditions. One of the most significant advantages of these coatings is their ability to extend the ice nucleation time significantly. This effect is primarily attributed to the superior superhydrophobicity of the nanoparticles and the remarkable photothermal conversion capability of the CNTs. Upon exposure to Xenon lamp radiation, the ice droplets rapidly melt, underscoring the impressive performance of these coatings in preventing ice formation.

Sectoral GDP and Tax Revenue: a Panel Data Analysis

To analyze tax revenue from its relationship with the sectoral gross domestic product (GDP) becomes essential. Sectoral GDP plays a role in achieving sectoral tax revenue and, in turn, obtaining tax revenue in total. This paper aims to reveal this relationship using empirical evidence. Using a dataset from 34 provinces in Indonesia, the researchers found that industrial, mining, accommodation, and financial sectors positively correlated with tax revenue. On the other hand, agriculture, transportation, and communication correlated negatively with tax revenue. These results have a meaningful implication for the government, particularly for the Directorate General of Taxes (DGT). DGT may apply this result to predict and to establish strategy to boost tax revenue based on the sectoral GDP.

Information Sharing among Actors in Dairy Innovation Platforms

Dairy farming is a cornerstone of global food security, serving as a primary source of nutrition for a burgeoning world population. Information sharing, a fundamental practice of exchanging knowledge and data, plays a pivotal role in enhancing the dairy sector's productivity and sustainability. This study delves into the intricacies of information exchange within the context of dairy innovation platforms (IPs) dynamic collaborative spaces where diverse stakeholders, including farmers, researchers, input suppliers and extension personnels etc., converge to address common challenges. Taking place both physically and virtually, dairy IPs facilitates collective problem-solving, with each member contributing their unique expertise to foster a win-win collaborative environment. This research article draws from a comprehensive investigation conducted in Haryana (India), focusing on two districts with substantial bovine populations i.e., Karnal and Hisar. These districts are home to multiple agricultural research institutes, universities and innovation platforms actively engaged in the dairy sector. Data were gathered randomly from 140 dairy actors, that includes researchers, extension personnels, input suppliers and dairy farmers, all with a minimum of five years of experience in their respective fields. Information sharing was evaluated through responses to specific dairy-related topics such as breeding, feeding, healthcare and management practices, collected during March 2017. Our findings reveal a dynamic landscape of information sharing among different actors within the dairy innovation platform. Researchers emerge as key contributors to topics like animal breeding (27.87%) and extreme weather control, while extension personnel excel in areas like pregnancy diagnosis and disbudding. Dairy Farmers, constituting the largest group, exhibit a keen interest in concentrate composition and green fodder types. Dairy farming serves as a critical pillar in meeting the nutritional needs of our ever-expanding global population and the information sharing is fundamental to enhancing its productivity and sustainability.

Impact of financial market development on economic growth: evidence from Sri Lanka

The study focuses on the impact of financial market development (FMD) on economic growth in Sri Lanka. The study investigates positive association flows from finance to growth, called the “supply-leading hypothesis”, in different directions such as positive, negative, bidirectional and neutral. FMD impact is considered in both depth and efficiency aspects. Natural logarithms (Ln) form of all gross domestic production in real terms, total domestic credit, percentage of loans and advances to total deposits, inflation index, market capitalisation of listed domestic companies and money supply as liquidity indicator are concerned, first being the dependent variable, next two as depth indicators and last three explanatories as efficiency indicating variables. Changes in both private sector production volume Index and government expenditure are also included into the model as independent variables to represent the non-financial market impact. Secondary monthly time series data published by the Central Bank of Sri Lanka from January 2008 to June 2019 of 138 observations are analysed using the E-views version 10. The ARDL model is applied. The study suggests a significant long-run impact of FMD on economic growth in Sri Lanka. Furthermore, inflation hinders the FMD. Up to the bearable limit, financial depth positively affects, while the higher degree of financial depth negatively influences economic growth in Sri Lanka. The impact of the non-financial market is comparatively insignificant on economic growth.

Employment protection and labour productivity growth in the EU: skill-specific effects during and after the Great Recession

Does employment protection affect sectoral productivity growth differently during crises and recovery periods? This paper sheds light into this question by investigating the relationship between employment protection legislation (EPL hereafter) and sectoral labour productivity growth in the EU in the context of the Great Recession. We consider the crisis and recovery periods, evaluate the relevance of both levels and changes in EPL for productivity growth, and explore the conditioning role played by sectoral differences in terms of cumulativeness of knowledge as well as the skills of the labour force, captured by different levels of education. We find that stricter labour protection reduces labour productivity growth in sectors with a large share of workers with tertiary education, whereas this effect is negligible or positive in sectors where workers with secondary or only primary education are more prevalent (such as agriculture, mining and quarrying). We attribute this to a more intensive labour hoarding in the former, as EPL strengthens labour hoarding in sectors that rely on firm-specific knowledge accumulation and skilled human capital that are difficult to substitute with physical capital. Whereas it is simple to dismiss (and to find later) unskilled employees. They not only can be substituted more easily with capital, but also the costs of their firing are lower, they are overrepresented among workers holding temporary contracts, and they might be unequally informed and able to exercise their rights. This leads to low (if any) labour hoarding and little impact of EPL on labour productivity in such sectors. We also document that the negative effect is prominent only during the crisis, and an increase in the stringency of EPL over an extended period stimulates employers to substitute labour with investments in physical and knowledge capital.

Business environment and productivity in Africa: macro evidence

PurposeAfrica's business environment (BE) is characteristically unfriendly and poses severe development challenges. This study evaluates the impact of business climate on productivity in sub-Saharan Africa (SSA).Design/methodology/approachMacroeconomic data for 51 sub-Saharan African economies from 1990 to 2018 are employed for the analysis. The seemingly unrelated regression model is used to address inter-sectorial linkages.FindingsThe study uncovers several findings. First, a high start-up cost substantially leads to productivity losses by limiting the funds available for investment in productivity-enhancing labour and technology and limiting the number of businesses that see the light of day. The productivity impacts of start-up costs are most enormous for industry, followed by services and agriculture. Second, economies with favourable financing environments tend to be more productive economy wide and sector wise. Third, high taxes and tax inefficiency lower productivity by reducing the resource envelope of firms, thus lowering investment amounts. Fourth, poor business infrastructure inflicts the most damage on productivity. Lastly, business administration and macroeconomic environments impact sectoral and economy-wide productivity.Practical implicationsSSA economies must strive to lower the cost of starting a business as high start-up costs injure productivity. One way of reducing start-up costs is to create a one-stop shop for registering and formalising a business. Another way is to automate business registration and administrative processes to reduce red tape and corruption.Originality/valueThe authors extend the body of knowledge by analysing sectoral and economy-wide productivity effects of various business climate indicators while accounting for inter-sectoral linkages, cross-sectional dependence and endogeneity.

The global economic impacts of the COVID-19 pandemic

The COVID-19 global pandemic has caused significant global economic and social disruption. We use global data on cases and deaths, and public health and economic policy responses to the pandemic, to illustrate the alternative past and potential future trajectories of the pandemic. Shocks to labor and sectoral productivity, consumption, government expenditure, and country and sector risk premia are used within a global multisectoral intertemporal general equilibrium model: G-Cubed, to assess the economic impacts of COVID-19 under those scenarios. We illustrate the vital role of public health responses in managing a pandemic and restoring confidence among economic agents. The role of global coordination amidst a pandemic is also highlighted. We also compare the GDP projections under the alternative scenarios with the actual GDP outcomes in 2020 and 2021. Despite the uncertainties regarding the health outcomes of COVID-19 and the health and economic policy responses to the pandemic, we demonstrate that the actual outcomes lie within those projected for the scenarios.

Circular economy and sustainable agri-food systems

In recent times, scientists and economic policy authorities have been promoting viable solutions to address global emergencies related to human-caused climate change. In particular, there is a growing demand for renewable energy sources, technological innovation and energy-saving systems, and ecological and environmental sustainability of natural resources and the territory. At the center of this global effort, an increasingly significant role seems to be destined for the agricultural sector and agro-energy production systems due to the potential benefits in terms of production costs. However, the interest in non-conventional and low-impact energy sources requires an in-depth investigation not only of the advantages, in terms of availability and economic efficiency, but also of the impact on the environment and the quality of the landscape, as well as on the aspects of the overall intervention that must be adopted to allow the supply of agricultural products to the market. Given this scenario, the broad agro-energy issue would be incomplete without exhaustive economic sustainability analyses, which serve as operational decision support tools to measure the cost-effectiveness of investments in agro-energy production and its use. This study presents a methodological proposal to evaluate the economic convenience of energy investments for the production of renewable energy which represents a trade-off between food and non-food production to promote effective and efficient solutions for the allocation of resources. The results of the research must be read to make the agricultural company competitive, not forgetting that it is called upon to produce agricultural products for the market.