Innovation sources and productivity in Catalonian firms: a quantile regression analysis

This paper explores the effects of two main sources of innovation -intramural and external R&D- on the productivity level in a sample of 3,267 Catalonian firms. The data set used is based on the official innovation survey of Catalonia which was a part of the Spanish sample of CIS4, covering the years 2002-2004. We compare empirical results by applying usual OLS and quantile regression techniques both in manufacturing and services industries. In quantile regression, results suggest different patterns at both innovation sources as we move across conditional quantiles. The elasticity of intramural R&D activities on productivity decreased when we move up the high productivity levels both in manufacturing and services sectors, while the effects of external R&D rise in high-technology industries but are more ambiguous in low-technology and knowledge-intensive services. JEL codes: O300, C100, O140. Keywords: Innovation sources, R&D, Productivity, Quantile regression

Innovation sources and productivity: a quantile regression analysis

This paper explores the effects of two main sources of innovation —intramural and external R&D— on the productivity level in a sample of 3,267 Catalan firms. The data set used is based on the official innovation survey of Catalonia which was a part of the Spanish sample of CIS4, covering the years 2002-2004. We compare empirical results by applying usual OLS and quantile regression techniques both in manufacturing and services industries. In quantile regression, results suggest different patterns at both innovation sources as we move across conditional quantiles. The elasticity of intramural R&D activities on productivity decreased when we move up the high productivity levels both in manufacturing and services sectors, while the effects of external R&D rise in high-technology industries but are more ambiguous in low-technology and services industries.

Innovation sources and productivity in Catalonian firms: a quantile regression analysis

This paper explores the effects of two main sources of innovation - intramural and external R&D— on the productivity level in a sample of 3,267 Catalonian firms. The data set used is based on the official innovation survey of Catalonia which was a part of the Spanish sample of CIS4, covering the years 2002-2004. We compare empirical results by applying usual OLS and quantile regression techniques both in manufacturing and services industries. In quantile regression, results suggest different patterns at both innovation sources as we move across conditional quantiles. The elasticity of intramural R&D activities on productivity decreased when we move up the high productivity levels both in manufacturing and services sectors, while the effects of external R&D rise in high-technology industries but are more ambiguous in low-technology and knowledge-intensive services. JEL codes: O300, C100, O140 Keywords: Innovation sources, R&D, Productivity, Quantile Regression

Quality in work and aggregate productivity

We explore the relationship between quality in work and aggregate productivity in regions and sectors. Using recent Spanish aggregate data for the period 2001-2006, we find that quality in work may be an important factor to explain productivity levels in sectors and regions. We use two alternatives definitions of quality in work: one from survey data and the other from a social indicators approach. We also use two different measurements of labour productivity to test the robustness of our results. The estimates are run using a simultaneous equation model for our panel of data, and find important differences between high tech and low tech sectors: a positive relationship between quality in work and productivity in the former case, and a negative relationship in the latter. Consequently, on the one hand we see that quality in work is not only an objective per se, but may also be a production factor able to increase the wealth of regions; on the other hand, at the aggregate level, we may also find that high productivity levels coincide with lower quality in work conditions.

Drug innovation, prices and health

This article tries to reconcile economic-industrial policy with health policy when dealing with biomedical innovation and welfare state sustainability. Better health accounts for an increasingly large proportion of welfare improvements. Explanation is given to the welfare losses coming from the fact than industrial and health policy tend to ignore each other. Drug s prices reflecting their relative relative effectiveness send the right signal to the industry rewarding innovation with impact on quantity and quality of life- and to the buyers of health care services.The level of drug s public reimbursement indicates the social willingness to pay of the different national health systems, not only by means of inclusion, or rejection, in the basket of services covered, but especially establishing the proportion of the price that is going to be financed publicly.Reference pricing for therapeutic equivalents as the upper limit of the social willingness to pay- and two-tiered co-payments for users (avoidable and inversely related with the incremental effectiveness of de drug) are deemed appropriate for those countries concerned at the same time with increasing their productivity and maintaining its welfare state. Profits drive R&D but not its location. There is no intrinsic contradiction between high productivity and a consolidated National Health Service (welfare state) as the European Nordic Countries are telling us every day.

Bubbles and capital flows

This paper presents a stylized model of international trade and asset price bubbles. Its central insight is that bubbles tend to appear and expand in countries where productivity is low relative to the rest of the world. These bubbles absorb local savings, eliminating inefficient investments and liberating resources that are in part used to invest in high productivity countries. Through this channel, bubbles act as a substitute for international capital flows, improving the international allocation of investment and reducing rate-of-return differentials across countries. This view of asset price bubbles could eventually provide a simple account of some real world phenomenae that have been difficult to model before, such as the recurrence and depth of financial crises or their puzzling tendency to propagate across countries.

Financial reforms and capital flows: Insights from general equilibrium

As a result of debt enforcement problems, many high-productivity firms in emergingeconomies are unable to pledge enough future profits to their creditors and this constrains thefinancing they can raise. Many have argued that, by relaxing these credit constraints, reformsthat strengthen enforcement institutions would increase capital flows to emerging economies. Thisargument is based on a partial equilibrium intuition though, which does not take into account theorigin of any additional resources that flow to high-productivity firms after the reforms. We showthat some of these resources do not come from abroad, but instead from domestic low-productivityfirms that are driven out of business as a result of the reforms. Indeed, the resources released bythese low-productivity firms could exceed those absorbed by high-productivity ones so that capitalflows to emerging economies might actually decrease following successful reforms. This resultprovides a new perspective on some recent patterns of capital flows in industrial and emergingeconomies.

Innovation, R&D spillovers and productivity: the role of knowledge-intensive services

This paper analyses the performance of companies’ R&D and innovation and the effects of intra- and inter-industry R&D spillover on firms’ productivity in Catalonia. The paper deals simultaneously with the performance of manufacturing and service firms, with the aim of highlighting the growing role of knowledge-intensive services in promoting innovation and productivity gains. We find that intra-industry R&D spillovers have an important effect on the productivity level of manufacturing firms, and the inter-industrial R&D spillovers related to computer and software services also play an important role, especially in high-tech manufacturing industries. The main conclusion is that the traditional classification of manufactured goods and services no longer makes sense in the ‘knowledge economy’ and in Catalonia the regional policy makers will have to design policies that favour inter-industrial R&D flows, especially from high-tech services.

Productivity growth and competition in Spanish manufacturing firms: What has happened in recent years?

This paper addresses the issue of the relationship between productivity and market competition. In comparison to the economies of other European countries, the Spanish economy has been growing, while productivity growth has stagnated. Here we provide empirical evidence about the relationship between productivity and market competition from Spanish manufacturing firms at firm level between 1994 and 2004. Correcting for selection bias, our study pays special attention to the patterns of productivity growth between openness and non-openness firms. When market competition increases the effect on firms operating in domestic markets is positive but when the level of competition is high incentives to invest in innovation and productivity gains disappear. The empirical relationship between competition and productivity is an inverted U-shape, where productivity growth is highest at intermediate levels of competition. The productivity growth of firms operating in international markets is higher than that of non-openness firms, but when market competition rises they moderate their productivity growth. Our empirical results suggest that the correct competition policy in the Spanish economy should remove the barriers to competition in internal markets in order to increase the incentives for manufacturing firms to invest in innovation and productivity growth.

Productivity, quality, and export intensities

We study how firm and foreign market characteristics affect the geographic distribution of exporter' sales. To this purpose, we use export intensities (the ratio of exports to sales) across destinations as our key measures of firms'relative involvement in heterogeneous foreign markets. In a representative sample of Italian manufacturing firms, we find a robust negative correlation between revenue-TFP and export intensity to low-income destinations and, more generally, that the correlations between export intensities and TFP are increasing in per capita income of the foreign destinations. We argue that these (and other) empirical regularities can arise from the interplay between (endogenous) cross-firm heterogeneity in product quality and cross-country heterogeneity in quality consumption. To test this conjecture, we propose a new strategy to proxy for product quality that allows to exploit some unique features of our dataset. Our results strongly suggest that firms producing higher-quality products tend to concentrate their sales in the domestic and other high-income markets.

Infrastructures and productivity: an updated survey

The relationship between infrastructures and productivity has been the subject of an ongoing debate during the last two decades. The available empirical evidence is inconclusive and its interpretation is complicated by econometric problems that have not been fully solved. This paper surveys the relevant literature, focusing on studies that estimate aggregate production functions or growth regressions, and extracts some tentative conclusions. On the whole, my reading of the evidence is that there are sufficient indications that public infrastructure investment contributes significantly to productivity growth, at least for countries where a saturation point has not been reached. The returns to such investment are probably quite high in early stages, when infrastructures are scarce and basic networks have not been completed, but fall sharply thereafter. Hence, appropriate infrastructure provision is probably a key input for development policy, even if it does not hold the key to rapid productivity growth in advanced countries where transportation and communications needs are already adequately served.

Irrigation performance and gross water productivity in furrow-irrigated ornamental tree production

In the ornamental plant production region of Girona (Spain), which is one of the largest of its kind in southern Europe, most of the surface is irrigated using wide blocked-end furrows. The objectives of this paper were: (1) to evaluate the irrigation scheduling methods used by ornamental plant producers; (2) to analyse different scenarios inorder to assess how they affect irrigation performance; (3) to evaluate the risk of deep percolation; and (4) to calculategross water productivity. A two-year study in a representative commercial field, planted with Prunus cerasifera ‘Nigra’, was carried out. The irrigation dose applied by the farmers was slightly smaller than the required water dose estimated by the use of two different methods: the first based on soil water content, and the second based on evapotranspiration. Distribution uniformity and application efficiency were high, with mean values above 87%. Soil water contentmeasurements revealed that even at the end of the furrow, where the infiltrated water depth was greatest, more than 90% of the infiltrated water was retained in the shallowest 40 cm of the soil; accordingly, the risk of water loss due to deep percolation was minimal. Gross water productivity for ornamental tree production was € 11.70 m–3, approximately 20 times higher than that obtained with maize in the same region

High-growth cooperatives: Financial profile and key factors for competitiveness

Given the current economic environment, high-growth companies are particularly relevant for their contribution to employment generation and wealth.This paper discusses the results of a survey that was conducted in order to gain a deeper understanding of high-growth cooperatives through analyzing their financial profiles and then identifying key contributing factors to their growth. To do this, we compared this particular sample with other cooperatives and other high-growth mercantile companies.The results show the main drivers related to high-growth companies success. They are the competitive advantages based on the surveyed group, modern management techniques, quality and productivity, innovation and internationalization. Additionally, we have observed some financial strengths and weaknesses. In this sense, they are under capitalized companies with an unbalanced growth.

Productivity and the welfare of nations

We show that the welfare of a representative consumer can be related to observable aggregatedata. To a first order, the change in welfare is summarized by (the present value of) the Solowproductivity residual and by the growth rate of the capital stock per capita. We also show thatproductivity and the capital stock suffice to calculate differences in welfare across countries, withboth variables computed as log level deviations from a reference country. These results hold forarbitrary production technology, regardless of the degree of product market competition, and applyto open economies as well if TFP is constructed using absorption rather than GDP as the measureof output. They require that TFP be constructed using prices and quantities as perceived byconsumers. Thus, factor shares need to be calculated using after-tax wages and rental rates, andwill typically sum to less than one. We apply these results to calculate welfare gaps and growthrates in a sample of developed countries for which high-quality TFP and capital data are available.We find that under realistic scenarios the United Kingdom and Spain had the highest growth ratesof welfare over our sample period of 1985-2005, but the United States had the highest level ofwelfare.

The Impact of Cooperation on R&D, Innovation and Productivity: an Analysis of Spanish Manufacturing and Services Firms

This paper investigates relationships between cooperation, R&D, innovation and productivity in Spanish firms. It uses a large sample of firm-level micro-data and applies an extended structural model that aims to explain the effects of cooperation on R&D investment, of R&D investment on output innovation, and of innovation on firms’ productivity levels. It also analyses the determinants of R&D cooperation. Firms’ technology level is taken into account in order to analyse the differences between high-tech and low-tech firms, both in the industrial and service sectors. The database used was the Technological Innovation Panel (PITEC) for the period 2004-2010. Empirical results show that firms which cooperate in innovative activities are more likely to invest in R&D in subsequent years. As expected, R&D investment has a positive impact on the probability of generating an innovation, in terms of both product and process, for manufacturing firms. Finally, innovation output has a positive impact on firms’ productivity, being greater in process innovations. Keywords: innovation sources; productivity; R&D Cooperation