The Wage-Productivity gap revisited: is the labour share neutral to employment?

This paper challenges the prevailing view of the neutrality of the labour income share to labour demand, and investigates its impact on the evolution of employment. Whilst maintaining the assumption of a unitary long-run elasticity of wages with respect to productivity, we demonstrate that productivity growth affects the labour share in the long run due to frictional growth (that is, the interplay of wage dynamics and productivity growth). In the light of this result, we consider a stylised labour demand equation and show that the labour share is a driving force of employment. We substantiate our analytical exposition by providing empirical models of wage setting and employment equations for France, Germany, Italy, Japan, Spain, the UK, and the US over the 1960-2008 period. Our findings show that the timevarying labour share of these countries has significantly influenced their employment trajectories across decades. This indicates that the evolution of the labour income share (or, equivalently, the wage-productivity gap) deserves the attention of policy makers.

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.

Revisiting the size-R&D productivity relation: introducing the mediating role of decision-making style on the scale and quality of innovative output

We develop a mediation model in which firm size is proposed to affect the scale and quality of innovative output through the adoption of different decision styles during the R&D process. The aim of this study is to understand how the internal changes that firms undergo as they evolve from small to larger organizations affect R&D productivity. In so doing, we illuminate the underlying theoretical mechanism affecting two different dimensions of R&D productivity, namely the scale and quality of innovative output which have not received much attention in previous literature. Using longitudinal data of Spanish manufacturing firms we explore the validity of this mediation model. Our results show that as firms evolve in size, they increasingly emphasize analytical decision making, and consequently, large-sized firms aim for higher-quality innovations while small firms aim for a larger scale of innovative output.

Multinationals, R&D and productivity: Evidence for UK Manufactoring firms

In this study we analyze multinationality (domestic-based firms vs. multinationals) and foreignness (foreign vs. domestic firms) effects in the returns of R&D to productivity. We follow a two-step strategy. In the first step, we consistently ''s productivity by GMM and numerically compute the sample distribution of the R&D returns. In the second step, we use stochastic dominance techniques to make inferences on the multinationality and foreignness effects. Results for a panel of UK manufacturing firms suggest that multinationality and foreignness effects operate in an opposite way: whilst the multinationality effect enhances R&D returns, the foreignness diminishes them.

Human capital and productivity

This paper surveys the empirical literature on human capital and productivity and summarizes the results of my own work on the subject. On balance, the available evidence suggests that investment in education has a positive, significant and sizable effect on productivity growth. According to my estimates, moreover, the social returns to investment in human capital are higher than those on physical capital in most EU countries and in many regions of Spain.

Misallocation of capital in a model of endogenous financial intermediation and insurance

In this paper we analyze productivity and welfare losses from capital misallocation in a general equilibrium model of occupational choice and endogenous financial intermediation. We study the effects of borrowing and lending, insurance, and risk sharing on the optimal allocation of resources. We find that financial markets together with general equilibrium effects have large impact on entrepreneurs' entry and firm-size decisions. Efficiency gains are increasing in the quality of financial markets, particularly in their ability to alleviate a financing constraint by providing insurance against idiosyncratic risk.

Haar wavelets-based approach for quantifying credit portfolio losses

This paper proposes a new methodology to compute Value at Risk (VaR) for quantifying losses in credit portfolios. We approximate the cumulative distribution of the loss function by a finite combination of Haar wavelet basis functions and calculate the coefficients of the approximation by inverting its Laplace transform. The Wavelet Approximation (WA) method is specially suitable for non-smooth distributions, often arising in small or concentrated portfolios, when the hypothesis of the Basel II formulas are violated. To test the methodology we consider the Vasicek one-factor portfolio credit loss model as our model framework. WA is an accurate, robust and fast method, allowing to estimate VaR much more quickly than with a Monte Carlo (MC) method at the same level of accuracy and reliability.

Simulating the Impact of Sectorial Productivity Gains on Two Regional Economies: Key Sectors from a Supply Side Perspective

In this paper we simulate and analyse the economic impact that sectorial productivity gains have on two regional Spanish economies (Catalonia and Extremadura). In particular we study the quantitative effect that each sector’s productivity gain has on household welfare (real disposable income and equivalent variation), on the consumption price indices and factor relative prices, on real production (GDP) and on the government’s net income (net taxation revenues of social transfers to households). The analytical approach consists of a computable general equilibrium model, in which we assume perfect competition and cleared markets, including factor markets. All the parameters and exogenous variables of the model are calibrated by means of two social accounting matrices, one for each region under study. The results allow us to identify those sectors with the greatest impact on consumer welfare as the key sectors in the regional economies. Keywords: Productivity gains, key sectors, computable general equilibrium

Productivity and human capital: a business-level analysis

This paper aims to analyse the impact of human capital on business productivity, focusing the analysis on the possible effect of the complementarity that exists between human capital and new production technologies, particularly advanced manufacturing technologies (AMTs) for the specific case of small and medium enterprises (SMEs) in Catalonia. Additionally, following the theory of skill-biased technological change, the paper analyses whether technological change produces bias exclusively in the skills required for managers, or whether the bias extends to the skills required of production staff. With this objective, we have compared the possible existence of complementarity between AMTs and the level of human capital for different occupational groups. The results confirm the complementary relationship between human capital and new production technologies. The results by occupational group confirm that to maximise the productivity of new technologies, skilled staff are needed both in management and production, with managers and professionals as well as skilled operatives playing a vital role. Keywords: human capital, process technologies, complementarity, business productivity. (JEL D24, J24, O30).

Productivity in southern European small firms: When and how work organization complements process innovation

The aim of this paper is to analyse the effects of human capital, advanced manufacturing technologies (AMT), and new work organizational practices on firm productivity, while taking into account the synergies existing between them. This study expands current knowledge in this area in two ways. First, in contrast with previous works, we focus on AMT and not ICT (information and communication technologies). Second, we use a unique employer-employee data set for small firms in a particular area of southern Europe (Catalonia, Spain). Using a small firm data set, allows us to analyse the particular case of small and medium enterprises, since we cannot assume they have the same characteristics as large firms. The results provide evidence in favor of the complementarity hypothesis between human capital, advanced manufacturing technologies, and new work organization practices, although we show that the complementarity effects depend on what type of work organization practices are used by a firm. For small and medium Catalan firms, the only set of work organization practices that improve the benefits of human capital and technology investment are those practices which are more quality oriented, such as quality circles, problem-solving groups or total quality management.

Land use regulation and productivity - Land matters: Evidence from a UK Supermarket chain

We use store-specific data for a major UK supermarket chain to estimate the impact of planning on store output. Using the quasi-natural experiment of the variation in policies between England and other UK countries, we isolate the impact of Town Centre First policies. We find that space contributes directly to store productivity; and planning policies in England directly reduce output both by reducing store sizes and forcing stores onto less productive sites. We estimate that since the late 1980s planning policies have imposed a loss of output of at least 18.3 to 24.9% - more than a “lost decade’s” growth. JEL codes: D2, L51, L81, R32.

The Network Company in Catalonia : ICT, Productivity, Competitiveness, Salaries and Performance in Catalonia's Companies. Research report (synthesis document)

Resum en anglès del projecte de recerca L'empresa xarxa a Catalunya. TIC, productivitat, competitivitat, salaris i beneficis a l'empresa catalana té com a objectiu principal constatar que la consolidació d'un nou model estratègic, organitzatiu i d'activitat empresarial, vinculat amb la inversió i l'ús de les TIC (o empresa xarxa), modifica substancialment els patrons de comportament dels resultats empresarials, en especial la productivitat, la competitivitat, les retribucions dels treballadors i el benefici. La contrastació empírica de les hipòtesis de treball l'hem feta per mitjà de les dades d'una enquesta a una mostra representativa de 2.038 empreses catalanes. Amb la perspectiva de l'impacte de la inversió i l'ús de les TIC no s'aprecia una relació directa entre els processos d'innovació digital i els resultats de l'activitat de l'empresa catalana. En aquest sentit, hem hagut de segmentar el teixit productiu català per a buscar les organitzacions en què el procés de coinnovació tecnològica digital i organitzativa és més present i en què la intensitat de l'ús del coneixement és un recurs molt freqüent per a poder copsar impactes rellevants en els principals resultats empresarials. Això és així perquè l'economia catalana, avui, presenta una estructura productiva dual.

Signalling and Productivity Effects of Overeducation: Is It Really a Waste of Resources?

Overeducation raises concerns that governments may be overinvesting in education. To inform the debate, this paper studies the impact of overeducation on productivity. We advance the literature by considering that returns to overeducation may be due both to productivity and signalling effects. To disentangle both effects, we apply Wolpin’s (1977) methodology and compare the rates of return of screened (employed) and unscreened (selfemployed) workers. To overcome well-known endogeneity problems due to unobserved heterogeneity, we estimate a panel with individual and employment-status fixed effects. Our results show that signalling effects are relevant and that overeducation does not carry a productivity penalty. Keywords: Overeducation, signalling model, human capital model, unobserved heterogeneity. JEL classification: I20, J24, J31.

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