Structural change in four Latin American countries: An international perspective

Incluye bibliografía.

CEPAL Review no. 114

Aspects of recent developments in the Latin American and Caribbean labour markets / Jürgen Weller .-- The earnings share of total income in Latin America, 1990-2010 / Martín Abeles, Verónica Amarante and Daniel Vega .-- Latin America: Total factor productivity and its components / Jair Andrade Araujo, Débora Gaspar Feitosa and Almir Bittencourt da Silva .-- Financial constraints on economic development: Theory and policy for developing countries / Jennifer Hermann .-- The impact of China’s incursion into the North American Free Trade Agreement (NAFTA) on intra-industry trade / Jorge Alberto López A., Óscar Rodil M. and Saúl Valdez G. .-- Work, family and public policy changes in Latin America: Equity, maternalism and co-responsibility / Merike Blofield and Juliana Martínez F. .-- A first approach to the impact of the real exchange rate on industrial sectors in Colombia / Lya Paola Sierra and Karina Manrique L. .-- Global integration, disarticulation and competitiveness in Mexico’s electromechanical sector: A structural analysis / Raúl Vázquez López .-- Technological capacity-building in unstable settings: Manufacturing firms in Argentina and Brazil / Anabel Marín, Lilia Stubrin and María Amelia Gibbons .-- Index of political instability in Brazil, 1889-2009 / Jaime Jordan Costantini and Mauricio Vaz Lobo Bittencourt

O efeito do fim do Acordo sobre Têxteis e Vestuários para a indústria brasileira: uma análise a partir da fronteira de produção estocástica

This article investigates the productivity and production function of thirteen large Brazilian textile and clothing companies before and after the end of the Agreement on Textiles and Clothing (AVT) that abolished import quotas in 2005. For this purpose, we estimate the stochastic production frontier in panel data between 1997 and 2008 and simultaneously an explanatory equation for the (in)efficiency of firms, as proposed by Battese and Coelli (1995). The results indicated that more efficient firms are the oldest. The total factor productivity of firms tended to fall, even after the end of quotas, increasing productivity only from 2007. Overall, firms from Santa Catarina were more efficient than those of other states.

L’impatto degli incentivi sull’efficienza delle imprese manifatturiere

Produttività ed efficienza sono termini comunemente utilizzati per caratterizzare l’abilità di un’impresa nell’utilizzazione delle risorse, sia in ambito privato che pubblico. Entrambi i concetti sono legati da una teoria della produzione che diventa essenziale per la determinazione dei criteri base con i quali confrontare i risultati dell’attività produttiva e i fattori impiegati per ottenerli. D’altronde, le imprese scelgono di produrre e di investire sulla base delle proprie prospettive di mercato e di costi dei fattori. Quest’ultimi possono essere influenzati dalle politiche dello Stato che fornisce incentivi e sussidi allo scopo di modificare le decisioni riguardanti l’allocazione e la crescita delle imprese. In questo caso le stesse imprese possono preferire di non collocarsi nell’equilibrio produttivo ottimo, massimizzando produttività ed efficienza, per poter invece utilizzare tali incentivi. In questo caso gli stessi incentivi potrebbero distorcere quindi l’allocazione delle risorse delle imprese che sono agevolate. L’obiettivo di questo lavoro è quello di valutare attraverso metodologie parametriche e non parametriche se incentivi erogati dalla L. 488/92, la principale politica regionale in Italia nelle regioni meridionali del paese nel periodo 1995-2004, hanno avuto o meno effetti sulla produttività totale dei fattori delle imprese agevolate. Si è condotta una ricognizione rispetto ai principali lavori proposti in letteratura riguardanti la TFP e l’aiuto alle imprese attraverso incentivi al capitale e (in parte) dell’efficienza. La stima della produttività totale dei fattori richiede di specificare una funzione di produzione ponendo l’attenzione su modelli di tipo parametrico che prevedono, quindi, la specificazione di una determinata forma funzionale relativa a variabili concernenti i fattori di produzione. Da questa si è ricavata la Total Factor Productivity utilizzata nell’analisi empirica che è la misura su cui viene valutata l’efficienza produttiva delle imprese. Il campione di aziende è dato dal merge tra i dati della L.488 e i dati di bilancio della banca dati AIDA. Si è provveduto alla stima del modello e si sono approfonditi diversi modelli per la stima della TFP; infine vengono descritti metodi non parametrici (tecniche di matching basate sul propensity score) e metodi parametrici (Diff-In-Diffs) per la valutazione dell’impatto dei sussidi al capitale. Si descrive l’analisi empirica condotta. Nella prima parte sono stati illustrati i passaggi cruciali e i risultati ottenuti a partire dalla elaborazione del dataset. Nella seconda parte, invece, si è descritta la stima del modello per la TFP e confrontate metodologie parametriche e non parametriche per valutare se la politica ha influenzato o meno il livello di TFP delle imprese agevolate.

A Comparative Study of Development Mechanisms in Korea and Taiwan: Introductory Analysis

This article is the introduction to a special issue of The Developing Economies which presented the results of a research project by the Institute of Developing Economies that examined the development mechanisms in Korea and Taiwan. Our conclusion in this article is that their development mechanisms, despite their similar development patterns of export-led industrialization, have been essentially different: a government-led mechanism in Korea as opposed to a market-led mechanism in Taiwan. We verified this difference through comparative studies of the two economies covering trade balances, the growth of total factor productivity, the scale of enterprises and business groups, and the development processes of individual manufacturing sectors. In our explanatory discussion we propose that the difference in the mechanisms is based on: 1) the amount of accumulation in the economy at the time postwar industrialization started, 2) the relationship between government and society, and 3) the mechanism of social network formation.

Competitiveness of the knitwear industry in Bangladesh : a study of industrial development amid global competition

This paper assesses the technical efficiency and profitability of the knitwear industry in Bangladesh taking into account the sector’s role in poverty reduction. While stochastic frontier analysis was invoked to assess technical efficiency, three alternative measures, namely the rate of return, total factor productivity and the Solow residual, were used to gauge the extent and determinants of the profitability of the industry based on firm-level data collected in 2001. The estimation results indicate the high profitability of the knitwear firms. In Bangladesh, the dynamic development of the industry has entailed great diversity in efficiency in comparison with the garment industries of other developing countries. While there is a significant scale effect in profitability and productivity, no supporting evidence was found for the positive impact on competitiveness of industrial upgrading in terms of usage of expensive machinery and vertical integration and industrial agglomeration.

Economics of Wheat in Egypt

Este estudio pretende estimar la eficiencia y la productividad de las principales provincias de la producción de trigo en Egipto. Los datos utilizados en este estudio son datos de panel a nivel de provincias del período 1990-2012, obtenidos del Ministerio de Agricultura y Recuperación Tierras, y de la Agencia Central de Movilización Pública y Estadística, Egipto. Se aplica el enfoque de fronteras estocásticas para medir la eficiencia (función de producción de Cobb-Douglas) y se emplean las especificaciones de Battese y Coelli (1992) y (1995). También se utiliza el índice de Malmquist como una aproximación no paramétrica (Análisis de Envolvente de Datos) para descomponer la productividad total de los factores de las principales provincias productoras de trigo en Egipto en cambio técnico y cambio de eficiencia. El coeficiente de tierra es positivo y significativo en los dos especificaciones Battese y Coelli (1992) y (1995), lo que implica que aumentar la tierra para este cultivo aumentaría significativamente la producción de trigo. El coeficiente de trabajo es positivo y significativo en la especificación de Battese y Coelli (1992), mientras que es positivo y no significativo en la especificación de Battese y Coelli (1995). El coeficiente de la maquinaria es negativo y no significativo en las dos especificaciones de Battese y Coelli (1992) y (1995). El coeficiente de cambio técnico es positivo y no significativo en la especificación de Battese y Coelli (1992), mientras que es positiva y significativo en la especificación de Battese y Coelli (1995). Las variables de efectos del modelo de ineficiencia Battese y Coelli (1995) indican que no existe impacto de las diferentes provincias en la producción de trigo en Egipto; la ineficiencia técnica de la producción de trigo tendió a disminuir durante el período de estudio; y no hay ningún impacto de género en la producción de trigo en Egipto. Los niveles de eficiencia técnica varían entre las diferentes provincias para las especificaciones de Battese y Coelli (1992) y (1995); el nivel mínimo medio de eficiencia técnica es 91.61% en la provincia de Fayoum, mientras que el nivel máximo medio de la eficiencia técnica es 98.69% en la provincia de Dakahlia. La eficiencia técnica toma un valor medio de 95.37%, lo que implica poco potencial para mejorar la eficiencia de uso de recursos en la producción de trigo. La TFPCH de la producción de trigo en Egipto durante el período 1990-2012 tiene un valor menor que uno y muestra un declive. Esta disminución es debida más al componente de cambio técnico que al componente de cambio de eficiencia. La disminución de TFPCH mejora con el tiempo. La provincia de Menoufia tiene la menor disminución en TFPCH, 6.5%, mientras que dos provincias, Sharkia y Dakahlia, son las que más disminuyen en TFPCH, 13.1%, en cada uno de ellas. Menos disminución en TFPCH ocurre en el período 2009-2010, 0.3%, mientras que más disminución se produce en TFPCH en el período 1990-1991, 38.9%. La disminución de la PTF de la producción de trigo en Egipto se atribuye principalmente a la mala aplicación de la tecnología. ABSTRACT The objectives of this study are to estimate the efficiency and productivity of the main governorates of wheat production in Egypt. The data used in this study is a panel data at the governorates level, it represents the time period 1990-2012 and taken from the Ministry of Agriculture and Land Reclamation, and the Central Agency for Public Mobilization and Statistics, Egypt. We apply the stochastic frontier approach for efficiency measurement (Cobb-Douglas production function) and the specifications of Battese and Coelli (1992) and (1995) are employed. Also we use Malmquist TFP index as a non-parametric approach (DEA) to decompose total factor productivity of the main governorates of wheat production in Egypt into technical change and efficiency change. The coefficient of land is positive and significant at Battese and Coelli (1992) and (1995) specifications, implying that increasing the wheat area could significantly enhance the production of wheat. The coefficient of labor is positive and significant at Battese and Coelli (1992) specification, while it is positive and insignificant at Battese and Coelli (1995) specification. The coefficient of machinery is negative and insignificant at the specifications of Battese and Coelli (1992) and (1995). The technical change coefficient is positive and insignificant at Battese and Coelli (1992) specification, while it is positive and significant at Battese and Coelli (1995) specification. The variables of the inefficiency effect model indicate that there is no impact from the location of the different governorates on wheat production in Egypt, the technical inefficiency of wheat production tended to decrease through the period of study, and there is no impact from the gender on wheat production in Egypt. The levels of technical efficiency vary among the different governorates for the specifications of Battese and Coelli (1992) and (1995); the minimum mean level of technical efficiency is 91.61% at Fayoum governorate, while the maximum mean level of technical efficiency is 98.69% at Dakahlia governorate. The technical efficiency takes an average value of 95.37%, this implying that little potential exists to improve resource use efficiency in wheat production. The TFPCH of wheat production in Egypt during the time period 1990-2012 has a value less than one and shows a decline; this decline is due mainly to the technical change component than the efficiency change component. The decline in TFPCH is generally improves over time. Menoufia governorate has the least declining in TFPCH by 6.5%, while two governorates, Sharkia and Dakahlia have the most declining in TFPCH by 13.1% for each of them. The least declining in TFPCH occurred at the period 2009- 2010 by 0.3%, while the most declining in TFPCH occurred at the period 1990-1991 by 38.9%. The declining in TFP of wheat production in Egypt is attributed mainly to poor application of technology.

Essays on Firm Heterogeneity with Empirical Applications in Economic History and Agricultural Economics

This thesis uses models of firm-heterogeneity to complete empirical analyses in economic history and agricultural economics. In Chapter 2, a theoretical model of firm heterogeneity is used to derive a statistic that summarizes the welfare gains from the introduction of a new technology. The empirical application considers the use of mechanical steam power in the Canadian manufacturing sector during the late nineteenth century. I exploit exogenous variation in geography to estimate several parameters of the model. My results indicate that the use of steam power resulted in a 15.1 percent increase in firm-level productivity and a 3.0-5.2 percent increase in aggregate welfare. Chapter 3 considers various policy alternatives to price ceiling legislation in the market for production quotas in the dairy farming sector in Quebec. I develop a dynamic model of the demand for quotas with farmers that are heterogeneous in their marginal cost of milk production. The econometric analysis uses farm-level data and estimates a parameter of the theoretical model that is required for the counterfactual experiments. The results indicate that the price of quotas could be reduced to the ceiling price through a 4.16 percent expansion of the aggregate supply of quotas, or through moderate trade liberalization of Canadian dairy products. In Chapter 4, I study the relationship between farm-level productivity and participation in the Commercial Export Milk (CEM) program. I use a difference-in-difference research design with inverse propensity weights to test for causality between participation in the CEM program and total factor productivity (TFP). I find a positive correlation between participation in the CEM program and TFP, however I find no statistically significant evidence that the CEM program affected TFP.

Investment as the key to recovery in the euro area? CEPS Policy Brief No. 326, 18 November 2014

Investment has declined in the euro area since the start of the economic and financial crisis, but this does not mean that there is necessarily an ‘investment gap’, explains Daniel Gros in this CEPS Policy Brief. Investment was probably above a sustainable level due to the credit boom before 2007. Moreover, the fall in the euro area’s potential growth − due to a combination of a sharp demographic slowdown and lower total factor productivity (TFP) growth − should also lead to a permanently lower investment rate. Increasing the investment rate might thus be the wrong target for economic policy. The author advises that the aim of economic policy should be to increase consumption, rather than investment overall. Increasing infrastructure investment might be justified in some member countries, but it is not a ‘free lunch’ when efficiency levels are low, which seems to be the case in some of the financially stressed euro area countries.

How cost efficient are Australia's mining industries?

This paper uses a stochastic translog cost frontier model and a panel data of five key mining industries in Australia over 1968-1969 to 1994-1995 to investigate the sources of output growth and the effects of cost inefficiency on total factor productivity (TFP) growth. The results indicate that mining output growth was largely input-driven rather than productivity-driven. Although there were some gains from technological progress and economics of scale in production, cost inefficiency which barely exceeded 1.1% since the mid-1970s in the mining industries was the main factor causing low TFP growth. (C) 2002 Elsevier Science B.V. All rights reserved.

Economic performance in European telecommunications, 1978-1998:a comparative study

The European telecommunications sector is undergoing major structural change in the face of new technology, privatisation and European Commission directives requiring market liberalisation. This study considers the comparative performance of the major European telecommunications operators between 1978 and 1998. This period encompasses an era of state monopolies, market liberalisation initiatives and a number of privatisations. The objectives are to assess: the extent so far to which market liberalisation and privatisation have impacted on the efficiency with which telecommunications services are provided in Europe; and changes in the performance of the different telecommunications operators over time with a view to providing an insight into the comparative efficiency performance of the different telecommunications operators in Europe. Performance is measured in terms of profit margins and labour and total factor productivity.

Malmquist indexes using a geometric distance function (GDF)

Traditional approaches to calculate total factor productivity change through Malmquist indexes rely on distance functions. In this paper we show that the use of distance functions as a means to calculate total factor productivity change may introduce some bias in the analysis, and therefore we propose a procedure that calculates total factor productivity change through observed values only. Our total factor productivity change is then decomposed into efficiency change, technological change, and a residual effect. This decomposition makes use of a non-oriented measure in order to avoid problems associated with the traditional use of radial oriented measures, especially when variable returns to scale technologies are to be compared.

Malmquist indexes using a geometric distance function (GDF):application to a sample of Portuguese bank branches

Traditional approaches to calculate total factor productivity (TFP) change through Malmquist indexes rely on distance functions. In this paper we show that the use of distance functions as a means to calculate TFP change may introduce some bias in the analysis, and therefore we propose a procedure that calculates TFP change through observed values only. Our total TFP change is then decomposed into efficiency change, technological change, and a residual effect. This decomposition makes use of a non-oriented measure in order to avoid problems associated with the traditional use of radial oriented measures, especially when variable returns to scale technologies are to be compared. The proposed approach is applied in this paper to a sample of Portuguese bank branches.

The impact of the post-1993 economic reforms on Chinese state-owned enterprises:evidence from the electronics industry

Since 1979, China has embarked on a series of economic reform programmes, leading its socialist economy away from a Soviet planning model towards a much greater reliance on the market. In the course of the last twenty years, the Chinese economy has enjoyed a phenomenally high economic growth rate. However, earlier research suggests that Chinese state-owned enterprises remain a financial 'black hole' for the Chinese economy, in spite of various enterprise reform measures. This thesis tries to assess the impact of the reforms after 1993, especially the so-called Modern Enterprise System, on the behaviour and management practices of state firms. The central research question is whether the new rounds of economic reform have changed state firms into commercial entities operating according to market signals, as intended. In order to explore this question, an institutional approach is employed. More specifically, the thesis examines how the behaviour and management practices of state enterprises have changed with changes in the institutional environmental resulting from the introduction of new reform measures and especially the MES. The main evidence used in this research comes from the Chinese electronics industry (CEI). Non-state firms, namely collectives and joint ventures, are involved in the study to provide a benchmark against which changes in the behaviour of state firms in the mid and late 1990s are compared. A comparative statistical analysis shows that state-owned firms, both traditional and corporatised ones, still lag behind collectives and joint ventures in terms of both labour and total factor productivity. The further empirical work of this research consists of a questionnaire survey and case studies that are based on interviews with senior managers of 17 firms in the CEI. The findings of these analyses suggest that there has been little fundamental change in the behaviour pattern of state firms in the 1990s, despite the introduction of the Modern Enterprise System, and that the economic reforms after 1993 so far seem to have failed to transform the state firms into commercial entities operating according to market signals.

A study of performance and regulation in telecommunications in the European Union

This thesis looks at two issues. Firstly, statistical work was undertaken examining profit margins, labour productivity and total factor productivity in telecommunications in ten member states of the EU over a 21-year period (not all member states of the EU could be included due to data inadequacy). Also, three non-members, namely Switzerland, Japan and US, were included for comparison. This research was to provide an understanding of how telecoms in the European Union (EU) have developed. There are two propositions in this part of the thesis: (i) privatisation and market liberalisation improve performance; (ii) countries that liberalised their telecoms sectors first show a better productivity growth than countries that liberalised later. In sum, a mixed picture is revealed. Some countries performed better than others over time, but there is no apparent relationship between productivity performance and the two propositions. Some of the results from this part of the thesis were published in Dabler et al. (2002). Secondly, the remainder of the tests the proposition that the telecoms directives of the European Commission created harmonised regulatory systems in the member states of the EU. By undertaking explanatory research, this thesis not only seeks to establish whether harmonisation has been achieved, but also tries to find an explanation as to why this is so. To accomplish this, as a first stage to questionnaire survey was administered to the fifteen telecoms regulators in the EU. The purpose of the survey was to provide knowledge of methods, rationales and approaches adopted by the regulatory offices across the EU. This allowed for the decision as to whether harmonisation in telecoms regulation has been achieved. Stemming from the results of the questionnaire analysis, follow-up case studies with four telecoms regulators were undertaken, in a second stage of this research. The objective of these case studies was to take into account the country-specific circumstances of telecoms regulation in the EU. To undertake the case studies, several sources of evidence were combined. More specifically, the annual Implementation Reports of the European Commission were reviewed, alongside the findings from the questionnaire. Then, interviews with senior members of staff in the four regulatory authorities were conducted. Finally, the evidence from the questionnaire survey and from the case studies was corroborated to provide an explanation as to why telecoms regulation in the EU has reached or has not reached a state of harmonisation. In addition to testing whether harmonisation has been achieved and why, this research has found evidence of different approaches to control over telecoms regulators and to market intervention administered by telecoms regulators within the EU. Regarding regulatory control, it was found that some member states have adopted mainly a proceduralist model, some have implemented more of a substantive model, and others have adopted a mix between both. Some findings from the second stage of the research were published in Dabler and Parker (2004). Similarly, regarding market intervention by regulatory authorities, different member states treat market intervention differently, namely according to market-driven or non-market-driven models, or a mix between both approaches.