We analyze conceptually and in an empirical counterpart the relationship between economic growth, factor inputs, institutions, and entrepreneurship. In particular, we investigate whether ...entrepreneurship and institutions, in combination in an ecosystem, can be viewed as a "missing link" in an aggregate production function analysis of cross-country differences in economic growth. To do this, we build on the concept of National Systems of Entrepreneurship (NSE) as resource allocation systems that combine institutions and human agency into an interdependent system of complementarities. We explore the empirical relevance of these ideas using data from a representative global survey and institutional sources for 46 countries over the period 2002-2011. We find support for the role of the entrepreneurial ecosystem in economic growth.
We study the nonparametric identification of gross output production functions under the environment of the commonly employed proxy variable methods. We show that applying these methods to gross ...output requires additional sources of variation in the demand for flexible inputs (e.g., prices). Using a transformation of the firm’s first-order condition, we develop a new nonparametric identification strategy for gross output that can be employed even when additional sources of variation are not available. Monte Carlo evidence and estimates from Colombian and Chilean plant-level data show that our strategy performs well and is robust to deviations from the baseline setting.
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CEKLJ, IZUM, KILJ, NUK, PILJ, SAZU, UL, UM, UPUK
In the common case where polynomial approximations are used for unknown functions, I show how proxy variable approaches to controlling for unobserved productivity, proposed by Olley and Pakes Olley, ...S. and Pakes, A., 1996. The dynamics of productivity in the telecommunications equipment industry. Econometrica 64, 1263–1298. and Levinsohn and Petrin (Levinsohn, J. and Petrin, A., 2003. Estimating production functions using inputs to control for unobservables. Review of Economic Studies 70, 317–341., can be implemented by specifying different instruments for different equations and applying generalized method of moments. Studying the parameters within a two-equation system clarifies some key identification issues, and joint estimation of the parameters leads to simple inference and more efficient estimators.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
► We estimate a production function using panel data of Belgian firms. ► The main focus is the productivity of R&D, especially basic research. ► R&D is disentangled into basic research vs. applied ...research and development. ► A productivity premium for basic R&D is found in high-tech sectors. ► In low tech sectors, R&D also contributes productivity, but there is no premium for basic research.
R&D encompasses plenty of activities which are usually summarized under the terms of basic research, applied research and development. Although basic research is often associated with low appropriability it provides the fundamental basis for subsequent applied research and development. Especially in the high-tech sector basic research capabilities are an essential component for a firm's success. We use firm-level panel data stemming from Belgian R&D surveys and apply a production function approach which shows that basic research exhibits a premium on a firm's output when compared to applied research and development. When we split the sample into high-tech and low-tech companies, we find a large premium of basic research for firms in high-tech industries, but no premium in low-tech sectors.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
•Water productivity (WP) indicators are useful for decision making on on-farm irrigation.•The water footprint approach does not render better results than the WP approach for on-farm irrigation ...decision.•In addition to biophysical WP indicators, economic WP indicators by unit of land or water must be considered for decision making on irrigation.•Profit function analysis further improves the estimation of the best irrigation option.
Increasing the efficiency of on-farm water use requires wise decisions on the irrigation system, the irrigation strategy and the method to schedule irrigation, among other factors related to water management. Since the early 2000s, the water productivity approach has been widely used to address this issue. It provides useful indicators to both the biophysical water productivity and the economic performance of irrigation. Analysis of the literature, however, shows both confusion on the use of terms and lack of agreement on the equations. We have addressed the rational use of the water productivity approach for the irrigator to improve both biophysical and economic water productivity at the field scale. We also addressed the increasing use of the water footprint approach at the field scale. The literature shows a lack of consensus on the reliability of the conceptual framework behind that approach. We focused on its potential for irrigation decision making, and concluded that it is not advantageous, as compared to the water productivity approach, for assessing on-farm water use. In addition, we show a case study of a super high density olive orchard which analyses the joint use of economic water productivity indicators and both production and profit functions to improve decision making.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
6.
Economic impacts of AI-augmented R&D Besiroglu, Tamay; Emery-Xu, Nicholas; Thompson, Neil
Research policy,
September 2024, 2024-09-00, Volume:
53, Issue:
7
Journal Article
Peer reviewed
Open access
Since its emergence around 2010, deep learning has rapidly become the most important technique in Artificial Intelligence (AI), producing an array of scientific firsts in areas as diverse as protein ...folding, drug discovery, integrated chip design, and weather prediction. As scientists and engineers adopt deep learning, it is important to consider what effect widespread deployment would have on scientific progress and, ultimately, economic growth. We assess this impact by estimating the idea production function for AI in two computer vision tasks that are considered key test-beds for deep learning and show that AI idea production is notably more capital-intensive than traditional R&D. Because increasing the capital-intensity of R&D accelerates the investments that make scientists and engineers more productive, our work suggests that AI-augmented R&D has the potential to speed up technological change and economic growth.
•Capital-intensive technologies in R&D may speed up innovation and economic growth.•We present a dataset on human and computational capital in deep learning.•A new machine learning approach more accurately measures scientists’ human capital.•Deep learning is found to be more capital-intensive than most U.S. STEM R&D fields.•If deep learning in R&D diffuses widely, the U.S. economic growth rate may double.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
We present the first comprehensive set of firm-level total factor productivity (TFP) estimates for China's manufacturing sector that spans China's entry into the WTO. For our preferred estimate, ...which adjusts for a number of potential sources of measurement error and bias, the weighted average annual productivity growth for incumbents is 2.85% for a gross output production function and 7.96% for a value added production function over the period 1998–2007. This is among the highest compared to other countries. Productivity growth at the industry level is even higher, reflecting the dynamic force of creative destruction. Over the entire period, net entry accounts for over two thirds of total TFP growth. In contrast to earlier studies looking at total non-agriculture including services, we find that TFP growth dominates input accumulation as a source of output growth.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
Markups and Firm-Level Export Status De Loecker, Jan; Warzynski, Frederic
The American economic review,
10/2012, Volume:
102, Issue:
6
Journal Article
Peer reviewed
Open access
In this paper, we develop a method to estimate markups using plantlevel production data. Our approach relies on cost-minimizing producers and the existence of at least one variable input of ...production. The suggested empirical framework relies on the estimation of a production function and provides estimates of plant-level markups without specifying how firms compete in the product market. We rely on our method to explore the relationship between markups and export behavior. We find that markups are estimated significantly higher when controlling f or unobserved productivity; that exporters charge, on average, higher markups and that markups increase upon export entry.
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BFBNIB, CEKLJ, INZLJ, IZUM, KILJ, NMLJ, NUK, ODKLJ, PILJ, PNG, SAZU, UL, UM, UPUK, ZRSKP
Drawing upon regional innovation system literature, this paper estimates a stochastic frontier model to explain the increasing disparity in innovation performance between Chinese regions. The ...estimated results show that government support, the constitution of the R&D performers, and the regional industry-specific innovation environment are significant determinants of innovation efficiency. Due to the large difference in the firms’ innovation performance across the regions, when regional innovation modes are transformed from university and research institute dominant to firm dominant, the overall innovation efficiency between regions becomes more and more disparate, which actually underlies the widening gap in regional innovation performance.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UL, UM, UPCLJ, UPUK
In this study the production functions (Cobb-Douglas, Zener-Rivanker, and the transcendental production function) have been used to assess the profitability of insurance companies, by reformulating ...these nonlinear functions based on the introduction of a set of variables that contribute to increase the explanatory capacity of the model. Then the best production function commensurate with the nature of the variable representing the profitability of insurance companies was chosen, to use it to assess the efficiency of their profitability versus the use of different factors of production and thus the possibility of using it in forecasting. It was found that the proposed model of the production function "Zener-Rivanker" is the best production functions representing the profitability of the Tawuniya and Bupa Insurance Companies. The proposed model of the Cobb-Douglas production function is suitable for the results of both Enaya and Sanad Cooperative Insurance Companies. The explanatory capacity of the production functions was also increased when the proposed variables were added (net subscribed premiums-net claims incurred).
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