Chiara Criscuolo

Multinationals and U.S. Productivity Leadership: Evidence from Great Britain

We study the productivity of US owned plants in the UK. Using a new dataset that identifies foreign and domestic MNEs, we find that UK MNEs are less productive than US affiliates, but as productive as non US foreign affiliates. We investigate the source of the US and MNE advantage. We find evidence confirming that the MNE advantage is driven by sharing superior firm level assets across plants and by cherry picking the better plants in a country. The additional superiority of US firms seems entirely driven by their particular ability to takeover the best British plants. Thirdly, the study features a novel approach to TFP calculation.

Productivity, Exporting, and the Learning-by-Exporting Hypothesis: Direct Evidence from UK Firms

Case study evidence suggests that exporting firms learn from their clients. But econometric evidence, mostly using exporting and TFP growth, is mixed. We use a UK panel data set with firm-level information on exporting and productivity. Our innovation is that we also have direct data on the sources of learning (in this case about new technologies). Controlling for fixed effects we have two main findings. First, we find firms who exported in the past are more likely to then report that they learnt from buyers (relative to learning from other sources). Second, firms who had learned from buyers (more than they learnt from other sources) in the past are more likely to then have productivity growth. This suggests some support for the learning-by-exporting hypothesis.

Employer Size - Wage Effect: A Critical Review and an Econometric Analysis

The strong empirical regularity of higher wages in large establishments seems to be ubiquitous. It was first brought to light by Moore (1911) and later confirmed by, among others, Brown and Medoff (1989), it prevails across countries and over time, across studies that span a broad range of industries and occupations. Yet, in the literature, the particular reason why the size of a firm should be a determinant of a workers wage rate is still controversial. This research examines the size-wage relationship using the Institut fuer Arbeitsmarkt und Berufsforschung (IAB) employment sample over the period 1980-1995. Firstly, we summarise previous theoretical research and empirical evidence on the size-wage relationship.Secondly, the different theoretical arguments are tested empirically. The attempt to account for the size premium using observable worker and plant characteristics through level estimation meets with limited success. Size could reflect various unobserved determinants and it is generally argued that, the greater the possibility of controlling for these latent factors, the less likely that a significant size effect will appear; to control for constant unmeasured worker and firm characteristics, we apply fixed effect and first difference models. In the longitudinal analysis, the size wage differential is still sizeable and is quite similar to level estimates. We find that the wage change closely resembles the differential estimated in the level regression and pre-displacement plant size plays also a role in post-displacement wage determination. The empirical findings demonstrate that positive effects of firm size on wages persist after controlling for observed and unobserved worker and firm characteristics. They suggest that although each of the explanations of size-wage differentials can account for some of the observed variation in worker wages, none can fully unravel the observed employer size-wage differentials. In the end, the unexplained premium remains large and significant.

An Emerging Knowledge-Based Economy in China?

This paper shows that China is catching up rapidly with other dynamic Asian economies and the Triad economies on a score of indicators relating to the knowledge-based economy. Taking into account that a number of measurement issues hamper international comparability to varying degrees, some of the main results are the following. • Economic growth in China has outpaced the other economies substantially. Nevertheless, GDP per capita is still considerably smaller than that of the other economies. • The main contributor to GDP in China is industry (mining; manufacturing; electricity, gas and water supply; and construction), which saw its share rise by 10 percentage points to 52% between 1990 and 2002. • Trade in goods as a percentage of GDP doubled between 1990 and 2002, reaching a level well above that of the Triad economies. The largest contribution to this expansion was made by... Les multinationales et le role preponderant de la productivite americaine : Le cas de la Grande-Bretagne Dapres des etudes americaines au niveau de lentreprise, les multinationales americaines sont plus productives que les autres multinationales. Cette situation pourrait sexpliquer par le role preeminent de la productivite aux Etats-Unis ou par la facilite avec laquelle les entreprises americaines exercent leurs activites sur le territoire de leur pays. La demonstration serait plus convaincante si les entreprises americaines etaient en tete a lexterieur des Etats-Unis. Nous etudions la productivite des etablissements industriels detenus par des entreprises americaines situees au Royaume-Uni. Notre etude se demarque de beaucoup detudes consacrees aux etablissements industriels a capitaux etrangers de trois manieres. Premierement, grâce a une nouvelle base de donnees, nous pouvons identifier non seulement les multinationales etrangeres, mais egalement les multinationales nationales. Nous concluons que les multinationales du Royaume-Uni sont moins productives que les etablissements ...

Multinationals and U.S. Productivity Leadership

US plant level studies show US multinational enterprises (MNE) are more productive than other MNEs. This could reflect US productivity leadership or could be due to the ease in which US firms operate in their home surroundings. The evidence would therefore be more compelling if US firms were leaders outside the US. We study the productivity of plants owned by US firms located in the UK. Our study differs from many studies of foreign owned plants in three ways. Firstly, using a newly available dataset we can identify not only foreign but also domestic MNEs. We find that UK MNEs are less productive than US owned plants, but as productive as non US foreign owned plants. Secondly, having a panel dataset we distinguish between different hypotheses regarding the nature of the US and MNE advantage. We find strong evidence that the US advantage lies in the ability to takeover already productive plants. Whereas we find some evidence for a shared asset effect for MNEs in general we do not find any evidence that the US advantage is driven by superior shares assets. Thirdly, this paper features a novel approach to TFP calculation.

Start-up Dynamics In Japan: Comparative Evidence From the Dynemp v.2 Database

Abstract The present paper describes the patterns of entry and post-entry growth in the Japanese manufacturing sector over the 2001–2007 period, pointing to similarities and differences with other countries. The paper also presents a detailed characterization of start-up dynamics at a more detailed (two-digit) sectoral level within the manufacturing sector. The analysis shows that in Japan the entry and growth of start-ups contribute relatively little to net job creation, as compared to other countries. The main reasons are a particularly low start-up rate and a growth rate of surviving new businesses that is among the lowest in the sample of countries analysed.

Designing Evaluation of Modern Apprenticeships in Scotland

This chapter outlines how the impacts of a major vocational training programme can be evaluated with the use of linked administrative and survey data. To do so, it presents a strategy for future evaluations of Modern Apprenticeships in Scotland. Drawing on lessons from the existing literature, it describes the options and preferred choices for examined outcomes, data sources and evaluation approaches. It argues that future evaluations should focus mainly on individual employment and wages, and on firm productivity outcomes; they should rely mainly on existing administrative data and use two distinct control groups, consisting of non-participants and non-completers. The chapter also illustrates how the evaluator can use narrower control groups, matching techniques, regression analysis and changes over time to better identify causal effects.

The productivity-wage premium

The literature has established two robust stylised facts: (i) the existence of a firm size-wage premium; and (ii) a positive relationship between firm size and productivity. However, the existing evidence is mainly based on manufacturing data only. With manufacturing nowadays accounting for a small share of the economy, whether productivity, size, and wages are closely linked, and how tight this link is across sectors, is still an open question. Using a unique micro-aggregated dataset covering the whole economy in 17 countries over 1994-2012, this paper compares these relationships across sectors. While the size-wage and size-productivity premia are significantly weaker in market services compared to manufacturing, the link between wages and productivity is stronger. The combination of these results suggests that, in a service economy the “size-wage premium” becomes more a “productivity-wage premium”. These results have first-order policy implications for both workers and firms.

The Contribution of Foreign Affilliates to Productivity Growth

This study uses new information to determine the role of foreign affiliates in productivity growth. The study has three aims. Firstly, the study quantifies the contribution of foreign affiliates to productivity growth in OECD countries using a growth accounting approach. Secondly, the analysis shows how much of this contribution derives from an increase in the employment share of foreign affiliates in the host country relative to an increase in the productivity of existing foreign affiliates. Thirdly, the study compares the presence of foreign affiliates across OECD countries. The information is derived by matching three OECD data sources: the STAN database for industrial analysis, the AFA (Activities of Foreign Affiliates) and FATS (Foreign Affiliates in Trade and Services) databases. Despite its limitations, this combined database provides longitudinal industry level information on both the presence and the productivity of foreign affiliates in OECD countries. The analysis confirms that foreign affiliates can make an important contribution to productivity growth. The contribution is larger in the manufacturing sector. In the services sector and in low-tech manufacturing sectors, the largest component of the contribution of foreign affiliates is due to the increased employment share of foreign affiliates. In medium- and high-tech sectors, the contribution is mainly driven by stronger productivity growth of existing foreign affiliates. In the United States the contribution is consistently driven by stronger productivity growth of existing foreign affiliates in both the manufacturing and the services sectors. La constribution des filiales etrangeres a la croissance de la productivite : Observations concernant les pays de lOCDE La presente etude utilise de nouvelles informations pour determiner le role joue par les filiales etrangeres dans la croissance de la productivite. Lanalyse sarticule autour de trois axes. Premierement, letude quantifie la contribution des filiales etrangeres aux gains de productivite dans les pays de lOCDE a partir dune analyse causale de la croissance. Deuxiemement, lanalyse montre dans quelle mesure cette contribution resulte dune augmentation du poids relatif des filiales etrangeres dans lemploi du pays hote, ou de gains de productivite realises par les filiales etrangeres existantes. Troisiemement, letude compare la presence des filiales etrangeres dans differents pays de lOCDE. Les informations utilisees sont obtenues par rapprochement de trois sources de donnees de lOCDE : la base de donnees sur lanalyse structurelle (STAN), la base de donnees sur les activites des filiales etrangeres (AFA) et la base de donnees sur les echanges de services des filiales etrangeres (FATS). Malgre ses limites, lensemble de donnees ainsi constitue offre des informations longitudinales par secteur tant sur la presence que sur la productivite des filiales etrangeres dans les pays de lOCDE. Lanalyse confirme que les filiales etrangeres peuvent contribuer de maniere importante a la croissance de la productivite. Cette contribution est plus forte dans le secteur manufacturier. Dans les services et dans les secteurs manufacturiers de basse technologie, la contribution des filiales etrangeres est principalement imputable a laugmentation de leur poids relatif dans lemploi. Dans les secteurs de moyenne et haute technologie, cette contribution repose essentiellement sur une croissance plus forte de la productivite des filiales etrangeres existantes. Aux Etats-Unis, cette contribution resulte systematiquement dune croissance plus forte de la productivite des filiales etrangeres existantes, tant dans le secteur manufacturier que dans les services.