Boosting Productivity via Innovation and Adoption of New Technologies : Any Role for Labor Market Institutions?

The authors present empirical evidence on the determinants of industry-level multifactor productivity growth. They focus on "traditional factors," including the process of technological catch up, human capital, and research and developmen...

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Main Authors:	Scarpetta, Stefano, Tressel, Thierry
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	ACCOUNTING BASE YEAR BUSINESS CYCLES CAPITAL STOCK CAPITAL-LABOR CAPITAL-LABOR RATIO CLIMATE COMPARATIVE ADVANTAGE CONSTANT RETURNS CONSTANT RETURNS TO SCALE CONSUMERS COUNTRY COMPARISONS DECREASING RETURNS DETERMINANTS OF GROWTH ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIES OF SCALE ECONOMISTS ELASTICITY EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EQUILIBRIUM LEVEL EXPECTED RETURNS FACTORS OF PRODUCTION GDP GDP PER CAPITA GROWTH LITERATURE GROWTH MODEL GROWTH MODELS GROWTH PATH GROWTH PERFORMANCE GROWTH RATES HUMAN CAPITAL HUMAN DEVELOPMENT INCENTIVES TO SAVE INCOME INDUSTRIAL ECONOMIES INNOVATION INVENTORY LABOR COSTS LABOR FORCE LABOR INPUT LABOR PRODUCTIVITY LAWS LEGISLATION MACROECONOMIC SHOCKS MARGINAL COST MARGINAL COSTS MARGINAL PRODUCT MARKET POWER OLDER PEOPLE OVERLAPPING GENERATIONS MODEL PENALTIES PERFECT COMPETITION POLICY MAKERS PRICE LEVELS PRODUCT DIFFERENTIATION PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION PROCESS PRODUCTION PROCESSES PRODUCTIVITY PRODUCTIVITY GROWTH PURCHASING POWER RELATIVE PRICES ROLE OF INNOVATION SAVINGS SHARE OF LABOR SUNK COSTS TECHNICAL CHANGE TECHNICAL PROGRESS TECHNOLOGICAL FACTORS TECHNOLOGICAL PROGRESS TECHNOLOGY ADOPTION TIME SERIES TOTAL COSTS TRADE UNIONS WAGES WORKERS PRODUCTIVITY GROWTH INNOVATION IN BUSINESS TECHNOLOGICAL CHANGE TECHNOLOGICAL INNOVATIONS LABOR MARKET NEXUS FACTOR PRODUCTIVITY HUMAN CAPITAL FORMATION RESEARCH & DEVELOPMENT INSTITUTIONAL FRAMEWORK MANUFACTURING SECTOR INDUSTRIALIZED SOCIETIES TECHNOLOGICAL CAPACITY RATE OF RETURN ADJUSTMENT COSTS EMPLOYMENT POLICIES ON THE JOB TRAINING WAGE CONTROLS
Online Access:	http://documents.worldbank.org/curated/en/2004/04/3227079/boosting-productivity-innovation-adoption-new-technologies-role-labor-market-institutions http://hdl.handle.net/10986/14748

id	okr-10986-14748
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spelling	okr-10986-147482021-04-23T14:03:20Z Boosting Productivity via Innovation and Adoption of New Technologies : Any Role for Labor Market Institutions? Scarpetta, Stefano Tressel, Thierry ACCOUNTING BASE YEAR BUSINESS CYCLES CAPITAL STOCK CAPITAL-LABOR CAPITAL-LABOR RATIO CLIMATE COMPARATIVE ADVANTAGE CONSTANT RETURNS CONSTANT RETURNS TO SCALE CONSUMERS COUNTRY COMPARISONS DECREASING RETURNS DETERMINANTS OF GROWTH ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIES OF SCALE ECONOMISTS ELASTICITY EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EQUILIBRIUM LEVEL EXPECTED RETURNS FACTORS OF PRODUCTION GDP GDP PER CAPITA GROWTH LITERATURE GROWTH MODEL GROWTH MODELS GROWTH PATH GROWTH PERFORMANCE GROWTH RATES HUMAN CAPITAL HUMAN DEVELOPMENT INCENTIVES TO SAVE INCOME INDUSTRIAL ECONOMIES INNOVATION INVENTORY LABOR COSTS LABOR FORCE LABOR INPUT LABOR PRODUCTIVITY LAWS LEGISLATION MACROECONOMIC SHOCKS MARGINAL COST MARGINAL COSTS MARGINAL PRODUCT MARKET POWER OLDER PEOPLE OVERLAPPING GENERATIONS MODEL PENALTIES PERFECT COMPETITION POLICY MAKERS PRICE LEVELS PRODUCT DIFFERENTIATION PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION PROCESS PRODUCTION PROCESSES PRODUCTIVITY PRODUCTIVITY GROWTH PURCHASING POWER RELATIVE PRICES ROLE OF INNOVATION SAVINGS SHARE OF LABOR SUNK COSTS TECHNICAL CHANGE TECHNICAL PROGRESS TECHNOLOGICAL FACTORS TECHNOLOGICAL PROGRESS TECHNOLOGY ADOPTION TIME SERIES TOTAL COSTS TRADE UNIONS WAGES WORKERS PRODUCTIVITY GROWTH INNOVATION IN BUSINESS TECHNOLOGICAL CHANGE TECHNOLOGICAL INNOVATIONS LABOR MARKET NEXUS FACTOR PRODUCTIVITY HUMAN CAPITAL FORMATION RESEARCH & DEVELOPMENT INSTITUTIONAL FRAMEWORK LABOR COSTS MANUFACTURING SECTOR INDUSTRIALIZED SOCIETIES TECHNOLOGICAL CAPACITY RATE OF RETURN ADJUSTMENT COSTS EMPLOYMENT POLICIES ON THE JOB TRAINING WAGE CONTROLS The authors present empirical evidence on the determinants of industry-level multifactor productivity growth. They focus on "traditional factors," including the process of technological catch up, human capital, and research and development (R&D), as well as institutional factors affecting labor adjustment costs. Their analysis is based on harmonized data for 17 manufacturing industries in 18 industrial economies over the past two decades. The disaggregated analysis reveals that the process of technological convergence takes place mainly in low-tech industries, while in high-tech industries, country leaders tend to pull ahead of the others. The link between R&D activity and productivity also depends on technological characteristics of the industries: while there is no evidence of R&D boosting productivity in low-tech industries, the effect is strong in high-tech industries, but the technology leaders tend to enjoy higher returns on R&D expenditure compared with followers. There is also evidence in the data that high labor adjustment costs (proxied by the strictness of employment protection legislation) can have a strong negative impact on productivity. In particular, when institutional settings do not allow wages or internal training to offset high hiring and firing costs, the latter reduce incentives for innovation and adoption of new technologies, and lead to lower productivity performance. Albeit drawn from the experience of industrial countries, this result may have relevant implications for many developing economies characterized by low relative wage flexibility and high labor adjustment costs. 2013-08-01T19:54:35Z 2013-08-01T19:54:35Z 2004-04 http://documents.worldbank.org/curated/en/2004/04/3227079/boosting-productivity-innovation-adoption-new-technologies-role-labor-market-institutions http://hdl.handle.net/10986/14748 English en_US Policy Research Working Paper;No.3273 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING BASE YEAR BUSINESS CYCLES CAPITAL STOCK CAPITAL-LABOR CAPITAL-LABOR RATIO CLIMATE COMPARATIVE ADVANTAGE CONSTANT RETURNS CONSTANT RETURNS TO SCALE CONSUMERS COUNTRY COMPARISONS DECREASING RETURNS DETERMINANTS OF GROWTH ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIES OF SCALE ECONOMISTS ELASTICITY EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EQUILIBRIUM LEVEL EXPECTED RETURNS FACTORS OF PRODUCTION GDP GDP PER CAPITA GROWTH LITERATURE GROWTH MODEL GROWTH MODELS GROWTH PATH GROWTH PERFORMANCE GROWTH RATES HUMAN CAPITAL HUMAN DEVELOPMENT INCENTIVES TO SAVE INCOME INDUSTRIAL ECONOMIES INNOVATION INVENTORY LABOR COSTS LABOR FORCE LABOR INPUT LABOR PRODUCTIVITY LAWS LEGISLATION MACROECONOMIC SHOCKS MARGINAL COST MARGINAL COSTS MARGINAL PRODUCT MARKET POWER OLDER PEOPLE OVERLAPPING GENERATIONS MODEL PENALTIES PERFECT COMPETITION POLICY MAKERS PRICE LEVELS PRODUCT DIFFERENTIATION PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION PROCESS PRODUCTION PROCESSES PRODUCTIVITY PRODUCTIVITY GROWTH PURCHASING POWER RELATIVE PRICES ROLE OF INNOVATION SAVINGS SHARE OF LABOR SUNK COSTS TECHNICAL CHANGE TECHNICAL PROGRESS TECHNOLOGICAL FACTORS TECHNOLOGICAL PROGRESS TECHNOLOGY ADOPTION TIME SERIES TOTAL COSTS TRADE UNIONS WAGES WORKERS PRODUCTIVITY GROWTH INNOVATION IN BUSINESS TECHNOLOGICAL CHANGE TECHNOLOGICAL INNOVATIONS LABOR MARKET NEXUS FACTOR PRODUCTIVITY HUMAN CAPITAL FORMATION RESEARCH & DEVELOPMENT INSTITUTIONAL FRAMEWORK LABOR COSTS MANUFACTURING SECTOR INDUSTRIALIZED SOCIETIES TECHNOLOGICAL CAPACITY RATE OF RETURN ADJUSTMENT COSTS EMPLOYMENT POLICIES ON THE JOB TRAINING WAGE CONTROLS
spellingShingle	ACCOUNTING BASE YEAR BUSINESS CYCLES CAPITAL STOCK CAPITAL-LABOR CAPITAL-LABOR RATIO CLIMATE COMPARATIVE ADVANTAGE CONSTANT RETURNS CONSTANT RETURNS TO SCALE CONSUMERS COUNTRY COMPARISONS DECREASING RETURNS DETERMINANTS OF GROWTH ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIES OF SCALE ECONOMISTS ELASTICITY EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPLOYMENT EQUILIBRIUM EQUILIBRIUM LEVEL EXPECTED RETURNS FACTORS OF PRODUCTION GDP GDP PER CAPITA GROWTH LITERATURE GROWTH MODEL GROWTH MODELS GROWTH PATH GROWTH PERFORMANCE GROWTH RATES HUMAN CAPITAL HUMAN DEVELOPMENT INCENTIVES TO SAVE INCOME INDUSTRIAL ECONOMIES INNOVATION INVENTORY LABOR COSTS LABOR FORCE LABOR INPUT LABOR PRODUCTIVITY LAWS LEGISLATION MACROECONOMIC SHOCKS MARGINAL COST MARGINAL COSTS MARGINAL PRODUCT MARKET POWER OLDER PEOPLE OVERLAPPING GENERATIONS MODEL PENALTIES PERFECT COMPETITION POLICY MAKERS PRICE LEVELS PRODUCT DIFFERENTIATION PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION PROCESS PRODUCTION PROCESSES PRODUCTIVITY PRODUCTIVITY GROWTH PURCHASING POWER RELATIVE PRICES ROLE OF INNOVATION SAVINGS SHARE OF LABOR SUNK COSTS TECHNICAL CHANGE TECHNICAL PROGRESS TECHNOLOGICAL FACTORS TECHNOLOGICAL PROGRESS TECHNOLOGY ADOPTION TIME SERIES TOTAL COSTS TRADE UNIONS WAGES WORKERS PRODUCTIVITY GROWTH INNOVATION IN BUSINESS TECHNOLOGICAL CHANGE TECHNOLOGICAL INNOVATIONS LABOR MARKET NEXUS FACTOR PRODUCTIVITY HUMAN CAPITAL FORMATION RESEARCH & DEVELOPMENT INSTITUTIONAL FRAMEWORK LABOR COSTS MANUFACTURING SECTOR INDUSTRIALIZED SOCIETIES TECHNOLOGICAL CAPACITY RATE OF RETURN ADJUSTMENT COSTS EMPLOYMENT POLICIES ON THE JOB TRAINING WAGE CONTROLS Scarpetta, Stefano Tressel, Thierry Boosting Productivity via Innovation and Adoption of New Technologies : Any Role for Labor Market Institutions?
relation	Policy Research Working Paper;No.3273
description	The authors present empirical evidence on the determinants of industry-level multifactor productivity growth. They focus on "traditional factors," including the process of technological catch up, human capital, and research and development (R&D), as well as institutional factors affecting labor adjustment costs. Their analysis is based on harmonized data for 17 manufacturing industries in 18 industrial economies over the past two decades. The disaggregated analysis reveals that the process of technological convergence takes place mainly in low-tech industries, while in high-tech industries, country leaders tend to pull ahead of the others. The link between R&D activity and productivity also depends on technological characteristics of the industries: while there is no evidence of R&D boosting productivity in low-tech industries, the effect is strong in high-tech industries, but the technology leaders tend to enjoy higher returns on R&D expenditure compared with followers. There is also evidence in the data that high labor adjustment costs (proxied by the strictness of employment protection legislation) can have a strong negative impact on productivity. In particular, when institutional settings do not allow wages or internal training to offset high hiring and firing costs, the latter reduce incentives for innovation and adoption of new technologies, and lead to lower productivity performance. Albeit drawn from the experience of industrial countries, this result may have relevant implications for many developing economies characterized by low relative wage flexibility and high labor adjustment costs.
format	Publications & Research :: Policy Research Working Paper
author	Scarpetta, Stefano Tressel, Thierry
author_facet	Scarpetta, Stefano Tressel, Thierry
author_sort	Scarpetta, Stefano
title	Boosting Productivity via Innovation and Adoption of New Technologies : Any Role for Labor Market Institutions?
title_short	Boosting Productivity via Innovation and Adoption of New Technologies : Any Role for Labor Market Institutions?
title_full	Boosting Productivity via Innovation and Adoption of New Technologies : Any Role for Labor Market Institutions?
title_fullStr	Boosting Productivity via Innovation and Adoption of New Technologies : Any Role for Labor Market Institutions?
title_full_unstemmed	Boosting Productivity via Innovation and Adoption of New Technologies : Any Role for Labor Market Institutions?
title_sort	boosting productivity via innovation and adoption of new technologies : any role for labor market institutions?
publisher	World Bank, Washington, D.C.
publishDate	2013
url	http://documents.worldbank.org/curated/en/2004/04/3227079/boosting-productivity-innovation-adoption-new-technologies-role-labor-market-institutions http://hdl.handle.net/10986/14748
_version_	1764430041574277120

Boosting Productivity via Innovation and Adoption of New Technologies : Any Role for Labor Market Institutions?

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