Product Quality, Productive Efficiency, and International Technology Diffusion : Evidence from Plant-Level Panel Data
What mechanisms most frequently transmit foreign technologies to developing country firms? Do these foreign technologies affect both productive efficiency and product quality in the recipient firms? Under what circumstances do firms pursue activiti...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2002/01/1687152/product-quality-productive-efficiency-international-technology-diffusion-evidence-plant-level-panel-data http://hdl.handle.net/10986/15721 |
| id |
okr-10986-15721 |
|---|---|
| recordtype |
oai_dc |
| 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 |
PRODUCT QUALITY PRODUCTIVITY EFFICIENCY TECHNOLOGY DIFFUSION ENTERPRISES EXPORT CAPACITY FOREIGN DIRECT INVESTMENTS IMPORTS PRODUCTION FUNCTIONS MARGINAL COSTS PRODUCTION STANDARDS LOCATION ACCESS TO FOREIGN MARKETS ADAPTATION ADJUSTMENT ADVERTISING BELIEFS CAPITAL GOODS CONCEPTUAL FRAMEWORK CONDITIONING CONSUMERS COST INCREASES DEVELOPED COUNTRIES DOMESTIC MARKET ECONOMETRIC MODELING ECONOMETRIC MODELS ECONOMIC DEVELOPMENT ECONOMICS LITERATURE ELASTICITIES EMPIRICAL ANALYSIS ENDOGENOUS VARIABLES EQUATIONS EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORTS FACTOR PRICES HOME MARKET IMPORTS INFERENCE INTERMEDIATE GOODS INTERMEDIATE INPUTS INTERNATIONAL TRADE LABOR COSTS LDCS LEARNING LEARNING PROCESSES LESS DEVELOPED COUNTRIES MACROECONOMIC SHOCKS MACROECONOMICS MARGINAL COST MARGINAL COSTS MARKET COMPETITION MARKET EQUILIBRIUM MARKET POWER MARKET SHARE OPTIMIZATION PHYSICAL CHARACTERISTICS PRICE ADJUSTMENTS PRODUCERS PRODUCT QUALITY PRODUCTION COSTS PRODUCTIVITY PRODUCTIVITY GROWTH PURCHASING STOCKS STREAMS SUBSTITUTES SUNK COSTS SUPPLIERS TIME SERIES UTILITY FUNCTION VARIABLE COSTS WAGES |
| spellingShingle |
PRODUCT QUALITY PRODUCTIVITY EFFICIENCY TECHNOLOGY DIFFUSION ENTERPRISES EXPORT CAPACITY FOREIGN DIRECT INVESTMENTS IMPORTS PRODUCTION FUNCTIONS MARGINAL COSTS PRODUCTION STANDARDS LOCATION ACCESS TO FOREIGN MARKETS ADAPTATION ADJUSTMENT ADVERTISING BELIEFS CAPITAL GOODS CONCEPTUAL FRAMEWORK CONDITIONING CONSUMERS COST INCREASES DEVELOPED COUNTRIES DOMESTIC MARKET ECONOMETRIC MODELING ECONOMETRIC MODELS ECONOMIC DEVELOPMENT ECONOMICS LITERATURE ELASTICITIES EMPIRICAL ANALYSIS ENDOGENOUS VARIABLES EQUATIONS EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORTS FACTOR PRICES HOME MARKET IMPORTS INFERENCE INTERMEDIATE GOODS INTERMEDIATE INPUTS INTERNATIONAL TRADE LABOR COSTS LDCS LEARNING LEARNING PROCESSES LESS DEVELOPED COUNTRIES MACROECONOMIC SHOCKS MACROECONOMICS MARGINAL COST MARGINAL COSTS MARKET COMPETITION MARKET EQUILIBRIUM MARKET POWER MARKET SHARE OPTIMIZATION PHYSICAL CHARACTERISTICS PRICE ADJUSTMENTS PRODUCERS PRODUCT QUALITY PRODUCTION COSTS PRODUCTIVITY PRODUCTIVITY GROWTH PURCHASING STOCKS STREAMS SUBSTITUTES SUNK COSTS SUPPLIERS TIME SERIES UTILITY FUNCTION VARIABLE COSTS WAGES Kraay, Aart Soloaga, Isidro Tybout, James Product Quality, Productive Efficiency, and International Technology Diffusion : Evidence from Plant-Level Panel Data |
| geographic_facet |
Africa Latin America & Caribbean |
| relation |
Policy Research Working Paper;No. 2759 |
| description |
What mechanisms most frequently transmit
foreign technologies to developing country firms? Do these
foreign technologies affect both productive efficiency and
product quality in the recipient firms? Under what
circumstances do firms pursue activities that give them
access to foreign knowledge? To address these questions, the
authors develop a new methodology and apply the framework to
plant-level panel data from Colombia, Mexico, and Morocco.
Their results point to several basic messages. First, by
imposing enough structure on the production function and the
demand system, it is possible to measure product quality and
marginal costs at the plant level and to relate the
evolution of these variables to firms' activity
histories. Doing so, the authors find strong firm-level
persistence in both quality and marginal costs. But in most
industry or country panels that they study, past
international activities help little in predicting current
performance once past realizations on quality and marginal
cost are controlled for. That is, activities do not
typically Granger-cause performance. Interestingly, in the
minority of cases where significant associations emerge,
international activities appear to move costs and product
quality in the same direction. So the net effect on profits
in these cases is not immediately apparent. Second, several
basic patterns emerge with respect to the determinants of
international activities. Most fundamentally, activities are
highly persistent, even after unobserved heterogeneity is
controlled for. That suggests that firms incur sunk
threshold costs when they initiate or cease activities, so
temporary policy or macroeconomic shocks may have long-run
effects on the patterns of activities observed in a
particular country or industry. Also, activities tend to go
together, so that studies that relate firms'
performance to one international activity and ignore the
others may generate misleading conclusions. But the bundling
of activities seems to mainly reflect unobserved plant
characteristics, such as managerial philosophy, contacts,
product niche, and location. Once these are controlled for,
there is little evidence that engaging in one international
activity increases the probability that a firm will engage
in others in the future. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Kraay, Aart Soloaga, Isidro Tybout, James |
| author_facet |
Kraay, Aart Soloaga, Isidro Tybout, James |
| author_sort |
Kraay, Aart |
| title |
Product Quality, Productive Efficiency, and International Technology Diffusion : Evidence from Plant-Level Panel Data |
| title_short |
Product Quality, Productive Efficiency, and International Technology Diffusion : Evidence from Plant-Level Panel Data |
| title_full |
Product Quality, Productive Efficiency, and International Technology Diffusion : Evidence from Plant-Level Panel Data |
| title_fullStr |
Product Quality, Productive Efficiency, and International Technology Diffusion : Evidence from Plant-Level Panel Data |
| title_full_unstemmed |
Product Quality, Productive Efficiency, and International Technology Diffusion : Evidence from Plant-Level Panel Data |
| title_sort |
product quality, productive efficiency, and international technology diffusion : evidence from plant-level panel data |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2002/01/1687152/product-quality-productive-efficiency-international-technology-diffusion-evidence-plant-level-panel-data http://hdl.handle.net/10986/15721 |
| _version_ |
1764429740954877952 |
| spelling |
okr-10986-157212021-04-23T14:03:19Z Product Quality, Productive Efficiency, and International Technology Diffusion : Evidence from Plant-Level Panel Data Kraay, Aart Soloaga, Isidro Tybout, James PRODUCT QUALITY PRODUCTIVITY EFFICIENCY TECHNOLOGY DIFFUSION ENTERPRISES EXPORT CAPACITY FOREIGN DIRECT INVESTMENTS IMPORTS PRODUCTION FUNCTIONS MARGINAL COSTS PRODUCTION STANDARDS LOCATION ACCESS TO FOREIGN MARKETS ADAPTATION ADJUSTMENT ADVERTISING BELIEFS CAPITAL GOODS CONCEPTUAL FRAMEWORK CONDITIONING CONSUMERS COST INCREASES DEVELOPED COUNTRIES DOMESTIC MARKET ECONOMETRIC MODELING ECONOMETRIC MODELS ECONOMIC DEVELOPMENT ECONOMICS LITERATURE ELASTICITIES EMPIRICAL ANALYSIS ENDOGENOUS VARIABLES EQUATIONS EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORTS FACTOR PRICES HOME MARKET IMPORTS INFERENCE INTERMEDIATE GOODS INTERMEDIATE INPUTS INTERNATIONAL TRADE LABOR COSTS LDCS LEARNING LEARNING PROCESSES LESS DEVELOPED COUNTRIES MACROECONOMIC SHOCKS MACROECONOMICS MARGINAL COST MARGINAL COSTS MARKET COMPETITION MARKET EQUILIBRIUM MARKET POWER MARKET SHARE OPTIMIZATION PHYSICAL CHARACTERISTICS PRICE ADJUSTMENTS PRODUCERS PRODUCT QUALITY PRODUCTION COSTS PRODUCTIVITY PRODUCTIVITY GROWTH PURCHASING STOCKS STREAMS SUBSTITUTES SUNK COSTS SUPPLIERS TIME SERIES UTILITY FUNCTION VARIABLE COSTS WAGES What mechanisms most frequently transmit foreign technologies to developing country firms? Do these foreign technologies affect both productive efficiency and product quality in the recipient firms? Under what circumstances do firms pursue activities that give them access to foreign knowledge? To address these questions, the authors develop a new methodology and apply the framework to plant-level panel data from Colombia, Mexico, and Morocco. Their results point to several basic messages. First, by imposing enough structure on the production function and the demand system, it is possible to measure product quality and marginal costs at the plant level and to relate the evolution of these variables to firms' activity histories. Doing so, the authors find strong firm-level persistence in both quality and marginal costs. But in most industry or country panels that they study, past international activities help little in predicting current performance once past realizations on quality and marginal cost are controlled for. That is, activities do not typically Granger-cause performance. Interestingly, in the minority of cases where significant associations emerge, international activities appear to move costs and product quality in the same direction. So the net effect on profits in these cases is not immediately apparent. Second, several basic patterns emerge with respect to the determinants of international activities. Most fundamentally, activities are highly persistent, even after unobserved heterogeneity is controlled for. That suggests that firms incur sunk threshold costs when they initiate or cease activities, so temporary policy or macroeconomic shocks may have long-run effects on the patterns of activities observed in a particular country or industry. Also, activities tend to go together, so that studies that relate firms' performance to one international activity and ignore the others may generate misleading conclusions. But the bundling of activities seems to mainly reflect unobserved plant characteristics, such as managerial philosophy, contacts, product niche, and location. Once these are controlled for, there is little evidence that engaging in one international activity increases the probability that a firm will engage in others in the future. 2013-09-09T19:56:29Z 2013-09-09T19:56:29Z 2002-01 http://documents.worldbank.org/curated/en/2002/01/1687152/product-quality-productive-efficiency-international-technology-diffusion-evidence-plant-level-panel-data http://hdl.handle.net/10986/15721 English en_US Policy Research Working Paper;No. 2759 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Africa Latin America & Caribbean |