Pub Date : 2024-10-25DOI: 10.1016/j.econmod.2024.106919
Deng-Kui Si , Mingyue Meng , Jiaming Wang , Fuyou Zhou
Labor income share is crucial for maintaining social stability and promoting sustainable economic development, capturing the attention of both academics and policymakers. Existing studies focus on the impact of industry transformation and corporate operation on labor income share. Utilizing a quasi-natural experiment based on the implementation of the Shanghai–Hong Kong and Shenzhen–Hong Kong Stock Connect policies, this study identifies the causal effect of capital market liberalization on corporate labor income share in China. The results show that capital market liberalization enhances labor income share by optimizing human capital, improving corporate governance, and promoting market competition. The findings provide essential implications for advancing income distribution and optimizing the structure of China's capital market.
{"title":"Does capital market liberalization increase corporate labor income share? Evidence from China","authors":"Deng-Kui Si , Mingyue Meng , Jiaming Wang , Fuyou Zhou","doi":"10.1016/j.econmod.2024.106919","DOIUrl":"10.1016/j.econmod.2024.106919","url":null,"abstract":"<div><div>Labor income share is crucial for maintaining social stability and promoting sustainable economic development, capturing the attention of both academics and policymakers. Existing studies focus on the impact of industry transformation and corporate operation on labor income share. Utilizing a quasi-natural experiment based on the implementation of the Shanghai–Hong Kong and Shenzhen–Hong Kong Stock Connect policies, this study identifies the causal effect of capital market liberalization on corporate labor income share in China. The results show that capital market liberalization enhances labor income share by optimizing human capital, improving corporate governance, and promoting market competition. The findings provide essential implications for advancing income distribution and optimizing the structure of China's capital market.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"141 ","pages":"Article 106919"},"PeriodicalIF":4.2,"publicationDate":"2024-10-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142554461","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-23DOI: 10.1016/j.econmod.2024.106917
Subal C. Kumbhakar , Yulu Wang
During the COVID-19 pandemic, the precision in reporting infectious cases and fatalities presents significant challenges, exacerbated by rapid transmission rates and overburdened healthcare infrastructures. Officially reported cases occasionally exhibit zero increments, which is likely to be under-reported. Some models exclude zero values from the sample, creating a sample selectivity problem. In contrast, alternative models substitute zero values with a constant to enable logarithmic transformations. Since both modeling approaches are wrong, in this study, we address this issue by extending the Tobit model to account for both under-reporting and random noise. Analyzing data from 61 countries between January 1, 2020, and November 3, 2020, we explore external factors that explain country-specific under-reporting. Our findings confirm the existence of under-reporting across countries and reveal that cases reported with zero increments actually involve non-zero infectious instances. This novel methodology enriches future under-reporting analyses.
{"title":"Global COVID-19 under-reporting: A Tobit model","authors":"Subal C. Kumbhakar , Yulu Wang","doi":"10.1016/j.econmod.2024.106917","DOIUrl":"10.1016/j.econmod.2024.106917","url":null,"abstract":"<div><div>During the COVID-19 pandemic, the precision in reporting infectious cases and fatalities presents significant challenges, exacerbated by rapid transmission rates and overburdened healthcare infrastructures. Officially reported cases occasionally exhibit zero increments, which is likely to be under-reported. Some models exclude zero values from the sample, creating a sample selectivity problem. In contrast, alternative models substitute zero values with a constant to enable logarithmic transformations. Since both modeling approaches are wrong, in this study, we address this issue by extending the Tobit model to account for both under-reporting and random noise. Analyzing data from 61 countries between January 1, 2020, and November 3, 2020, we explore external factors that explain country-specific under-reporting. Our findings confirm the existence of under-reporting across countries and reveal that cases reported with zero increments actually involve non-zero infectious instances. This novel methodology enriches future under-reporting analyses.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"141 ","pages":"Article 106917"},"PeriodicalIF":4.2,"publicationDate":"2024-10-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142554463","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-22DOI: 10.1016/j.econmod.2024.106923
Jinting Dong , Lianchao Yu
This study examined the relationship between CEO foreign experience and corporate environmental violations using data from heavy-polluting China-listed firms. The impact of CEO foreign experience on corporate environmental violations remains underexplored. Existing studies primarily examine managerial foreign experience in corporate environmentally responsible behavior, relying on firms' voluntary disclosure or third-party agencies’ evaluations. However, data on corporate environmental violations issued by governments is more reliable. Our findings indicate firms led by CEOs with foreign experience exhibited less likelihood and frequency of environmental violations. The negative correlation was more pronounced when firms were under weaker institutional pressure from central and local governments, poor environmental judicial quality, and adequate public participation. Enhanced environmental ethics and general competency are potential mechanisms through which CEO foreign experience affects corporate environmental behavior. The findings highlight the significance of CEO foreign experience in shaping corporate environmental violations, providing essential policy implications for emerging market stakeholders.
本研究利用中国重污染上市公司的数据，研究了首席执行官的外国经历与企业环境违法行为之间的关系。首席执行官的外国经历对企业环境违法行为的影响仍未得到充分探讨。现有研究主要依靠企业的自愿披露或第三方机构的评价来考察企业环境责任行为中管理者的涉外经历。然而，由政府发布的企业环境违规数据更为可靠。我们的研究结果表明，由具有国外经验的首席执行官领导的企业，其环境违规的可能性和频率都较低。当企业受到的来自中央和地方政府的制度压力较弱、环境司法质量较差以及公众参与充分时，这种负相关更为明显。增强环境道德和综合能力是 CEO 国外经验影响企业环境行为的潜在机制。研究结果凸显了首席执行官的海外经历对企业环境违法行为的重要影响，为新兴市场利益相关者提供了重要的政策启示。
{"title":"Impact of CEO foreign experience on corporate environmental violations: The role of enhanced environmental ethics and general competency","authors":"Jinting Dong , Lianchao Yu","doi":"10.1016/j.econmod.2024.106923","DOIUrl":"10.1016/j.econmod.2024.106923","url":null,"abstract":"<div><div>This study examined the relationship between CEO foreign experience and corporate environmental violations using data from heavy-polluting China-listed firms. The impact of CEO foreign experience on corporate environmental violations remains underexplored. Existing studies primarily examine managerial foreign experience in corporate environmentally responsible behavior, relying on firms' voluntary disclosure or third-party agencies’ evaluations. However, data on corporate environmental violations issued by governments is more reliable. Our findings indicate firms led by CEOs with foreign experience exhibited less likelihood and frequency of environmental violations. The negative correlation was more pronounced when firms were under weaker institutional pressure from central and local governments, poor environmental judicial quality, and adequate public participation. Enhanced environmental ethics and general competency are potential mechanisms through which CEO foreign experience affects corporate environmental behavior. The findings highlight the significance of CEO foreign experience in shaping corporate environmental violations, providing essential policy implications for emerging market stakeholders.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"141 ","pages":"Article 106923"},"PeriodicalIF":4.2,"publicationDate":"2024-10-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142531054","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-22DOI: 10.1016/j.econmod.2024.106921
Pascal Xavier Gnagne, Beatrice D. Simo-Kengne, Mathias Mandla Manguzvane
This study examines the spillover effects of sovereign risk on international stock markets using a dynamic spatial Durbin model (SDM) on a panel of forty countries from 2009Q1 to 2024Q2. The findings show that an increase in sovereign risk, as measured by CDS spreads, leads to a significant decrease in both local and foreign stock prices, with 0.027 percent reductions across foreign markets on average. These effects are transmitted through geographical, and economic and financial channels, with exchange rates, gross fixed capital formation, and industrial production playing crucial roles in influencing stock market performance. Additionally, the negative (positive) spillover effects from rising gross fixed capital formation and sovereign risk (industrial production) demonstrate how foreign markets are more impacted than domestic ones. The study highlights the interconnected nature of global financial markets, reinforcing the need for coordinated international policy responses to mitigate the transmission of sovereign risk across borders. These findings provide new insights into how global economic factors influence stock market volatility, particularly through specific transmission channels, underscoring the importance of multilateral collaboration in managing sovereign risk.
{"title":"The spillover and contagion effects of sovereign risk on stock markets","authors":"Pascal Xavier Gnagne, Beatrice D. Simo-Kengne, Mathias Mandla Manguzvane","doi":"10.1016/j.econmod.2024.106921","DOIUrl":"10.1016/j.econmod.2024.106921","url":null,"abstract":"<div><div>This study examines the spillover effects of sovereign risk on international stock markets using a dynamic spatial Durbin model (SDM) on a panel of forty countries from 2009Q1 to 2024Q2. The findings show that an increase in sovereign risk, as measured by CDS spreads, leads to a significant decrease in both local and foreign stock prices, with 0.027 percent reductions across foreign markets on average. These effects are transmitted through geographical, and economic and financial channels, with exchange rates, gross fixed capital formation, and industrial production playing crucial roles in influencing stock market performance. Additionally, the negative (positive) spillover effects from rising gross fixed capital formation and sovereign risk (industrial production) demonstrate how foreign markets are more impacted than domestic ones. The study highlights the interconnected nature of global financial markets, reinforcing the need for coordinated international policy responses to mitigate the transmission of sovereign risk across borders. These findings provide new insights into how global economic factors influence stock market volatility, particularly through specific transmission channels, underscoring the importance of multilateral collaboration in managing sovereign risk.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"141 ","pages":"Article 106921"},"PeriodicalIF":4.2,"publicationDate":"2024-10-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142531595","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-21DOI: 10.1016/j.econmod.2024.106908
Reona Hagiwara
Some medical demand is inelastic to price fluctuations, but not all. This paper examines the role of the price elasticity of medical demand on the welfare effects of public health insurance reform. I develop a computational general equilibrium life-cycle model for heterogeneous agents with varying income, wealth, and health that allows for endogenous medical spending. I calibrate the model for the Japanese economy. If medical spending is totally price-inelastic, increasing copayments will improve the welfare of future generations, but harm all current generations, particularly older people with low income or poor health. In contrast, the welfare gain for newborns is significantly greater in the empirically observed situation where medical spending includes some price-elastic components. Moreover, the reform reduces welfare losses for current individuals and may benefit younger generations.
{"title":"Welfare effects of health insurance reform: The role of elastic medical demand","authors":"Reona Hagiwara","doi":"10.1016/j.econmod.2024.106908","DOIUrl":"10.1016/j.econmod.2024.106908","url":null,"abstract":"<div><div>Some medical demand is inelastic to price fluctuations, but not all. This paper examines the role of the price elasticity of medical demand on the welfare effects of public health insurance reform. I develop a computational general equilibrium life-cycle model for heterogeneous agents with varying income, wealth, and health that allows for endogenous medical spending. I calibrate the model for the Japanese economy. If medical spending is totally price-inelastic, increasing copayments will improve the welfare of future generations, but harm all current generations, particularly older people with low income or poor health. In contrast, the welfare gain for newborns is significantly greater in the empirically observed situation where medical spending includes some price-elastic components. Moreover, the reform reduces welfare losses for current individuals and may benefit younger generations.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"141 ","pages":"Article 106908"},"PeriodicalIF":4.2,"publicationDate":"2024-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142531055","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-20DOI: 10.1016/j.econmod.2024.106911
Caterina Conigliani , Valeria Costantini , Elena Paglialunga , Andrea Tancredi
This study investigates how climate change might impact economic development in the future through its effects on violence, addressing the gap in research on long-term conflict risk assessment. Using geocoded data (1°resolution) on climate and socio-economic indicators covering 1990–2050, we employ a forecasting recursive model to examine the probability and intensity of different types of conflict, under various socio-economic and climate scenarios. Our analysis reveals that climate change has both direct and indirect effects on violence, highlighting the key role of the agricultural channel, the spillover across neighbouring areas and the socio-economic context. These findings offer new insights into adaptation strategy and provide implications for the need to jointly account for the complex interactions between climate conditions, socio-economic factors, and conflict dynamics.
{"title":"Forecasting the climate-conflict risk in Africa along climate-related scenarios and multiple socio-economic drivers","authors":"Caterina Conigliani , Valeria Costantini , Elena Paglialunga , Andrea Tancredi","doi":"10.1016/j.econmod.2024.106911","DOIUrl":"10.1016/j.econmod.2024.106911","url":null,"abstract":"<div><div>This study investigates how climate change might impact economic development in the future through its effects on violence, addressing the gap in research on long-term conflict risk assessment. Using geocoded data (1°resolution) on climate and socio-economic indicators covering 1990–2050, we employ a forecasting recursive model to examine the probability and intensity of different types of conflict, under various socio-economic and climate scenarios. Our analysis reveals that climate change has both direct and indirect effects on violence, highlighting the key role of the agricultural channel, the spillover across neighbouring areas and the socio-economic context. These findings offer new insights into adaptation strategy and provide implications for the need to jointly account for the complex interactions between climate conditions, socio-economic factors, and conflict dynamics.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"141 ","pages":"Article 106911"},"PeriodicalIF":4.2,"publicationDate":"2024-10-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142531596","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-19DOI: 10.1016/j.econmod.2024.106916
Tommy Andersson , Lina Maria Ellegård , Andreea Enache , Albin Erlanson , Prakriti Thami
Third-party payers often reimburse health care providers based on prospectively set prices. Although a key motivation of prospective payment is to contain costs, this paper shows that this aspect crucially depends on the design of the pricing scheme due to the well-known incentives of patient selection (or “dumping”). This paper provides a general theoretical framework where heterogeneous users are served by either private for-profit or public providers, each paid an hourly compensation by a third-party payer. The private, but not the public providers may select patients. It is demonstrated that this realistic feature of the model implies that total costs depends on the number of prices. The features of the model is illustrated using the Swedish system of personal assistance services as a motivating example. Numerical results show that marginal adjustments to the current uniform pricing scheme would lead to substantial savings.
{"title":"Multiple pricing for personal assistance services","authors":"Tommy Andersson , Lina Maria Ellegård , Andreea Enache , Albin Erlanson , Prakriti Thami","doi":"10.1016/j.econmod.2024.106916","DOIUrl":"10.1016/j.econmod.2024.106916","url":null,"abstract":"<div><div>Third-party payers often reimburse health care providers based on prospectively set prices. Although a key motivation of prospective payment is to contain costs, this paper shows that this aspect crucially depends on the design of the pricing scheme due to the well-known incentives of patient selection (or “dumping”). This paper provides a general theoretical framework where heterogeneous users are served by either private for-profit or public providers, each paid an hourly compensation by a third-party payer. The private, but not the public providers may select patients. It is demonstrated that this realistic feature of the model implies that total costs depends on the number of prices. The features of the model is illustrated using the Swedish system of personal assistance services as a motivating example. Numerical results show that marginal adjustments to the current uniform pricing scheme would lead to substantial savings.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"141 ","pages":"Article 106916"},"PeriodicalIF":4.2,"publicationDate":"2024-10-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142531050","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-18DOI: 10.1016/j.econmod.2024.106912
Jianhua Tan , Zhan Wang , Kam C. Chan
This study investigates whether social drinking culture (SDC), as an informal institution, impacts the cost of bank loans to a firm. Studies suggest that SDC influences individual behavior by fostering interpersonal relationships. Few studies have explored the impact of SDC on corporate borrowing. We argue that executives use SDC to obtain bank loans at lower interest rates. However, the mechanism remains unclear. Firms can leverage SDC to engage in rent-seeking from or improve communication with lenders. We tested the hypothesis and the underlying mechanism on a sample of Chinese firms from 2011 to 2020. Results suggest that the SDC lowers bank loan rates for firms and supports the rent-seeking mechanism. Furthermore, firms in strong SDC regions have larger sizes, longer maturities, and more non-collateralized loans but perform poorly in corporate and bank loans. Therefore, strong SDC is used by firms to engage in rent-seeking borrowing, resulting in credit resource misallocation.
{"title":"Impact of social drinking culture on the cost of bank loans: Rent-seeking or loan-contracting efficiency","authors":"Jianhua Tan , Zhan Wang , Kam C. Chan","doi":"10.1016/j.econmod.2024.106912","DOIUrl":"10.1016/j.econmod.2024.106912","url":null,"abstract":"<div><div>This study investigates whether social drinking culture (SDC), as an informal institution, impacts the cost of bank loans to a firm. Studies suggest that SDC influences individual behavior by fostering interpersonal relationships. Few studies have explored the impact of SDC on corporate borrowing. We argue that executives use SDC to obtain bank loans at lower interest rates. However, the mechanism remains unclear. Firms can leverage SDC to engage in rent-seeking from or improve communication with lenders. We tested the hypothesis and the underlying mechanism on a sample of Chinese firms from 2011 to 2020. Results suggest that the SDC lowers bank loan rates for firms and supports the rent-seeking mechanism. Furthermore, firms in strong SDC regions have larger sizes, longer maturities, and more non-collateralized loans but perform poorly in corporate and bank loans. Therefore, strong SDC is used by firms to engage in rent-seeking borrowing, resulting in credit resource misallocation.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"141 ","pages":"Article 106912"},"PeriodicalIF":4.2,"publicationDate":"2024-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142531049","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Brazil and South Korea have both been known to implement capital controls during emerging market crises to address the complexity of foreign capital flows, which affects international investor behaviour. This research studies Brazil and South Korea bond and stock flows and sentiment of economic and political uncertainty (SEPU), a local news-based sentiment indicator, using a novel time-varying technique. Findings show multiple short-term occasions where increased SEPU strangely boosts equity flows, contrary to the assumption that uncertainty discourages equity investment. This paradoxical discovery is linked to a "behavioural arbitrage strategy" in which risk-seeking investors employ informational asymmetries to capitalize on increased uncertainty. Foreign investors prefer South Korean over Brazilian bonds due to the former country's stronger policy framework. The second significant finding is that equity inflows increase uncertainty (negative domestic sentiment in media) during acute crises. We conclude that inflation, recession, geopolitical risk, financial instability, and tight monetary policy amplify this feedback loop.
{"title":"Unravelling the complex interactions between sentiment of uncertainty and foreign capital flows: Evidence from Brazil and South Korea","authors":"Brahim Gaies , Mohamed Sahbi Nakhli , Jean-Michel Sahut","doi":"10.1016/j.econmod.2024.106913","DOIUrl":"10.1016/j.econmod.2024.106913","url":null,"abstract":"<div><div>Brazil and South Korea have both been known to implement capital controls during emerging market crises to address the complexity of foreign capital flows, which affects international investor behaviour. This research studies Brazil and South Korea bond and stock flows and sentiment of economic and political uncertainty (SEPU), a local news-based sentiment indicator, using a novel time-varying technique. Findings show multiple short-term occasions where increased SEPU strangely boosts equity flows, contrary to the assumption that uncertainty discourages equity investment. This paradoxical discovery is linked to a \"behavioural arbitrage strategy\" in which risk-seeking investors employ informational asymmetries to capitalize on increased uncertainty. Foreign investors prefer South Korean over Brazilian bonds due to the former country's stronger policy framework. The second significant finding is that equity inflows increase uncertainty (negative domestic sentiment in media) during acute crises. We conclude that inflation, recession, geopolitical risk, financial instability, and tight monetary policy amplify this feedback loop.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"141 ","pages":"Article 106913"},"PeriodicalIF":4.2,"publicationDate":"2024-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142531051","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-18DOI: 10.1016/j.econmod.2024.106909
André Carrascal-Incera , Luis Orea
Although there is an extensive literature on the measurement of total factor productivity (TFP) and its decomposition, the benefits of international trade for aggregate TFP have been less frequently studied. Combining the theoretical trade models and the so-called proxy-variable approach, this paper provides a new method for estimating trade elasticities based on a production model where trade elasticities and technological parameters are estimated simultaneously. Our proposed model is used to analyse the main determinants of the degrees of openness (embeddedness) of countries and sectors. Using data from the World Input-Output Database, we find that the pecuniary productivity gains attributable to embeddedness tend, on average, to offset its effect on sectors' underlying productivity. We also use the model to measure the different factors affecting productivity changes due to the Covid-19 pandemic. We find that the trade-related consequences are important in explaining the contraction in countries’ productions.
{"title":"A new approach for estimating trade elasticities and measuring the productivity effects associated with trade","authors":"André Carrascal-Incera , Luis Orea","doi":"10.1016/j.econmod.2024.106909","DOIUrl":"10.1016/j.econmod.2024.106909","url":null,"abstract":"<div><div>Although there is an extensive literature on the measurement of total factor productivity (TFP) and its decomposition, the benefits of international trade for aggregate TFP have been less frequently studied. Combining the theoretical trade models and the so-called proxy-variable approach, this paper provides a new method for estimating trade elasticities based on a production model where trade elasticities and technological parameters are estimated simultaneously. Our proposed model is used to analyse the main determinants of the degrees of openness (embeddedness) of countries and sectors. Using data from the World Input-Output Database, we find that the pecuniary productivity gains attributable to embeddedness tend, on average, to offset its effect on sectors' underlying productivity. We also use the model to measure the different factors affecting productivity changes due to the Covid-19 pandemic. We find that the trade-related consequences are important in explaining the contraction in countries’ productions.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"141 ","pages":"Article 106909"},"PeriodicalIF":4.2,"publicationDate":"2024-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142531053","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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