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Big data technologies change the way in which data and labor combine to create knowledge. Is this a modest innovation or a data revolution? Using hiring and wage data, we estimate firms' data stocks and their knowledge production functions. Quantifying changes in production functions informs us about the likely long-run changes in output, in factor shares, and in the distribution of income, due to big data technologies. For the investment management industry, our structural estimates predict a 5% decline in the labor share of income; that change is comparable to similar estimates for the industrial revolution. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online [ABSTRACT FROM AUTHOR]

We document that the aggregate hiring rate of publicly traded firms in the U.S. economy negatively predicts stock market returns and long-term cash flows, and positively predicts short-term cash flows. In addition, through a variance decomposition, we show that the time-series variation in the aggregate hiring rate is mainly driven by changes in discount rates and short-term expected cash flows, with no contribution from variation in long-term expected cash flows. We estimate a neoclassical dynamic model with labor market frictions and show that labor adjustment costs and time-varying risk are essential for the model to replicate the empirical patterns. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

The aim of the paper is to assess the causes of spatial variations in labour productivity of Italian regions using the gravitational model of economic growth. The model is an extension of Robert Solow’s economic growth model. The model parameters are calibrated using historical data and numerical simulations of the long-run equilibrium states of the model are carried out. The scenarios considered in the paper vary in forecast investment rates, employment growth rates and urbanisation rates. Based on the results of numerical simulations, it is claimed that to achieve the full convergence in labour productivity, it is necessary to maintain higher investment rates in the south of the country than in Lombardy (by about 4%–11%), and to keep investment rates in central and northern Italy at a similar level as in Lombardy. The fall in investment has affected the poorest regions, Southern Italy, the most, followed by central Italy and the richest regions of the north of the country the least.

We study the relation between trade credit, asset prices, and production-network linkages. Empirically, firms extending more trade credit earn 7.6 |$\%$| p.a. lower risk premiums and maintain longer relationships with customers. Using a production-based model, we quantitatively explain these novel facts. Trade credit reduces the departure probability of high-quality customers, thereby reducing firms' exposures to systematic costs incurred in finding new customers. The mechanism predicts that the aggregate amount of trade credit proxies for customer-search costs and that suppliers with shorter-duration links to customers command higher expected returns. We confirm these and other novel predictions in the data. [ABSTRACT FROM AUTHOR]

Based on a multisector general equilibrium framework, we show that the sectoral elasticity of substitution plays the key role in the evolution of asymmetric tails of macroeconomic fluctuations and the establishment of robustness against productivity shocks. A non-unitary elasticity of substitution renders a nonlinear Domar aggregation, where normal sectoral productivity shocks translate into non-normal aggregated shocks with variable expected output growth. We empirically estimate 100 sectoral elasticities of substitution, using the time-series linked input-output tables for Japan and find that the production economy is elastic overall, relative to a Cobb-Douglas economy with unitary elasticity. In addition to the previous assessment of an inelastic production economy for the USA, the contrasting tail asymmetry of the distribution of aggregated shocks between the USA and Japan is explained. Moreover, the robustness of an economy is assessed by expected output growth, the level of which is led by the sectoral elasticities of substitution under zero-mean productivity shocks. [ABSTRACT FROM AUTHOR]

Information communication technology (ICT) has been envisaged to promote sustainable growth and development in Nigeria due to its increased contribution to GDP. However, its impact on aggregate output and employment is still questionable. Likewise, the increase in Nigerian debt services has raised questions about economic sustainability. Given this, the study investigates the short- and long-run impact of ICT and debt services on employment and output using autoregressive distributed lags (ARDL). The study shows that ICT has a positive relationship with employment, and debt service negatively affects employment in the long run. In the short run, ICT is insignificant to employment, while debt service negatively affects employment. Also, ICT has a positive long-term relationship with output. Debt service has a negative relationship with productivity in the long run. In the short run, ICT has a positive relationship with productivity. Debt service is not significant with output in the short run. The result implies that ICT complements employment rather than substitutes it. Likewise, economic stability can be threatened by excessive debt service. Based on this, the study recommends policy to improve the situation.

This study examines the impacts of weather and climate shocks on firm performance in Uganda, a low-income country that shares many characteristics with countries at similar levels of development. The analysis exploits panel methods on novel quarterly business climate data. The results are threefold. First, weather and climate shocks are negatively associated with business performance. Second, these effects are stronger among micro and small enterprises, and among firms in the agricultural and industrial sectors. Third, poor business environments characterized by excruciating constraints exacerbate the impact of climate shocks on business performance. The results are robust to alternative econometric model specifications.

This study assesses, from the perspective of financial stability, how business/financial sustainability, moderates the influence of information technology on female economic participation in 49 countries in Sub-Saharan Africa for the period 2008–2018. The empirical evidence is based on Tobit regression, which accounted for the censored nature of the outcome variables. The following important findings were obtained: First, ICT (information and communications technology) dynamics (mobile phone penetration, internet penetration, and fixed broadband subscriptions) are consistently moderated by business sustainability to positively affect female employment. Second, business sustainability scores must exceed certain thresholds before moderating fixed broadband subscriptions to induce favorable overall effects on female employment, female labor force participation, and female unemployment rates. The positive effects on female employment and labor force participation is ascertained by the thresholds of 18.742 and 19.505 Z-scores, respectively and a Z-score of 17.300 for the negative impact on female unemployment. The thresholds that should be exceeded are within policy reach, make economic sense, and are policy-relevant. This study contributes to the extant literature by providing actionable thresholds for business sustainability that can be employed by policy makers such that information technology positively influences female economic inclusion in Sub-Saharan Africa.

AbstractWe explore the sources of economic growth in Sri Lanka for the period during which it implemented a liberalized trade policy. We first calculate the primal and dual total factor productivity growth (TFPG), and then evaluate the roles of FDI and exports in driving TFPG. Results show that the average annual primal TFPG for 1980–2019 is 2.1%, constituting 43% of output growth. The corresponding dual TFPG is 3.3%. This divergence between primal and dual calculations is due to market imperfections, regulations, government monopolies, and issues in national accounts compilations. Regression results show that FDI has been a significant driver of Sri Lanka’s TFPG. Moreover, we find that both factor accumulation and TFPG are important sources of output growth. This is the first study that calculates dual TFPG for Sri Lanka. It provides policymakers the direction for implementing targeted policies to enhance Sri Lanka’s long-term growth prospects. [ABSTRACT FROM AUTHOR]

Purpose: The authors empirically aim to study the implications of uncertainty generated by oil price volatility on some key macroeconomic variables, including production, exchange rates and interest rates, of both oil-exporting and oil-importing countries. Using a block exogeneity structural Vector Auto Regression (VAR) model that mutes the effects of domestic variables on global factors and that is suitable for small open economies because of significant differences in the responses of domestic production in oil-importing countries will most likely decrease through reducing planning horizons, postponing investment projects and relocating resources more inefficiently. Design/methodology/approach: The authors integrated into the structural vector autoregressive (SVAR) model the block exogeneity feature since all the countries in this study are small open economies that cannot influence the global economic variables. The block exogeneity feature imposes the restriction that the domestic variables have neither a contemporaneous nor a lagged impact on the global variables. This model has eight variables: oil price volatility, world demand and federal funds rate as the global variables; and domestic production, monetary aggregate, inflation rate, exchange rate and interest rate as domestic variables. The authors assemble the data for 12 developing countries for which the necessary data for the analysis are available: six oil exporting countries (Russia, Saudi Arabia, Iran, Kazakhstan, Mexico and Colombia) and six oil importing countries (Turkey, India, Philippines, Poland, South Africa and Indonesia). Findings: The results point out significant differences in the responses of macroeconomic variables to oil price volatility shocks between oil-exporting and oil-importing countries. Furthermore, the local currencies of these countries depreciate due to concerns about possible current account worsening. In response to the shock, domestic interest rates are reduced so as to alleviate the negative exposure of the shock on domestic economic activity. While domestic production in some oil-exporting countries (i.e. Russia, Saudi Arabia and Iran) increases during oil price uncertainty; in some other countries (i.e. Mexico, Kazakhstan and Colombia), domestic production decreases. Originality/value: Several components of the study contribute to its novelty. One of them is the period under consideration. The time frame that encompasses the most significant geopolitical and financial events, such as the Middle East Spring and the global financial crisis of 2007–2008. The research was conducted using the block-exogeneity SVAR model, which includes 12 oil exporting and importing developing countries. With this model, the global dynamics, particularly the energy market, that these nations may influence and are influenced by, i.e. global and nonglobal factors can be constrained. This makes it easy to determine the various effects prices have on macroeconomic variables. Highlights: Oil prices and volatility still matter to the global economy Monetary and fiscal policy interventions in response to oil price volatility create uncertainty and impede investment activity The response of macroeconomic variables to volatility shocks in oil prices varies across oil importers and exporters Interest rates help stabilize production in oil-importing economies that have well-functioning financial markets [ABSTRACT FROM AUTHOR]

This paper examines the existence of Okun’s law in Algeria over the period of 1970–2020 using both the gap and differences model.

During the late 1800s and early 1900s, Argentina was among the ten richest economies in terms of gross domestic product per capita with the United States being the leading economy most of the time. However, Argentina grew less and was less stable than the United States in a period of over 140 years (1875–2018). Structural breaks (1935 and 1975) were identified in the declining ratio of Argentina's gross domestic product per capita long-term trend to that of the United States, as well as in the long-term per capita growth rates of Argentina (1911 and 1975) and the United States (1935). The declining ratio partly reflects that growth in the United States accelerated after 1935 (during the post-1930 Great Depression recovery and the Second World War years) while it decelerated in Argentina after 1975 (in the context of large government deficits, high inflation, the first oil crisis, and the Latin American debt crisis). A Bayesian estimation model suggests that long-term growth was generally higher and less volatile in the United States than in Argentina, with relatively low spillovers from one country to the other. [ABSTRACT FROM AUTHOR]

Capital reallocation between firms is procyclical and leads to variations in measured aggregate productivity. In this paper, we ask how much of the cyclical variation in measured productivity is the consequence of capital reallocation. We build a heterogeneous‐firm model to study the effects of exogenous shocks to total factor productivity (TFP) and to the costs of reallocation. These shocks cause an endogenous cyclicality of measured aggregate productivity. Only a model driven by exogenous TFP shocks is able to generate both data‐consistent cyclical movements in reallocation and sizeable variations in measured aggregate productivity. We find that capital reallocation does not play a major role in amplifying aggregate productivity variations over the business cycle. [ABSTRACT FROM AUTHOR]

What is the relationship between financial development, political instability, trade openness and economic growth and how does it change over time? This paper examines these links using a new econometric approach and unique data set. In this paper, we apply the logistic smooth transition model (LST) to annual data for Brazil from 1890 to 2003. The main finding is that financial development has a time-varying effect on economic growth, which depends significantly on (jointly estimated) trade openness thresholds. In addition, political instability displays a negative effect on growth whereas trade openness a positive one. Finally, our estimates show that in 56% of the years in which financial development has a 'below the mean' effect, we find that trade openness experiences a substantial 'above the mean' change. [ABSTRACT FROM AUTHOR]

We estimate sectoral spillovers around the Great Moderation with the help of forecast error variance decomposition tables. Obtaining such tables in high dimensions is challenging because they are functions of the estimated vector autoregressive coefficients and the residual covariance matrix. In a simulation study, we compare various regularization methods on both and conduct a comprehensive analysis of their performance. We show that standard estimators of large connectedness tables lead to biased results and high estimation uncertainty, both of which are mitigated by regularization. To explore possible causes for the Great Moderation, we apply a cross‐validated estimator on sectoral spillovers of industrial production in the US from 1972 to 2019. We find that the spillover network has considerably weakened, which hints at structural change, for example, through improved inventory management, as a critical explanation for the Great Moderation. [ABSTRACT FROM AUTHOR]

This study examines the technical inefficiency of small and medium Japanese manufacturing firms by using panel data from the Basic Survey on Small and Medium Enterprises (2009–2018). We estimate the stochastic frontier production function with four production factors (regular workers, nonregular workers, capital stock and materials) and calculate the technical inefficiency of individual firms by applying a true random effects model that can distinguish technical inefficiency from firm heterogeneity.We find that inefficient firms are smaller, rely more on nonregular workers, exhibit poorer firm performance, have a higher debt-asset ratio, pay a lower interest rate and are inactive in capital investment and R&D investment. We also find that inactive capital investment and a high debt-asset ratio are mainly responsible for causing technical inefficiency.