technology international trade and pollution from us manufacturing pollution emitted by us manufacturers declined markedly over the past several decades even as real manufacturing output increased i first show that most of the decline in us manufacturing pollution has resulted from changing production processes technology rather than changes in the mix of goods produced i then show that increased net imports of polluting goods international trade accounts for only a small portion of the pollution reductions from the changing mix of goods together these two findings demonstrate that shifting polluting industries overseas explains only a minor part less than 10 percent of the cleanup of us manufacturing jel f18 l23 l60 o30 q52 q53

productivity growth of newly industrializing economies in heterogeneous capital goods markets the case of the korean machinery and equipment industry although many previous studies have investigated the economic growth of east asian countries from the perspective of productivity growth they have adopted a limited focus only on the national level or on the aggregated level and have overlooked the heterogeneity at the disaggregated level furthermore only a few studies have examined the sources of the remarkable growth and trade performance of the korean machinery and equipment industry despite its importance for sustainable growth of national economy therefore we investigated the total factor productivity growth tfpg of the korean machinery and equipment industry and its 12 sub sectors from 1970 to 2012 using the stochastic frontier production approach as a result we found that the industry has achieved labour input driven tfpg largely due to technical progress this is contrary to the previous result that east asia has expanded the production frontier by capital accumulation in contrast in some sub sectors scale effect and allocation effici

effort observability and worker productivity towards an explanation of economic dualism this paper suggests an explanation of the wage and productivity differentials between formal and informal sectors in developing countries this explanation is based on differences in the observability of effort that arise from technological differences such as size of operation the authors argue that observability of effort is lower in the formal sector and then show that under reasonable conditions this leads to higher wages and higher effort productivity this is because with lower observability the marginal cost of effort is lower when existing employees are induced to work harder than when more workers are hired explanations for intersectoral differences in factor intensities and sector specific unemployment rates also follow from the authors basic assumptions copyright 1989 by royal economic society

coordination of internal supply chains in vertically integrated high tech manufacturing organizations htmos abstract this paper uses economic mechanisms to coordinate supply chains within high tech manufacturing organizations htmos it models the one shot initial production and allocation decisions involved in the production and marketing of new technologies these decisions are driven by the economic objectives of the firm and of the employees with private information the experts it analyzes and compares the efficiency of three coordination policies centralized command and control centralized revelation and decentralized revelation it shows that decentralized policies introduce an additional cost and it proposes rules of thumb for coordinating supply chains within firms that use many experts

profitability and profit sharing claims that profit sharing is a purely distributive wealth confiscation scheme without incentive effects due to free rider problems are based on neglect of cooperation and interaction in the workforce when these activities are difficult to monitor directly group incentives such as profit sharing can increase efficiency and maintain a superior nashequilibrium with strictly individual optimization with simultaneous wls tobit estimates we find here strong effects of profit sharing and worker ownership shares on residual owners return on capital in medium sized metal working firms in west germany complementing earlier results on productivity

technological regimes catching up and leapfrogging findings from the korean industries abstract this paper examines the experiences of selected industries in korea to identify the stylized facts in the process of technological capability building and thereby to sort out the conditions for the catching up to occur to explain the process we have built a model of technological and market catching up a special attention has been given to the question of whether there has been a case of leapfrogging in any industry in korea and if so what are the conditions for its incidence in our framework we first measure the degree of catching up in terms of market shares in the world then we focus on catching up in technological capabilities in explaining the different record and prospects of korean industries in market catching up in the model technological capability is determined as a function of both technological effort and the existing knowledge base as determinants of technological effort we look at the technological regimes of the industries such as cumulativeness of technical advances fluidity predictability of technological trajectory and the properties of knowledge base using this model we explain the different technological evolution of the selected industries in korea including the d ram automobile mobile phone consumer electronics personal computer and machine tool industries we find three different patterns of catching ups path creating catching up cdma mobile phone path skipping catching up d ram and automobile and path following catching up consumer electronics personal computers and machine tools we interpret the first two case of catching up as leapfrogging unlike the argument by perez and soete perez c soete l 1988 catching up in technology entry barriers and windows of opportunity in dosi et al eds technical change and economic theory pinter publishers london we find that important r d projects except automobiles where only private r d was involved involved both private and public capacities and that entry was not driven by endogenous generation of knowledge and skills but by collaboration with foreign companies

exploring the capital goods economy complex product systems in the uk over the past decade qualitative empirical research at the firm project and industry levels has improved our understanding of the characteristics and dynamics of innovation in the high technology high value capital goods or complex product systems cops which underpin modern industrial activity this paper describes the development of a new industrial classification system for cops which is able to estimate quantitative shares of production and value added accounted for by cops at the economy level it is also able to provide insights into the capital information technology and skill intensity of cops as well as employment contributions as an example the method is applied to one major industrial economy namely the uk through a comparison of cops with non cops industries the paper identifies some of the key factors which explain the different patterns of innovation between the two types of industrial activity although preliminary the analysis shows that cops based industries together represent a distinctive class of industrial activity based on the classification system provided further research is underway to examine cross country comparisons in both production and trade performance through time

approaching the innovation frontier in korea the transition phase to leadership as leading east asian latecomer firms begin to compete on the basis of new product development and in house research and development r d they appear to confront a difficult strategic dilemma should they compete as r d and brand leaders on the international stage or should they continue with their tried and tested formula of low cost catch up competitiveness most studies of east asian firms focus on catch up innovation processes by contrast this paper focuses on the challenges facing latecomer firms in the transition phase from catch up to leadership status in order to assess the strategic dilemma argument and examine the nature of transition innovation based on in depth interviews with leading korean firms the paper contends that the strategic dilemma argument is a misleading oversimplification of the main innovation challenges facing most korean firms as they become more technologically advanced most of the major exporters or chaebol offer a portfolio of products some of which are technologically advanced and others less advanced corporate innovation strategies tend to be executed in relation to the needs of specific products or closely related product families rather than the firm in its entirety in addition many firms in many product areas have yet to reach the innovation frontier stage and even the leading chaebol continue to produce large volumes of products under sub contracting and licensing agreements firm strategies tend to embody a mix of leadership followership and latecomer positions according to the product portfolio of the company in question the study identifies various strategic options and difficulties facing korean firms during the transition process and points to promising future research on latecomer transition

sectoral patterns of technical change towards a taxonomy and a theory abstract the purpose of the paper is to describe and explain sectoral patterns of technical change as revealed by data on about 2000 significant innovations in britain since 1945 most technological knowledge turns out not to be information that is generally applicable and easily reproducible but specific to firms and applications cumulative in development and varied amongst sectors in source and direction innovating firms principally in electronics and chemicals are relatively big and they develop innovations over a wide range of specific product groups within their principal sector but relatively few outside firms principally in mechanical and instrument engineering are relatively small and specialised and they exist in symbiosis with large firms in scale intensive sectors like metal manufacture and vehicles who make a significant contribution to their own process technology in textile firms on the other hand most process innovations come from suppliers these characteristics and variations can be classified in a three part taxonomy based on firms 1 supplier dominated 2 production intensive 3 science based they can be explained by sources of technology requirements of users and possibilities for appropriation this explanation has implications for our understanding of the sources and directions of technical change firms diversification behaviour the dynamic relationship between technology and industrial structure and the formation of technological skills and advantages at the level of the firm the region and the country

awarding monopoly franchises the authors analyze how to award a monopoly franchise when the objective is to maximize expected consumers surplus net of transfer payments to the producer potential producers initially possess independent private information about uncertain production costs only the chosen producer subsequently observes realized production costs after awarding the franchise to the producer with the lowest expected costs prices are optimally set above realized marginal cost these ex post distortions foster more competitive bidding ex ante the distortions for any bid cost pair are invariant to the number of bidders n though expected distortions and profits decline with n copyright 1987 by american economic association

fostering the capital goods sector in ldcs abstract the conventional arguments in favour of the production of capital goods by ldcs are based on comparative advantage the possibility of designs appropriate to indigenous factor proportions and the externalities conferred on other sectors these and other arguments are inducing the governments of many middle income countries to more intensively foster the development of the machinery sector this paper examines the analytic and empirical bases of the conventional arguments and finds a considerably more complex picture than that contained in earlier studies

information technology efficiency and productivity evidence from korean local governments this study evaluates the performance of korean local government by measuring their technical efficiency te and total factor productivity tfp growth and more importantly examining the impact of information technology it on this performance the study is different from received analysis in that a unique measure of the state of it the informatization index is used to investigate the impact of it on both te and tfp growth empirical analyses are conducted on data from 222 korean local governments for the period 1999 to 2001 in particular data envelopment analysis techniques are applied to calculate te scores and tfp growth rates for sampled local governments the empirical findings confirm the positive impact it has in improving technical efficiency and accelerating productivity growth the estimated coefficients are correctly signed with other regional characteristics controlled for when te scores and tfp growth rates are regressed on the index in addition the findings indicate that economies o

convergence and catching up in asean a comparative analysis the increasing diversity of average growth rates and income levels across countries has generated a large literature on testing the income convergence hypothesis most countries in south east asia particularly the five founding asean member countries asean 5 have experienced substantial economic growth with the pace of growth having varied substantially across countries recent empirical studies have found evidence of several convergence clubs in which per capita incomes have converged for selected groupings of countries and regions this paper applies different time series tests of convergence to determine if there is a convergence club for asean 5 as well as asean 5 and the usa the catching up hypothesis states that the lagging country with low initial income and productivity levels will tend to grow more rapidly by copying the technology of the leader country without having to bear the associated costs of research and development given the important effects of technological change on growth

the productivity debate of east asia revisited a stochastic frontier approach this paper applies a stochastic frontier production model to the data from penn world table s 49 countries over the period 1965 to 1990 to decompose total factor productivity growth into technical change and technical efficiency change empirical results show east asian countries led the world in productivity growth mainly because their technical efficiency gain was so much faster than that of other countries east asian countries also registered rapid technical change which was comparable to that of the g6 countries after the late 1980s the results provide evidence that negate the hypothesis that east asian growth was mostly input driven and unsustainable

coordination failures and government policy a model with applications to east asia and eastern europe abstract poor countries must specialize in standardized labor intensive commodities middle income countries may have a richer menu of options if their labor force is reasonably well educated and skilled the multiplicity of equilibria is due to a coordination problem inherent in activities that require specialized inputs if no intermediate inputs are presently produced there may be little incentive for any single firm to do so on its own the economy may get stuck in a low wage low tech equilibrium an investment subsidy or a minimum wage policy can enhance welfare by moving the economy to a superior equilibrium

comparative economic performance of conventional and profit sharing firms abstract this paper compares the various economic properties of conventional firms and profit sharing firms the properties contrasted include wage level employment output price total economic rents and industry efficiency the firms operate in an oligopolistic industry with a labor union in general profit sharing firms outperform non sharing firms however there exist counterexamples in which non sharing firms can outperform sharing firms to test the robustness of the results the analysis is conducted for a variety of oligopolistic industries quantity setting pricesetting and joint collusion

trigger strategies in chinese agricultural teams in this paper the reasons why chinese agricultural teams could not reply on the threat of internal effort response to solve incentive problems are investigated the detrimental effects of state extractive agricultural policies the basic needs program and cultural revolution era ideology on the dynamic self enforcing mechanism in chinese teams are analysed using the data on the teams of a moderately prosperous commune during the period 1970 76 the author estimates the discount factor and the impact of the trigger strategies on workers effort decisions it is found that the estimates of the discount factor and the trigger strategy effect are significantly greater than zero in some periods but not large enough to eliminate the need for monitoring

costly monitoring loan contracts and equilibrium credit rationing this paper develops a model with asymmetrically informed agents and costly monitoring of loan contracts where an equilibrium can exhibit credit rationing borrowers are identical ex ante but some receive loans and others do not in contrast to existing credit rationing theories rationing does not occur here due to inflexible prices adverse selection or moral hazard optimizing behaviour produces a standard debt contract in equilibrium the aggregate quantity of loans and equilibrium interest rates respond differently depending on whether there is rationing in equilibrium

firm size age and efficiency evidence from kenyan manufacturing firms translog stochastic frontier production functions are estimated using an unbalanced panel of 235 kenyan manufacturing firms in the food wood textile and metal sectors the sectors are estimated individually in order to investigate whether technical efficiency is systematically related to the size and age of firms the evidence suggests that firm size has a positive and significant effect in the wood and textile sectors the age effect is less systematic but is insignificant in all sectors except textiles

optimal assignment of principalship in teams abstract this paper investigates the optimal assignment of principalship in teams we formalize a theory of the firm pioneered by alchian and demsetz am econ rev 62 1972 777 using an approach in the spirit of grossman and hart j pol econ 94 1986 691 our theory makes a distinction between production effort and monitoring effort when it is costly to sign contracts on efforts it may be optimal to let one party purchase the rights to monitor and to direct and claim full residual principalship is the purchase of these rights these rights are limited residual rights of control over actions we have confirmed alchian and demsetz s celeberated conjecture that residual claims should match residual control we have also explored how the optimal assignment of principalship and partnership depends on the interaction between each member s importance in production the effectiveness of monitoring and the degree of teamwork

the incentive effects of monitoring under alternative compensation schemes abstract this paper examines the marginal incentive effect of monitoring under share and wage payment schemes using various assumptions concerning the risk preferences of workers and the informational content of monitoring signals the direction of this effect is shown to depend critically on the set of assumptions employed furthermore the conditions necessary to generate a positive response of labor effort to monitoring may be restrictive and intuitively unappealing a positive incentive effect is most easily guaranteed under both compensation schemes if monitoring produces an accurate signal of effort with a probability which depends on the level of monitoring intensity implications for the argument that the problem of monitoring dictates efficient organizational form are briefly explored

productivity growth and factor prices in east asia the industrial revolution in several east asian countries over the last three decades is one of the most important economic events in the postwar era several recent growthaccounting exercises have found that their extraordinary rate of output growth was due primarily to an equally impressive rate of factor accumulation with little due to technological progress see alwyn young 1992 1995 jong il kim and lawrence lau 1994 susan collins and barry bosworth 1996 since these studies suggest that factor accumulation has been the lead actor in east asia s growth many economists have reached the conclusion that the industrial revolution in east asia can largely be explained in terms of transition dynamics in a neoclassical growth framework see e g paul krugman 1994 n gregory mankiw 1995 if this view is correct the lesson from east asia s experience is that there are no easy solutions for a poor country that seeks to join the league of wealthy nations low levels of investment and education may be the result of bad policies but once proper policies are enacted a poor country faces the grim prospect of a further decline in its already low standards of living as it devotes more resources to investment and education the central point of this paper is that if east asia s growth was largely driven by capital accumulation with little technological progress the return to capital should have fallen dramatically as capital accumulation encounters diminishing returns for example the capital output ratio for korea computed from the national accounts has increased at an average rate of 3 4 percent per year from 1966 to 1990 while that of singapore has increased at an average rate of 3 7 percent per year from 1968 to 1990 by dividing the share of payments to capital in total income by the capital output

firm size and technical efficiency applications of production frontiers to indian survey data abstract this paper is an empirical investigation of the relationship between relative technical efficiency and firm size in four indian manufacturing industries a frontier translog production function is used to derive measures of technical inefficiency at the enterprise level given the properties of the estimated production frontier these indices of technical efficiency are also indices of total factor productivity tfp which is the single most widely accepted measure of productive efficiency variations in technical efficiency are correlated with several explanatory variables including size of firm firm size is found to be positively associated with relative productive efficiency in only one of the four industries

the welfare implications of costly monitoring in the credit market a note unconventional policy prescriptions it is worthwhile to check its robustness in a more general setting in this note we extend the hw model to allow for endogenous determination of monitoring costs and show that the hw result can be reversed the general equilibrium model developed in this note provides a better foundation for policy analysis in the costly monitoring situation 1 the model this section extends the hw model to allow for endogenous determination of monitoring costs consider an economy with a capitalists and 1 a entre

the measurement and sources of technical inefficiency in the indonesian weaving industry production function models are estimated with a time series of cross section data on indonesian weaving establishments the sources of technical inefficiency are investigated three firm attributes are identified as being potentially related to firm efhciency tbey are firm ownership age and size the importance of these attributes as sources of inefficiency in the indonesian weaving industry is investigated and the implications of the find ings discussed

the welfare implications of costly monitoring in the credit market rationing is a pervasive feature of credit markets it has been suggested that credit rationing represents a suboptimal allocation of resources in a general equilibrium model of credit rationing with hidden information and costly monitoring we show that if credit is rationed it is suboptimal but that credit should be rationed more tightly in equilibrium loan applicants bear average monitoring costs whereas for efficiency they should bear marginal monitoring costs which are larger because average monitoring costs increase with quantity as extra loans are accompanied by a rise in the interest rate which increases the number of defaults copyright 1994 by royal economic society

high profit strategies in mature capital goods industries a contingency approach high profit and low profit strategic gestalts in two different types of mature capital goods industries are examined multiple avenues to high profits are found within both types but they differ