capital utilization economies of scale and technical change in the growth of total factor productivity an explanation of south korean manufacturing growth abstract this paper presents a method of interpreting the growth of total factor productivity directly linking the productivity growth to key parameters of a specific cost function it shows that the productivity index can be decomposed into effects due to a technical change b non constant returns to scale and c change in capital utilization the decomposition framework was applied to data on south korean manufacturing during the 1961 1980 period in south korean manufacturing the total factor productivity was found to have grown at 3 per annum scale economies contributed about 38 of the growth of tfp the technical change 45 and the change in the capital utilization rate 17 the results of this study support of the view that for growing less developed economies the growth in capital utilization rate is a source of growth in total productivity that is too significant to be ignored

international trade and energy intensity during european industrialization 1870 1935 the study was conducted in the research project who did the dirty work energy embodied in european and global trade 1800 1970 funded by the swedish research council 421 2013 1110 vetenskapsradet

economic growth and productivity a case study of south korea the economic performance that south korea has achieved over the past quarter century is often likened to a miracle recently much interest has been expressed in the driving forces behind the korean economic transformation using the valueadded measure of output christiansen and cummings have shown that technology measured by tfp accounts for about 43 of korean economic growth between 1960 and 1973 this figure is considerably high compared with recent major studies on japanese and singaporean economic growth we found that the value added framework is not appropriate for the description of the structure of the korean economy and re examined the sources of korean economic growth using the gross output framework surprisingly it has been discovered that only 7 of real output growth in the manufacturing sector during the 1962 1981 period is attributable to technological progress these findings parallel those for the japanese and singapore economies

baumol s disease and dematerialization of the economy this paper argues that there is reason to be skeptical about the idea that the transition to a service economy will bring about dematerialization of production and consequent environmental improvement this is because the shift to a service economy is an illusion in terms of real production but is instead generated by the fall in the price of manufacturing goods relative to services which is in turn caused by more rapid productivity growth in manufacturing than in services this argument relies on the insights baumol provided on the nature of the service economy and uses swedish long term data on relative sectoral development as an empirical illustration on the other hand the paper argues that there is reason to be cautiously optimistic that structural change may bring about a greening of growth namely the changes in growth patterns sometimes labeled the third industrial revolution which is connected to the emergence of microelectronics swedish co2 emissions show a decline after 1970 which is mainly explained by a politically driven change in the mix of energy carriers but is also related to the stabilization of energy consumption this energy stabilization was caused by slow growth of the economy in conjunction with substantial declines in energy intensity within industrial sectors and an absence of relative growth of the heavy sectors a growth that had marked the economy between 1870 and 1970 microelectronics have contributed to permanently transforming the swedish industrial sector in a lighter direction reducing energy losses in heavy industries and stabilizing household energy consumption so it appears as if there may be some environmental gains from this development that was initiated in the 1970s but not from relatively more production in the service sector

structural changes and sustainability a selected review of the empirical evidence abstract the paper offers a review of selected topics in the empirical literature on structural change and sustainability we focus on aspects of structural change that directly affect emissions and energy intensity changes of the sectoral composition of economies trade and international fragmentation of production technological change and innovation and demand we identify several empirical facts first only a few countries have experienced a decoupling between growth and emissions due to proportionately faster growth rather than greater energy efficiency second the long term shift from manufacturing to services has not led in all cases to the de materialisation of economies and a lower environmental burden exploitation of energy efficiency increases depends on the ability of the service sectors to incorporate technical changes to reduce energy intensity third global trade and energy and emissions intensity trends support the pollution haven hypothesis which predicts displacement of the environmental burden from developed to emerging countries the pursuit by developing countries of a long term strategy of trading jobs for emissions is likely to exacerbate the asymmetry related to emissions intensities between developed and less developed economies the review should inform debate on environmental policy within the broader context of innovation and development policies

determinants of emissions growth in oecd countries abstract this paper analyses the sources of growth in energy related greenhouse gas emissions for oecd countries over the period 1982 1997 it employs a decomposition formula that separates out the effects of changes in population economic growth energy intensity of output in aggregate and by sector primary energy use in final energy consumption the share of fossil fuels and the carbon intensity of fossil fuel combustion it is shown that in general growth in emissions depends on how effectively energy use can be changed to offset the effects of economic growth across the oecd as a whole growth in emissions has been mainly due to economic growth both gdp per capita and population growth as well as an increase in primary energy required for final energy consumption offset by falling energy intensities and a declining share of fossil fuels overall the large fall in the energy intensity of oecd economies over 1982 1997 has been driven primarily by falling energy intensities in the services and industry sectors of the usa and the services sector of the european union but these have been offset somewhat by rising energy intensity of services in japan the influence of falling energy intensities and the declining share of fossil fuels weakened in the five year period 1992 1997 resulting in faster emissions growth there were sharp difference between countries with population growth and worsening fuel mix playing a much stronger role in the usa compared to the eu and japan but with the us making much larger reductions in energy use per unit of gdp the analysis suggests that opportunities to reduce emissions are more limited in germany the uk and japan with more opportunities in the usa canada the netherlands and australia

modelling the relationship between energy intensity and gdp for european countries an historical perspective 1800 2000 abstract in this paper we discuss an original article by gales et al 2007 concerning the relationship between total energy intensity and gdp per capita in their chiefly descriptive analysis of four european countries sweden the netherlands italy and spain over the last two centuries no inverted u curve relationship was found between total energy intensity sum of traditional and modern energy sources and gdp per capita by contrast in addition to considering total energy intensity we also distinguish between modern energy intensity and traditional energy intensity further we integrate qualitative analysis with empirical analysis i e the ardl cointegration procedure in order to make our results more robust the main conclusions of gales et al 2007 are only partially confirmed considering total energy intensity can lead to erroneous conclusions in particular our estimates show a u shaped relationship between total energy intensity and gdp per capita in addition when we decompose total energy intensity two different relationships emerge a hyperbolic pattern traditional energy carriers and a u shaped inverse pattern modern energy carriers we conclude that the decreasing branch of the u shaped relationship between total energy intensity and gdp per capita is driven by traditional energy sources when the latter dominate modern energy sources low levels of gdp per capita in contrast the ascending branch of the u shaped relationship is driven by modern energy sources when prevailing over traditional sources high levels of gdp per capita

useful work and information as drivers of economic growth abstract a semi empirical endogenous growth theory was proposed by the authors in 2005 it is based on a model of the economy as a two stage materials energy processing system growth is simulated by a two parameter production function with two traditional factors labor and capital and a non traditional factor namely useful work the non traditional factor is calculated from primary energy inputs multiplied by an empirically estimated average energy conversion efficiency which is a function of changing technology over time this model explains past us growth from 1900 through 1973 74 with satisfactory accuracy but it slightly underestimates subsequent growth i e it leaves a small unexplained but increasing residual for the period after 1975 however by subdividing capital stock into traditional and ict components we are able to extend the theory to explain us economic growth accurately in this paper we also extend the results to japan the revised production function has only three independent parameters the new model also has implications for future economic growth energy and environmental policy that differ significantly from the traditional growth theory these implications are discussed briefly

the structure of production in south korea s manufacturing sector abstract this paper estimates a model of producer behavior for south korean manufacturing that simultaneously identifies substitution elasticities and scale economies a non homothetic translog function is employed which takes on various other functional forms i e cobb douglas homothetic homogeneous as special or limiting cases four significant conclusions are a there is potential scale economies in each subsector of south korean manufacturing b the substitutabilities between factor inputs are relatively low c factor demands are price elastic d the scale economies are correlated with the factor intensity

government policy and performance of the indian engineering industry abstract a major liberalization of the indian industrial policy framework has been undertaken in the 1980s the proponents of liberalization expected not only a general increase in the efficiency of indian industry but also an improvement in its innovative performance detailed industry studies as well as macro level data suggest that the simultaneous liberalization of industrial licence and foreign technological collaboration policies resulted in a large scale entry of new firms into a range of industries industry structures best characterized as miniature replications of the global industry were created chiefly in response to an inherently large demand for foreign disembodied technology in the indian industrialization model foreign technological collaborations became the overwhelming source of product technology in the process the indian capital goods industry has been given the opportunity to better fulfil its role as diffuser of globally generated new technology to indian customers in doing so the liberalization measures have been successful in improving the performance of indian industry within the limits of an import substituting industrialization model the extremely fierce competitive situation coupled with nearly free access to foreign technology has however not been associated with an improvement in the indian engineering industry s innovative performance indeed the greater domestic competition has been associated with greater technology imports rather than greater in house innovative efforts

explaining the non causality between energy and economic growth in the u s a multivariate sectoral analysis the rapidly growing literature on the relationship between energy consumption and economic growth has not univocally identified the causal relationship yet we argue that bivariate models which analyze the causality only at the macro level are eventually misleading especially in cases where both variables do not cover the same scope of economic activity after discussing appropriate pairs of variables we investigate granger causality between energy and growth in the u s for the period from 1970 to 2007 for three sectors industry commercial sector transport as well as on the macro level using the recently developed ardl bounds testing approach by pesaran and shin 1999 and pesaran et al 2001 we find evidence for unidirectional long run granger causality in the commercial sector from growth to energy as well as evidence for bi directional long run granger causality in the transport sector the dependence of causality on the level of aggregation is interpreted as evidence for simpsons paradox the choice of control variables is based on findings from the environmental kuznets curve literature we find that controlling for the increasing energy productivity of production as well as trade significantly improves the fit of the bivariate model

decomposing industrial co2 emissions of southern european countries into production and consumption based driving factors abstract industry is a leading economic sector in european countries as well as a major carbon emitter european industry has been quite successful in abating the environmental pressures and carbon emissions and increasing its energy efficiency from production over the last years however focusing only on the production side may not lead to the desired sustainable development since there are other forces such as the international trade and consumption patterns which also shape the evolution of industrial co 2 emissions the aim of this study is to investigate how changes in production and consumption of industrial products affect the co 2 emissions of industries in four southern european countries during the period 2000 2011 to this purpose a new model of index decomposition analysis is developed in order to decompose the change in co 2 emissions of the industrial sectors of greece italy spain and portugal moreover the examined period in this study is split into two sub periods 2000 2008 and 2008 2011 in order to investigate the impact of the recent economic crisis on both the driving factors and industrial co 2 emissions the overall evolution of industrial co 2 emissions was quite similar in all the countries and the decomposition results of the two sub periods revealed substantial homogeneity across countries two production based driving factors the economic activity and the energy intensity were the main driving factors which shaped the total change in co 2 emissions of industries in the examined countries the consumption based driving factors contributed mostly to the increase in industrial co 2 emissions but not at the same level as the production based ones furthermore industrial production was more significantly affected by the economic crisis than consumers expenditures the decomposition results performed at a sectoral level revealed that it was difficult for southern european consumers to switch to a more environmentally conscious use of industrial products and their consumption preferences were not significantly affected by the consequences of the economic crisis

in quest of the slutsky diamond the slutsky equation can be constructed as a parallelogram a diamond the area of which is proportional to the elasticity of substitution this construction permits to show immediately that demand functions become concave on an interval if the elasticity of substitution increases sufficiently also the diamond sheds light on the fact that the production level increases with the elasticity of substitution as an application the author shows that the elasticity of substitution has a direct bearing not only on the rate of growth of an economy but also on the very existence of sustained growth copyright 1989 by american economic association

the lmdi approach to decomposition analysis a practical guide in a recent study ang energy policy 32 2004 compared various index decomposition analysis methods and concluded that the logarithmic mean divisia index method is the preferred method since the literature on the method tends to be either too technical or specific for most potential users this paper provides a practical guide that includes the general formulation process summary tables for easy reference and examples

the cross sectional inter industry structure of capital utilization in a developing economy the case of s korean manufacturing t he literature on capital utilization has experienced a remarkable growth of late in particular implications of a model of optimal capital utilization put forth by kim and winston 1974 have been shown to be consistent with empirical findings 1 on inter country crosssectional sectoral rates of capital utilization kim 1969 mason and sakong 1971 and winston 1971b and 2 on intra country timetrend rates of capital utilization kim and kwon 1977 as a sequel to such recent developments this paper proposes to show an implication of the kim winston model in the context of an intra country cross sectional inter industry structure of capital utilization and then to test this implication against cross sectional data from s korean manufacturing industries

input measurement and productivity growth in japanese and u s manufacturing in their article in this review j r norsworthy and david h malmquist 1983 have presented interesting comparisons of productivity growth in the japanese and u s manufacturing sectors their paper starts with the discussion of whether the conventional value added or gnp measurement of output is an appropriate framework for productivity analysis some confusion frequently arises as to whether a production function should be structured on the basis of gross output or value added output separability is a pivotal concept in the analysis of production structures especially in relation to the existence of a real value added aggregate it is well known that there are two types of separability which pertain to the existence of a real value added function weak local separability and strong partial separability the practical advantage of distinguishing these two different forms of separability is that the double deflation method in conventional gnp accounting is justified only when strong partial separability holds using the approximate separability tests of michael denny and melvyn fuss 1977 norsworthy and malmquist have shown that a value added aggregate does not exist in either u s or japanese manufacturing and they conclude that the appropriate output measure for joint investigation of both countries for purposes of productivity analysis is gross output p 953 the purpose of this comment is to indicate some deficiencies in norsworthy and malmquist s analysis in particular it will be demonstrated that the conditions for weak local and strong partial separability in norsworthy and malmquist s paper are incorrectly formulated and as a consequence their findings may not be used as conclusive evidence that a gross output measure is an appropriate basis for the analysis of capital labor substitutability and productivity growth in japan and the united states

the relation between real cash balances and physical inputs in south korea s manufacturing sector abstract this study investigates the role of real cash balances and primary inputs in the production process of an average firm in a newly industrializing country south korea for 1968 1983 it is hypothesized that real balances and capital in the modern sector of industrializing countries are substitutes akin to those of the developed countries whereas in the traditional sector the two inputs are complements similar to those of the less developed countries using the translog cost function approach the hypothesis is verified for south korea the results also shed some light on the korean miracle of growth along with implications for income redistribution

real product real factor input and productivity in the republic of korea 1960 1973 abstract estimates of real output real input and total factor productivity are constructed for south korea for the period 1960 1973 the average annual growth rates are 9 7 5 5 and 41 respectively higher than the major developed countries also capital deepening is observed to contribute substantially less to growth in korea than elsewhere

the modest environmental relief resulting from the transition to the service economy a service transition is supposed to lead to the decline of energy intensity energy gdp we argue that this interpretation is overly optimistic because the shift to a service economy is somewhat of an illusion in terms of real production several recent studies of structural effects on energy intensity have made the error of using sector shares in current prices combined with gdp in constant prices which is inconsistent and ignores the different behaviour of prices across sectors we use the more correct method of sector shares in constant prices and make an attempt to single out the effect from the real service transition by using two complementary methods shift share analyses in current and constant prices and logarithmic mean divisia index lmdi for 10 developed and 3 emerging economies a service transition is rather modest in real terms the major driver of the decline in energy intensity rests within the manufacturing sector meanwhile the transition to a service sector had a small downward impact on energy intensity in 7 of the developed countries and no impact in the others for emerging economies like brazil mexico and india it is the residential sector that drives energy intensity down because of the declining share of this sector as the formal economy grows and as a consequence of switching to more efficient fuels less

driving forces for aggregate energy consumption a cross country approach abstract although a cornerstone for development past and current energy use has often posed a major challenge for policymakers with respect to planning and management within this context in this paper an updated multi sectorial cross country assessment of energy consumption trends was undertaken aiming at identifying the main drivers of changes in aggregate energy consumption these drivers have been interpreted in the light of the policy measures that have been implemented over the years by different countries to achieve a sustainable development of the energy sector the cross country assessment encompasses a set of developed united kingdom portugal and spain and emerging brazil china and india countries resorting to the logarithmic mean divisia index lmdi decomposition method changes in the aggregate energy consumption were decomposed into three main explanatory effects activity structure and intensity the major findings achieved reflect the relevance of intensity and activity effects in detriment of the structural effect the assessment of energy consumption trends using the lmdi decomposition method provides critical information regarding which is the dominant factor that should be focused in policy design

digitalization and energy consumption does ict reduce energy demand abstract this article investigates the effect of digitalization on energy consumption using an analytical model we investigate four effects 1 direct effects from the production usage and disposal of information and communication technologies ict 2 energy efficiency increases from digitalization 3 economic growth from increases in labor and energy productivities and 4 sectoral change tertiarization from the rise of ict services the analysis combines empirical and theoretical findings from debates on decoupling energy consumption from economic growth and from debates on green it and ict for sustainability our main results effects 1 and 3 tend to increase energy consumption effects 2 and 4 tend to decrease it furthermore our analysis suggests that the two increasing effects prevail so that overall digitalization increases energy consumption these results can be explained by four insights from ecological economics a physical capital and energy are complements in the ict sector b increases in energy efficiency lead to rebound effects c ict cannot solve the difficulty of decoupling economic growth from exergy d ict services are relatively energy intensive and come on top of former production in future digitalization can only boost sustainability when it fosters effects 2 and 4 without promoting effects 1 and 3

ces production functions in manufacturing and problems of industrialization in ldcs evidence from korea information about the elasticity of substitution between capital and labor is very important in ldcs for several reasons first development policies in many ldcs pursue both rapid industrialization and widespread distribution of its benefits by expanding industrial employment opportunities if the elasticity of substitution is high it is relatively easy to expand employment opportunities without sacrificing output growth by manipulating relative factor prices properly or for that matter by reducing the wage rental ratio since the factor intensities of output depend on relative factor prices second high elasticity of substitution makes possible a flexible response to external changes for example a factor price change in the international market i e an oil price shock can be partially absorbed by adopting laborintensive production processes in this article i am going to discuss ces production functions for two digit industries in korea one of my main purposes in this article is to show empirically that the elasticities of substitution are not zero in almost all of korea s industries regardless of the firm s size 2 furthermore i shall show that production functions differ across different size groups of business firms in a given industry since it is widely acknowledged that wage rental ratios in small and medium firms are lower than in large firms 3 nonzero elasticities of substitution between labor and capital in small medium firms will have an important policy implication that is by encouraging the activities of smalland medium sized firms one can expand employment opportunities in the manufacturing sector and enhance the efficiency of the economy by adjusting the industrial structure to be consistent with domestic factor endowments it is conceivable that the direct importation of production technologies

economic growth technical change biases and the elasticity of substitution a test of the de la grandville hypothesis a recent development in microeconomic theory suggests that the size of the elasticity of substitution between factors is relevant to economic growth this study undertakes an empirical investigation of this proposition comparing two economies the united states and south korea the authors test results support the de la grandville hypothesis that the elasticity of substitution is a potent explanatory variable of economic growth this inquiry also provides a clue to the puzzle that the u s elasticity of substitution between labor and capital is well below unity whereas that of south korea is close to unity nonetheless the u s factor shares have tended to remain fairly stable whereas the distributive shares of south korea seem to have changed in favor of capital their findings indicate that a high elasticity of substitution is a bad signal for the distribution of income under the paradigm of modern technology copyright 1991 by mit press

decomposition of aggregate energy intensity changes in two measures ratio and difference decomposition analysis has been popular in energy demand analysis and has been found useful in policy related studies past studies include decomposition of changes of an aggregate indicator measured in terms of either ratios or differences into several pre defined contributing factors aggregate indicators that are often studied include total national energy demand energy demand in specific consuming sectors aggregate energy intensity and energy related carbon dioxide emissions however the possible linkages between the ratio measure and the difference measure including their decomposition results have seldom been analysed this paper examines this issue using the divisia decomposition technique and a unique pair of decomposition formulae numerical examples based on singapore and taiwan industrial electricity demand data are presented

energy decomposition analysis iea model versus other methods abstract in energy decomposition analysis the international energy agency iea model which is based on the laspeyres index method is included in a recent international collaborative initiative on energy indicators for sustainable development for possible adoption iaea 2005 energy indicators for sustainable development guidelines and methodology international atomic energy agency vienna www pub iaea org mtcd publications pdf pub1222 web pdf from an empirical analysis using the data of the united states we found that the residual term given by the iea model could be significant and that the estimates of the impacts of structure and intensity changes given by the model could be quite different from those given by other decomposition methods the residual term tends to be large when changes in structure and or energy intensity variables are significant since changes in these variables over time are generally larger in the developing countries than in the iea countries there is the question about whether the iea model is an appropriate decomposition method for the developing countries

business service specialization and regional economic change perry m 1990 business service specialization and regional economic change reg studies 24 195 209 business services are experiencing rapid employment growth but there is uncertainty over the interpretation of this trend three surveys assess changes in the demand and supply of business services in the auckland region new zealand 1983 8 the data indicate that employment growth is real in that it is not caused by a transfer of activities that were formerly retained within other industries most manufacturing firms have adopted a pragmatic purchasing policy externalizing and internalizing services on an individual basis with increased internalization dominant for data processing and accountancy services a survey of business service suppliers indicates the greater importance of service exports demand from other services and product innovation as the basis for growth perry m 1990 la specialisation des services aux entrepri ses et l evolution regionale economique reg studies 24 195 209 les

towards a sustainable growth in latin america a multiregional spatial decomposition analysis of the driving forces behind co2 emissions changes abstract this paper aims to understand the driving forces behind the growth of co2 emissions in latin america as a region by groups of countries according to their behaviour in terms of growth of income and co2 emissions per capita and by countries during 1990 2013 the main drivers for the latin america region are the activity and the population effects followed by the fossil fuel and the carbonisation effects while the intensity effect is revealed as the only inhibitor the lessons from latin america s group of countries are the following first the necessary decoupling between the growth of co2 emissions and the economic activity has not taken place the population growth also being an important driver effect second the groups of countries with the highest co2 emissions growth show the highest population and fossil fuel effects this latter confirms the scant efforts made to reduce the weight of fossil fuels in the total primary energy supply third the energy intensity has become the most important inhibitor of co2 emissions for those countries that are not able to substitute fossil fuels so easily finally the desirable increase of less pollutant fossil fuels or even the increase of renewable energies has not yet been achieved