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Institutions and Productivity in Advanced Countries

Paper Session

Sunday, Jan. 5, 2025 8:00 AM - 10:00 AM (PST)

San Francisco Marriott Marquis, Foothill F
Hosted By: Association for Comparative Economic Studies
  • Chair: John Fernald, INSEAD

The Contribution of Robots to Productivity and GDP Growth in Advanced Economies over 1960-2022

Gilbert Cette
,
NEOMA Business School
Vincenzo Spiezia
,
OECD
Claudia Nobile
,
PSE

Abstract

While the employment effects of robots are a matter of vivid debate among
economists, only a few empirical studies have looked at their impact on productivity and
growth at the country level. This paper provides new estimates of the robots’ contribution to
growth in a set of 29 advanced economies countries over the period 1960-2022. Based on a
standard growth accounting framework, the user cost of robots is estimated according to two
different methodologies. The estimated robots’ contribution to growth largely differs between
the two methodologies, suggesting that the value of the stock of robots, the decrease in their
quality-adjusted price index or both may be undervalued. These findings call for further
research on the robots’ contribution to growth at the country level.

The Employment Impact of Product Market Regulation: Evidence from European Regions

Océane Vernerey
,
Université de Bourgogne
Jimmy Lopez
,
Université de Bourgogne

Abstract

We investigate the labor market effects of product market regulation on a sample of 37 million individuals from 191 regions in 19 European countries for the period 1998–2017. We find: (i) a detrimental impact of the network regulation on activity, unemployment and employment rates, particularly for the most vulnerable populations; (ii) insignificant or small effects of retail regulation; and (iii) negative effects of professional services regulations on unemployment and activity rates that offset each other in terms of employment. According to our simulation, the expected employment gains from network regulation reforms are
substantial for many countries.

Organizational Capital, ICT and Productivity in the Digital Age

Filippo Bontadini
,
LUISS University
Cecilia Jona-Lasinio
,
LUISS University
Giuseppe Nicoletti
,
LUISS University

Abstract

Intangible investments were found to support aggregate labour productivity growth directly as a production input, via interactions with new technologies and by generating important aggregate spillovers, but focus on the “organizational capital” component of intangibles has been thin, partly due to lack of aggregate data. This study looks at how the complementarity between a specific subset of intangibles, “organizational capital”, and ICT affects aggregate labour productivity outcomes, focusing on the distinction between “own-account” and purchased organizational expenses in digital-intensive industries. We leverage on a new harmonized and fully-integrated productivity database including all intangible components, with broad international, industry and historical coverage (Bontadini et al., 2023; Corrado et al., 2022a) to address this gap. Based on a sample of 10 OECD countries and 39 manufacturing and service industries over the 1995-2019 period, we find robust evidence that the productivity benefits of organizational expenses originate mostly from in-house built-up of such intangibles, which are more than twice as productive as purchased organizational services in our estimates. These results are magnified in industries that are digital intensive. Moreover, we find evidence of production complementarities of organizational expenses with ICT intensity. Synergies with ICT are driven mostly by investment in “own account” organizational capital and are stronger in digital-intensive industries. Our results highlight that better internal organization of production is a key channel through which intangible investments affect productivity and are consistent with complementarities between intangibles, new technologies and digital adoption stressed for instance by Brynjolfsson et al., (2017, 2021) and Corrado et al (2017).

Surveying the Structural Reforms-Productivity Riddle: New Evidence from Labour Reforms in Advanced Countries

Nauro F. Campos
,
University College London
Balasz Egert
,
OECD

Abstract

There remains a heated controversy about the empirical support for the effects of structural reforms on productivity and the main focus of this controversy mostly remains on labour market reforms. Several issues still plague empirical research, chiefly among them, measurement matters, endogeneity concerns, and the sequencing and bundling aspects of structural reforms packages. This paper takes stock of this vast econometric literature. We make use of the latest (up to 2020) main measures of labour market reforms (e.g., EPL and CBR) to revisit standard specifications from the literature on the effect of reforms on productivity, both for the short and long runs. We put forward evidence suggesting that the estimated long-run effects of reform on growth tend to be substantial but are conditional on institutions and initial conditions.
JEL Classifications
  • P5 - Comparative Economic Systems
  • O4 - Economic Growth and Aggregate Productivity