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Business and Economics > Production and Operations Management

You are looking at 1 - 10 of 72 items for :

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Cover Selected Issues Papers
Growth and Production Network in Chile: Chile
Si Guo
Productivity growth depends not only on technological innovation but also on production networks that amplify its impact. Theory and cross-country evidence indicate a positive relationship between productivity growth and the use of intermediate inputs, a measure of network connectedness. We find that Chile’s intermediate input utilization is significantly lower than that of OECD peers, such as Korea and the Czech Republic, and declined during 2008-21. This is primarily due to weak domestic producer connections and the smaller presence of the manufacturing sector. We argue that diversifying exports from mining, reducing trade costs, and improving contract enforcement could strengthen network linkages and boost growth.
Keywords:
Chile; Productivity; Input-output; production network; D. input-output linkage; A. growth slowdown; network linkage; aggregate productivity growth; Exports; Manufacturing; Total factor productivity; Eastern Europe; Global
Cover IMF Working Papers
Europe’s Productivity Weakness: Firm-Level Roots and Remedies
Oyun Erdene Adilbish
,
Diego A. Cerdeiro
,
Romain A Duval
,
Gee Hee Hong
,
Luca Mazzone
,
Lorenzo Rotunno
,
Hasan H Toprak
, and
Maryam Vaziri
Europe faces a well-known productivity malaise, with a large and widening aggregate productivity gap relative to the U.S. In this paper, we provide a novel diagnosis of the firm-level roots of Europe’s productivity growth slowdown through an analysis of data covering the universe of firms in Europe and the U.S over their life cycles. Compared to their U.S. counterparts, we identify critical performance gaps among both Europe’s frontier firms and young high-growth firms. Our firm-level analyses reveal that smaller markets and limited market-based financing are key bottlenecks for frontier European firms, while skill shortages and insufficient risk capital, such as venture capital, hinder the formation and subsequent growth of young firms in Europe. These findings suggest that removing remaining intra-Europe barriers to accelerate factor and product markets integration, alongside national reforms to facilitate swifter resource reallocation and enhance human capital, could help revive Europe’s productivity growth.
Keywords:
Firm-level productivity; business dynamism.; EU accession; productivity weakness; productivity problem; frontier firm; trade Barries; firm Size; Productivity; Trade balance; Trade barriers; Total factor productivity; Europe
Cover IMF Staff Country Reports
Chile: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
2024 Selected Issues
Keywords:
input-output linkage; housing wealth effect; growth slowdown; real estate sector; risk assessment; Pension spending; Exports; Mortgages; Loans; Global; Eastern Europe
Cover IMF Staff Country Reports
Czech Republic: 2024 Article IV Consultation-Press Release; and Staff Report
International Monetary Fund. European Dept.
The Czech Republic is evolving from a heavily manufacturing-based, export-oriented hub to a more mature and diversified economy. Non-auto manufacturing, energy, and construction, once important Czech engines of growth, have run out of steam, hampered by decelerating productivity growth, higher energy costs, and sluggish demand. The auto industry has shown resilience so far, but the required transition to electric vehicles and exposure to foreign competition are set to exert significant pressures in the coming years. Higher value-added sectors, including ICT services, are constrained by lack of skilled labor and limited access to capital, undermining their ability to compete in global markets.
Keywords:
currency of the Czech Republic; FSAP update; FSAP participation; services inflation; managing inflation risk; Inflation; Productivity; Labor markets; Central bank policy rate; Global
Cover IMF Staff Country Reports
Czech Republic: Selected Issues
International Monetary Fund. European Dept.
2024 Selected Issues
Keywords:
macro News; macroeconomics news; ECB monetary policy surprise; EU TFP frontier; inflation expectation; Automobile industry; Total factor productivity; Productivity; Asset prices; Global; Europe; Eastern Europe
Cover IMF Staff Country Reports
Euro Area Policies: 2024 Annual Consultation-Press Release; Staff Report; and Statement by the Executive Director for Member Countries
International Monetary Fund. European Dept.
The 2024 Article IV Consultation explains that the euro area is recovering gradually, with a modest acceleration of growth projected for 2024, gathering further speed in 2025. Increasing real wages together with some drawdown of household savings are contributing to consumption, while the projected easing of financing conditions is supporting a recovery in investment. A modest pickup in growth is projected for 2024, strengthening further in 2025. This primarily reflects expected stronger consumption on the back of rising real wages and higher investment supported by easing financing conditions. Inflation is projected to return to target in the second half of 2025. The economy is confronting important new challenges, layered on existing ones. Beyond returning inflation to target and ensuring credible fiscal consolidation in high-debt countries, the euro area must urgently focus on enhancing innovation and productivity. Higher growth is essential for creating policy space to tackle the fiscal challenges of aging, the green transition, energy security, and defense.
Keywords:
EU institution; EU industrial; headline inflation; EU climate; two-sided inflation risk; Inflation; Labor markets; Fiscal consolidation; Europe; Global
Cover IMF Staff Country Reports
Slovak Republic: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper focuses on drivers and impacts of inflation in Slovakia. High and volatile inflation in Slovakia in recent years seems to be mainly driven by volatile food prices amplified by the larger consumer price index weight of food items. Other drivers include the large impact of imported inflation, elevated profit margins of domestic firms, and higher wage growth. High inflation could erode external competitiveness through higher unit labor costs, but there is no clear evidence of this so far. Domestically, high inflation has had uneven impacts across households and firms. Firms with the largest cost increases experienced a deterioration in their financial situation, and certain categories of households, including those with low-income levels and the elderly, are particularly vulnerable to the rising cost of living. The recent fall in inflation is projected to continue, but strong unit labor cost growth or an increase in profit margins could keep inflation elevated and undermine competitiveness.
Keywords:
price change; unit labor cost; inflation in Slovakia; B. income convergence; D. policy implication; Inflation; Productivity; Total factor productivity; Aging; Europe; Central and Eastern Europe; Baltics
Cover Selected Issues Papers
Structural Transitions to Electric Vehicle Production: Czech Republic
Stephen Ayerst
and
Neree C.G.M. Noumon
Sustaining the impressive convergence gains allowed by the Czech automotive sector has become challenging due to its comparatively lower value added, lower investments in research and development, and lower skills in the labor market. Using a structural model of global value chains, the paper examines policies to smooth the transition to the production of electric vehicles in Czechia. The analysis explores the impacts of increasing labor productivity, boosting production capabilities, and moving up the global value chain. These policies were found to have a relatively lower impact when they shift specialization towards lower value-added stages of production.
Keywords:
Automotive industry; Czech Republic; Convergence; Electric vehicles; Global value chains; Labor productivity; Structural Policy; electric vehicle production; production capability; model illustration; Czechia economy; Policy recommendation; Employment; Skilled labor; Global
Cover IMF Staff Country Reports
Czech Republic: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper examines—through the lenses of a structural model of global value chains—policies that could smooth the transition to the production of electric vehicles in Czechia economy context. In particular, the paper analyzes the impacts of a broad set of policies related to increasing labor productivity, boosting production capabilities in the current set of specialties, and moving up the global value chain. Czechia automotive sector’s value-added share and skill intensity are comparatively lower in the regional context. IMF analysis investigates the potential impact of a transition to electric vehicles in Europe, through a combination of data and modeling techniques. The paper also introduces a stylized structural model of automotive global value chains that includes distinct production of electric and combustion vehicles. The model describes the inter-connectedness of trade and imbeds domestic capability features, including specialization along the global value chain. The model is also calibrated to capture key features of Czechia and Germany’s positions in global value chains, as well as key differences between electric and combustion vehicle production.
Keywords:
electric vehicle production in Czechia; model illustration; Czechia economy; I. model description; consumers from Czechia; Global value chains; Labor productivity; Employment; Skilled labor; Global
Cover IMF Working Papers
Home or Away? Profit Shifting with Territorial Taxation
Dominika Langenmayr
and
Ms. Li Liu
In 2009, the United Kingdom abolished the taxation of profits earned abroad and introduced a territorial tax system. Under the territorial system, firms have strong incentives to shift profits abroad. Using a difference-in-differences research design, we show that the profitability of UK subsidiaries in low-tax countries increased after the reform compared to subsidiaries of non-UK multinationals in the same countries by an average of 2 percentage points. This increase in profit shifting also leads to increases in measured productivity of the foreign affiliates of UK multinationals of between 5 and 9 percent.
Keywords:
profit shifting; territorial tax system; multinational firms; shifted profit; UK multinational; UK subsidiary; difference-in-differences research design; Total factor productivity; Transnational corporations; Corporate income tax; Income; Wages; Global