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Business and Economics > Production and Operations Management

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

  • Type: Journal Issue x
  • Industrialization; Manufacturing and Service Industries; Choice of Technology x
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Cover IMF Working Papers
Advancing India’s Structural Transformation and Catch-up to the Technology Frontier
Cristian Alonso
and
Margaux MacDonald
While India’s growth has been strong in recent decades, its structural transformation remains incomplete. In this paper, we first take stock of India’s growth to date. We find that economic activity has shifted from agriculture to services, but agriculture remains the predominant employer. Catch up to the technological frontier has been uneven, with limited progress in agriculture, but also in construction and trade, which have grown the most in terms of employment. We do find some Indian firms already operating at the technological frontier. These strong performers tend to be large firms. We then consider India’s employment challenge going forward. We find that India needs to create between 143-324 million jobs by 2050 and that doing so and with workers shifting towards more dynamic sectors could boost GDP growth by 0.2-0.5 percentage points. Structural reforms can help India create high-quality jobs and accelerate growth.
Keywords:
Economywide Production; Potential Output; Labor Productivity; Employment; Structural Transformation; Technological Frontier.; frontier employment; India's employment challenge; technology frontier; growth decomposition; IMF staff estimate; industry level; Agricultural sector; Productivity; Global
Cover Selected Issues Papers
Lifting productivity in Oman: The Role of Structural Reforms
Muayad Ismail
and
Haytem Troug
Oman’s potential nonhydrocarbon real GDP growth has trended downward since the global financial crisis, with a negative contribution from total factor productivity. This paper estimates productivity gains associated with structural reforms and identifies key binding constraints and reform priorities to boost productivity in Oman. Our results show that reforms to reduce the state’s footprint and strengthen institutions, as well as product market reforms, should be prioritized and packaged together to magnify productivity gains from labor market and financial sector reforms. These findings could inform the planning and implementation of the ongoing structural reform agenda envisaged under Oman Vision 2040.
Keywords:
Economic diversification; productivity; Oman; structural reforms; productivity gain; Lifting productivity; hydrocarbon real GDP growth; reform priority; product market reform; Commodity markets; Labor markets; Total factor productivity; Global
Cover IMF Working Papers
E-commerce as a Potential New Engine for Growth in Asia
Mr. Tidiane Kinda
The use of e-commerce around the world has accelerated in recent years, with Asia, led by China, spearheading the rise. Using cross-country enterprise survey data, this paper shows that firms engaged in e-commerce have higher productivity and generate a larger share of their revenues from exports than other firms. This is particularly true in Asia, where firms have 30 percent higher productivity and generate about 50 percent more of their revenues from exports. The results presented in this paper are robust to the use of instrumental variables, which highlight possible larger effects of e-commerce on Asian productivity and exports when essential elements are in place for its effective use, such as reliable electricity, telecommunication, and transport infrastructure. Despite the rapid growth of e-commerce in recent years, gaps persist in digital infrastructure and legislation, preventing many Asian countries from fully reaping the potential benefits of e-commerce.
Keywords:
WP; e-commerce firm; World Bank enterprises survey; firm performance; way firm; affiliate company; e-commerce; productivity; exports; World Bank enterprises Surveys; TFP of firm; Total factor productivity; Human capital; Asia and Pacific; Global
Cover IMF Working Papers
Road to Industrialized Africa: Role of Efficient Factor Market in Firm Growth
Manabu Nose
After a decade of rapid growth, industrialization has lost ground with shrinking manufacturing sector and high informality in Sub-Saharan Africa (SSA). This paper explores how land market and labor regulations affect factor allocative efficiency and firm performance in SSA. Using pooled data on firm balance sheets for 40 countries in SSA, the results identify significant land and labor misallocations due to limited market allocation of land and inappropriate regulatory policies. Using variations in ethnic diversity and the intensity of regulatory actions to peer firms at subnational level as instrumental variables, local average treatment effects show large productivity gains from factor reallocations, especially for marginally productive firms. Panel data results for Nigerian firms confirm factor market inefficiency as a principal driver of declining productivity, while showing that the 2011 minimum wage reform increased firm size. The results imply that improving formal regulation is critical to support firm growth at the stage of weak legal capacity, while informal sector monitoring gets effective as legal capacity develops.
Keywords:
WP; allocative efficiency; minimum wage; firm size; factor market; Firm growth; misallocation; land market; labor regulations; allocation index; tax contribution; firm productivity; firm performance; productivity measure; panel datum; firm size distribution; dual economy; firm age; Minimum wages; Labor markets; Wages; Labor demand; Asia and Pacific; Africa; Southern Africa; Sub-Saharan Africa; policy effect; case study; A. aggregate level analysis; A. firm size
Cover IMF Working Papers
The Leap of the Tiger: How Malaysia Can Escape the Middle-Income Trap
Reda Cherif
and
Fuad Hasanov
Only a few European economies and Korea and Taiwan Province of China reached high-income status during 1970-2010. Malaysia’s real income per capita increased to 26 percent of the U.S. level in 2010 from 20 percent in 1970. Despite relatively strong growth and a substantial improvement in export sophistication, Malaysia’s total factor productivity lagged behind that of Korea and Taiwan Province of China. We argue that what characterizes their experience in contrast to Malaysia’s is the creation of technologies by domestic firms and a push to leapfrog to the technological frontier at an early stage of development.
Keywords:
WP; invested company share; electronics firm; firm Hyundai; spin-off firm; firm development; growth; middle-income trap; innovation; productivity; technology; global brand; firms in the electronics sector; local firm; auto parts firm; government intervention; Exports; Income; Manufacturing; Global; Asia and Pacific
Cover IMF Working Papers
Structural Transformation — How Does Thailand Compare?
Mr. Vladimir Klyuev
Thailand stands out in international comparison as a country with a high dispersion of productivity across sectors. It has especially low labor productivity in agriculture—a sector that employs a much larger share of the population than is typical for a country at Thailand’s level of income. This suggests large potential productivity gains from labor reallocation across sectors, but that process—which made a significant contribution to Thailand’s growth in the past—appears to have stalled lately. This paper establishes these facts and applies a simple model to discuss possible explanations. The reasons include a gap between the skills possessed by rural workers and those required in the modern sectors; the government’s price support programs for several agricultural commodities, particularly rice; and the uniform minimum wage. At the same time, agriculture plays a useful social and economic role as the employer of last resort. The paper makes a number of policy recommendations aimed at facilitating structural transformation in the Thai economy.
Keywords:
WP; productivity difference; low-productivity agriculture; high-productivity sector; price support; productivity differential; productivity growth; structural transformation; industrialization; agricultural price support; standard of living; Thailand's productivity gap; low-productivity activity; productivity increase; higher-productivity sector; differentials in Thailand; Agricultural sector; Productivity; Employment; Labor productivity; Global
Cover IMF Working Papers
Structural Transformation and the Volatility of Aggregate Output in OECD Countries
Mr. Constant A Lonkeng Ngouana
This paper finds a negative relationship between the employment share of the service sector and the volatility of aggregate output in the OECD—after controlling for the level of financial development. This result reflects volatility differentials across sectors: labor productivity is more volatile in agriculture and manufacturing than in services. Aggregate output would therefore become less volatile as labor moves away from agriculture and manufacturing and toward the service sector. I examine the quantitative role of these labor shifts—termed structural transformation—on the volatility of aggregate output in OECD countries. I first calibrate to the U.S. economy an indivisible labor model in which the reallocation of labor across sectors emerges endogenously from sectoral labor productivity growth differentials. The setup is then used to generate the time path of labor shares in agriculture, manufacturing and services in individual countries. Finally, I perform a set of counterfactual analyzes in which the reallocation of labor across sectors is constrained endogenously. I find that the secular shift of labor towards the service sector was volatility-reducing in OECD countries during 1970–2006.
Keywords:
WP; service sector; aggregate output; Dynamic general equilibrium; Indivisible labor; Labor productivity; OECD; Output volatility; Structural transformation; growth differential; aggregate output volatility; indivisible labor model; reallocation of labor; service sector employee; sectoral labor reallocation in OECD country; aggregate output growth; service sector's labor share; employment share of the service sector; sectoral labor productivity processes; reallocation in OECD country; reallocation in the model; Services sector; Employment; Global
Cover IMF Working Papers
Competitiveness in the Southern Euro Area: France, Greece, Italy, Portugal, and Spain
Mr. Bogdan Lissovolik
,
Mr. Julio Escolano
,
Ms. Stefania Fabrizio
,
Mr. Werner Schule
,
Mr. Herman Z Bennett
,
Mr. Stephen Tokarick
,
Mr. Yuan Xiao
,
Ms. Marialuz Moreno Badia
,
Miss Eva Gutierrez
, and
Mr. Iryna V. Ivaschenko
This collection of studies analyzes developments in nonprice external competitiveness of France, Greece, Italy, Portugal, and Spain. While France, Italy, and Portugal have experienced substantial export market share losses, Greece and Spain performed relatively well. Export market share losses appear associated with rigidities in resource allocation (sectoral, geographical, technological) relative to peers and lower productivity gains in high value-added sectors. Disaggregated analysis of goods and services export markets provides insights on aspects such as quality, market concentration, growth of destination markets, and geographical and sectoral diversification. Also, increased import penetration, offshoring and FDI could improve productivity and export performance.
Keywords:
WP; SEA-5; export; Greece; Spain; Portugal; offshoring intensity; FDI inflow; export competitor; services export; high-tech industry; export structure; Exports; Imports; Competition; Export performance; Service exports; Global; Europe; Africa; Southern Europe
Cover IMF Working Papers
Will there Be New Emerging-Market Economies in Africa b+L2280y the Year 2020?
Mr. Jean-Claude Berthélemy
and
Mr. Ludvig Söderling
This paper examines past African growth experience and attempts to simulate future ones. In addition to more commonly used determinants of total factor productivity, a measure of the effect of labor reallocation and an index of economic diversification are constructed and included as factors for long-term growth. A simple model is constructed for the purpose of simulating growth scenarios up to the year 2020 for Burkina Faso, Côte d'Ivoire, Ghana, Mali, Tanzania, and Uganda. Even if one makes relatively optimistic assumptions, Africa is not likely to reach "Asian tiger" levels of growth. The results also suggest that growth will depend, to a large extent, on educational investments and productivity gains in agriculture.
Keywords:
WP; terms of trade; Africa; growth; productivity; education; labor reallocation; diversification; reallocation effect; GDP ratio; CFA franc; production function; productivity gain; growth scenario; reallocation openness; diversification index; TFP gain; diversification gain; Cote d'Ivoire II; Human capital; Total factor productivity; Exports; Sub-Saharan Africa
Cover IMF Working Papers
The Impact of Intersectoral Labor Reallocationon Economic Growth
This study seeks to explain economic growth differences in an aggregate production function framework, where labor reallocation from agriculture to modern sectors influences labor efficiency growth. The econometric analysis uses a panel of 65 countries over 1960-90. The results highlight: (a) the differences in labor reallocation impact on growth, controlled for using the intersectoral wedge in labor productivities; (b) the significance of labor reallocation effects, even after controlling for capital accumulation, initial conditions, and country effects; (c) the role of slow labor reallocation in explaining the dummy variable for Sub-Saharan Africa; (d) the role of initial education levels in explaining differences in labor reallocation rates.
Keywords:
WP; growth rate; Growth; labor reallocation; labor efficiency; education; reallocation effect; reallocation variable; reallocation decision; labor efficiency index; labor reallocation-driven growth; country effect; labor productivity gap; labor reallocation variable; Public expenditure review; Labor productivity; Capital accumulation; Sub-Saharan Africa; South Asia; East Asia; Africa