Essays on economic productivity
Abstract
This dissertation consists of a preamble and three separate articles. All articles in the dissertation examine economic productivity. Two articles examine productivity at the macro-level and one at the micro-level. One of the macro-level analyzes examines whether the productivity levels of countries converge. In contrast, the other examines whether or not geographical factors can explain the persistent differences in countries’ productivity levels. The third article examines the impact of privatization on productivity with plant-level data.
The first paper, using the Penn World Table 9.1 dataset, studies cross-country convergence of labor productivity. The study utilizes several different convergence tests, both standard and new. The tests support unconditional convergence in the country groups of OECD, EU, APEC, Europe, and Asia. Contrary to the current belief that the income gap between rich and poor countries is not closing, the paper provides evidence of convergence in a group that excludes only African countries. More so, even the group of all countries seems to converge from on the year 2000.
The second paper studies the relationship between fixed environmental factors – natural resources and geography – and labor productivity. The paper combines a novel data set covering 42 developed countries for the years 1995-2011. An econometric model is estimated to predict how productivity might change if there is a change in one of the fixed environmental variables. The results provide supportive evidence that mineral reserves boost productivity, whereas on average, forest area and gas and oil reserves, if anything, only slightly decrease productivity. Moreover, it seems that education and R&D intensity seem to counteract the disadvantages of a sparse population and remote location.
The third paper studies the effects of privatization on establishment/plants that operate in Finland’s manufacturing sector. The sample consists of 84 establishments that went through privatization during 1988-2012. Also, the sample consists of the exact share of state ownership for 60 establishments. The paper uses this information to study the effects of any reduction in state ownership with the generalized event study design. Furthermore, a control group is formed with coarsened exact matching from private establishments to strengthen the analysis. The results suggest that privatization increases productivity (sales/employment).
Publication Information
Lähdemäki, S. (2021), Essays on economic productivity, Annales Universitatis Turkuensis, Series E 74.
- ISSN: 2343-3159 (Print), 2343-3167 (Online)
- ISBN: 978-951-29-8348-3 (Print), 978-951-29-8349-0 (Online)
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