scholarly journals Investment Demand and Structural Change

Econometrica ◽  
2021 ◽  
Vol 89 (6) ◽  
pp. 2751-2785 ◽  
Author(s):  
Manuel García-Santana ◽  
Josep Pijoan-Mas ◽  
Lucciano Villacorta
Keyword(s):  
Capital Accumulation ◽  
Developing Economies ◽  
Value Added ◽  
Relative Price ◽  
Investment Rate ◽  
Investment Demand ◽  
Consumption Goods ◽  
Sectoral Composition ◽  
The One ◽  
Investment Goods

We study the joint evolution of the sectoral composition and the investment rate of developing economies. Using panel data for several countries in different stages of development, we document three novel facts: (a) the share of industry and the investment rate are strongly correlated and follow a hump‐shaped profile with development, (b) investment goods contain more domestic value added from industry and less from services than consumption goods do, and (c) the evolution of the sectoral composition of investment and consumption goods differs from the one of GDP. We build a multi‐sector growth model to fit these patterns and provide two important results. First, the hump‐shaped evolution of investment demand explains half of the hump in industry with development. Second, asymmetric sectoral productivity growth helps explain the decline in the relative price of investment goods along the development path, which in turn increases capital accumulation and promotes growth.

scholarly journals How Much of South Korea’s Growth Miracle Can Be Explained by Trade Policy?

2015 ◽  
Vol 7 (4) ◽  
pp. 188-221 ◽  
Author(s):  
Michelle Connolly ◽  
Kei-Mu Yi
Keyword(s):  
Trade Policy ◽  
Capital Accumulation ◽  
Manufacturing Sector ◽  
Value Added ◽  
Policy Reforms ◽  
Welfare Gains ◽  
Catch Up ◽  
Multistage Production ◽  
Investment Goods ◽  
Tariff Reductions

This paper assesses the importance of trade policy reforms in South Korea, as well as the General Agreement on Tariffs and Trade (GATT) tariff reductions, in explaining Korea's growth miracle. We develop a model of neoclassical growth and trade in which lower tariffs lead to increased gross domestic product (GDP) per worker via comparative advantage and specialization, and capital accumulation. We calibrate the model and simulate the tariff reductions that occurred between early 1962 and 1989. The model can explain 17 percent of South Korea's catch-up to the G7 countries in value-added per worker in the manufacturing sector. These gains, as well as most of the welfare gains, are driven by two key transmission channels: multistage production and imported investment goods. (JEL F13, F43, L60, O47)

scholarly journals Transition dynamics in the neoclassical growth model: the case of South Korea

2015 ◽  
Vol 15 (2) ◽  
Author(s):  
Yongsung Chang ◽  
Andreas Hornstein
Keyword(s):  
South Korea ◽  
Growth Model ◽  
Capital Accumulation ◽  
Transition Period ◽  
Early Stage ◽  
Relative Price ◽  
Neoclassical Growth Model ◽  
Investment Rate ◽  
Stage Of Development ◽  
Neoclassical Growth

AbstractMany successful examples of economic development, such as South Korea, exhibit long periods of sustained capital accumulation. This process is characterized by a gradually rising investment rate along with a moderate rate of return to capital, both of which are strongly at odds with the standard neoclassical growth model that predicts an initially high and then declining investment rate with an extremely high return to capital. We show that minor modifications of the neoclassical model go a long way toward accounting for the capital accumulation path of the South Korean economy. Our modifications recognize that (i) agriculture (which makes up a large share of the aggregate economy in the early stage of development) does not rely much on capital and (ii) the relative price of capital declined substantially during the transition period.

scholarly journals Technological Changes, Offshoring, and the Labor Share

2019 ◽  
Vol 2019 (142) ◽  
Author(s):  
Weicheng Lian
Keyword(s):  
Developing Economies ◽  
Relative Price ◽  
Downward Trend ◽  
Elasticity Of Substitution ◽  
Technological Changes ◽  
Labor Share ◽  
Investment Goods

Existing studies on the downward trend in the labor share of income mostly focus on changes within individual countries. I document, however, that half of the global decline in the labor share of income can be traced to the relocation of activities between countries. I develop a two-country model to show that when the relative price of investment goods falls, production activities with a small elasticity of substitution between capital and labor tend to get offshored from high- to low-wage countries. The model provides an explanation as to why such relocation may drive the labor share down in both developed and developing economies, as well as globally.

Hungarian small business tax and possibilities to minimize distortions from capital income taxation

2015 ◽  
Vol 37 (s1) ◽  
pp. 87-105
Author(s):  
Benedek Nobilis ◽  
András Svraka
Keyword(s):  
Small Business ◽  
Cash Flow ◽  
Capital Accumulation ◽  
Value Added ◽  
Regulatory Elements ◽  
Capital Income ◽  
Potential Growth ◽  
Elegant Method ◽  
Business Tax ◽  
Working Out

Governments throughout the EU and OECD countries rely on revenues raised on capital income. Albeit several arguments can be made for keeping these taxes, in their widespread form they hinder capital accumulation and significantly lower potential growth due to their savings and investment distorting nature. At the same time, the actual economic impact of tax types is largely influenced by their structure. An elegant method, which is also simple in its concept, for eliminating the economic distortions of profit taxes is cash-flow taxation which moves income taxes closer to the more growth-friendly value-added taxes. The small business tax, which was introduced in Hungary in 2013, was designed along these principles. In this paper we review the theoretical literature on cash-flow taxation and discuss the main regulatory elements of the small business tax, as well as the solutions elaborated for working out the challenges related to its implementation.

scholarly journals Recovery of Anthocyanins and Monosaccharides from Grape Marc Extract by Nanofiltration Membranes

Molecules ◽  
2021 ◽  
Vol 26 (7) ◽  
pp. 2003
Author(s):  
Paul Muñoz ◽  
Karla Pérez ◽  
Alfredo Cassano ◽  
René Ruby-Figueroa
Keyword(s):  
Functional Foods ◽  
General Trend ◽  
Value Added ◽  
Operating Conditions ◽  
Permeate Flux ◽  
Ultrasound Assisted Extraction ◽  
Grape Marc ◽  
Assisted Extraction ◽  
The One ◽  
By Products

Wastewaters and by-products generated in the winemaking process are important and inexpensive sources of value-added compounds that can be potentially reused for the development of new products of commercial interest (i.e., functional foods). This research was undertaken in order to evaluate the potential of nanofiltration (NF) membranes in the recovery of anthocyanins and monosaccharides from a clarified Carménère grape marc obtained through a combination of ultrasound-assisted extraction and microfiltration. Three different flat-sheet nanofiltration (NF) membranes, covering the range of molecular weight cut-off (MWCO) from 150 to 800 Da, were evaluated for their productivity as well as for their rejection towards anthocyanins (malvidin-3-O-glucoside, malvidin 3-(acetyl)-glucoside, and malvidin 3-(coumaroyl)-glucoside) and sugars (glucose and fructose) in selected operating conditions. The selected membranes showed differences in their performance in terms of permeate flux and rejection of target compounds. The NFX membrane, with the lowest MWCO (150–300 Da), showed a lower flux decay in comparison to the other investigated membranes. All the membranes showed rejection higher than 99.42% for the quantified anthocyanins. Regarding sugars rejection, the NFX membrane showed the highest rejection for glucose and fructose (100 and 92.60%, respectively), whereas the NFW membrane (MWCO 300–500 Da) was the one with the lowest rejection for these compounds (80.57 and 71.62%, respectively). As a general trend, the tested membranes did not show a preferential rejection of anthocyanins over sugars. Therefore, all tested membranes were suitable for concentration purposes.

scholarly journals Annuity Markets and Capital Accumulation

2019 ◽  
Vol 20 (1) ◽  
Author(s):  
Shantanu Bagchi ◽  
James A. Feigenbaum
Keyword(s):  
Old Age ◽  
Capital Stock ◽  
Early Life ◽  
Capital Accumulation ◽  
Substitution Effect ◽  
Income Effect ◽  
Substitution Effects ◽  
Income Effects ◽  
Annuity Markets ◽  
The One

AbstractWe examine how the absence of annuities in financial markets affects capital accumulation in a two-period overlapping generations model. Our findings indicate that the effect on capital is ambiguous in general equilibrium, because there are two competing mechanisms at work. On the one hand, the absence of annuities increases the price of old-age consumption relative to the price of early-life consumption. This induces a substitution effect that reduces saving and capital, and an income effect that has the opposite effect as households want to consume less when young, causing them to save more. On the other hand, accidental bequests originate from the assets of the deceased under missing annuity markets. The bequest received in early life always has a positive income effect on saving, but the bequest received in old age, conditional on survival, is effectively a partial annuity with both substitution and income effects. We find that when the desire to smooth consumption is high, the income effects dominate, so the capital stock always increases when annuity markets are missing. However, when the desire to smooth consumption is low, the substitution effects dominate, and the capital stock decreases with missing annuity markets.

Capital Production and Social Equity: Finding Balance in Chinese Cities

2014 ◽  
pp. 28-35
Author(s):  
Andrew Liang
Keyword(s):  
Economic Reform ◽  
Capital Accumulation ◽  
Global Economy ◽  
Social Equity ◽  
Modern Society ◽  
Global Market ◽  
Wealth Creation ◽  
Rapid Urbanization ◽  
Chinese Cities ◽  
The One

China’s massive capital accumulation, economic ascent and wealth production has largely been the result of their rapid urbanization effort. While it is indisputable that the country has largely succeeded in its economic reform efforts given its status as the world’s second largest economy and in that process lifted hundreds of millions of its population out of poverty, it has also, in that process, created severe social inequality and friction. This essay largely argues that Chinese cities are purpose-built financial instruments for capital accumulation, a result of the forces of globalization which could only have happened in sync with the time and space of a global economy. Though highly successful, so far the process has marginalized the objective of social integration into its performative matrix indexing. In this regard China has pursued an exploitive model of market driven urbanization and the resultant morphological and spatial attributes of the Chinese cities, while having achieved spectacular results on many levels, are nevertheless disjunctive. They are commodities of generic sameness that are mass-produced and exhibit the same anesthetizing effects of the spectacle that are ever prevalent in today’s global market production process, product and place. Recognizing that globalization and capitalism are here to stay in the immediate future, it begs the question if China, while having already undertaken extreme economic reform experimentations allowing it to now bask in its temporal success, will be able to leverage its acquired market knowledge and wealth creation to prospectively overcome the incredibly complex challenge of creating equitable cities in the future — ones that balance the demands of capital production on the one hand and social equity on the other — or rather will it sink deeper into the “neoliberal modern society” that it has already become.

Intellectual capital and performance of listed companies: empirical evidence from Italy

2014 ◽  
Vol 18 (1) ◽  
pp. 22-35 ◽  
Author(s):  
Domenico Celenza ◽  
Fabrizio Rossi
Keyword(s):  
Explanatory Power ◽  
Value Added ◽  
Listed Companies ◽  
Cross Sectional ◽  
Content Type ◽  
Accounting Performance ◽  
And Performance ◽  
The One ◽  
Two Stages ◽  
The Relationship

Purpose – The aim of this paper is to investigate the relationship between corporate performance and Value Added Intellectual Coefficient (VAICTM) on the one hand, and the relationship between the variations in market value and the variations in VAIC on the other hand. Design/methodology/approach – Starting from the VAIC model, 23 Italian listed companies were examined with the aim of investigating the relationship between VAIC and the performance of the firms in the sample. The analysis was divided into two stages. In the first stage, eight models of linear regression were estimated to verify the presence of a positive and statistically significant relationship between M/BV and VAIC and between accounting performance indicators (ROE, ROI, ROS) and the VAIC. In the second stage, six other models were tested, considering as an independent variable the variations in VAIC and the variations in profitability indicators. Findings – The outcomes of the application stress the importance of VAIC in the explanation of the variations in MV and its role as “additional coefficient” in the analysis of equity performance. Originality/value – This methodology highlights some very interesting aspects. In particular, whereas the relationship between M/BV and VAIC and between profitability indicators (ROI, ROE, ROS) and VAIC is statistically insignificant, the subsequent analysis highlights the importance of VAIC as a variable capable of increasing the explanatory power of the regression in a cross-sectional perspective.

Foreign Capital Inflow and Real Exchange Rate Appreciation in Developing Economies: Theory and Empirical Evidence

2014 ◽  
Vol 14 (03n04) ◽  
pp. 453-465
Author(s):  
Anindya Biswas ◽  
Biswajit Mandal ◽  
Nitesh Saha
Keyword(s):  
Exchange Rate ◽  
Global Economy ◽  
Foreign Capital ◽  
Factor Model ◽  
Developing Economies ◽  
Capital Inflow ◽  
Specific Factor ◽  
Export Sector ◽  
The Exchange Rate ◽  
Sectoral Composition

Foreign direct investment specially targeted to export sector is relatively new phenomenon in the global economy. Such inflow of foreign capital changes the sectoral composition of the economy, and it has some influence on the exchange rate of the destination country. In this study, we attempt to provide underlying theoretical and empirical explanations for exchange rate appreciation due to foreign capital inflow. We first use an extended three-sector specific factor model to explain analytically why and how an inflow of foreign capital boosts the price of a nontradable good that helps tilting the exchange rate in favor of the host country and then conduct an empirical analysis based on a panel dataset of 12 prominent developing countries over the time period 1980–2011 to substantiate our theoretical findings. We also strive to look at the possible consequences on factor prices and on sectoral de-composition of a representative economy.

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