The New Zealand productivity puzzle: A paradox or an issue of 'firm governance'

<p>New Zealand’s productivity under-performance, despite its good quality institutions, has remained a puzzling phenomenon. This topic has generated spirited debates among academia and public policy experts seeking to provide an answer to this age-old paradox. Solving ‘The New Zealand Productivity Puzzle’ is not a straightforward proposition. Previous studies in this area attempted to pin down the main determinants behind the extent to which New Zealand’s actual GDP per capita growth has undershot its predicted rates based on policy settings (Barnes et al., 2013). The recent New Zealand Productivity Commission (2014a) report shows the three key determinants accounting for such a gap are New Zealand’s weak international connections, low innovation and low managerial quality. This paper seeks to go further than merely highlighting the determinants (symptoms) of poor productivity performance in New Zealand, to the cause(s) of the problem by asking ‘why’ these key determinants (symptoms) of poor productivity performance occur. The analytical process of piecing together key results and findings (from available data, literature, and empirical studies) enables one to build a richer picture of New Zealand’s relatively poor productivity performance, to better understand the mechanism behind this puzzling phenomenon. The findings unraveled in this paper verify that this phenomenon is not paradoxical but simply an issue of firm/corporate governance. The sort of issues uncovered here is neither one of poor corporate governance in a conventional manner or an issue of managerial competency alone. Rather problems arise largely as a consequence of inappropriate incentives unintentionally generated by a certain ownership structure. This paper discusses how high ownership concentration associated with lower firm performance in New Zealand negatively affects managerial effectiveness by exacerbating the agency costs associated with managerial entrenchment. The paper shows that together New Zealand’s relatively lower managerial competency and managerial effectiveness associated with lower firm performance, can account for New Zealand’s lack of international connections, low innovation and low managerial quality, and thus potentially explain ‘The New Zealand Productivity Puzzle’.</p>

The New Zealand productivity puzzle: A paradox or an issue of 'firm governance'

<p>New Zealand’s productivity under-performance, despite its good quality institutions, has remained a puzzling phenomenon. This topic has generated spirited debates among academia and public policy experts seeking to provide an answer to this age-old paradox. Solving ‘The New Zealand Productivity Puzzle’ is not a straightforward proposition. Previous studies in this area attempted to pin down the main determinants behind the extent to which New Zealand’s actual GDP per capita growth has undershot its predicted rates based on policy settings (Barnes et al., 2013). The recent New Zealand Productivity Commission (2014a) report shows the three key determinants accounting for such a gap are New Zealand’s weak international connections, low innovation and low managerial quality. This paper seeks to go further than merely highlighting the determinants (symptoms) of poor productivity performance in New Zealand, to the cause(s) of the problem by asking ‘why’ these key determinants (symptoms) of poor productivity performance occur. The analytical process of piecing together key results and findings (from available data, literature, and empirical studies) enables one to build a richer picture of New Zealand’s relatively poor productivity performance, to better understand the mechanism behind this puzzling phenomenon. The findings unraveled in this paper verify that this phenomenon is not paradoxical but simply an issue of firm/corporate governance. The sort of issues uncovered here is neither one of poor corporate governance in a conventional manner or an issue of managerial competency alone. Rather problems arise largely as a consequence of inappropriate incentives unintentionally generated by a certain ownership structure. This paper discusses how high ownership concentration associated with lower firm performance in New Zealand negatively affects managerial effectiveness by exacerbating the agency costs associated with managerial entrenchment. The paper shows that together New Zealand’s relatively lower managerial competency and managerial effectiveness associated with lower firm performance, can account for New Zealand’s lack of international connections, low innovation and low managerial quality, and thus potentially explain ‘The New Zealand Productivity Puzzle’.</p>

Corporate Social Responsibility and Tax Management: The Moderating Effect of Beliefs about Corporate Tax Duty

Limited empirical evidence exists regarding investor perceptions of tax management and whether investors consider paying taxes a social responsibility. To fill this gap, we use an experiment to explore investor perceptions about the corporate duty to pay or minimize taxes. We find that investors view paying taxes (rather than minimizing taxes) as socially responsible. We also measure participants’ attitudes about the corporate duty to pay or minimize taxes and find that participants lean more towards a view that corporations have a duty to pay taxes. In a path analysis, we find that a firm’s tax management and its performance in a non-tax area of CSR both influence investors’ perceptions of managerial quality that ultimately impacts investors’ willingness to invest. We also find that the investor’s attitude about the corporate tax duty moderates the association between tax management and investor perceptions of the quality of managerial decision-making.

Supportive management practice and intrinsic motivation go together in the public service

Drawing on over 4,000,000 individual and 2,000 agency observations across five countries, this paper examines the relationship between features of an employee’s work environment and intrinsic motivation in public agencies. It finds that practices which foster employees’ sense of autonomy, competence, and relatedness are associated with substantially higher levels of intrinsic motivation across a broad range of settings. This is true both at the individual and agency level and when examining changes within agency over time. These patterns appear to be at least partially a result of differential selection in and out of the agency, with lower levels of supportive practices associated with greater desire to exit for employees with higher levels of intrinsic motivation. Nonfinancial elements of job design are strongly associated with intrinsic motivation, as are potentially more difficult to alter features of an agency, such as satisfaction with compensation and managerial quality. There is also suggestive evidence that the relationship between agency practices and employee intrinsic motivation is stronger when tasks are more difficult to monitor.

Determinants of Exports Behaviour of India’s Agro-processing Firms: Role of Technology, Imported Raw Materials and Logistics Infrastructure

Despite accounting for a sizeable share in the overall output and employment of the manufacturing sector, the export potential of India’s Agro-processing firms has received less attention. This article investigates the determinants of export propensity and intensity of relatively labour-intensive agro-processing firms in India with a focus on the role of technology adopted, the proportion of imported raw materials used and status of the logistics infrastructure at the location of the firm. The article makes use of the CMIE-PROWESS dataset to obtain a cross-section of agro-processing firms for the year 2016–2017 and the Logistic Ease Across Different States (LEADS) database. The empirical strategy involves the Heckman two-step process to address the sample selection bias originating in modelling export behaviour. The article finds that the likelihood of an agro-processing firm to enter the exporting market increases with an increase in technology enhancing investment in terms of expenditure on research and development and import of capital goods. Moreover, a better level of logistics infrastructure enhances the likelihood of exporting. The likelihood of a firm to export also increases with the increase in the use of imported raw materials, firm size, age and superior managerial quality. However, the paper finds only the expenditure on imported capital goods and imported raw materials to be positively and significantly associated with the export intensity of the exporting firms.

Why is bank credit in Brazil the most expensive in the world?

The article reviews the scientific literature about the determinants of credit spreads in Brazil. Econometric evidence shows that market concentration, a proxy for (un)competitive behavior, is statistically significant for all studies surveyed. We posit that that higher concentration is part of a well-defined strategy by the Brazilian Central Bank that favors prudence over efficiency. Other variables that help explain why spread in Brazil is among the highest in the world include market microstructure, operating costs, credit risk, opportunity costs, managerial quality, nominal interest rates (SELIC), market concentration, interest rate volatility, earmarked credit, and GDP.

Upaya Peningkatan Kualitas Manajerial Lembaga Pendidikan Islam Melalui TQM

ABSTRACT One of the important challenges of Islamic educational institutions today is the weak managerial quality of the institution. This article will discuss Total Quality Management (TQM) in educational institutions, how to improve the quality of educational institutions that are managed. TQM is a management approach that can be applied in Islamic education institutions to be more effective in managing their educational resources. TQM is also called integrated quality management because it departs from efforts to improve quality in an integrated manner, covering quality, energy, infrastructure, management, and graduates.

DETERMINANTS OF AGRICULTURE-RELATED LOAN DEFAULT: EVIDENCE FROM CHINA

This paper investigates agriculture-related loan default in 2002–2009 through a largedata set from a leading Chinese state-owned bank. Using logit regression, we findthe default rate on agriculture-related loans is significantly higher than that on non–agriculture-related loans. We find that base interest rates, loan maturity, the typeof collateral, firm size, ownership structure, and managerial quality rating have asignificant impact on agriculture-related loan default, but this also depends on howagriculture-related loans are defined. The results provide insight into the real impactof monetary policy on agriculture-related lending.