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This paper imputes the effects of US tariffs on wages attributing variation in the import price index completely to tariffs starting with availability of the index in 1983. The average wage derived from the labor share of income and the labor force is treated as the dependent variable. Single equation error correction estimates based on the factor proportions model include energy Btu input with capital and labor. Fixed capital assets effectively imbed technology. An intensive specification based on growth theory and a labor market model are also estimated. These estimates find no imputed effects of tariffs on wages.

Extracts of Aquilaria sinensis possess pharmacological activity that has been widely used in traditional medicines since ancient times. In this study, techno-economic assessment was conducted for extraction of volatile oil from abundant biomass (lignified ring) and resin of A. sinensis to evaluate their respective economic feasibility using supercritical carbon dioxide (SC-CO2) extraction in Malaysia. The assessment revealed that for a production capacity of 5280 kg/y volatile oil, the total capital investment (TCI) was $ 7.11 million from summation of fixed capital cost and working capital. In terms of operating expenditure (OPEX), the volatile oil extracted from resin and lignified ring of A. sinensis required $ 81.96 million and $ 52.39 million, respectively. The selling price of volatile oil from resin and lignified ring were estimated to be $ 0.025 million/kg and $ 0.0125 million/kg, respectively. Both volatile oil extracted from resin and lignified ring showed a positive net profit which indicated their profitability. In addition, a cradle-to-gate analysis of life-cycle assessment (LCA) was performed, whereby the extraction process contributed the highest impact towards the environment due to its high energy consumption. Nevertheless, this study estimated that the process might reduce the environmental impacts by approximately 90% when the technology readiness levels (TRLs) reach the level of 9–10. These findings are beneficial in providing preliminary insights in terms of economic and environmental aspects for volatile oil extraction using SC-CO2 technology.

China has the largest electricity system in the world, which is undergoing a critical market reform. Based on the panel data in 2000 to 2016 of China, this paper tries to explain theinconsistency between electricity consumption and economic growth. For example, in 2015, GDP growth rate was close to 6.9% but with only 2.9% growth in electricity consumption. However, in 2018, a 6.6% growth in GDP required an 8.5% electricity growth. The results explain the reasons for inconsistency and identify the key factors. We find that the increase in inventory, fixed capital and industrial electricity consumption will narrow the gap when economy grows faster than electricity consumption, and widen the gap on the contrary. Heterogeneity exists among regions, the model and variables seem most convincing in explaining the situation in the western region, which is most similar to the full sample of China. Feedback effect is also observed between electricity consumption and economic growth in most parts of China by Granger test. The findings provides suggestions for the policy makers in making power planning, in an effort to avoid large power shortage or surplus.

In this study, a relaxation strategy for the synthesis of a heat exchanger network with a fixed capital cost using a heuristic optimization approach was presented. Since the fixed capital cost existed in the cost formula, when a heat exchanger was generated or eliminated, the total annual cost would suddenly increase or decrease, which prevented the structural optimization and forced the algorithm to remain at the suboptimal solution. Hence, the relaxation strategy presented in this paper could soften the impact of this sort of sudden change by retrofitting the cost formulation, avoided the imperfect solution through promoting the evolution of structure, circumvented the barrier by evolution and eventually arrived at the optimal solution. Applied the proposed strategy into random walk algorithm with compulsive evolution to solve the HENS problem, the obtained results showed its robustness in yielding good solutions and were superior to previously reported ones.

This paper demonstrates the adjustment speed of firm working capital and the relationships between working capital and firm performance in Japan during the global financial crisis. Using quarterly firm-level data, we find that the adjustment of working capital was weaker during the crisis. Moreover, the negative relationship between excess working capital and firm performance became more significant during the crisis, especially for larger firms. However, this crisis-related working capital–firm performance effect does not appear to persist for very long, because to finance any excess working capital, firms borrow from banks and reduce their internal cash both during and outside periods of crisis.

This paper investigates the relationship between corruption and fixed capital investment in the setting of a corrupt country. Using different measures of corruption – registered cases of bribe taking and incidents of experienced corruption by the population – we find a negative relationship between investment and corruption. We then address the problem of endogeneity of corruption using an instrumental variables approach: when corruption is instrumented with freedom of the press and violations of journalists' rights, we find an even bigger negative effect. Disaggregating investment by ownership-type shows that only private investment is affected by corruption, but not investment made by state-owned companies. The negative effect is larger for companies with full or partial foreign ownership. Additionally, we look at the relationship between corruption and foreign direct investment (FDI): similar to the investment in fixed capital, we find a negative relationship; however, its statistical significance varies across specifications with different data sources for FDI and different corruption measures.

I evaluate the impact of BNDES disbursements on Brazilian commercial banks’ disbursement using balance-sheet data for the period of 2002-2016. Using dynamic panel data techniques, I find BNDES disbursement for both investment in innovation and fixed capital investments crowded-in commercial banks’ disbursement. Further, the results obtained considering the distribution before and after 2008, suggest the beginning of the crowding-in impact together with the countercyclical role adopted by the bank at the beginning of the financial crisis.

This article considers structural economic dynamics with a choice of technique in models of the production of commodities with fixed capital. Fluke switch points are described and cataloged. For fluke switch points, parameter perturbations create a qualitative change in how the choice of technique varies with distribution. Techniques are presented for visualizing partitions of parameter spaces such that the analysis of the choice of technique does not vary within each region. Implications are drawn about the choice of the truncation of the operation of (or the economic life of) machines and about the adoption of roundabout techniques.

The accelerated depreciation policy on fixed assets is a representative tax reduction policy in China. However, it is rarely systematically studied on the macro-level. This paper builds a general model for analysing accelerated depreciation. It uses China's input-output data (1987-2015) to test and quantify the role of accelerated depreciation in promoting economic growth under different asset structures. The results show that accelerated depreciation with investment has a positive effect on economic growth. It becomes more significant as the depreciation period shortens, and is also limited by the asset structure. This paper discusses the possible situations in which tax incentives are not used for investment, and finds that shortening the depreciation period leads to a negative adjustment in economic accounting. This effect has a depreciation turning point where the rate of change increases sharply; this corresponds with the minimum depreciation period for accelerated depreciation in real terms. This paper proposes a method of estimating the depreciation turning point, and calculates the minimum weighted average of the accelerated depreciation period in China (1987-2015), thus providing effective proposals for the formulation and implementation of related economic policies.

The pandemic is impacting at a time of major transformational change in the global economy driven by the digital transformation, a decoupling between the United States and China, and the rise of populism. The massive economic shock of the pandemic is not only accelerating changes that were “in the works” but is also deflecting the evolution of the economy in new and unexpected directions by changing market evaluation of supply chain risks and raising national concerns about the robustness of domestic capacities for emergency response. Whether V-shaped, W-shaped, or Nike swoosh-shaped, the important issue is not so much when (and if) the global economy regains the heights of the pre-pandemic era, but where the recovery takes the global economy in terms of how and where work is done. A substantial part of the fixed capital stock will have to be written down or written off, including the backbone economic infrastructure; comparative advantage of nations will be reshaped by national investment strategies (which may include an accelerated adoption of green economy strategies to address climate change); and business strategies will evolve to take advantage of accelerated technological development and to respond to changing patterns of demand. These developments will naturally have major implications for the direction and structure of trade, both as regards traditional goods and services and the rapidly growing forms of digital and digitally enabled trade. The accelerated expansion of the latter forms also heighten the needs for trade governance reforms.

The study was examined the dynamics of economic growth, unemployment, and poverty in Ethiopia by using annual time series data from 1980 to 2018. The Auto-Regressive Distribution Lag (ARDL) bounds test approach is applied to determine the existence of the long-run linkage among study variables. The result indicates the existence of a long-run causal relationship among economic growth, unemployment, poverty and investment (gross fixed capital as an intermittent variable) in Ethiopia. Hence, the error correction term is adjusted annually by 0.522% towards the long-run equilibrium. Besides, all the estimated coefficients of all variables have satisfied the hypothesized signs of trickle-down economic growth path preposition at a 1% statistical significance level. Furthermore, the Granger causality test result confirmed that there is a unidirectional causality running from economic growth to poverty, unemployment to economic growth, and investment to economic growth. There is bidirectional causality exists between running from investment to poverty and poverty to investment. But, there is no Granger causality between poverty (real household consumption expenditure per capita) and unemployment in Ethiopia. Thus, the study concludes that Ethiopian economic growth was following a trickle-down growth path that targeting the poorer people to trap in poverty. Finally, the study recommends to the policymakers and government to insightful more ways on economic growth trickle down to solve salient traits i.e. unemployment and poverty in the Ethiopian economy.

This paper analyzed the trends in corporate finance in Pakistan and uses a panel data model for empirically identifying the factors which influence corporate investment decisions, during the period 2014-18. The findings revealed that firm-level factors such as cash flow, fixed capital intensity, leverage, and firm size are significant in determining corporate investment decisions. At the macro level, the cost of borrowing and the effective tax rate is significant in influencing corporate investment decisions negatively. The results of the study generally contribute to the existing literature on the impact of macroeconomic variables and certain firm-level factors on corporate investment decisions. The main value of this paper is to consider a broad-based approach to analyzing the determinants of corporate investment decisions from developing market context.

Are rents, or excess profits, good for development? Rents could induce firms to lobby or bribe governments to preserve the status quo; on the other hand, rents may promote growth by giving firms the needed funds to make investments in fixed capital or research and development. To test this question empirically, we use a panel of manufacturing data at the industry-country-year level, and measure rents by the mark-up ratio. We find that the relationship between rents and growth is strongly negative, with the results being primarily driven by the poorer countries (or those with worse institutions) in the sample. This result holds when we instrument for mark-up using the average mark-up in other industries in the country. Even in industries with high external financing needs and countries with less developed financial sectors, precisely the places where excess profits could be used to drive growth, we find that rents are especially harmful. Consistent with the rent-seeking mechanism we highlight, we find that high rents are associated with a slower reduction in tariffs. We also test for the most likely alternative mechanism, that higher rents cause slower growth through the channel of allowing managerial slack. We find that controlling for management has little impact on our estimate of the impact of mark-up on productivity growth.

The variation of industrial land use efficiency caused by industrial relocation is of great significance to the land use, but little attention has been paid to the spatial effect of industrial relocation on industrial land use efficiency. This study investigates the temporal features of industrial land use efficiency at the regional level and the spatial features of industrial relocation at the provincial level. The industrial land use efficiency exhibits an obvious rising trend in the eastern region, central region, western region and northeast region from 2002 to 2013. There is significant spatial correlation among 30 provinces in industrial land use efficiency and shows obvious trapezoidal growth trends in 2002, 2006, 2010, and 2013. The study estimates the spatial effect of industrial relocation on the industrial land use efficiency in six industries by the spatial Durbin model (SDM). The results show that the industrial relocation of the chemical and rubber industry, mineral manufacturing industry, and machinery manufacturing industry plays a markedly positive role in improving the industrial land use efficiency. It is noteworthy that the impacts of industrial relocation on the industrial land use efficiency in the food and beverage industry, light and textile industry, and high-tech manufacturing industry are not significant. Except for the enterprise ownership structure, three other control variables, namely regional economic development, human capital stock, and industrial fixed capital, can contribute to promoting industrial land use efficiency.

Capital estimates are widely used in economic growth and productivity studies, for profitability considerations and wealth accounting exercises. Yet the calculation of “capital” frequently receives only cursory attention, despite the challenges posed by conceptual difficulties, the complexity of calculations, and the extensive data requirements. This paper (i) calculates long-run provincial (and national) physical capital series for China, (ii) distinguishes between wealth capital stock and capital services (the appropriate measure of capital for productivity studies), and (iii) applies the most recent methodology advanced by the OECD (and implemented by the U.S. Bureau of Labor Statistics and the Australian Bureau of Statistics). The complete set of data is available online and is expected to be updated on an annual basis in the future.

The article refers to the old issue of profit rates equalization, originated from the works of Smith and Ricardo. It is devoted to a dynamic, recursive model of classical competition in a growing economy. The economy is composed of n firms (sectors) producing n different goods. Decisions on prices and production are made in each period by firms managers who take production capacities, determined by fixed capital, as given. All firms are owned by one representative capital owner (a capitalist) who decides in each period on his consumption and investment funds and next distributes the investment fund among firms on the basis of their capital profitability differentials. The author presents proof of existence, uniqueness and stability of a long-run classical equilibrium, which is equivalent to a balanced, long-run growth of fixed capital, output and consumption with equal profit rates and zero inventories.

This study explores how inflows of foreign direct investment (FDI) affect a country’s carbon dioxide (CO2) emission levels. To investigate this relationship, we use panel data (2002–2015) from the 28 subsectors of the Chinese manufacturing sector. We also perform panel framework analysis to verify the characteristics of the panel data before establishing the panel estimator meant to test the relationships between carbon dioxide emissions, FDI inflows, industrial GDP, industry openness, net domestic fixed capital stock and cleaner production. The results of the panel framework analysis suggest the need to eliminate dynamic panel bias and produce more efficient and consistent parameter estimates. To do so, we use System Generalized Method of Moments (GMM) estimators with time dummies. Ultimately, the results of the analysis show that FDI is a positive predictor of environmental quality in the host country, which serves as evidence of the halo effect that FDI reduces CO2 emission levels. The study also finds evidence that industrial GDP and cleaner production improve environmental quality. However, the domestic capital stock has a negative effect on environmental quality. By showing that past carbon dioxide emissions significantly influence current emissions, our findings demonstrate the importance of consistency and persistence in efforts to reduce those emissions. Accordingly, we discuss some policy implications based on these results.

The paper describes an econometric model of the Russian economy which is tailored to analyze and explain current trends in Russian economy and to forecast its dynamics for the next 2 years. The model showed that if all exogenous variables (export and import prices, the money mass and economically active population, etc.) will have the same dynamics they had during last years the average annual growth rate of Russian economy for the next two years will be about 1 - 2 % annually while inflation will increase to about 8 - 9 % annually. Active monetary policy increases the short-term economic growth only slightly but helps to improve investment in fixed capital. Active fiscal policy has negative impact on economic growth. Such outcome is the result of reduction of total factor productivity of Russian economy and of inadequate investment.

International trade in capital goods has quantitatively important effects on economic development through capital formation and aggregate TFP. Capital goods trade enables poor countries to access more efficient technologies, leading to lower relative prices of capital goods and higher capital-output ratios. Moreover, poor countries can use their comparative advantage—non-capital goods production—and increase their TFP. We quantify these channels using a multisector, multicountry, Ricardian model of trade with capital accumulation. The model matches several trade and development facts within a unified framework. Frictionless trade in capital goods reduces the income gap between rich and poor countries by 40 percent. More than half of the reduction in the income gap is due to the TFP channel.

We study the efficiency implications of bargaining in frictional capital markets in which firms match bilaterally with dealers in order to buy or sell capital. We show how two of the distinguishing characteristics of capital – ownership and the intertemporal nature of investment – give rise to a dynamic inefficiency. Firms that anticipate buying capital in the future overinvest because this increases their outside option of no trade in negotiations with dealers in the future, thereby lowering the bargained purchase price. Vice versa, firms that anticipate selling capital in the future strategically underinvest because this increases the bargained sale price. If the only motive for trade is capital depreciation, there is overinvestment. With stochastic productivity, high-productivity firms underinvest and low-productivity firms overinvest. In equilibrium, the inefficiency interacts with the externality from dealer entry and implies that no bargaining power achieves the constrained–efficient allocation. We propose a regressive tax on capital that can restore efficiency. Finally, we calibrate the model to data on physical capital markets and show that depending on bargaining power, the welfare loss from the inefficiency can be large.

This paper attempts to show how the cost of capital influences the non-linear interaction between investment and Tobin's q by affecting the probability of regime-switches. Treating the US non-farm, non-financial corporate sector as a representative firm and calculating a cost of capital by weighting the respective costs of equity and debt financing, our estimation results shed light on the periods of low capital expenditure, which are picked up neither by Tobin's q nor by the real interest rate. The findings challenge the concept of the ‘irrelevance of dividends/capital structure’.

The primary resources of labor and capital are required for the industrial production process. It could be argued that industries cannot produce CO2 emissions unless primary resources are available. However, few studies have focused on estimating the role of primary resources in the production of industrial CO2 emissions. Furthermore, primary resource-induced inter and intra-sectoral linkages have received little attention. The purpose of this research is to estimate the role of primary resources in driving direct and net CO2 emissions (net CO2 linkages) in China, India, and the United States, all of which are at different stages of economic development. This study estimated the supply-induced CO2 emissions and linkages of China, India, and the United States using the Ghosh supply input–output model and by proposing some new supply-induced net emission linkage measures. The findings revealed that, when compared to fixed capital, labor produced more total and net carbon emissions in all three countries. The utility sector of “Electricity, gas, and water” (EGW) had the highest amount of labor and capital-induced emissions of all three nations. However, further decomposition of these emissions revealed the impact of different levels of economic development. In the services-based developed economy of the United States, input supplies from the sector of “Financial Intermediation and Business Activities” resulted in the highest emissions of the downstream sectors. The largest amount of downstream emissions was caused by supplies from the raw material supplier of “Mining and quarrying” in the industrial-based Chinese economy. While in India, which has a comparatively more agro-based economy, the “Agriculture” sector caused the greatest amount of downstream emissions. Our findings on supply-induced CO2 emissions of major countries at various levels of economic development can help guide both developed and developing economies to reduce industrial carbon emissions by efficiently managing and reallocating primary resource supplies to sectors.

The study examines the impact of economic growth and globalization on environmental quality and sustainability proxied by carbon dioxide emissions and Adjusted National Savings respectively as well as the satisfaction of the Environmental Kuznets Curve hypothesis for 36 Sub-Saharan African countries using panel data for the period 1990 to 2013 and the system General Method of Moments estimation technique. The results reveal a positive relationship between economic growth and environmental quality and sustainability. Evidence of the satisfaction of the Environmental Kuznets Curve hypothesis for both environmental quality and sustainability was also observed. Globalization was found to have a worsening effect on both environmental quality and sustainability and its negative effect outweighs the positive income effects on environmental quality and sustainability. We recommend that Sub-Saharan African countries strengthen their environmental norms in their effort to increase growth and participate in globalization through the use of cleaner technologies and products as well as reducing the depreciation of natural and fixed capital through investments in green infrastructure and nature-based projects while increasing educational expenditure and combating the ecological crises that arise from environmental quality degradation.

While policies targeting particular geographic regions are widely used by governments, there have been few rigorous evaluations of their causal impacts. In this paper, I study the impact of a location-based tax incentive scheme in India. Using aggregated and firm-level panel data, I find large increases in employment, total output, fixed capital, and the number of firms as a result of the program. These increases are due to both the growth of existing firms as well as the entry of new firms. There is supporting evidence that the new firms entering the treated regions are larger and more productive. I find no evidence for relocation of firms or spillovers in industrial activity between treatment and control areas. Finally, using data from household surveys, I show that wages of workers rise but find no changes in housing rents or migration across the treated and control regions. My results therefore suggest that the policy increased welfare, and I also conclude that the policy was cost-effective. This provides support for “place-based” policies to correct for regional economic disparities, especially in settings with low labor mobility.

Does a country's stock of financial capital affect its ability to achieve energy transitions? This paper uses data for up to 137 countries for the period 1998–2013 to investigate the importance of financial capital for changes in the use of each energy type. I find that financial capital supports transition to more capital-intensive energy types. For high-income countries, financial capital facilitates transitions from fossil fuels to modern renewable energy sources, especially wind. Both private credit from banks and domestic private debt securities support greater shares of wind energy. For lower-income countries, financial capital supports progression from biomass towards fossil fuel energy sources such as coal. I also find that countries with larger stocks of financial capital are more likely to move to more capital-intensive electricity generation systems.

As a developing country, China faces the dual challenges of economic development and environment protection. This study analyzes whether the Chinese government will be able to implement this win-win goal and how to achieve it in 2020. The results show that: (1) The annual contribution rates to GDP of comprehensive factors, human capital, fixed capital, fossil energy, and non-fossil energy during 1991–2013 were 33.97%, 14.17%, 15.47%, 14.91%, and 21.47%, respectively. China's economic growth mainly depends on fixed capital investment and the output elasticity of human capital to GDP is the highest. (2) Fossil energy consumption could be reduced by increasing human capital investment based on the substitution elasticity of human capital for fossil energy. Simultaneously, the technological progress of fixed capital and fossil energy is slower than that of non-fossil energy, which is conducive to the dual goals of economic growth and carbon emissions reduction. (3) To reach these goals in 2020, the inputs of human capital, fixed capital, fossil energy, and non-fossil energy must increase by 12.05%, 16.89%, 1.29 times, and 74.67% of the 2013 levels by 2020. (4) This study analyzes the means and conditions for China to meet their goal in terms of these constraints and finds that technological progress is the key to meeting the economic growth and carbon emissions goals in 2020.

Host and investing countries are faced with a tradeoff between growth and volatility arising from capital flows. The host country seeks capital inflows for high growth, yet worries about accompanying volatility so much that it limits capital market opening due to its financial weakness. However, the investing country solicits quick and safe returns from capital outflows by requesting wide foreign openness. It is often observed that one side’s push for opening encounters the other side’s reluctance. We examine how this conflict of interest is resolved for international compromise equilibrium through sequential bargaining between the two sides with private valuations of capital flows. We find that openness bargaining can end up with strategic delay after information revelation. This finding sheds light on certain puzzles in international finance.

This paper shows that in a life-cycle framework, the optimal tax on capital crucially depends on how human capital is accumulated. We focus on three cases common to the macroeconomic literature: (i) Learning-By-Doing (LBD), (ii) Learning-Or-Doing (LOD), and (iii) exogenous accumulation. First, we show analytically in a simple two-period model that endogenizing human capital introduces novel motives for the government to tax capital when it cannot directly condition taxes on age, and moreover that these motives differ depending on whether LBD or LOD is assumed. We then quantify differences in optimal capital taxes using a rich life-cycle framework that features heterogeneity in learning ability and initial human capital. With proportional taxes, the optimal capital tax is 16pp higher with LBD than with exogenous accumulation, but 2pp lower with LOD than with exogenous accumulation. We show that heterogeneity in learning ability strengthens the novel channels introduced by human capital, resulting in a larger gap in capital taxes between LBD and LOD relative to a case with homogeneous workers. Finally, we show that although allowing the government to make labor taxes progressive reduces the gap in optimal capital taxes, a sizable gap still persists.

Succinic acid from carbohydrates is increasingly being recognized as a renewable biochemical for deriving a wide range of sustainable value-added products. However, in spite of earlier efforts to commercialize bio-succinic acid on an industrial scale, the product's entry into the market has been severely constrained, leading to the demise of the business. This study evaluates the commercialization of bio-succinic acid from a technoeconomic and innovation value chain perspective, using BioAmber's carbohydrate-based succinic acid as a case study. A 30,000-tonne annum−1 bio-succinic acid production plant was designed and simulated using SuperPro® Designer. The estimated fixed capital cost of the Sarnia Plant was $147 million which was similar to BioAmber's expense but the calculated cost of succinic acid production was $2.23 kg−1 which was much higher than of BioAmber's original projection. The analysis revealed a number of factors that may have contributed to the demise of BioAmber Sarnia Plant. Lacking of cost competition and market demand, the Sarnia plant could not operate at full capacity and was unable to generate profit. The sensitivity analysis showed the derived coproducts such as 1,4-butanediol would not be profitable under current succinic acid prices. This study provides benchmarks for understanding risks in technology commercialization strategies and assisting in eliminating similar mistakes associated with the translation of a research invention into a successful commercial product.

The price of capital is a key determinant of the financial accelerator, a transmission mechanism of shocks generated through the capital accumulation process of entrepreneurs that borrow in credit markets with frictions. This paper shows that the procedure of approximating the price of old capital by the net-of-depreciation price of new capital, as used in many articles since Bernanke et al. (1999), has profound implications when the capital depreciation rate is positive. When accounting for the appropriate price of capital, the effects of the financial accelerator are even stronger than originally assessed. (C) 2016 Elsevier B.V. All rights reserved. Hernán Seoane gratefully acknowledges support from Ministerio de Economía y Competitividad (Spain), grants ECO2014-56676-C2-1-P, MDM 2014-0431, and Comunidad de Madrid, MadEco-CM (S2015/HUM-3444).

Natural capital is an asset that provides natural resource inputs and environmental services for economic production. Regional patterns of production and consumption have direct and indirect effects on sustainability of its natural capital. Traditional gross domestic product (GDP) estimates fail to explicitly and fully account for natural capital in system of national accounts (SNA). To address this gap, this study builds on United Nation's System of Environmental-Economic Accounting (SEEA) and provides a methodological framework to integrate natural capital into system of national accounts, in input-output table. It further illustrates how natural capital-integrated system of national accounts in input-output table can be used as an effective tool for natural resource management and policy analysis in computable general equilibrium (CGE) modeling framework. Results indicate that, without natural capital accounting and integration into system of national accounts, GDP estimates may give misleading signals as a measure of a region's economic performance, where economic growth could be at the expense of natural capital depletion.

Using tax abatements, financial incentives, and public investments to attract (or retain) firms is the primary economic development tool for many local governments. Often local job creation policies focus on increasing capital through grants, low-interest financing, and other economic development incentives. Theory predicts that capital subsidies induce firm behaviors that limit their job creation effects. This paper employs the Incentives Environment Index, constructed from state constitutional provisions that limit and structure the ability of state and local governmental entities to aid private enterprises, and five-year county panels to test theoretical predictions on county capital expenditure and input mixes as well as industry establishment shares. The results indicate the act of increasing capital subsidy tools is associated with capital-labor substitution, decreased employment density, and changes in local industry mix. Results are robust to alternative empirical specifications and measures of capital subsidy availability.

There are to date no official Chinese statistics relating to capital stocks. This lacking data hinders econometric studies of growth in this country. Series of such stocks are proposed in the literature, but most available empirical work on this topic suffers multiple deficiencies. The purpose of this article is to build the most reliable and longest possible statistical series of capital stocks for China. Our initial capital stocks are calculated on the basis of an output-capital ratio which is less approximate (and lower) than those generally provided. Our investment flows are consistent with the perimeters of the initial stocks. Our investment price indices are strictly tailored to the content of these stocks, and the unit root tests show that all the indices are non-stationary and cointegrated to the order of 2. This means they cannot be substitutes, as supposed in many other studies. Our depreciation rates are estimated by type of capital, under assumptions consistent with age-efficiency and retirement. Investment shares are used to approximate an overall capital structure and to calculate a total depreciation rate. Built from 1952 to 2014, our original series are available to econometricians seeking to conduct new empirical studies on China, over the long run.

This paper empirically investigates the linkage of corporate sector performance with the capital structure and macroeconomic environment. Using a balanced panel data of 1594 Indian corporate firms over 14 years (1998 to 2011), we find empirical evidence to support the hypotheses relating to the relevance of asymmetric information, agency cost, trade off theory, signaling and liquidity aspects in determining firm's capital structure decisions in emerging market economy. It is found that macro economic cycle significantly influences corporate financing decisions and hence performance. The endogeneity between capital structure and corporate performance has also been resolved through a two step dynamic panel generalized method of moments (GMM). The study suggests that the performance of any company hinges around its ability to operate on a capital structure. With the widening of scope of sourcing of capital, the right blend of instruments needs to be meticulously worked out to optimize cost of capital.

This paper presents and applies an experimental agroforestry accounting system (AAS) to measure the commercial income and capital of hunting activities in a large territorial area. This application goes beyond the conventional system of national agriculture and forestry accounts. The methodology developed allows the independent valuation of both environmental and manufactured capital which in turn allows the disaggregation of hunting income and other economic indicators by type of capital. The spatial distribution of these economic indicators can also be provided. Results show positive current total capital income but residual manufactured capital income current losses. An underlying economic rationale explaining this phenomenon is offered., This study is framed within the RECAMAN-Project (Contract NET165602), funded by Andalusia Regional Government and the Agency for Water and Environment in Andalusia.

This paper analyzes the antecedent conditions of capital expenditure to fill a gap in the literature. This paper argues that non-financial performance measures related to product status and product market may influence corporate capital investment decisions. Industrial product market competition also compels companies to adopt incentives for capital expenditures. This paper further describes the impact of agency costs for firms on the relationship between non-financial performance and capital expenditure, because corporate investment decision involves management discretion. In a Taiwanese sample consisting of 5815 firm-years during 2005–2012, the findings demonstrate a negative relationship between two current non-financial performance measures as follows: 1. defect-free rate and 2. market share rate and future capital expenditures. When industry faces competition pressure, a firm will not increase future capital expenditures. The agency costs may inversely affect the relationship between non-financial performance measures and future capital expenditures.

This paper examines the long-run relationship between energy consumption and real GDP, including fixed capital and total employment, for 18 EU countries from 1995 to 2012. The analysis was based on the panel unit root tests, panel cointegration test and fully modified ordinary least squares (FMOLS) estimator and dynamic ordinary least squares (DOLS) estimator. Data were analyzed in three groups – all sample, Visegrad countries (V4) and old 14 EU countries. Indeed, the results demonstrate that economic growth and the variables – energy consumption, gross fixed capital – are cointegrated for the whole panel of countries as well as for the two selected groups of countries. Furthermore, the panel FMOLS and DOLS estimators reveal that the relationship between energy consumption, gross fixed capital and economic growth is positive.

This paper introduces and presents an estimate of a production function motivated by physics with labor and energy providing force to produce work. The separate interactions of capital with labor and energy lead to reliable estimates for US output from 1951 to 2008 with fixed capital assets, the labor force, and total Btu energy inputs. Underpaid energy has an output elasticity twice that of labor. Overpaid labor faces elastic own substitution while there is weak substitution for capital. The policy implications of these properties are discussed.

This paper tests the robustness of key elements of the Smith and Weiher (2012) countercyclical capital regime. Such tests are now possible given that the recent house price cycle is nearing its end. The recent house price cycle allows for rigorous out-of-sample testing because it encompassed state-level house price cycles of significantly greater magnitude than those observable by Smith and Weiher during the design period of their stress test. The tests of robustness presented herein support the conclusion that the Smith and Weiher countercyclical capital regime should produce capital requirements sufficient to ensure an entity would remain solvent during severe house price cycles. This conclusion is strongly supported by a back-test of the countercyclical framework using Fannie Mae’s historical book of business. If the countercyclical capital requirement had been in place during the run-up to the recent house price bubble, Fannie Mae would have been sufficiently capitalized to withstand losses it sustained in the subsequent housing crisis. This result is particularly noteworthy given that key components of the Smith and Weiher stress test were designed based upon pre-2002 data. Individual examinations of the trend line, trough, and time path components of the Smith and Weiher countercyclical capital regime all indicate that the underlying methodology is stable and robust. We also find that the countercyclical-related patterns in capital requirements will not vary when the stress test is applied to different credit models, but the level of capital required may vary appreciably. This suggests that over-reliance on any one credit model may not be prudent.?

In the present work, the effects of energy abundance on sustainable economic growth and the mechanisms of this phenomenon were investigated using panel data from 31 areas (including provinces, autonomous regions, and municipalities) in China during the period from 2003 to 2012. The results indicate that the so-called “resource curse thesis” is not supported by the development of China at the provincial level. When several important variables—such as fixed capital, human capital, innovation input, regional openness, and foreign direct investment—are controlled, energy abundance exhibits a significantly positive correlation with economic growth rate. The so-called “Dutch disease”, human capital, and institutional quality are three primary transmission routes through which energy abundance affects economic growth. Among these routes, human capital exhibits the maximum positive transmission effect. Employment in the manufacturing industry can be crowded out by energy abundance, and the institution will be weakened to a certain degree. To promote sustainable economic growth in resource-abundant regions, long-term planning, optimization of industrial structure, and nurturing a good business environment should be supported and developed.

Our paper evaluates the relationship between energy efficiency (which is the key issue of European climate policy), consumption of the natural gas, and economic development in the European Union. We employ the panel time series data from 1997 to 2011 that covers 26 EU Member States (represented by the countries of the Eurozone). We build and test a multivariate model originating from in the neoclassical growth model and amended to include gross fixed capital and total labour as our explanatory variables. We use the panel cointegration tests and error correction modelling for determining whether there exists a long-term causality between economic growth and natural gas consumption in the EU. Moreover, we aim to derive the existence of the two-way causality between natural gas consumption and economic growth in the EU Member States. Our results show that the relationship between economic development and the consumption of the natural gas is positive, while the relationship between the consumption of the natural gas and economic development in the EU appears to be negative. Our findings might be relevant for formulating the policy framework targeting and increasing energy intensity and efficiency.

This paper considers how heterogeneity in capital goods affects international trade patterns, and shows a novel source of comparative advantage: the magnitude of heterogeneity in capital goods. Capital goods are heterogeneous in their vintage and productivity, and due to capacity constraints, only productive capital goods are activated in the equilibrium. Through this selection, the distribution of capital goods determines industry-level productivity: industry-level productivity is higher in an industry with relatively larger variation in capital goods. Hence in a perfectly competitive two-country, two-good, two-factor equilibrium, the industry has Ricardian comparative advantage. An extension of the model, which includes fixed trade cost, describes a sorting situation in which the most productive production units (which are generally newer vintage) export, the moderately productive units serve the domestic market, and the least productive units (older) do not operate.

In the case of population dividend which tends to disappear, to choose a new driving force of economic growth has become essential. In this “new normal” economy, in essence, the supply-side reform is to optimize the allocative capital, labor and land. Raising human capital may be the source of economic growth in the new situation. In academia today, there is consensus that human capital is an important driver of economic growth, but how human capital promotes economic growth mechanism remains controversial. This paper discusses mechanism and classification of heterogeneous effects of human capital on economic growth, on which hypothesis is based. It uses demographic data from the country's 30 provinces and autonomous regions to analyze and verify this. The last comprehensive actual situation in China is concluded.

Tourism sector stays in the limelight, especially because of the economic benefits that it provides to the state. Therefore, it is observed that an important part of the literature studies on tourism are related to the economic aspects of tourism. Kazakhstan, which has a very large potential for tourism, has tried to evaluate these values as much as possible and has given place to tourism in the development plans. In this study have been studied effects of tourism sector on the economy of Kazakhstan since independence in 1991. Share of tourism in total fixed capital, projects which are encouraged in the tourism sector, foreign investments in tourism, the ratio of tourism expenditures to expenditure on imports, contribution of tourism revenues to GDP, basic economic impact of tourism revenue and expenditure balance are considered under the scope of study.

This paper estimates the effect of changes in banks’ capital requirements on lending by studying the joint dynamics of the historic aggregate capital ratio of the UK banking system and a set of macro-financial variables. This is achieved by means of sign restrictions that attempt to identify shocks in past data that match a set of assumed directional responses of other variables to future changes in capital requirements aimed at increasing the resilience of the banking system to losses during an upswing. This may provide policy-makers with a plausible ‘upper bound’ on the short-term effects of future increases in macroprudential capital requirements in certain states of the UK economic cycle. An increase in the aggregate bank capital requirement during an economic upswing is associated with a reduction in lending, with a larger effect on lending to corporates than on that to households. The impact on GDP growth is statistically insignificant.

This paper explores how the joint behavior of hiring and investment is governed by the expected present values of capital and of jobs. It uses a model of frictions, which is a combination of a search model of the labor market and a q-type model of the capital market, emphasizing the interaction of capital and labor frictions. Relying on structural estimation of private sector U.S. data, it studies the future determinants of capital and job values and the implications for U.S. labor market developments. Key findings include: (i) complementarity between the hiring and investment processes; (ii) important cross effects of the value of capital on the mean and the volatility of the hiring rate, and vice versa; (iii) future returns are shown to play a dominant role in determining capital and job values; and (iv) U.S. labor market developments, including the outward shift of the Beveridge curve in the Great Recession and its aftermath 2007–2013, can be accounted for by changes in job and capital values. A relatively surprising finding is that job values went up, not down, in the Great Recession.

Highlights • Africa’s agricultural productivity depends on the formation of physical capital. • Capital formation is imperative to overcome potential post COVID-19 food insecurity. • Instantaneous impact of agricultural ODA on agricultural fixed capital formation. • Corruption and rule of law do matter for agricultural ODA inflows to SSA. • ODA is necessary to accelerate agricultural investments and enhance food security., The formation of physical capital in Sub-Saharan Africa (SSA) in agriculture is imperative to help the continent (1) overcome the effect of the COVID-19 pandemic on food insecurity and (2) still be on track towards achieving the Sustainable Development Goals (SDGs) of “No poverty” and “Zero hunger” in the midst of the COVID-19 pandemic. Using country-level data on 40 SSA countries from 1996 to 2014 and rainfall deviations as an instrument for agricultural official development assistance (ODA) in fixed-effect estimation settings, this paper examines the ‘instantaneous’ impact of agricultural ODA on agricultural fixed capital formation in SSA. The question here is whether aid to agriculture does translate instantaneously to building fixed capital urgently needed to address the effect of any potential crisis on food insecurity. Measuring agricultural fixed capital as fixed investments in farm machinery, dams, industrial buildings for agricultural and agro-processing, fences, ditches, drains, etc., we find that capital formation in SSA agriculture improves instantaneously with agricultural ODA inflows. Second, we find that even though rainfall deviations are associated with agricultural ODA inflows to SSA, institutions particularly those designed to control corruption and strengthen rule of law, do matter for agricultural aid inflows to SSA. These results suggest that agricultural ODA is necessary to accelerate agricultural investments and achieve food security. Our results are robust to sensitivity analysis on the specification of the instantaneous model.

Recent advances in the industrial Internet of Things and smart data analytics have empowered companies to shift towards an open manufacturing paradigm to crowdsource and share manufacturing resources based on demand and capacities across the value chain. Reconfigurable process planning (RPP) reconstructs the optimal process planning for each batch according to different part batches based on commonality. In combination with the optimal crowdsourcing contracting (OCC) strategy, RPP helps release fixed capital and increase the flexibility of the enterprise under the requirement of diversified parts. The coupling of process planning and crowdsourcing contracting decisions is inherent in open manufacturing. This paper focuses on coordinated optimization underlying OCC with RPP. An OCC decision-making mechanism considering RPP based on Stackelberg game theory is established, which provides a solution for trade-offs between the RPP decision-maker and the OCC decision-maker. A coordinated optimization model is proposed to reveal the hierarchical relationships and is solved by a nesting genetic algorithm. A case study of a group of rotating shaft parts is taken to illustrate the effectiveness of the bilevel coordinated optimization (BCO) model. The results present that the commonality has an apparent impact on the OCC and RPP decisions in open manufacturing, and integrating it into process planning activities is advisable for platform enterprises to increase production efficiency and competitive advantages. Our proposed model can deal with the conflict and coordination between OCC and RPP and balances the benefits of platform enterprise with the optimal contractor impacts triggered by planning activities.

This study analyzes the effectiveness of rural credit policy to increase the adoption of ICLS. Analyzes are based on a survey with 175 farmers in the State of Sao Paulo, Brazil. Our estimates suggest that rural credit has positive and relevant impacts on the adoption of ICLS. In turn, the adoption of these systems may also involve investments in fixed capital and increases in operational costs, which create additional demand for rural credit. Other factors, such as access to extension policy, production scale, ex-ante perceptions, and market infrastructure also explain ICLS adoption. The access to rural credit policy is also determined by dependence on farm income, farmer’s perception of transaction costs, and supply of credit in the municipality. The study finally discusses important implications for the devising of rural credit policies and the diffusion of sustainable production systems in developing countries.

This article attempts to assess the real capacity of national economies to optimize their energy efficiency, measured as real output per unit of energy consumed. National economies are assumed to be collective intelligences, striving to optimize a set of values, including energy efficiency. A set of 59 countries has been studied in this respect over the period 1990–2014, with the use of a multi-layer perceptron mimicking their collective intelligence, expressed in 14 quantitative variables. The results obtained suggest that economies studied optimize the proportion between their R&D effort and their fixed capital in the first place, then they strive to optimize their sheer economic and demographic scale, and only after these values, they optimize their energy efficiency. Further theoretical interpretation allows guessing the presence of an evolutionary function of sexual selection between social sub-structures.