Climate risk, institutional quality, and total factor productivity

Song, Yanwu; Wang, Can; Wang, Zhaohua

doi:10.1016/j.techfore.2023.122365

Cited by 25 publications

(7 citation statements)

References 75 publications

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“…In addition, it was also necessary to calculate the cost share of each input factor when using the stochastic frontier approach. The cost of capital input was measured by the depreciation of fixed assets and the interest expenditure of the service-oriented manufacturing industry in each province, and the total labor remuneration was used to measure the cost of labor input [51]. The data for all the above variables were taken from the China Statistical Yearbook, the China Industrial Statistical Yearbook, the China Labor Statistical Yearbook, and the China Science and Technology Statistical Yearbook.…”

Section: Variable Selection and Data Sourcesmentioning

confidence: 99%

Estimating and Decomposing the TFP Growth of Service-Oriented Manufacturing in China: A Translogarithmic Stochastic Frontier Approach

et al. 2023

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By constructing a translogarithmic stochastic frontier production model, this study explores the total factor productivity (TFP) of service-oriented manufacturing in 30 provinces in China during 2004–2020. We carried out decomposition analysis to understand in greater depth the potential drivers of TFP growth. The results show that the overall TFP of service-oriented manufacturing continuously improved during the sample period; however, the overall growth rate showed a significant slowing trend, and the contribution of TFP growth to output growth is still low. The industrial growth of service-oriented manufacturing is mainly driven by capital input, and the transformation of its growth mode from extensive to intensive has not yet been realized. Furthermore, there exists significant regional and sub-sectoral heterogeneity in the TFP growth of the industry. The decomposition of TFP growth shows that technological progress and technical efficiency are the main sources of TFP growth, but the growth rate of technological progress is declining gradually, and its driving effect on TFP is weakening. The deterioration of both scale and allocation efficiency hinders the improvement of TFP in service-oriented manufacturing, and there is still room for the industry to improve its TFP level by improving scale efficiency and allocation efficiency.

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Section: Variable Selection and Data Sourcesmentioning

confidence: 99%

Estimating and Decomposing the TFP Growth of Service-Oriented Manufacturing in China: A Translogarithmic Stochastic Frontier Approach

et al. 2023

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“…While it has been found that it lowers, though not significantly, economic growth in Nigeria (Ogbuabor et al 2020), it was found to support economic growth in China (Cui 2017) as well as in the Middle East and North Africa (Kandil 2009). Similarly, institutional quality has been found to positively influence firm survival in Europe (Baumöhl and Kočenda 2022) as well as firm productivity, either directly (Chang 2023;Qui et al 2021;Goedhuys and Srholec 2015;Alvi and Admed 2014) or indirectly, by moderating the impact of other negative influences, like climate change (Song et al 2023). However, in a study of 28 African countries, the positive relationship with firm productivity was not statistically significant (Amin 2013).…”

Section: Introductionmentioning

confidence: 97%

Total factor productivity and institutional quality in Vietnam: which institutions matter most?

Ha,

Andre,

Kim

et al. 2024

Asia-Pac J Reg Sci

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The roles of institutional quality’s impact on firm performance are becoming increasingly prominent in the literature. This is true in the Global North and South. Vietnam has seen less research on this topic than other developing countries, so this paper seeks to rectify this by examining whether or not institutional quality influences firm performance, as measured by total factor productivity (TFP). This paper also digs deeper into the sub-components to see which institutions are the most influential. We applied the General Method of Moments (GMM) approach to a firm-level panel dataset covering the 2010–2020 period to examine institutional quality's impact on firm TFP. Results are explored by firm size and by ownership type (domestic private, foreign and state-owned). Using rich datasets covering institutional quality at the provincial level in Vietnam and also individual firm performance from 2010 to 2020, we found that Time cost (how long it takes firms to deal with the government on various issues) and Labor policy (how easy it is to hire good quality labor) are the most important of the 10 institutions studied. Additionally, while not all institutions influence TFP, institutional quality overall (all 10 institutions combined) clearly has a positive influence on TFP. This study fills a research gap by examining the relationship between institutional quality and firm performance in Vietnam. The findings emphasize the significance of Time cost and Labor policy as influential institutions and highlight the positive overall impact of institutional quality on TFP. The policy recommendations offered provide valuable insights for the government to further enhance firm productivity through targeted measures.

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“…They found that both domestic and foreign environmental policies have a positive impact on domestic RETI, and that institutional quality positively moderates this impact. Song et al (2023) found that the negative effects of CR on total factor productivity can be significantly mitigated by good economic and political systems. Moreover, a stable institutional environment is critical for the effective implementation of climate adaptation measures and green development policies (Owen, 2020).…”

Section: Introductionmentioning

confidence: 99%

“…As anthropogenic emissions of greenhouse gases reach record highs, the Fifth Assessment Report (AR5) of the United Nations Intergovernmental Panel on Climate Change (IPCC), published in 2014, demonstrates that CR has widespread effects on human and environmental systems (Paglialunga et al., 2022). For instance, CR increases the frequency and severity of natural disasters, such as floods, storms, droughts, and extreme temperatures (Song et al., 2023). According to the Global Climate Risk Index 2021 released by Germanwatch, extreme weather has thus far caused more than 475,000 deaths and more than $2.56 trillion in economic losses during 2000‐2019, and the global cost of adapting to CR is rising.…”

Section: Introductionmentioning

confidence: 99%

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Climate risk and renewable energy technological innovation: An institutional environment perspective

2023

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To explore whether climate risk (CR) affects renewable energy technological innovation (RETI) and its boundary conditions, this study examines the relationship between CR and RETI as moderated by institutional environment. Based on panel data of 60 countries for the period 2000–2019, we show that CR is not conducive to RETI, and that its negative marginal impact shows an inverted U‐shaped trend with the improvement of RETI. Heterogeneity analysis shows that floods and storms have the greatest negative impacts on RETI, and that innovations in solar and wind energy technologies are more vulnerable to the adverse shocks of CR. Furthermore, CR has a greater adverse effect on RETI in developing countries than in developed countries. However, the institutional environment, especially the economic institutional environment, can work to mitigate the negative effect of CR on RETI. Our findings not only enrich the research on the economic consequences of CR but also provide effective ways to mitigate the adverse impact of CR on RETI from the perspective of institutional environment.

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Climate risk, institutional quality, and total factor productivity

Cited by 25 publications

References 75 publications

Estimating and Decomposing the TFP Growth of Service-Oriented Manufacturing in China: A Translogarithmic Stochastic Frontier Approach

Estimating and Decomposing the TFP Growth of Service-Oriented Manufacturing in China: A Translogarithmic Stochastic Frontier Approach

Total factor productivity and institutional quality in Vietnam: which institutions matter most?

Climate risk and renewable energy technological innovation: An institutional environment perspective

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