Catching Up or Falling Behind? The Effect of Infrastructure Capital on Technology Adoption in Transition Economies

This paper demonstrates that a link between infrastructure capital and productivity growth can lead to multiple balanced growth equilibria if one accounts for the endogenous provision of infrastructure. Starting with the contribution of Barro (1990), the literature on infrastructure and growth mainly focuses on the relation between private and public capital investments. In contrast, we focus on the relationship between the provision of infrastructure capital and a country's innovative capacity. This is consistent with recent empirical evidence that reports a positive link between the two variables. The framework leads to bivariate causality between the rate of technical change and the provision of infrastructure services and generates scope for multiple strictly positive balanced growth equilibria.

Distributed communications and control network for robotic mining

The application of robotics to coal mining machines is one approach pursued to increase productivity while providing enhanced safety for the coal miner. Toward that end, a network composed of microcontrollers, computers, expert systems, real time operating systems, and a variety of program languages are being integrated that will act as the backbone for intelligent machine operation. Actual mining machines, including a few customized ones, have been given telerobotic semiautonomous capabilities by applying the described network. Control devices, intelligent sensors and computers onboard these machines are showing promise of achieving improved mining productivity and safety benefits. Current research using these machines involves navigation, multiple machine interaction, machine diagnostics, mineral detection, and graphical machine representation. Guidance sensors and systems employed include: sonar, laser rangers, gyroscopes, magnetometers, clinometers, and accelerometers. Information on the network of hardware/software and its implementation on mining machines are presented. Anticipated coal production operations using the network are discussed. A parallelism is also drawn between the direction of present day underground coal mining research to how the lunar soil (regolith) may be mined. A conceptual lunar mining operation that employs a distributed communication and control network is detailed

Calling for innovations - infrastructure and sources of growth

This paper analyzes the impact of infrastructure capital on different sources of economic growth. Starting with the contribution of Barro (1990), the literature on infrastructure and growth mainly focuses on the relation between private and public capital investments. In contrast, we demonstrate a link between (telecommunication) infrastructure capital and endogenous technological change in the context of an dynamic panel estimation applying aggregate country- as well as U.S. firm-level data. The main empirical finding is that the increase in telecommunication infrastructure during the last 30 years enhanced R&D investments but did not affect the accumulation of physical or human capital in our sample. Moreover, we provide an extended R&D growth model, which emphasizes a cost-reducing feature of infrastructure capital, to demonstrate a potential link between the level of infrastructure capital and endogenous technological change.DYNREG

Distributional Effects of Capital and Labor on Economic Growth

In the following we propose a growth model for an economy consisting of firms which are heterogeneous in technologies and input demands. We show that the growth rate in this economy depends not only on changes in the aggregate level of capital and labor, but also on changes in the allocation of these inputs across firms. As the latter effects are neglected in conventional growth models, they are misleadingly captured by the residual TFP measure. In contrast, we are able to quantify the infuence of these components. Our empirical analysis, which is based on structural estimation from firm-level data, reveals that changes in allocation of capital and labor have pronounced effects on GDP-growth for most European countries. Further, we take cross-country differences in the distributional effects into account to improve conventional growth accounting exercises. In particular, we find that they explain additionally up to 17% of growth differences among 19 European countries. Consequently, allowing for heterogeneity in firm-level technologies and input demands increases the explanatory power of the inputs.aggregation of production functions, distribution of capital and labor, firm heterogeneity, growth accounting

Inflation, Investment Composition and Total Factor Productivity

This paper employs a dynamic stochastic general equilibrium model with a financial market friction to rationalize the empirically observed negative relationship between inflation and total factor productivity (TFP). Specifically, an empirical analysis of US macroeconomic time series establishes that there is a negative causal effect of inflation on aggregate productivity. Rather than taking the productivity process as exogenous, the model is therefore set up to feature an endogenous component of TFP. This is achieved by allowing physical investment to be channelled into two distinct technologies: a safe, but return-dominated technology and a superior technology which is subject to idiosyncratic liquidity risk. An agency problem prevents complete insurance against liquidity risk, and the scope for insurance is endogenously determined via the relevant liquidity premium. Since the liquidity premium is positively related to the rate of inflation, the model demonstrates how nominal fluctuations have an influence not only on the overall amount, but also on the qualitative composition of aggregate investment and hence on TFP. The quantitative relevance of the underlying transmission mechanism which links nominal fluctuations to TFP via corporate liquidity holdings and the composition of aggregate investment is corroborated by means of the quantitative analysis of the calibrated model economy as well as a detailed analysis of industry-level and firm-level panel data. Notably, the empirical findings are consistent with both the properties of the agency problem postulated in the theoretical model and its implications for corporate liquidity holdings and physical investment portfolios.

Do Foreign Mergers & Acquisitions Boost Firm Productivity?

This paper examines the causal relationship between foreign mergers and acquisitions and firm productivity in the UK over the period 1999-2007. Our results raise questions about the existence of aggregate effects of foreign ownership on TFP in the longer-run. However, we find significant heterogeneity in the TFP effects of foreign M&A at the industry level. Overall, we uncover a systematic pattern of post-acquisition TFP effects that is consistent with the most recent theoretical models of firm heterogeneity and cross-border mergers and acquisitions as mode of foreign entry. Furthermore, we find positive aggregate effects on labor productivity due to capital deepening but not due to changes in TFP.Cross-border mergers and acquisitions; Productivity; Firm heterogeneity

Nanocapillary Membrane Devices: A Study in Electrokinetic Transport Phenomena

There is considerable interest in developing micro-total analysis systems, also known as lab-on-a-chip devices, for applications in chemical and biological analysis. These devices often employ electrokinetic transport phenomena to move, mix, concentrate and separate dissolved species. The details of these phenomena in micro- and nanometer scale geometries are not fully understood; consequently, the basic principles of device operation are often unclear. For example, nanocapillary membranes (NCM) and other nanometer-sized passages can exhibit charge-selectivity and rectification effects similar to those observed in biological membranes. This dissertation addresses several issues related to ion transport in these membranes. Leading-order 1D steady-state models for diffusion-layer modulated transport through non-ideal membranes are used to study ionic rectification in geometrically asymmetric devices. These models provide qualitative explanations of the operation of a variety of fluidic rectifiers and experimentally observed hysteresis effects. By taking the first steps in the full boundary-layer analysis of the model, it is shown that non-ideal membranes do not maintain local electro-neutrality under passage of electric current. This is in contrast to the usual assumption of membrane local electro-neutrality, but is compatible with the existence of the non-equilibrium macroscopic space charge known to appear in the flanking electrolyte and the requirement of overall charge conservation. Lastly, the problem of electrokinetic instability due to non-equilibrium electro-osmotic slip is considered for the case of an electrolyte-membrane interface inside a 2D channel

Inflation, Liquidity Risk and Long-run TFP - Growth

This paper demonstrates a negative relation between inflation and long-run productivity growth. Inflation generates long-run real effects due to a link from the short-run nominal and financial frictions to a firm's qualitative investment portfolio. We develop an endogenous growth model whose key ingredients are (i) a nominal short-run portfolio choice for households, (ii) an agency problem which gives rise to financial market incompleteness, (iii) a firm-level technology choice between a return-dominated but secure and a more productive but risky project. In this framework, inflation increases the costs of corporate insurance against productive but risky projects and hence a firm's choice of technology. It follows that each level of inflation is associated with a different long-run balanced growth path for the economy as long as financial markets are incomplete. Finally, we apply U.S. industry and firm level data to examine the relevance of our specific microeconomic mechanism. We find that (i) firms insure systematically against risky R&D investments by means of corporate liquidity holdings, (ii) periods of higher inflation restrain firm-level R&D investments by reducing corporate liquidity holdings.

Dynamic Effects of Foreign Direct Investment When Credit Markets are Imperfect

This paper argues that foreign direct investment in economies with credit market imperfections may increase their vulnerability to capital flow shocks. Due to better access to financial markets foreign firms can use other wage contracts than domestic ones. This alters the domestic wage composition and the subsequent wealth distribution. When credit markets are imperfect, the wealth distribution typically determines an economy's growth potential in autarky; hence, high exposure to foreign direct investment may significantly impede the capability to recover from sudden withdrawals of foreign capital. This is substantiated by empirical evidence on durations of output recovery after systemic sudden stops. --Credit market imperfections,foreign direct investment,growth,occupational choice,sudden stops