This is prompted by a relatively high growth of wages that is not sufficiently compensated by productivity growth. find that investing in intangible assets fosters participation in GVCs and contributes to value appropriation along the chain.23. Number 2/ Given the complex nature of competition, however, one should be aware of the caveats and pitfalls of the measures. equipment 1.04 1.04 3.9% 5.8% 368 240 1.3% 1.3% 2.22 2.03 Transport equipment 1.01 0.95 5.0% 7.2% 287 254 2.1% 1.7% 3.25 1.84 Other manufacturing: : 4.2% 6.3% 165 235: :: : Public utilities 1.32 1.09: :: : 3.0% 2.2% 0.76 0.60 Construction 1.14 1.08 5.3% 10.1%: : 0.5% 0.8% 2.06 1.51 Wholesale & retail 1.23 1.08 5.0% 8.8% 142 108 0.8% 0.9% 1.30 1.90 Hotels & restaurants: : 7.2% 9.5%: :: :: : Transport & storage 0.88 0.87 4.8% 7.3% 258 237 0.7% 0.9% 0.90 0.84 Communications 0.96 1.06 11.6% 14.5% 253 272 2.1% 2.3% 1.23 0.89 Financial services 1.14 1.15 9.9% 11.0%: : 2.8% 2.6% 0.60 0.80 Real estate } 1.14 1.12 9.3% 9.1%: : 1.8% 0.9% 0.60 0.54 Renting } 6.7% 10.5% } 190 174 1.9% 1.5% 0.14 0.67 Software 0.7% 1.7% 2.17 1.16 Research & development: :: : Professional services: :: : Manufacturing 1.15 1.06 4.1% 6.7% 302 206 1.2% 1.0% 1.82 1.78 Market services 1.14 1.09 6.3% 9.4% 206 186 1.4% 1.3% 1.07 1.10 All branches 1.14 1.08 6.0% 9.2% 267 199 1.3% 1.2% 1.26 1.27 Sources: Braila et al.

They found that intangible capital accounted for two-thirds of US productivity growth in the business sector between the mid-1990s and the early 2000s. First, an industry typically comprises many different products, each having its own relevant market. (2010) Braila et al. This holds for both the whole sample and the sample of three neighbouring countries, the latter serving as a relevant benchmark for competitiveness. This is a little higher than the average of the whole sample, although a little below that of the neighbouring countries (1.5%-point). 32Recent evidence shows that the competitiveness of Belgium is hampered by relatively high unit labour cost, at least in comparison to its neighbouring countries. By equipment 0.00 E -2.0% W +128 W 0.0% E +0.19 B Transport equipment +0.07 W -2.1% W +33 E +0.4% B +1.41 B Other manufacturing: : -2.1% W -70 B: :: : Public utilities +0.23 W: :: : +0.7% B +0.16 E Construction +0.06 W -4.7% W: : -0.3% E +0.55 B Wholesale & retail +0.15 W -3.9% W +34 E -0.1% E -0.61 W Hotels & restaurants: : -2.2% W: :: :: : Transport & storage +0.01 E -2.6% W +21 E -0.3% E +0.07 E Communications -0.11 B -2.9% W -18 E -0.2% E +0.34 B Financial services 0.00 E -1.2% E: : +0.2% E -0.20 E Real estate } +0.02 E +0.2% E: : +0.9% B +0.07 E Renting } -3.8% W } +16 E +0.4% B -0.52 W Software -1.0% W +1.01 B Research & development: :: : Professional services: :: : Manufacturing +0.09 W -2.6% W +96 W +0.2% E +0.04 E Market services +0.05 W -3.2% W +20 E +0.1% E -0.03 E All branches +0.06 W -3.3% W +68 W +0.1% E -0.02 E Sources: Braila et al. Likewise does exit include domestic and foreign firms, liquidations, and firms divesting their activities from the concerned market. Sakakibara & Porter (2001) associate oligopolic collusion with stable market shares and competition with unstable ones. Price-cost margin Average of entry and exit rates Herfindahl- Hirschman Index (0-1000) Average absolute change of market shares (%-pt) 2 Sensitivity of profit to cost changes 3 Belgium EU Belgium EU Belgium EU Belgium EU Belgium EU Food, beverages & tobacco 1.14 1.10 3.3% 5.8% 106 231 0.4% 0.8% 1.39 1.79 Textile & leather 1.08 0.99 4.4% 9.0% 219 204 0.5% 0.7% 2.14 1.83 Wood & cork 1.04 1.01 4.6% 7.4% 760 249 2.0% 1.2% 2.21 2.18 Paper & printing 1.11 1.08 5.4% 7.7% 93 79 0.8% 0.6% 1.27 1.23 Cokes & petrochemical }: : 433 352 } 1.3% 1.3% } 1.49 1.60 Chemicals 1.33 1.14 3.2% 5.3% 223 143 Rubber & plastic: : 71 119 Other minerals 1.10 1.04 3.3% 6.3% 263 273 0.6% 1.3% 2.38 1.73 Basic & processed metals 1.03 1.01 4.3% 6.5% 630 138 1.5% 0.7% 1.33 1.87 Machinery 1.18 1.06 3.4% 5.7% 234 112 1.2% 0.7% 2.71 2.06 Elec. For manufacturing there has been some convergence with respect to the neighbouring countries. 3 ) The UK is excluded from the other European countries because of its too different outcomes. It represents lower scaled production units that display less intense rivalry.The presentation of Table 2 was based on the averages of the available time series, running from about 1998 to about 2006. In particular, the relative weakness of TFP growth, which should be fed by technological development, has contributed to this. agriculture Again this is only part of the story. It has been developed by Sakakibara & Porter (2001) and builds on the logic that competition makes certain market players gain market share at the cost of others. It has been introduced by Boone (2000) and is measured by the marginal-cost elasticity of a producers profit, often acronymed as the profit elasticity. (2010). La croissance de la Productivit totale des facteurs (PTF) a t particulirement moins soutenue que dans les pays voisins. Consequently, the shift to a knowledge-based economy requires a deeper understanding of the role of intangible investments, not only for economic growth but also for international competitiveness. Il est interdit, sauf accord pralable et crit de lditeur, de reproduire (notamment par photocopie) partiellement ou totalement le prsent article, de le stocker dans une banque de donnes ou de le communiquer au public sous quelque forme et de quelque manire que ce soit. How Can Europe Upgrade Its Convergence Machine? Market economy Price-cost margin Average of entry and exit rates Herfindahl- Hirschman Index (0-1000) Average absolute change of market shares 2 Sensitivity of profit to cost changes 3 Belgium 1.14 6.0% 267 1.3%-pt 1.26 Other European countries 1.08 9.2% 199 1.2%-pt 1.27 Neighbouring countries: 9.1% 204 1.5%-pt: of which: Germany 1.02 9.5% 197 2.0%-pt: France: 8.6% 185 0.8%-pt 1.15 Netherlands 1.10 8.7% 300 1.9%-pt: Normalised rank of Belgium (scale 0-10) 4 3.8 0.5 2.5 5.0 6.7 Manufacturing Belgium 1.15 4.1% 302 1.2%-pt 1.82 Other European countries 1.06 6.7% 206 1.0%-pt 1.78 Neighbouring countries: 6.1% 215 1.2%-pt: of which: Germany 1.03 5.8% 203 1.6%-pt: France: 6.4% 193 0.5%-pt 1.61 Netherlands 1.20 6.0% 350 1.6%-pt: Normalised rank of Belgium (scale 0-10) 4 5.0 0.5 1.5 5.8 6.7 Market services Belgium 1.14 6.3% 206 1.4%-pt 1.07 Other European countries 1.09 9.4% 186 1.3%-pt 1.10 Neighbouring countries: 9.4% 182 1.6%-pt: of which: Germany 1.01 10.1% 187 2.2%-pt: France: 8.5% 169 0.8%-pt 1.02 Netherlands 1.08 9.3% 204 1.9%-pt: Normalised rank of Belgium (scale 0-10) 4 3.8 0.5 3.0 5.0 6.7 Sources: Braila et al. 20A further implication of the use of accounting data is that not all companies need to publish complete data. Finally, countries may have different accounting standards. The evolution, or cross-border comparison, of price levels should indicate market efficiency, be it allocative, productive or dynamic. This could give rise to decreases in the HHI that are not due to falling market concentration. Germany and the Netherlands are not among the seven. The numbers in the table show the difference in index points between Belgium and the benchmark samples, at both the beginning and the end of the time series. An elasticity close to zero would indicate a weak rivalry. According to this accounting measure, US intangibles actually outpace tangible investment. The impact of competition on prices is indeed driven by allocative efficiency. There were many industries that did much better than their European counterpart for one measure, but much worse for another. Given, however, that not all three are included in all samples, that evidence is incomplete.As concerns the industries that contributed most to the observations presented in Tables 3 and 4, there was no clear pattern. This paper has shown that intangible capital is as important as fixed/tangible capital in many advanced countries, and its importance is growing over time. In 1996 the average Belgian price-cost margin for market services was only 0.02 points higher than that of the other countries (1.06 and 1.04, respectively). The next section gives an overview for the five measures of this article. This can be read from Annex Table A2. As explained earlier, they do not deny so either. Entry & exit indicates the vigorousness of the interaction by the challenge of newcomers and the defeat of inefficient producers. 2 ) Average of 1998-2001 and 2003-2005, since the data for 2002 seem too erratic. Molnr (2010) estimated a parameter for returns to scale that could correct the markup. found that once intangible capital is included in a sources-of-growth analysis, it accounts for 20-33% of labour productivity growth in the market sectors of the US and EU economies.8. relate one specific intangible asset (organisational capital) and backward GVC participation, i.e. Griffith & Harrison, 2004; Van Ark, 2005).Besides the price-cost margin, four other measures are explored in this article: entry & exit, market concentration, market stability and the so-called profit elasticity. In the next section, the markup has been calculated as value added divided by the sum of labour and capital compensation. They are usually included in the activity of wholesale trade. They are followed by an indication whether Belgium performs better (B), more or less equal (E) or worse (W) than the other Member States. time series) 75% 90% 36% 76% 75% - sample (NACE Rev.1) 40-52 60-74 40-74*** 50-52 60-64 71-74 40-52 60-72 40-52 60-72 Weighting - countries GDP (2006) Enterprises GDP (2006) GDP (2006) GDP (2006) - industries Value added Enterprises Unweighted Value added Value added *) Sweden from 1998. For entry & exit, as already noted, no time series was available for other Member States. A cost-cutting producer would in that case attract quite a few customers from its competitors. Source: R. Mudambi: Location, control and innovation in knowledge-intensive industries, in: Journal of Economic Geography, Vol. The markup is the balance of price and marginal cost, both of which are affected by competition. Vous avez t dconnect car votre compte est utilis partir d'un autre appareil. The indicator is calculated as the average absolute change of the market shares of the largest enterprises during a certain period. Among further determinants underlined by the economic literature, competition conditions are particularly interesting as improving these conditions is generally not budgetary hurting and could be linked to the administrative simplification process.

The elasticity is estimated from company data. Each has its merits and drawbacks. The measurement of competition is focused on certain observable aspects of the interaction between market players. Belgium is one of these: it adopted in 1996 a law limiting hourly wage increases in private sector to the growth in its three neighbouring countries. Is Europes Productivity Glass Half Full or Half Empty.

Source: C. Corrado J. Haskel, C. Jona-Lasinio, M. Iommi: Intangible investment in the EU and US before and since the Great Recession and its contribution to productivity growth, in: Journal of Infrastructure, Policy and Development, forthcoming. It builds on the logic that a producers cost saving could lead to an increase in his total profits, not so much because of an increased markup, but more so because of increased sales. This implies that competition makes market players strive to be the most cost-efficient. Intangible and tangible investment, average 2000-2013, Contributions to labour productivity growth, 2000-2013, Intangible capital and backward GVC participation (all sectors), selected European countries, 2000-2013, Backward participation and labour productivity growth, Intangible capital and labor productivity growth : revisiting the evidence : an update, Intangible Capital and Labor Productivity Growth Revisiting the Evidence: An Update, Intangible Capital and Labor Productivity Growth: Revisiting the Evidence, Intangible capital and labor productivity growth : revisiting the evidence, Business sector intangible capital and sources of labour productivity growth in Canada, The EU on the 50th Anniversary of the Treaty of Rome, The Prospects for Future Economic Growth in the Euro Area. In particular small companies may be allowed to report value added instead of turnover. The dynamics of concentration may be interpreted just as entry & exit: it indicates challenge and defeat but neglects rivalry among incumbent producers. Despite low entry and high concentration there could very well be a strong rivalry among the incumbent firms. In nine years time, both margins had risen, the Belgian to 1.37, the others to 1.16. 26The average price-cost margin is somewhat higher than that of other countries, the neighbouring countries included. For a representative sample one should expect its turnover to cover a significant part of the industrys output. Comment reprer lessentiel ? Baldwin has defined this as a second unbundling of globalisation, which means that not only goods but also tasks are traded, and consequently the final product sold in international markets is the result of production stages located in different countries which specialise in different tasks.4 While the international fragmentation of production has allowed more countries to be involved in the production of a final good, not all countries have retained the same benefits from this process. In this paper, after briefly reviewing these two fields of analysis, we suggest some lines along which they can be fruitfully linked in order to establish the basic framework with which to investigate the synergies between intangible capital and participation in global value chains (GVCs) as drivers of productivity growth in modern economies. The work by Corrado et al. Moreover, numerous studies have demonstrated that intangible capital is a main driver of economic growth and international competitiveness. For the price-cost margin there has in most cases been a divergence, in particular in the services industries and at the end of the analysed period (2003-2005). Table 4, however, shows that this happened at different paces, thus giving rise to patterns of convergence and divergence. Only under constant returns to scale, the application of average cost leads to a correct calculation of the markup. The outcomes should therefore be treated as proxies of what the indicators should really measure. (2011) covered competition conditions indirectly by market regulation, which could be one of its determinants. Given the explorative nature of the analysis, one should be prudent taking policy conclusions. global competitiveness

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