Three Essays on Firm Productivity and Income Inequality

• Main Authors: Su, Yi-Hsuan, 蘇奕璿
• Other Authors: Chyi, Yih-Luan
• Format: Others
• Language: en_US
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/39370802396706014546

博士 === 國立清華大學 === 經濟學系 === 103 === This dissertation studies the topics on firms' productivity and income inequality. The first chapter aims at exploring the impacts of industrial agglomeration on productivity on the theoretical side as well as on the empirical side. In the following two chapters, we focus on the topic of income inequality. The second chapter attempts to investigate the relationship among trade, technology, and income inequality. The third chapter examines whether and how cultural attributes shaping institutions affecting income inequality. In the first chapter, our study is motivated by the fact that agglomeration economies tend to be a distinguishing feature for fostering economic growth and firms’ productivity in manufacturing industries in Taiwan. The benefits that firms cluster in a geographical area are considered to include a variety of mechanisms such as the possibility of sharing suppliers with similar firms (IO linkage), the existence of thick labor markets facilitating matching (labor market pooling), and the possibility of learning from other firms’ experiences and innovations in the industrial agglomeration (knowledge spillovers). In this study, we attempt to construct a theoretical model embracing three driving forces of industrial agglomeration and implement an empirical test using a plant-level dataset to explore the impacts of agglomeration on productivity in Taiwan's manufacturing sector. Our empirical findings suggest that, by and large, all three determinants of agglomeration boost plants' productivity. Particularly, after the decomposition of total knowledge spillovers, the inter-industry knowledge spillovers are helpful for productivity, while the intra-industry knowledge spillovers turn out to depress plants' performances. In the second chapter, we try to assess the effects of trade openness and technology on income inequality because many countries have experienced rising within-country inequality, technological development, and globalization since the 1990s. There has been an ongoing debate on the impact of changes in technology and globalization on income inequality in recent literature. To reconcile conflicting empirical findings, this study explores a nonlinear relationship between trade openness and income inequality across countries with a range of technological progress status. Using a panel of 61 countries over a 31 year period from 1975 to 2005, this study analyzes trade-inequality relationships by estimating panel threshold regression models. The threshold effects of technology and an inverted-U relationship are identified when examining the impacts of trade on income inequality. On the one hand, countries with less-advanced technologies tend to confront increases in income inequality when they become more globalized. On the other hand, trade openness is revealed to ease income inequality in countries with advanced technologies. In the third chapter, we additionally incorporating the role of cultural attribute into the analysis of income inequality. It has been discussed that trade globalization, financial globalization, and technology are simply proximate causes rather than fundamental ones like institutions to explain income inequality. With proxies for cultural backgrounds of the emergence of different types of institutions, this paper combines trade, FDI, and technology with cultural attributes to investigate how worldwide variations of within-country income inequalities are shaped by those factors. Using the Standardized World Income Inequality Database and the well-known Hofstede's cultural dimensions, this study compiles a cross-country dataset of 58 countries for 10-year averages from 2000 to 2009. The threshold regression model is applied to show that individualism is consistently helpful for reducing income inequality. In addition, unequal power distribution deteriorates income inequality, and tends to ease inequality only when the members of a society highly praise individualism. As for conventional causes of income inequality, including trade, FDI, and technological progress, our empirical findings suggest that their distributional effects vary depending on the status of a society.