The European Commission plans to tighten the greenhouse gas emissions targets in the Emissions Tr... more The European Commission plans to tighten the greenhouse gas emissions targets in the Emissions Trading System. Ralf Martin and colleagues examine the likely impact on affected businesses, and conclude that industry is exploiting concerns about competitiveness to obtain free emission permits according to criteria that are too lax.
Abstract Transport investments can induce positive productivity benefits via agglomeration econom... more Abstract Transport investments can induce positive productivity benefits via agglomeration economies by increasing the scale and efficiency of spatial economic interactions. In assessing the 'agglomeration benefits' of transport investments we need to understand the spatial scale over which these externalities are distributed. This report is concerned with the effect of urban agglomeration on productivity and with how agglomeration externalities diminish with distance from source.
Abstract I propose a new way of dealing with the fact that often only investment but not capital ... more Abstract I propose a new way of dealing with the fact that often only investment but not capital stocks are reported in business micro data sets. Capital stock information is essential to calculate measures of total factor productivity (TFP). Because data on investment is usually available, on the other hand, the standard practice is to apply some perpetual inventory method (PIM). This is not without problems however. A PIM calculation requires many assumptions.
Abstract Considerable policy interest warrants a closer look at small and medium sized firms. Usi... more Abstract Considerable policy interest warrants a closer look at small and medium sized firms. Using an a sample of manufacturing plants from the Annual Respondents Database (ARD). I find that plants owned by small single firms have significantly lower productivity than larger non single plants. Decomposing aggregate productivity growth into the contributions of various plant types, I do not find any evidence for an over proportional contribution of small firm plants. The biggest contribution comes from large multi plant firms.
Abstract Permit auctions are designated to take the place of grandfathering in phase III of the E... more Abstract Permit auctions are designated to take the place of grandfathering in phase III of the EU ETS, but industries at risk of relocating will be exempt from auctioning. Exemption criteria are the industry's carbon and trade intensities. Drawing on interviews with managers of manufacturing firms across Europe, we show that carbon intensity is an accurate metric of leakage risk across sectors whereas trade intensity is not. This leads to overly generous exemptions at the taxpayer's expense.
Raising national productivity is a key aim of the government. But the evidence concerning product... more Raising national productivity is a key aim of the government. But the evidence concerning productivity trends used in successive Budgets and Pre-Budget Reports (PBR) has been largely macroeconomic in nature, most notably in international comparisons of labour and total factor productivity (TFP). Some important insights have arisen from these data.
Abstract Previous research has shown that multinationals (MNEs) and in particular US-owned plants... more Abstract Previous research has shown that multinationals (MNEs) and in particular US-owned plants, are more productive than domestic ones. Existing evidence for the UK has shown that this US advantage is explained by US MNES picking the best plants to takeover and by US owned plants getting higher returns from ICT capital. One possible explanation for the MNE and US advantage is the existence of economies of scale and of scope. However, due to lack of necessary data, this hypothesis could not be tested.
Abstract We estimate the impacts of the Climate Change Levy (CCL) on manufacturing plants using p... more Abstract We estimate the impacts of the Climate Change Levy (CCL) on manufacturing plants using panel data from the UK production census. Our identification strategy builds on the comparison of outcomes between plants subject to the CCL and plants that were granted an 80% discount on the levy after joining a Climate Change Agreement (CCA). Exploiting exogenous variation in eligibility for CCA participation, we find that the CCL had a strong negative impact on energy intensity and electricity use.
At present the USA is-in per capita terms-the top greenhouse gas polluter among the world's major... more At present the USA is-in per capita terms-the top greenhouse gas polluter among the world's major economies. This is mirrored by the high energy intensity of all sectors of the US economy including manufacturing industries. A potential explanation for the higher energy intensity are lower US energy price levels. However, common price elasticity estimates are not high enough to explain the observed differences between countries.
Abstract Climate models predict that the increase in greenhouse gas concentrations is likely to l... more Abstract Climate models predict that the increase in greenhouse gas concentrations is likely to lead to climate change and increased temperatures. The likelihood of extreme weather events will also increase as a consequence. Whilst predictions on the costs of climate change can be made through economic modelling, this study seeks to measure precisely one component of these costs, namely the impact of extreme weather events on economic activity.
When governments design policies to reduce firms' greenhouse gas emissions, are they too lenient ... more When governments design policies to reduce firms' greenhouse gas emissions, are they too lenient on heavy polluters that claim such measures will damage their ability to compete in the global economy? Using European and UK survey data, Ralf Martin, Laure de Preux and Ulrich Wagner assess the UK's experience with the climate change levy.
The net entry contribution to aggregate productivity growth has increased dramatically in the UK ... more The net entry contribution to aggregate productivity growth has increased dramatically in the UK over 1990s according to calculations based on data from the Annual Respondents Database (ARD). Some recent studies have tried to link this to other structural changes over the same period such as increased globalisation and usage of ICT.
Abstract Based on interviews with almost 800 manufacturing firms in six European countries, this ... more Abstract Based on interviews with almost 800 manufacturing firms in six European countries, this study develops a firm level indicator of “clean” that is climate change related innovation and explores the impact of the EU Emissions Trading System on such innovation. We find that the majority of firms engage in some form of climate change related innovation although this is primarily process rather than product innovation.
Abstract When industry compensation is offered to prevent relocation of regulated firms, efficien... more Abstract When industry compensation is offered to prevent relocation of regulated firms, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it to analyze industry compensation rules proposed under the EU Emissions Trading Scheme, which allocate permits for free to carbon and trade intensive industries.
Executive summary UK policy makers increasingly see new technologies related to the mitigation of... more Executive summary UK policy makers increasingly see new technologies related to the mitigation of greenhouse gas (GHG) emissions as a potential source of income growth for the UK economy. In this study we examine a comprehensive international patent database to determine the position of UK innovators relative to global competitors when it comes to YcleanZ innovation.
Abstract We discuss the literature on the importance of entry and exit for raising productivity g... more Abstract We discuss the literature on the importance of entry and exit for raising productivity growth. Using micro data for the UK for a period from 1980 to 2000, we find that the share of productivity growth accounted for by entry and exit has increased considerably: from around 25 per cent in the 1980s to around 50 per cent in the 1990s.
Abstract Business support policies designed to raise productivity and employment are common world... more Abstract Business support policies designed to raise productivity and employment are common worldwide, but rigorous micro-econometric evaluation of their causal effects is rare. We exploit multiple changes in the area-specific eligibility criteria for a major program to support manufacturing jobs (“Regional Selective Assistance”). Area eligibility is governed by pan-European state aid rules which change every seven years and we use these rule changes to construct instrumental variables for program participation.
Abstract We exploit new firm-level panel data on “dirty”(internal combustion engine) and “clean”(... more Abstract We exploit new firm-level panel data on “dirty”(internal combustion engine) and “clean”(eg electric and hybrid) patents in the automobile industry across 80 countries. We show that firms tend to innovate relatively more in clean when they face higher tax-inclusive fuel prices and higher R&D subsidies to clean innovation. Furthermore, there is path dependence in the type of innovation both from countrywide spillovers and from the firm's own history of innovation.
The European Commission plans to tighten the greenhouse gas emissions targets in the Emissions Tr... more The European Commission plans to tighten the greenhouse gas emissions targets in the Emissions Trading System. Ralf Martin and colleagues examine the likely impact on affected businesses, and conclude that industry is exploiting concerns about competitiveness to obtain free emission permits according to criteria that are too lax.
Abstract Transport investments can induce positive productivity benefits via agglomeration econom... more Abstract Transport investments can induce positive productivity benefits via agglomeration economies by increasing the scale and efficiency of spatial economic interactions. In assessing the 'agglomeration benefits' of transport investments we need to understand the spatial scale over which these externalities are distributed. This report is concerned with the effect of urban agglomeration on productivity and with how agglomeration externalities diminish with distance from source.
Abstract I propose a new way of dealing with the fact that often only investment but not capital ... more Abstract I propose a new way of dealing with the fact that often only investment but not capital stocks are reported in business micro data sets. Capital stock information is essential to calculate measures of total factor productivity (TFP). Because data on investment is usually available, on the other hand, the standard practice is to apply some perpetual inventory method (PIM). This is not without problems however. A PIM calculation requires many assumptions.
Abstract Considerable policy interest warrants a closer look at small and medium sized firms. Usi... more Abstract Considerable policy interest warrants a closer look at small and medium sized firms. Using an a sample of manufacturing plants from the Annual Respondents Database (ARD). I find that plants owned by small single firms have significantly lower productivity than larger non single plants. Decomposing aggregate productivity growth into the contributions of various plant types, I do not find any evidence for an over proportional contribution of small firm plants. The biggest contribution comes from large multi plant firms.
Abstract Permit auctions are designated to take the place of grandfathering in phase III of the E... more Abstract Permit auctions are designated to take the place of grandfathering in phase III of the EU ETS, but industries at risk of relocating will be exempt from auctioning. Exemption criteria are the industry's carbon and trade intensities. Drawing on interviews with managers of manufacturing firms across Europe, we show that carbon intensity is an accurate metric of leakage risk across sectors whereas trade intensity is not. This leads to overly generous exemptions at the taxpayer's expense.
Raising national productivity is a key aim of the government. But the evidence concerning product... more Raising national productivity is a key aim of the government. But the evidence concerning productivity trends used in successive Budgets and Pre-Budget Reports (PBR) has been largely macroeconomic in nature, most notably in international comparisons of labour and total factor productivity (TFP). Some important insights have arisen from these data.
Abstract Previous research has shown that multinationals (MNEs) and in particular US-owned plants... more Abstract Previous research has shown that multinationals (MNEs) and in particular US-owned plants, are more productive than domestic ones. Existing evidence for the UK has shown that this US advantage is explained by US MNES picking the best plants to takeover and by US owned plants getting higher returns from ICT capital. One possible explanation for the MNE and US advantage is the existence of economies of scale and of scope. However, due to lack of necessary data, this hypothesis could not be tested.
Abstract We estimate the impacts of the Climate Change Levy (CCL) on manufacturing plants using p... more Abstract We estimate the impacts of the Climate Change Levy (CCL) on manufacturing plants using panel data from the UK production census. Our identification strategy builds on the comparison of outcomes between plants subject to the CCL and plants that were granted an 80% discount on the levy after joining a Climate Change Agreement (CCA). Exploiting exogenous variation in eligibility for CCA participation, we find that the CCL had a strong negative impact on energy intensity and electricity use.
At present the USA is-in per capita terms-the top greenhouse gas polluter among the world's major... more At present the USA is-in per capita terms-the top greenhouse gas polluter among the world's major economies. This is mirrored by the high energy intensity of all sectors of the US economy including manufacturing industries. A potential explanation for the higher energy intensity are lower US energy price levels. However, common price elasticity estimates are not high enough to explain the observed differences between countries.
Abstract Climate models predict that the increase in greenhouse gas concentrations is likely to l... more Abstract Climate models predict that the increase in greenhouse gas concentrations is likely to lead to climate change and increased temperatures. The likelihood of extreme weather events will also increase as a consequence. Whilst predictions on the costs of climate change can be made through economic modelling, this study seeks to measure precisely one component of these costs, namely the impact of extreme weather events on economic activity.
When governments design policies to reduce firms' greenhouse gas emissions, are they too lenient ... more When governments design policies to reduce firms' greenhouse gas emissions, are they too lenient on heavy polluters that claim such measures will damage their ability to compete in the global economy? Using European and UK survey data, Ralf Martin, Laure de Preux and Ulrich Wagner assess the UK's experience with the climate change levy.
The net entry contribution to aggregate productivity growth has increased dramatically in the UK ... more The net entry contribution to aggregate productivity growth has increased dramatically in the UK over 1990s according to calculations based on data from the Annual Respondents Database (ARD). Some recent studies have tried to link this to other structural changes over the same period such as increased globalisation and usage of ICT.
Abstract Based on interviews with almost 800 manufacturing firms in six European countries, this ... more Abstract Based on interviews with almost 800 manufacturing firms in six European countries, this study develops a firm level indicator of “clean” that is climate change related innovation and explores the impact of the EU Emissions Trading System on such innovation. We find that the majority of firms engage in some form of climate change related innovation although this is primarily process rather than product innovation.
Abstract When industry compensation is offered to prevent relocation of regulated firms, efficien... more Abstract When industry compensation is offered to prevent relocation of regulated firms, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it to analyze industry compensation rules proposed under the EU Emissions Trading Scheme, which allocate permits for free to carbon and trade intensive industries.
Executive summary UK policy makers increasingly see new technologies related to the mitigation of... more Executive summary UK policy makers increasingly see new technologies related to the mitigation of greenhouse gas (GHG) emissions as a potential source of income growth for the UK economy. In this study we examine a comprehensive international patent database to determine the position of UK innovators relative to global competitors when it comes to YcleanZ innovation.
Abstract We discuss the literature on the importance of entry and exit for raising productivity g... more Abstract We discuss the literature on the importance of entry and exit for raising productivity growth. Using micro data for the UK for a period from 1980 to 2000, we find that the share of productivity growth accounted for by entry and exit has increased considerably: from around 25 per cent in the 1980s to around 50 per cent in the 1990s.
Abstract Business support policies designed to raise productivity and employment are common world... more Abstract Business support policies designed to raise productivity and employment are common worldwide, but rigorous micro-econometric evaluation of their causal effects is rare. We exploit multiple changes in the area-specific eligibility criteria for a major program to support manufacturing jobs (“Regional Selective Assistance”). Area eligibility is governed by pan-European state aid rules which change every seven years and we use these rule changes to construct instrumental variables for program participation.
Abstract We exploit new firm-level panel data on “dirty”(internal combustion engine) and “clean”(... more Abstract We exploit new firm-level panel data on “dirty”(internal combustion engine) and “clean”(eg electric and hybrid) patents in the automobile industry across 80 countries. We show that firms tend to innovate relatively more in clean when they face higher tax-inclusive fuel prices and higher R&D subsidies to clean innovation. Furthermore, there is path dependence in the type of innovation both from countrywide spillovers and from the firm's own history of innovation.
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