Browsing by Author "Masso, Jaan"

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Churning and labor productivity in economic crisis, differences between foreign and domestic firms
(2021) Roosaar, Liis; Varblane, Urmas; Masso, Jaan
Our analysis of matched employee-employer data from Estonian firms (years 2006–2013) shows that an increase in labor churning is related to a positive change in labor productivity during an economic crisis. During boom years, churning is related to a negative change in labor productivity. Only in services during the crisis did foreign firms have a stronger positive relationship between labor churning and labor productivity changes than domestic firms. However, our analysis at the individual level does not confirm that, during a crisis, foreign firms in services hire more employees with characteristics that have been found to be related to productivity increases.
Eesti teaduse rahastamise rahvusvaheline võrdlevanalüüs
(2013) Ukrainski, Kadri; Kanep, Hanna; Masso, Jaan
Käesoleva raporti eesmärgiks on rahvusvahelise võrdlevanalüüsi kaudu anda poliitikasoovitusi Eesti teaduse finantseerimise kohta. Raportis püütakse anda vastused küsimustele, kuidas tagada et uued ja arenevad, samuti ka riigile strateegiliselt olulised teadusvaldkonnad saaksid riigipoolse rahastuse sealjuures jälgides, et konkurentsipõhiste meetmete pakett süsteemis ei muutuks riigi seisukohast võttes liiga kalliks administreerida. Lisaks eeltoodule püütakse vastata küsimusele, kuidas kujundada tasakaalu oluliste teadussuundade sihipärase arendamise ja lühiajaliste projektipõhiste finantseerimisvõimaluste vahel (et viimased ei hakkaks domineerima pikaajaliste eesmärkide üle). Pikaajalisi eesmärke uuritakse raportis riikide teadus-, arendustegevuse ja innovatsiooni (TAI) strateegiate alusel, viies need kokku riikide avaliku ja erasektori poolse TA finantseerimise kontekstis. Raportis koondatakse tähelepanu ka väikeriigi rollile Euroopa teaduse integratsiooniprotsessides.
The effect of technological innovation on age-specific labour demand
(2021) Jafarova, Sevil; Gurzaliyeva, Ulkar; Masso, Jaan
This research examines the relationship between technological innovation and age-specific labour demand at firm level. The research supports the hypothesis of age-biased technological innovation. A combined panel data set of Estonian firms is used in the study that merges three different data sets – Community Innovation Survey, Business Registry data, Estonian Tax and Customs Office data – consisting of 5,785 unique firms over the period of 2006–2016. This paper uses a constant elasticity of substitution production function to derive a labour demand equation for perfectly competitive firms and the System GMM approach to analyse a panel data set. The results are in accordance with the theoretical expectations that there is a significant positive impact of technological innovation on total employment at firm level and a negative relationship between innovation and the employment of older employees. However, the latter finding is the case only in low-tech firms. Moreover, adding organizational innovation to our estimation equations increased the coefficients of product innovation slightly; however, all estimations show that both product and process innovations do not have an age-specific impact on labour demand in the long run.
Effects of automation on the gender pay gap: the case of Estonia
(2021) Pavlenkova, Ilona; Alfieri, Luca; Masso, Jaan
This paper investigates how investments in automation-intensive goods affects the gender pay gap. The evidence on the effects of automation on the labour market is growing; however, little is known about the implications of automation for the gender pay gap. The data used in the paper are from a matched employer-employee dataset incorporating detailed information on firms, their imports, and employee-level data for Estonian manufacturing and services employers for 2006–2018. We define automation using the imports of intermediates embedding automation technologies. The effect of automation is estimated using simple Mincerian wage equations and the causality of the effect is validated using propensity score matching. We find that introducing automation enlarges the gender pay gap. The negative effect of importing automation-intensive goods for female employees is about two to four percentage points larger than for male employees. The propensity score matching confirms that the introduction of automation has a higher causal effect on the wages of male employees than female employees.
Joining and exiting the value chain of multinationals and the performance of suppliers: evidence from inter-firm transaction data
(2022) Masso, Jaan; Vahter, Priit
This paper investigates the productivity effects for domestic suppliers from joining and exiting the value chains of multinational enterprises (MNEs). The vast majority of prior literature has relied on sector-level input-output tables in estimating the effects of vertical linkages of FDI. Instead, our econometric analysis of the creation and destruction of backward linkages of MNEs is based on information on firm-to-firm transactions recorded in the valued added tax declarations data. Treatment analysis based on propensity score matching and panel data from Estonia suggests that starting to supply multinationals initially boosts the value added per employee of domestic firms, including effects on the scale of production and the capital-labour ratio. These first linkages to MNEs do not affect the total factor productivity (TFP) of domestic firms, suggesting that TFP effects take time to materialise. We further find that there are limits to the wider diffusion of the effects of linkages to MNEs. We find no significant positive effects on the second-tier suppliers: the positive effects are limited to the first-tier suppliers with direct links to MNEs. One novel result is the evidence that the productivity of suppliers does not fall, on average, after decreasing or ending supplier relationships with MNE customers.
Labour reallocation in transition countries: efficiency, restructuring and institutions
(2005) Masso, Jaan; Eamets, Raul, juhendaja; Karma, Otto, juhendaja
Predicting company innovativeness by analysing the website data of firms: a comparison across different types of innovation
(2022) Sõna, Sander; Masso, Jaan; Sharma, Shakshi; Vahter, Priit; Sharma, Rajesh
This paper investigates which of the core types of innovation can be best predicted based on the website data of firms. In particular, we focus on four distinct key standard types of innovation – product, process, organisational, and marketing innovation in firms. Web-mining of textual data on the websites of firms from Estonia combined with the application of artificial intelligence (AI) methods turned out to be a suitable approach to predict firm-level innovation indicators. The key novel addition to the existing literature is the finding that web-mining is more applicable to predicting marketing innovation than predicting the other three core types of innovation. As AI based models are often black-box in nature, for transparency, we use an explainable AI approach (SHAP - SHapley Additive exPlanations), where we look at the most important words predicting a particular type of innovation. Our models confirm that the marketing innovation indicator from survey data was clearly related to marketing-related terms on the firms' websites. In contrast, the results on the relevant words on websites for other innovation indicators were much less clear. Our analysis concludes that the effectiveness of web-scraping and web-text-based AI approaches in predicting cost-effective, granular and timely firm-level innovation indicators varies according to the type of innovation considered.
Productivity gains from labour churning in economic crisis: do foreign firms gain more?
(2020) Roosaar, Liis; Varblane, Urmas; Masso, Jaan
The purpose of this paper is to clarify whether domestic or foreign firms gained more from labour churning while adjusting to the Great Recession in Estonia. During times of high unemployment, all firms can raise their requirements for new employees, but in times of crisis foreign firms may have more resources available for restructuring. We analysed matched employee-employer data from Estonian firms from 2006 to 2013, and show that an increase in labour churning is related to a positive change in labour productivity during economic crisis. During boom years churning is related to a negative change in labour productivity. In both cases a slightly upward convex pattern can be noticed. Only in services during the crisis did foreign firms have a stronger positive relationship between labour churning and labour productivity changes than domestic firms. However, our analysis at the individual level does not confirm that during a crisis foreign firms hire more employees with characteristics that have been found to be related to productivity increases. We also show empirically that hiring employees who relatively often change jobs is negatively related to changes in labour productivity. In light of the world-wide virus-related crisis of 2020, this paper proves that economic downturns can be a good opportunity to restructure the pool of employees.
Productivity implications of R&D, innovation, and capital accumulation for incumbents and entrants: the case of Estonia
(2021) Masso, Jaan; Tiwari, Amaresh
In this paper, using Estonian Community Innovation Survey data, we study the role of R&D, capital accumulation, and innovation output on pro- ductivity for entrants and incumbents. We find that the impact of R&D invest- ment on labour productivity is larger for the entrants compared to the incum- bents. Entrants are found to be more productive and more heterogeneous in their total factor productivity (TFP) than the incumbents. Moreover, entrants who innovate are on average, in terms of TFP, 25% more productive than the entrants who do not, while the corresponding figure for the incumbents is 7%. In addition, it is mostly the incumbents who benefit from within-industry knowledge that is produced outside their own firm. Finally, for both entrants and incumbents, em- bodied technological change through capital accumulation is found to be more effective in generating productivity growth than R&D expenditure.
The role of firms in the gender wage gap
(2020) Masso, Jaan; Meriküll, Jaanika; Vahter, Priit
Recent research suggests that firm-level factors play a significant role in the gender wage gap. This paper adds to this literature by analysing the role of sorting between firms and bargaining within firms using the methodology of Card et al. (2016). We employ linked employer-employee data for the whole population of firms and employees from Estonia for 2006–2017. Estonia is a country with the highest gender wage gap in the EU with about two-thirds of that unexplained by conventional factors. The results show that firm-level factors are important determinants of the gender wage gap, explaining as much as 35% of the gap. We find that within-firm bargaining plays a larger role in the gender wage gap than similar prior papers. This could be related to lenient labour market institutions, as reflected in low minimum wages and union power, and to lower bargaining skills of women. Further, the role of firm-level factors in the gender wage gap have increased over time, and these are especially important at the top of the wage distribution and among workers that are more skilled. There is a heavy penalty for motherhood in wages, 4–9 log points, but this is not related to firm-specific time-invariant productivity premiums.
Teaduse-arendustegevuse ja innovatsiooni indikaatorid Eesti innovatsiooni- ja teaduspoliitikas: senine praktika ja poliitikasoovitused
(2013) Masso, Jaan; Liik, Margo; Ukrainski, Kadri
Käesoleva raporti eesmärgiks on anda panus Eesti poliitikakujundajatele innovatsiooni indikaatorite kasutamiseks nii uue programmiperioodi (2014-2020) teadus- ja arendustegevuse strateegias kui ka erinevate innovatsiooni ning teadus-arendustegevuse meetmete juures. Seda eesmärki on raportis üritatud saavutada läbi kolme tegevuse. Raporti teises peatükis tutvustatakse üldiseid indikaatorite koostamise metoodika põhimõtteid ja analüüsitakse Eesti senise teadus- ja arendustegevuse strateegia (perioodi 2007-2013) täitmist indikaatorite kaupa. Raporti kolmandas peatüki analüüsitakse uuritakse teadus- ja arendustegevuse panust erinevate tehnoloogilise tasemega majandusharude tegevusedukusse OECD riikides (sealhulgas ka Eestis) leidmaks milliseid võiksid olla teadus-arendustegevuse ja innovatsioonipoliitika rõhuasetused erinevates majandusharudes. Raporti neljanda osa eesmärk on pakkuda välja üks võimalik eeskiri (algoritm) indikaatorite valikuks teadus-arendustegevuse poliitikasse, mis arvestaks indikaatoritele esitatavaid erinevaid nõudeid, vähendaks vastava protsessi subjektiivsust ja oleks põhimõtteliselt rakendatav erinevatel tasanditel (indikaatorite valikuks nii strateegiatesse kui ka konkreetsetesse poliitikameetmetesse).