New Economics Papers
on Efficiency and Productivity
Issue of 2005‒03‒20
six papers chosen by

  1. Increasing Returns, Input-Output Linkages, and Technological Leapfrogging By Gallo, Fredrik
  2. Land Fragmentation and its Implications for Productivity: Evidence from Southern India By Raghbendra Jha; Hari K. Nagarajan; Subbarayan Prasanna
  3. Ownership Change, Productivity, and Human Capital: New Evidence from Matched Employer-Employee Data in Swedish Manufacturing By Donald S. Siegel; Kenneth L. Simons; Tomas Lindstrom
  4. A Recursive Thick Frontier Approach To Estimating Production Efficiency By Rien Wagenvoort; Paul Schure
  5. Distance to the Efficiency Frontier and FDI Spillovers By Klara Sabirianova Peter; Jan Svejnar; Katherine Terrell
  6. Labour productivity, ICT and regions: The revival of Italian “dualism”? By Simona Iammarino; Cecilia Jona-Lasini; Susanna Mantegazza

  1. By: Gallo, Fredrik (Department of Economics, Lund University)
    Abstract: Firms agglomerate in one region due to increasing returns, input-output linkages and transportation costs. In the de-industrialised region factor prices are lower and a new technology may be profitable to adopt in that region instead, inducing a change in the technological leadership. This paper shows that the risk of locking in to an old technology is monotonically increasing in the benefits of agglomeration. Greater incompatibility between technologies also increases the risk of rejecting potentially superior manufacturing processes.
    Keywords: agglomeration; lock-in; new economic geography; technological leapfrogging
    JEL: F12 F43 O33
    Date: 2005–03–11
  2. By: Raghbendra Jha; Hari K. Nagarajan; Subbarayan Prasanna
    Keywords: Length (pages): 37
    Date: 2005
  3. By: Donald S. Siegel (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA); Kenneth L. Simons (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA); Tomas Lindstrom (National Institute of Economic Research, Box 3116, SE-103 62 Stockholm, Sweden)
    Abstract: Empirical studies of the impact of changes in ownership of manufacturing plants on productivity (e.g., Lichtenberg and Siegel (1987, 1990a, 1990b), McGuckin and Nguyen (1995, 2001), and Maksimovic and Phillips (2001)) have provided limited evidence on how such transactions affect investment in human capital and have been based strictly on U.S. and U.K. data. We attempt to fill these gaps, based on an analysis of matched employer-employee data from over 19,000 Swedish manufacturing plants for the years 1985-1998. The sample covers virtually the entire population of manufacturing plants with 20 or more employees and a probability-based sample of smaller plants. We assess whether there are differential effects on productivity and human capital for different types of ownership changes, such as partial and full acquisitions and divestitures, and related and unrelated acquisitions. Our results suggest that ownership change results in an increase in relative productivity. We also find that plants involved in these transactions experience increases in average employee age, experience, and the percentage of employees with a college education. Ownership change also leads to an increase in wages and a reduction in the percentage of female workers. All of these patterns emerge most strongly for full acquisitions and divestitures and unrelated acquisitions.
    JEL: G34 D24 C81
    Date: 2005–03
  4. By: Rien Wagenvoort (European Investment Bank, Luxembourg); Paul Schure (Department of Economics, University of Northern B.C.)
    Abstract: We introduce a new panel data estimation technique for cost and production functions: the Recursive Thick Frontier Approach (RTFA). RTFA has two advantages over existing thick frontier methods. First, technical inefficiency is allowed to be dependent on the explanatory variables of the frontier model. Secondly, no distributional assumptions are imposed on the inefficiency component of the error term. We show by means of simulation experiments that RTFA can outperform the popular stochastic frontier approach (SFA) and the “within” OLS estimator for realistic parameterisations of the productivity model.
    Keywords: Technical Efficiency, Efficiency Measurement, Frontier Production Functions, Recursive Thick Frontier Approach
    JEL: C15 C23 C50 D2
    Date: 2005–03–11
  5. By: Klara Sabirianova Peter; Jan Svejnar; Katherine Terrell
    Abstract: We establish that domestically owned firms in two alternative models of emerging market economies, the Czech Republic and Russia, have not been converging to the technological frontier set by foreign owned firms. In both countries, the distance of domestic firms to the frontier grew (in all parts of the distribution) from 1992-1994 to 1995-1997 and did not change from 1995-1997 to 1998-2000. However, the distance to the frontier is orders of magnitude greater in Russia than in the Czech Republic throughout 1992-2000. We also find in both countries that domestic firms in industries with a greater share of foreign firms are falling behind more than domestic firms in industries with a smaller foreign presence. However, in the Czech Republic this “negative spillover” effect is diminished over time, whereas in Russia it continues to cause domestic firms to fall further behind. On the other hand, we find in both countries that foreign firms experience positive spillovers from other foreign firms operating in the same product market. This evidence on the dynamics of efficiency is consistent with the view that economies (firms) need to be more technologically advanced and open to competition in order to be able to gain from foreign presence.
    Keywords: foreign direct investment, productivity, convergence, frontier, knowledge spillovers, Czech Republic, Russia.
    JEL: C33 D20 F23 G32 L20 O33
    Date: 2004–09–01
  6. By: Simona Iammarino (SPRU, University of Sussex); Cecilia Jona-Lasini (Italian National Institute of Statistics (ISTAT), Rome, Italy); Susanna Mantegazza (Italian National Institute of Statistics (ISTAT), Rome, Italy)
    Abstract: Among the reasons underlying the slow economic convergence of some regions towards the national and the European Union average, the strong gap in technological endowment and innovation capacity has been indicated as one of the most important factors. The requirements of the current ‘knowledge-based economy’ and the contribution of Information and Communication Technology (ICT) to socio-economic change are very likely to have a significant impact upon regional differentials in the European Union. So far, however, it is rather unclear whether the new paradigm will spur greater socio-economic cohesion or, on the contrary, stronger territorial polarisation. This paper looks at the distribution of ICT-producing small and medium enterprises in Italy, comparing structural variables – in particular spatial and sectoral dimensions - with labour productivity levels. Ultimately, the objective is to shed some light on the role that ICT-producing firms might play with respect to regional gaps in the Italian economy, traditionally characterised by geographical polarisation and imbalances which are among the most striking in the “Europe of regions”. The first result of our analysis (carried out by using experimental micro data) is that a linkage seems to emerge between high labour productivity and the IT industry. This is in line with the insights of the economic theory of technical change, suggesting that IT-producing sectors are those where gains in productivity are by far the most evident. As expected, the geographical location of firms accounts for a good deal when looking at labour productivity levels across sectors, casting some concern on the development perspectives of the Italian regional divide.
    Keywords: regional development, Italy, Information and Communication Technology (ICT), small and medium enterprises, productivity
    JEL: R11 L63
    Date: 2004–11–10

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