New Economics Papers
on Efficiency and Productivity
Issue of 2005‒04‒16
fourteen papers chosen by

  1. Foreign Technology Transfer and Productivity: Evidence from a Matched Sample By Mahmut Yasar; Catherine J. Morrison Paul
  2. Bank Ownership and Performance By Alejandro Micco; Ugo Panizza; Monica Yañez
  3. Investment climate and total factor productivity in manufacturing: Analysis of Indian states By C.Veeramani; B.N.Goldar
  4. Impact of Ownership Structure on the Performance of China’s Feed Mill Sector, The By Fabiosa, Jacinto F.
  5. Have Price Policies Damaged LDC Agricultural Productivity? By Lilyan E. Fulginiti; Richard K. Perrin
  6. Institutions and Agricultural Productivity in Sub-Saharan Africa By Lilyan E. Fulginiti; Richard K. Perrin; Bingxin Yu
  7. Accounting for Agricultural Decline with Economic Growth in Taiwan By Ling Sun; Lilyan E. Fulginiti; E. Wesley Peterson
  8. Productivity Growth in China: Evidence from Chinese Provinces By Xiang Ao; Lilyan E. Fulginiti
  9. LDC Agriculture: Non-parametric Malmquist productivity indexes By Lilyan E. Fulginiti; Richard K. Perrin
  10. Efficiency of Banks in Regions at Different Stage of European Integration Process By Daniel Stavarek
  11. Public Inputs and Productivty in the Agricultural Sector: A Dynamic Dual Approach By Alejandro Onofri; Lilyan E. Fulginiti
  12. An Allais Measure of Production Sector Waste Due to Quotas By Lilyan E. Fulginiti; Richard K. Perrin
  13. Productivity Measures in the Presence of 'Poorly Priced' Goods By Richard K. Perrin; Lilyan E. Fulginiti

  1. By: Mahmut Yasar; Catherine J. Morrison Paul
    Abstract: This study examines the causal effects of alternative forms of foreign technology transfer on the productivity of manufacturing plants. We use propensity score matching techniques that limit implicit assumptions about plant homogeneity imbedded in standard estimates of such effects, and methods for estimating total factor productivity that accommodate simultaneity and selection biases. We find positive impacts of technology transfer through foreign direct investment and exporting on both total factor and labor productivity of these plants, and using both nearest neighbor and kernel matching methods. Technology transfer through importing, by contrast, impacts labor but not total factor productivity.
    Date: 2005–03
  2. By: Alejandro Micco (Inter-American Development Bank); Ugo Panizza (Inter-American Development Bank); Monica Yañez (Inter-American Development Bank)
    Abstract: This paper builds a new dataset on bank ownership and bank performance covering approximately 50,000 observations for 119 countries over the 1995-2002 period. The paper then uses the dataset to reassess the relationship between bank ownership and bank performance, providing separated estimations for developing and industrial countries. It is found that, while ownership is strongly correlated with performance in developing countries, that ownership is not correlated with performance in industrial countries. In particular, the paper suggests that stateowned banks operating in developing countries tend to have lower profitability and higher costs than their private counterparts, and that the opposite is true for foreign-owned banks (which tend to be characterized by higher profitability and lower costs). We also find that, in developing countries, the entry of foreign banks plays a useful role by making domestic banks more efficient in terms of overhead cost and spreads, although we do not find any effect on profitability of domestic banks.
    Keywords: Banking; Privatization; Ownership; Performance
    JEL: G21 D21
    Date: 2004–11
  3. By: C.Veeramani (Indian Council for Research on International Economic Rela); B.N.Goldar (Indian Council for Research on International Economic Rela)
    Keywords: Investment climate, Total factor productivity, manufacturing, Indian states
    JEL: L D L
  4. By: Fabiosa, Jacinto F.
    Abstract: In the decade of the 1990s, China’s feed sector became increasingly privatized, more feed mills opened, and the scale of operation expanded. Capacity utilization remained low and multi-ministerial supervision was still prevalent, but the feed mill sector showed a positive performance overall, posting a growth rate of 11 percent per year. Profit margin over sales was within allowable rates set by the government of China at 3 to 5 percent. Financial efficiency improved, with a 20 percent quicker turnover of working capital. Average technical efficiency was 0.805, as more efficient feed mills increasingly gained production shares. This study finds evidence that the increasing privatization explains the improved performance of the commercial feed mill sector. The drivers that shaped the feed mill sector in the 1990s have changed with China’s accession to the World Trade Organization. With the new policy regime in place, the study foresees that, assuming an adequate supply of soy meal and an excess capacity in the feed mill sector, it is likely that China will allow corn imports up to the tariff rate quota (TRQ) of 7.2 mmt since the in-quota rate is very low at 1 percent. However, when the TRQ is exceeded, the import duty jumps to a prohibitive out-quota rate of 65 percent. With an import duty for meat of only 10 to 12 percent, China would have a strong incentive to import meat products directly rather than bringing in expensive corn to produce meat domestically. This would be further reinforced if structural transformation in the swine sector would narrow the cost differential between domestic and imported pork.
    Date: 2005–04–04
  5. By: Lilyan E. Fulginiti (University of Nebraska); Richard K. Perrin (University of Nebraska)
    Abstract: This paper examines agricultural policies in 18 developing countries over the period 1961-1985. We measure productivity with both a nonparametric Malmquist index and a production function, confirming previous findings of declining agricultural productivity, but with sufficident inconsistencies as to raise concern about the adequacy of the methods. We nontehless find considerable support for the hypothesis that unfavorable price policies have damaged agricultural performance in these countries.
    Keywords: Agricultural productivity, developing countries, price policies
    JEL: O4 Q1
    Date: 2005–02–28
  6. By: Lilyan E. Fulginiti (University of Nebraska); Richard K. Perrin (University of Nebraska); Bingxin Yu (University of Nebraska)
    Abstract: Agricultural productivity in 41 Sub-Saharan Africa (SSA) countries from 1960 to 1999 is examined by estimating a semi-nonparametric Fourier production frontier. Over the four decades the estimated rate of productivity change was 0.83% per year, although the average rate from 1985-99 was a strong 1.90% per year. Former UK colonies exhibited significantly higher productivity gains than others, while Liberia and countries that had been colonies of Portugal or Belgium exhibited net reductions in productivity. We measure a significant reduction in productivity during political conflicts and wars, and a significant increase in productivity among those countries with higher levels of political rights and civil liberties.
    Keywords: Sub-Saharan Africa, agricultural productivity, institutions, stochastic frontier, Fourier functional form.
    JEL: Q
    Date: 2005–02–28
  7. By: Ling Sun (Providence University); Lilyan E. Fulginiti (University of Nebraska); E. Wesley Peterson (University of Nebraska)
    Abstract: In this paper we propose an empirical model to decompose the evolution of the agricultural GDP share of Taiwan into three components: price changes, factor endowment changes and technological change. The full sample period is 1967 to 1997. The data were first tested to assess whether the time series are nonstationary and cointegrated. After confirming their nonstationarity and cointegrated relation- ship, we then employ an error correction model (ECM) in the empirical estimation to capture the dynamic as well as long-run equilibrium relationship among those economic variables. The results suggest that relative prices have a positive influence on the share of agriculture in GDP in both the long-run and the short-run. An increase in capital per unit of labor, on the other hand, is associated with a smaller agricultural share. This result is consistent with the Rybczynski Theorem. Technical change has been biased in favor of this sector. The strong negative impact of the change in factor endowments seems to dominate any possible positive effect of relative prices and technical change. This result makes a strong case for a Heckscher-Ohlin type model as a basis of understanding the development of the Taiwanese economy.
    Keywords: Taiwan, productivity growth, GDP function, error correction,
    JEL: O4 Q1
    Date: 2005–02–28
  8. By: Xiang Ao (University of Nebraska); Lilyan E. Fulginiti (University of Nebraska)
    Abstract: Young (1995) estimated Total Factor Productivity (TFP) growth for Hong Kong, Taiwan, Singapore and South Korea. He reported moderate growth rates for these four regions. This means that rapid growth of GDP in these four economies is due mainly to fast increase of inputs. Young (2000) also estimated the TFP growth rate of China to be 1.4% per year during the period of 1978 to 1998. Similar to his claim for the four 'Asian Tigers', he concluded that 'the productivity performance of the non-agricultural economy (of China) during the reform period is respectable, but not outstanding.' China's real GDP grew at about 9% every year during that period. Is this extraordinary growth rate only due to factor accumulation? Or is it to a large degree due to improved efficiency and innovations? To answer this question, this study uses a panel dataset of real GDP, capital stock, and labor force for 30 provinces for 1978 to 1998 to estimate the TFP for the Chinese economy. Two approaches are used to estimate the aggregate production technology: a fixed-effects model and a stochastic frontier model. Our results are consistent across models indicating a TFP growth rate of 4.9% and 3.3% respectively. Both estimates are higher than Young's 1.9%. Our estimates also indicate that national average of TFP's contribution to GDP growth amount to 41.3% and 38.7%, respectively. Other results of interest indicate that capital has contributed more than labor to GDP growth and that technological change has been labor using.
    Keywords: Productivity growth, China, provinces, stochastic frontier, TFP, technical change, efficiency change
    JEL: O47 O53
    Date: 2005–02–28
  9. By: Lilyan E. Fulginiti (University of Nebraska); Richard K. Perrin (University of Nebraska)
    Abstract: This paper examines changes in agricultural productivity in18 developing countries over the period 1961-1985. We use the nonparametric, output- based Mamquist index to examine whether the results from such approach confirm results from other methods that have indicated declining agricultural productivity in less developed countries.
    Keywords: Journal of Development Economics, vol. 53 (1997), 373-390
    JEL: O4 Q1
    Date: 2005–02–28
  10. By: Daniel Stavarek (Silesian University - School of Business Administration)
    Abstract: This paper estimates commercial banks’ efficiency in three relatively homogenous groups of countries with different level of economic development and different involvement in the process of European integration. The first group consists of Portugal and Greece, the second group is represented by the Czech Republic, Hungary, Poland and Slovakia and the third group includes Bulgaria and Romania. The paper aims to reveal whether the differences among regions and countries in the stage of European integration and economic situation are visible also in banking efficiency. Thus we test the hypothesis that the higher degree of European economic integration and economic development goes hand in hand with higher baking efficiency. Employing Data Envelopment Analysis on unconsolidated data we evaluate efficiency of banks in a core of their business - financial intermediation - in 2002-2003. Results suggest that differences in banking efficiency exist among analyzed regions and the hierarchy corresponds with the hierarchy of regions and countries in terms of economic development and degree of integration. Thus, low level of financial intermediation efficiency in Central and Eastern European countries may undermine their effort to boost the economic growth and catch-up the forerunning countries. The importance of the efficiency gap is underscored by the fact that only some of the catching-up countries recorded higher growth of efficiency than the forerunners.
    Keywords: efficiency, banks, Data Envelopment Analysis, integration
    JEL: C14 G21
    Date: 2005–02–25
  11. By: Alejandro Onofri (University of Nebraska); Lilyan E. Fulginiti (University of Nebraska)
    Abstract: This paper introduces a dynamic model of productivity measurement based on recent endogenous growth theories. The model presented in this study is based on dynamic duality theory and incorporate public goods (public capital and R&D) as external factors to the firms. It also rationalizes the provision of public inputs by a benevolent social planner that internalizes the effects of them. Moreover, the Le Chatelier principle is extended for this dynamic duality modelin which the public factors are quasi-fixed for the firm and all firm-specific inputs can be adjusted in the long run. Therefore, increasing returns to scale over all inputs can still be tested at the long-run equilibrium perceived by the firm. Additionally, this model permits deriving testable hypotheses related to the two conditions of endogenous growth theory mentioned above. The model is tested with data for the U.S. agricultural sector.
    Keywords: endogenous growth, dynamic productivity, public goods, duality, U.S. agriculture
    JEL: H54 O13 Q16
    Date: 2005–02–28
  12. By: Lilyan E. Fulginiti (University of Nebraska); Richard K. Perrin (University of Nebraska)
    Abstract: In this paper we adapt a partial equilibrium approach of Allais and Diewert to measure the efficiency loss in the producing sector due to quotas. The measure of waste is the additional profits available due to reallocation subject to constraints that the welfare of persons and firms outside the sector is unaffected. An example is presented using the tobacco quota program in the U.S.
    Keywords: deadweight loss, production sector, quotas, waste, Allais
    JEL: Q
    Date: 2005–02–28
  13. By: Richard K. Perrin (University of Nebraska); Lilyan E. Fulginiti (Iowa State University)
    Abstract: The objective of this paper is to present Hickssian general equilibrium approaches to productivity measurement in the presence of market failure.
    Keywords: welfare measure of productivity, general equilibrium, deadweight loss, Hicks, market failure
    JEL: Q
    Date: 2005–02–28
  14. By: Julie Le Gallo (IERSO IFReDE-GRES); Sandy Dall'erba (REAL)
    Abstract: This paper analyzes the evolution of labor productivity disparities among 145 European regions over 1975-2000 according to the concepts of ƒã- and ƒÒ-convergence and emphasizes the importance of including spatial effects and a disaggregated analysis at a sectoral level. We detect a significant -convergence only in aggregate labor productivity and in the services sectors among peripheral regions. We also show that omitting spatial effects leads to biased measures of -convergence. We then estimate a pooled -convergence model including spatial autocorrelation and sectoral differentiation. The results indicate that disparities in productivity levels between core and peripheral regions persist by vary by sector.
    Keywords: convergence, spatial econometrics, labor productivity, sectoral approach
    JEL: O52 R11 R15
    Date: 2005–03–16

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