New Economics Papers
on Efficiency and Productivity
Issue of 2005‒04‒24
nine papers chosen by

  1. The Impact of Farmer-Field-Schools on Knowledge and Productivity: A Study of Potato Farmers in the Peruvian Andes By Erin Godtland; Elisabeth Sadoulet; Alain de Janvry; Rinku Murgai; Oscar Ortiz
  2. What Explains Differences in Efficiency Across Russian Banks? By Styrin Konstantin
  3. X-inefficiency, Moral Hazard, and Bank Failures By Styrin Konstantin
  4. How to Measure the Unobservable: A Panel Technique for the Analysis of TFP Convergence By Adriana Di Liberto; Roberto Mura; Francesco Pigliaru
  5. Exports and Productivity: A Survey of the Evidence fro Firm Level Data By Joachim Wagner
  6. Exports, Foreign Direct Investment, and Productivity: Evidence from German Firm Level Data By Joachim Wagner
  7. Net Capital Flows and Productivity: Evidence from U.S. States By Sebnem Kalemli-Ozcan; Bent E. Sørensen; Ariell Reshef; Oved Yosha
  8. UK Sugar Beet Farm Productivity under Different Reform Scenarios: A Farm Level Analysis By Alan W. Renwick; Cesar L. Revoredo Giha; Mark A. Reader
  9. Analysis of the Impact on UK Sugar Production Efficiency of Reforming the EU Sugar Regime By Alan W. Renwick; Cesar L. Revoredo Giha

  1. By: Erin Godtland (U.S. General Accounting Office); Elisabeth Sadoulet (University of California, Berkeley); Alain de Janvry (University of California, Berkeley); Rinku Murgai (Development Economics Research Group, The World Bank); Oscar Ortiz (International Potato Center, Consultative Group on Agricultural Research)
    Abstract: Using survey-data from Peru, this paper evaluates the impact of a pilot farmer-field-school (FFS) program on farmers' knowledge of integrated pest management(IPM) practices related to potato cultivation. We use both regression analysis controlling for participation and a propensity score matching approach to create a comparison group similar to the FFS participants in observable characteristics. Results are robust across the two approaches as well as with different matching methods. We find that farmers who participate in the program have significantly more knowledge about IPM practices than those in the non-participant comparison group. We also find that improved knowledge about IPM practices has a significant impact on productivity in potato production.
    Keywords: agricultural innovations, agricultural productivity, integrated pest management, potato cultivation,
    Date: 2003–11–01
  2. By: Styrin Konstantin
    Abstract: A bank can be viewed as a firm that uses deposits as inputs to “produce” loans and investments. If a manager does all her best, the bank affords its production possibilities frontier. However, the manager’s incentives may not go in-line with those of the bank’s owners, and this leads to X-inefficiency. The purpose of the research is two-fold. First, we measure the X-inefficiency of Russian banks econometrically using a quarterly panel of financial statements of all Russian banks for the period 1998-2002. Second, we explain the variation in X-inefficiency among Russian banks with a number of determinants such as the diversification of ownership structure, the type of ownership, and the bank size. Our findings suggest inter alia that regulatory authorities should be cautios in interpreting raw X-inefficiency scores: a low level of X-inefficiency may be due to the lack of intermediation rather that due an efficient intermediation.
    Keywords: Russia, Russian banks
    Date: 2005–04–21
  3. By: Styrin Konstantin
    Abstract: Inefficient management is considered as a major factor responsible both for bank failures and X-inefficiency. Using data from financial statements of largest Russian banks for the period immediately preceeding the August 1998 crisis, we tested the hypothesis that the past level of X-inefficiency predicted the probability of failure of a financial institution after August 1998 financial crisis. Our probit/logit regressions suggest that X-inefficiency in the past does not help to predict bank failures, at least, in the August 1998episode. We obtained some indirect evidence that moral hazard from the part of bank owners was among the reasons why bank went bankrupt in the afteemath of August 1998 financial crisis in Russia. The captiveness, or affiliation of a bank with a financial-industrial group exagerrated the adverse effects on failure caused by primary factors such as a high level of foreign debt, the exposure to FX risk, etc. In some sense, more captive banks were more “willing” to fail ceteris paribus, which is consistent with the abundant anecdotal evidence about tunneling and asset stripping by “oligarch” banks in the aftermath of 1998 crisis.
    Keywords: Russia, Russian banks
    Date: 2005–04–21
  4. By: Adriana Di Liberto (Universita' di Cagliari); Roberto Mura (University of York, Università di Cagliari and CRENoS); Francesco Pigliaru (Università di Cagliari and CRENoS)
    Abstract: This paper proposes a fixed-effect panel methodology that enables us to simultaneously take into account both TFP convergence and the traditional neoclassical-type of convergence. We analyse a sample of Italian regions between 1963 and 1993 and find strong evidence that both mechanisms were at work during the process of aggregate regional convergence observed in Italy up to the mid-seventies. Finally, we find that our TFP estimates are highly positively correlated with standard human capital measures, where the latter is not statistically significant in growth regressions. This evidence confirms one of the hypotheses of the Nelson and Phelps approach, namely that human capital is the main determinant of technological catch-up. Our results are robust to the use of different estimation procedures such as simple LSDV, Kiviet-corrected LSDV, and GMM à la Arellano and Bond.
    Keywords: TFP, Panel data, Regional convergence
    JEL: O47 O33 O18 C23
    Date: 2005–01
  5. By: Joachim Wagner (University of Lueneburg)
    Abstract: While the role of exports in promoting growth in general, and productivity in particular, has been investigated empirically using aggregate data for countries and industries for a long time, only recently have comprehensive longitudinal data at the firm level been used to look at the extent and causes of productivity differentials between exporters and their counterparts which sell on the domestic market only. This papers surveys the empirical strategies applied, and the results produced, in 45 microeconometric studies with data from 33 countries that were published between 1995 and 2004. Details aside, exporters are found to be more productive than non-exporters, and the more productive firms self-select into export markets, while exporting does not necessarily improve productivity.
    Keywords: Exports, Productivity, Firm level data, survey
    JEL: F14 D21
    Date: 2005–04–20
  6. By: Joachim Wagner (University of Lueneburg)
    Abstract: This paper presents the first empirical test with German establishment level data of a hypothesis derived by Helpman, Melitz and Yeaple in a model that explains the decision of heterogeneous firms to serve foreign markets either trough exports or foreign direct investment: only the more productive firms choose to serve the foreign markets, and the most productive among this group will further choose to serve these markets via foreign direct investments. Using a non-parametric test for first order stochastic dominance it is shown that, in line with this hypothesis, the productivity distribution of foreign direct investors dominates that of exporters, which in turn dominates that of national market suppliers.
    Keywords: Exports, Foreign Direct Investment, Productivity, Firm level data, Germany, Heterogeneous firms
    JEL: F14 F23 D21
    Date: 2005–04–20
  7. By: Sebnem Kalemli-Ozcan (Department of Economics, University of Houston); Bent E. Sørensen (Department of Economics, University of Houston); Ariell Reshef (New York University); Oved Yosha
    Abstract: We study net capital flows between U.S. states. We present a simple neoclassical model in which total factor productivity (TFP) varies across states and over time and where capital freely moves across state borders. In this framework capital flows to states that experience a relative increase in TFP thus creating net cross-state capital ownership positions. Net ownership positions converge to zero over time in the absence of further TFP movements. While TFP can not be directly observed, we can identify states with high TFP growth as states with high output growth. By comparing the level of personal income to output, we construct indicators of net capital flows into a state. We then examine empirically if the level of net capital flows between states following relative movements in TFP corresponds to the predictions of the model and whether net ownership positions tend to converge to zero. Our empirical results imply large flows of capital between states; for example, we find that a state with annual per capita output growth 1 percent higher than the average state over 10 years would attract capital in the amount of $9,900 per capita over those 10 years. These magnitudes are in close agreement with the predictions of the model. We conclude that frictions associated with borders are likely to be the main explanation for “low” international capital flows.
    Keywords: regional net capital flows, ownership, dividend income, historical income, net factor income.
    JEL: F21 F41
    Date: 2005–04
  8. By: Alan W. Renwick (Land Economy Research Group, Scottish Agricultural College, UK); Cesar L. Revoredo Giha (Department of Land Economy, University of Cambridge); Mark A. Reader (Department of Land Economy, University of Cambridge)
    Abstract: The purpose of this paper is to study the effect that the imminent reform in the European Union (EU) sugar regime may have on farm productivity in the United Kingdom (UK). We perform the analysis on a sample of sugar beet farms representative of all the UK sugar beet regions. To estimate the changes in productivity, we estimate a multi-output cost function representing the cropping part of the farm, which is the component that would be mostly affected by the sugar beet reform. We use this cost function to compute the new allocation of outputs and inputs after the changes in the sugar beet quota and price support. This are subsequently used to compute measures of total factor productivity. Our results show slight decreases in the productivity at the individual farm level under both quota and price support reduction. However, when considering the aggregate level, the reduction in the price support shows significant increases in productivity, in contrast to the results obtained from a reduction in quota.
    Keywords: EU sugar reform; UK agriculture; UK sugar beet production; Multi-output cost function; Total factor productivity
    Date: 2005–02
  9. By: Alan W. Renwick (Land Economy Research Group, Scottish Agricultural College, UK); Cesar L. Revoredo Giha (Department of Land Economy, University of Cambridge)
    Abstract: The purpose of the paper is examining the potential implications for the UK sugar beet sector of the EU sugar regime reform. Although the reform has yet to be formalised, the initial proposals centre on price and quota cuts. Using panel data from the Farm Business Survey for England, the paper estimates two cost functions: one for the sugar enterprise and another for the cropping part of the farm (i.e., excludes any livestock enterprise) and use them to analyse the impacts on profitability and costs of three possible reform scenarios: a 25 per cent cut in UK quota, a 25 per cent cut in price, a 40 per cent cut in price. The results show that the largest gains in terms of economic efficiency would be achieved under the 40 per cent price cut; however, the models suggest that this would also lead to the greatest reduction in production if the fixed costs of producing sugar were not adjusted.
    Keywords: EU sugar reform; UK agriculture; UK sugar beet production; Multi-output cost function.
    Date: 2005–02

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