nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2005‒05‒23
seven papers chosen by
Angelo Zago
Universitá degli Studi di Veroa

  1. La SAMEA y la eficiencia económica y ambiental en España By Gaspar J. Llanes Díaz- Salazar; Manuel Alejandro Cardenete; Carmen Rodríguez Morilla
  2. Productivity and the post-1990 U.S. economy By Ellen R. McGrattan; Edward C. Prescott
  3. Productivity spillovers, terms of trade, and the "home market effect" By Giancarlo Corsetti; Philippe Martin; Paolo Pesenti
  4. The Sources of the Productivity Rebound and the Manufacturing Employment Puzzle By William Nordhaus
  5. "Productivity Convergence at the Firm Level" By Kiyohiko G. Nishimura; Takanobu Nakajima; Kozo Kiyota
  6. Shadow Profit Maximization and a Generalized Measure of Inefficiency By Subhash C. Ray
  7. Efficienza di Costo e Profitto nel Sistema Bancario Italiano (1994-2000). Rilevanza degli Aspetti Istituzionali, Geografici e Dimensionali nella Dinamica Evolutiva By Luca Giordano; Antonio Lopes

  1. By: Gaspar J. Llanes Díaz- Salazar (Univesidad Pablo de Olavide); Manuel Alejandro Cardenete (Univesidad Pablo de Olavide); Carmen Rodríguez Morilla (Univesidad de Sevilla)
    Abstract: This paper aims to show the utility of the so-called Social Accounting Matrix and Environmental Accounts (SAMEA) for economic and environmental efficiency analysis. The article use the SAMEA for Spain in 2000, applied to the water resource and to greenhouses gases emissions. The estimation has been made from official data of the INE. This matrix is used like central core of a multisectorial model of the economic and environmental performance, and is calculated, what have been called "domestics multipliers SAMEA" and their decomposition into characteristic, direct, indirect and induced effects. These multipliers show some of the valuation economic and environmental efficiency. Also, is made an application of these multipliers that allows to appreciate that there is no causal interrelation between the sectors with a higher economic backward linkages and higher environmental deterioration backward linkages.
    Keywords: Input-Output Models; Evaluation of Environmental Effects; Air Pollution; Environmental Accounting
    JEL: C68 Q51 Q52 Q56
    Date: 2005
  2. By: Ellen R. McGrattan; Edward C. Prescott
    Abstract: In this paper, we show that ignoring corporate intangible investments gives a distorted picture of the post-1990 U.S. economy. In particular, ignoring intangible investments in the late 1990s leads one to conclude that productivity growth was modest, corporate profits were low, and corporate investment was at moderate levels. In fact, the late 1990s was a boom period for productivity growth, corporate profits, and corporate investment.
    Date: 2004
  3. By: Giancarlo Corsetti; Philippe Martin; Paolo Pesenti
    Abstract: This paper analyzes the welfare implications of international spillovers related to productivity gains, changes in market size, or government spending. We introduce trade costs and endogenous varieties in a two-country general-equilibrium model with monopolistic competition, drawing a distinction between productivity gains from manufacturing efficiency and those related to firms' lower cost of entry or product differentiation. Our model suggests that countries with lower manufacturing costs have higher GDP but supply a smaller number of goods at a lower international price. Countries with lower entry and differentiation costs also have higher GDP, but supply a larger array of goods at improved terms of trade. The sign of the international welfare spillovers depends not only on terms of trade, but also on consumers' taste for variety. Higher domestic demand has macroeconomic implications that are similar to those of a reduction in firms' entry costs.
    Keywords: Productivity ; Manufactures ; Gross domestic product ; Supply and demand
    Date: 2005
  4. By: William Nordhaus
    Abstract: Productivity has rebounded in the last decade while manufacturing employment has declined sharply. The present study uses data on industrial output and employment to examine the sources of these trends. It finds that the productivity rebound since 1995 has been widespread, with approximately two-fifths of the productivity rebound occurring in New Economy industries. Moreover, after suffering a slowdown in the 1970s, productivity growth since 1995 has been at the rapid pace of the earlier 1948-73 period. Finally, the study investigates the relationship between employment and productivity growth. If finds that the relevant elasticities indicate that more rapid productivity growth leads to increased rather than decreased employment in manufacturing. The results here suggest that productivity is not to be feared - at least not in manufacturing, where the largest recent employment declines have occurred. This shows up most sharply for the most recent period, since 1998. Overall, higher productivity has led to lower prices, expanding demand, and to higher employment, but the partial effects of rapid domestic productivity growth have been more than offset by more rapid productivity growth and price declines from foreign competitors.
    JEL: O4 E1
    Date: 2005–05
  5. By: Kiyohiko G. Nishimura (Policy Board, Bank of Japan); Takanobu Nakajima (Faculty of Business and Commerce, Keio University); Kozo Kiyota (Faculty of Business Administration, Yokohama National University)
    Abstract: Productivity convergence among countries has been investigated extensively with mixed results. This paper extends the analysis to the firm level to shed light on the debate of convergence or non-convergence. We find productivity convergence among firms widely in Japan, in both manufacturing industries and non-manufacturing ones. We obtain these results taking explicit account of exiting firms as a source of selection biases. The convergence rate is much faster among firms than countries. We also find that there are substantial differences among industries in the convergence speed. IT industries that heavily rely on technological progress show faster rates of convergence.
    Date: 2005–05
  6. By: Subhash C. Ray (University of Connecticut)
    Abstract: Determining the profit maximizing input-output bundle of a firm requires data on prices. This paper shows how endogenously determined shadow prices can be used in place of actual prices to obtain the optimal input-output bundle where the firm.s shadow profit is maximized. This approach amounts to an application of the Weak Axiom of Profit Maximization (WAPM) formulated by Varian (1984) based on shadow prices rather than actual prices. At these prices the shadow profit of a firm is zero. Thus, the maximum profit that could have been attained at some other input-output bundle is a measure of the inefficiency of the firm. Because the benchmark input-output bundle is always an observed bundle from the data, it can be determined without having to solve any elaborate programming problem. An empirical application to U.S. airlines data illustrates the proposed methodology.
    Keywords: DEA, Shadow Prices, Non-radial Efficiency
    JEL: C61 D21
    Date: 2005–05
  7. By: Luca Giordano; Antonio Lopes
    Abstract: Il sistema bancario italiano e' stato interessato da un profondo processo di ristrutturazione a partire dagli anni novanta. Gli esiti della liberalizzazione del settore e del conseguente fenomeno di concentrazione sono tuttora non completamente indagati. Questo lavoro utilizza tecniche econometriche di costruzione di frontiere stocastiche al fine di misurare l'evoluzione dell'efficienza di costo e di profitto delle banche italiane negli anni 1994-2000. I risultati mostrano un significativo processo di convergenza verso la frontiera efficiente per quanto riguarda i prodotti ed una sostanziale invarianza nel tempo per quanto riguarda l'efficienza di costo. Si osserva anche il permanere di significativi differenziali di efficienza tra banche localizzate in diverse aree geografiche e una dinamica dell'efficienza di costo e profitto che per le banche Popolari e Cooperative si discosta in modo marcato da quelle Spa.
    Date: 2005–05

This nep-eff issue is ©2005 by Angelo Zago. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.