New Economics Papers
on Efficiency and Productivity
Issue of 2005‒10‒04
six papers chosen by

  1. Quality of Service, Efficiency, and Scale in Network Industries: An Analysis of European Electricity Distribution By Christian Growitsch
  2. IT, Enterprise Reform and Productivity in Chinese Manufacturing Firms By Kazuyuki Motohashi
  3. The Division of Labour, Worker Organisation, and Technological Change By Borghans,Lex; Weel,Bas,ter
  4. What drives productivity growth in the new EU member states? The case of Poland By Marcin Kolasa
  5. Cross-country efficiency of secondary education provision - a semi-parametric analysis with non-discretionary inputs By António Afonso; Miguel St. Aubyn
  6. How Ownership Structure Affects Capital Structure and Firm Performance? Recent Evidence from East Asia By Nigel Driffield; Vidya Mahambare; Sarmistha Pal

  1. By: Christian Growitsch
    Abstract: Quality of service is of major economic significance in natural monopoly infrastructure industries and is increasingly addressed in regulatory schemes. However, this important aspect is generally not reflected in efficiency analysis of these industries. In this paper we present an efficiency analysis of electricity distribution networks using a sample of about 500 electricity distribution utilities from seven European countries. We apply the stochastic frontier analysis (SFA) method on multi-output translog input distance function models to estimate cost and scale efficiency with and without incorporating quality of service. We show that introducing the quality dimension into the analysis affects estimated efficiency significantly. In contrast to previous research, smaller utilities seem to indicate lower technical efficiency when incorporating quality. We also show that incorporating quality of service does not alter scale economy measures. Our results emphasise that quality of service should be an integrated part of efficiency analysis and incentive regulation regimes, as well as in the economic review of market concentration in regulated natural monopolies.
    Date: 2005–07
  2. By: Kazuyuki Motohashi
    Abstract: This paper is a first attempt of looking into the impact of IT and enterprise reform on productivity of Chinese manufacturing firms by using large scale firm level datasets from 1995 to 2002. It is found that enterprise reforms captured by entry and exit of firms have a positive impact on aggregated productivity growth. In addition, IT plays relatively more important role in productivity performance of post reform enterprises, as compared to enterprises which are not affected by major restructuring in the course of Chinese state owned enterprise reforms.
    Date: 2005–09
  3. By: Borghans,Lex; Weel,Bas,ter (ROA rm)
    Abstract: The model developed in this paper explains differences in the division of labour across firmsas a result of computer technology adoption. We find that changes in the division of labourcan result both from reduced production time and from improved communicationpossibilities. The first shifts the division of labour towards a more generic structure, while thelatter enhances specialisation. Although there exists heterogeneity, our estimates for arepresentative sample of Dutch establishments in the period 1990-1996 suggest thatproductivity gains have been the main determinant for shifts in the division of labour withinmost firms. These productivity gains have induced skill upgrading, while in firms gainingmainly from improved communication possibilities specialisation increased and skillrequirements have fallen.
    Keywords: education, training and the labour market;
    Date: 2005
  4. By: Marcin Kolasa (National Bank of Poland, Warsaw, Poland)
    Abstract: This paper considers productivity developments in the new EU member states and provides evidence on factors driving productivity growth in these countries, focusing on a panel of Polish manufacturing industries. Companies in Poland seem to benefit significantly from transfer of technologies that have been accumulated in more developed economies. By contrast, no strong evidence is found on immediate technology transfer. Another result is a significant effect of domestic innovation activity. There are signs that market reforms also boosted efficiency, whereas the role of reallocation of production factors towards more productive activities was marginal. Bearing in mind all methodological and data-related caveats, as well as cross-country diversity, caution is required while interpreting the findings and extrapolating them to other new member states. However, the results obtained provide some policy implications and make the case for taking into account domestic innovation activity while constructing endogenous growth models for the EU catching-up economies.
    Keywords: Multi-factor productivity; innovation; convergence; new member states; manufacturing.
    JEL: C23 O31 O47
    Date: 2005–05
  5. By: António Afonso (European Central Bank, Kaiserstraße 29, D-60311 Frankfurt am Main, Germany and ISEG/UTL - Technical University of Lisbon; CISEP – Research Centre on the Portuguese Economy, R. Miguel Lupi 20, 1249-078 Lisbon, Portugal); Miguel St. Aubyn (ISEG/UTL - Technical University of Lisbon; UECE – Research Unit on Complexity in Economics, R.Miguel Lupi 20, 1249-078 Lisbon, Portugal)
    Abstract: We address the efficiency of expenditure in education provision by comparing the output (PISA results) from the educational system of 25, mostly OECD, countries with resources employed (teachers per student, time spent at school). We estimate a semi-parametric model of the education production process using a two-stage procedure. By regressing data envelopment analysis output scores on nondiscretionary variables, both using Tobit and a single and double bootstrap procedure, we show that inefficiency is strongly related to GDP per head and adult educational attainment.
    Keywords: Education; technical efficiency; DEA; bootstrap; semi-parametric.
    JEL: C14 C61 H52 I21
    Date: 2005–06
  6. By: Nigel Driffield (Aston Business School); Vidya Mahambare (Cardiff Business School); Sarmistha Pal (Department of Economics & Finance, Brunel University)
    Abstract: Despite the seminal work of Claessens et al. (2002), role of ownership structure on capital structure and firm performance in East Asian corporattions remains much unexplored. Within the framework of Bajaj et al. (1998), the present paper empirically examines the effects of a controlling manager and degree of monitoring (a measure of moral hazard) on capital structure and firm performance among a sample of Korean and Indonesian firms. In doing so, we not only allow for simultaneity between capital structure and firm performance (a la Berger and di Patti, 2003), but also the non-linearity in these relationships. Our empirical results in essence depend on whether a firm is run by a family and also whether there is a manager who is also a controlling owner. There is evidence that family ownership could mitigate the problem of moral hazard though it could exacerbate the problem of over-lending in our samples. Also the effects of ownership structure on firm performance cannot be delineated from its effects on leverage. As such, the results presented here confirm and extend the essential findings of Claessens et al. (2002) and Bajaj et al. (1998).
    Keywords: Asian Crisis, Corporate Governance, Capital structure, Firm performance, Expropriation of minority shareholders, 3SLS estimates, Simultaneity bias, Non-linearity.
    JEL: G32
    Date: 2005–09–27

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