New Economics Papers
on Efficiency and Productivity
Issue of 2006‒01‒01
four papers chosen by

  1. Developing new approaches to measuring NHS outputs and productivity By Mary OMahony; Philip Stevens; Lucy Stokes; Pete Loveridge
  2. Measuring Aggregate Productivity Growth Using Plant-Level Data By Amil Petrin; James Levinsohn
  3. Italy’s Decline: Getting the Facts Right By Francesco Daveri; Cecilia Jona-Lasinio
  4. Measuring the impact of the investment climate on total factor productivity : the cases of China and Brazil By Lee, Kihoon; Anderson, William P.; Subramanian, Uma

  1. By: Mary OMahony; Philip Stevens; Lucy Stokes; Pete Loveridge
    Abstract: In March 2004 the Department of Health commissioned a research team from the Centre for Health Economics at the University of York and the National Institute for Economic and Social Research to develop new approaches to measuring NHS outputs and productivity. The research objectives were development of: 1)A comprehensive measure of NHS outputs and productivity. 2) Methods to facilitate regular in-year analysis of NHS productivity. 3) Output measures capable of measuring efficiency and productivity at subnational levels.
    Date: 2005–12
  2. By: Amil Petrin; James Levinsohn
    Abstract: We define productivity growth as the change in welfare that arises from additional output holding primary inputs constant. Using this traditional growth-accounting definition, we show that gains may arise because of plant-level technology shocks, and, in imperfectly competitive settings, from the reallocation of inputs across plants with differing markups and/or shadow values of primary inputs. With plant-level data, the alternative and most popular definition of productivity growth looks at the difference in the first moments of the productivity distribution. We show that this definition adds an additional term to the growth-accounting measure, which has been called “reallocation.” We show there is a very weak relationship between the two indexes in almost every 3-digit manufacturing industry in both Chile from 1987-1996 and Colombia from 1981-1991 - 49 in total - primarily because this “reallocation” term is large and volatile. We explore the theoretical reasons for this sharp divergence, in the process uncovering a number of previously unnoticed and unattractive features of the first-moment definition. For example, it is not tethered to any theoretical model, it is sensitive to measured units, and it can report positive productivity growth when welfare has fallen.
    JEL: L0
    Date: 2005–12
  3. By: Francesco Daveri; Cecilia Jona-Lasinio
    Abstract: The Italian economy is often said to be on a declining path. In this paper, we document that: (i) Italy’s current decline is a labor productivity problem (ii) the labor productivity slowdown stems from declining productivity growth in all industries but utilities (with manufacturing contributing for about one half of the reduction) and diminished interindustry reallocation of workers from agriculture to market services; (iii) the labor productivity slowdown has been mostly driven by declining TFP, with roughly unchanged capital deepening. The only mild decline of capital deepening is due to the rise in the value added share of capital that counteracted declining capital accumulation.
  4. By: Lee, Kihoon; Anderson, William P.; Subramanian, Uma
    Abstract: This study measures the impact of investment climate factors on total factor productivity (TFP) of firms in Brazil and China. The analysis is conducted in two steps: first an econometric production function is estimated to produce a measure of TFP at the firm level. In the second step, variation in TFP across firms is statistically related to a indicators of the investment climate as well as firm characteristics. The results yield a number of insights about the factors underlying productivity. In both countries, and in a variety of industry groups, indicators of poor investment climate, especially delays in customs clearance and interruptions in utility services, have significant negative effects on TFP. Reducing customs clearance time by one day in China could increase TFP by 2-6 percent. Indicators such as email usage have positive effects on TFP. In the case of China, state-owned firms and firms located in t he interior are shown to be much less productive than privately owned firms and firms located in the east. In Brazil, the results present an interesting contrast between the apparel industry and the electronics industry. In the apparel industry, older firms in competitive markets are more productive, while in the case of electronics, newer firms with higher market shares are more productive.
    Keywords: Economic Theory & Research,Technology Industry,Water and Industry,ICT Policy and Strategies,Economic Growth
    Date: 2005–12–01

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