New Economics Papers
on Efficiency and Productivity
Issue of 2006‒02‒26
eight papers chosen by

  1. The Effects of Entry on Incumbent Innovation and Productivity By Philippe Aghion; Richard Blundell; Rachel Griffith; Peter Howitt; Susanne Prantl
  2. Assessing Economic Performance among North American Manufacturing Establishments, 1870/71: Data, Methodology and Measurement Issues By Kris Inwood; Ian Keay
  3. Are Multinational Enterprises More Productive? A Test of the Selection Hypothesis By Yukako Murakami
  4. Gli effetti del capitale pubblico sulla produttivitá delle regioni italiane By Emanuela Marrocu; Raffaele Paci; Francesco Pigliaru
  5. Efficiency Analysis of East European Electricity Distribution in Transition : Legacy of the Past ? By Astrid Cullmann; Jürgen Apfelbeck; Christian von Hirschhausen
  6. Inward Foreign Direct Investments and Productivity Growth in Japan By Yukako Murakami; Kyoji Fukao
  7. New Measures of Port Efficiency Using International Trade Data By Bruce A. Blonigen; Wesley Wilson
  8. Board structure, Ownership structure, and Firm performance : Evidence from Banking By Mohamed Belkhir

  1. By: Philippe Aghion; Richard Blundell; Rachel Griffith; Peter Howitt; Susanne Prantl
    Abstract: How does firm entry affect innovation incentives and productivity growth in incumbent firms? Micro-data suggests that there is heterogeneity across industries--incumbents in technologically advanced industries react positively to foreign firm entry, but not in laggard industries. To explain this pattern, we introduce entry into a Schumpeterian growth model with multiple sectors which differ by their distance to the technological frontier. We show that technologically advanced entry threat spurs innovation incentives in sectors close to the technological frontier--successful innovation allows incumbents to prevent entry. In laggard sectors it discourages innovation--increased entry threat reduces incumbents' expected rents from innovating. We find that the empirical patterns hold using rich micro-level productivity growth and patent panel data for the UK, and controlling for the endogeneity of entry by exploiting the large number of policy reforms undertaken during the Thatcher era.
    JEL: E2
    Date: 2006–02
  2. By: Kris Inwood (University of Guelph); Ian Keay (Queen's University)
    Abstract: A number of conceptually robust and empirically practical approaches are available to assess relative economic performance among producers who operate on either side of an international border. In this paper we discuss the impact that data compilation, methodological choice, and variable definitions may have on the quantitative and qualitative assessment of cross-border performance comparisons. As an illustrative example we use manuscript census data from 1870/71 to compare total factor productivity (TFP) among a sample of manufacturing establishments located along the Canada-US border. We briefly discuss issues associated with the preparation of manuscript census data for the measurement of cross-border TFP differentials and the establishment of industry selection criteria. We also review TFP measurement techniques, such as growth accounting calculations, cost and production function index number approaches, and econometric estimation. However, the central focus of the paper is an investigation of the impact that variable definitions have on our assessment of TFP performance. In particular, we probe the relationship between the size of cross-border TFP differentials and the reliance on a variety of common definitions for labour, capital, output, input weights, and prices.
    Keywords: Productivity Measurement, International Performance Comparisons, North American Industrialization
    JEL: N01 N61 O14 O47
    Date: 2006–02
  3. By: Yukako Murakami
    Abstract: This paper investigates whether differences in productivity explain why some Japanese manufacturing firms sell only in the domestic market, while others serve foreign markets, either through exports, overseas production, outsourcing or licensing. Using firm level data, it is shown empirically that the productivity of multinational firms differs significantly from that of firms that sell only in the domestic market. It shows therefore that the heterogeneous productivity levels explain the channels of multinational enterprises.
    Keywords: FDI, exports, outsourcing, licensing, TFP
    JEL: F2
    Date: 2006–02
  4. By: Emanuela Marrocu; Raffaele Paci; Francesco Pigliaru
    Abstract: This paper investigates the role played by public capital in increasing the productivity levels in Italy. For the construction of the regional series for the public capital over the period 1996-2002, the study benefits from the use of the rich dataset on public expenditure, recently published by the Dipartimento per le Politiche di Sviluppo of the Italian Ministry of Economy and Finance. On the basis of estimated panel production functions the results point out that public capital has a positive and significant effect on production. Moreover, the effects of all production factors vary considerably between the Centre-Northern regions and the Southern regions of the country. In particular, while private capital is more effective in the South, public capital and labour exhibits elasticities much higher in the Centre-North with respect to the Mezzogiorno. The disaggregation of public capital in economic categories signals a significant different impact in the two macroareas. When the analysis is carried out by distinguishing among government levels it turns out that the decentralized administrative bodies are much less efficient in the South in delivering public expenditure.
    Keywords: public capital, production function, regional disparities, Italy
    JEL: C23 D24 O47
    Date: 2006
  5. By: Astrid Cullmann; Jürgen Apfelbeck; Christian von Hirschhausen
  6. By: Yukako Murakami; Kyoji Fukao
    Abstract: Firstly, this paper shows that before M&A the foreign firms value the facility and scale economy in target firms which have greater capital stock and sales in the host country. Secondly, out-in M&A firms acquired by foreign firms saw an improvement in their business efficiency after the acquisition. This finding suggests that out-in M&As involve a transfer of business resources or technological knowledge that help to further lift the efficiency of firms.
    Keywords: FDI, Total Factor Productivity, Merger and acquisition, Selection Hypothesis, Spillover
    JEL: F1 F2 O3
    Date: 2006–02
  7. By: Bruce A. Blonigen; Wesley Wilson
    Abstract: As the clearinghouses for a major portion of the world's rapidly increasing international trade flows, ocean ports and the efficiency with which they process cargo have become an ever more important topic. Yet, there exist very little data that allows one to compare port efficiency measures of any kind across ports and, especially, over time. This paper provides a new statistical method of uncovering port efficiency measures using U.S. Census data on imports into U.S. ports. Unlike previous measures, this study's methodology can provide such estimates for a much broader sample of countries and years with little cost. Thus, such data can be used by future researchers to examine a myriad of new issues, including the evolution of port efficiencies over time and its effects on international trade flows and country-level growth.
    JEL: F10 L92
    Date: 2006–02
  8. By: Mohamed Belkhir (LEO - Laboratoire d'économie d'Orleans - - CNRS : FRE2783 - Université d'Orléans)
    Abstract: This paper examines the interrelations among five ownership and board characteristics in a sample of 260 bank and savings-and-loan holding companies. These governance characteristics, designed to reduce agency problems between shareholders and managers, are insider ownership, blockholder ownership, the proportion of outside directors, board leadership structure, and board size. Using two-stage least squares regressions, we present evidence of interdependencies between board and ownership structures. The results suggest that banks substitute between governance mechanisms that align the interests of managers and shareholders. These findings suggest that cross-sectional OLS regressions of bank performance on single governance mechanisms may be misleading. Indeed, we find statistically significant relationships between performance and insider ownership and blockholder ownership when using OLS regressions. However, these statistically significant relationships disappear when the simultaneous equations framework is used. Together, these findings are consistent with optimal use of each governance mechanism by banks.
    Keywords: Corporate governance ; board structure ; ownership structure ; performance ; banking ; simultaneous equations
    Date: 2006–02–16

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