nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2006‒07‒02
ten papers chosen by
Angelo Zago
Universita degli Studi di Verona

  1. Alternative measures of total factor productivity growth By Raa,Thijs ten; Shestalova,Victoria
  2. Relating Productivity and Trade 1980-2000: A Chicken and Egg Analysis By Eleanor Doyle; Inmaculada Martínez-Zarzoso
  3. The Dynamics of Provincial Growth in China: A Nonparametric Approach By Bulent Unel; Harm Zebregs
  4. The theory of benchmarking and the measurement of industrial organization By Raa,Thijs ten
  5. Innovativity: A comparison across seven European countries By Mohnen, Pierre; Mairesse, Jacques; Dagenais, Marcel
  6. The Anglo-German Industrial Productivity Paradox, 1895-1938: A Restatement and a Possible Resolution By Albrecht Ritschl
  7. How Businesses Use Information Technology: Insights for Measuring Technology and Productivity By Sang Nguyen; B.K. Atrostic
  8. Obtstacles to Faster Growth in Transition Economies: The Mongolian Case By Stabley W. Black
  9. How Does Privatization Work? Ownership Concentration and Enterprise Performance in Ukraine By Alexander Pivovarsky
  10. Managerial ownership and corporate performance in Slovenian post-privatisation period By Marko Simoneti; Aleksandra Gregoric

  1. By: Raa,Thijs ten; Shestalova,Victoria (Tilburg University, Center for Economic Research)
    Abstract: The four main approaches to the measurement of total factor productivity (TFP)-growth and its decomposition are (i) Solow's residual analysis, (ii) the Index Number Approach, (iii) Input-Output Analysis (IO), and (iv) Data Envelopment Analysis (DEA). The corresponding measures of TFP growth are based on different assumptions, which we expose and interrelate. The Solow Residual serves as the benchmark for our comparisons. The interrelationships between the alternative measures permit an interpretation of the differences among them. We consolidate the four alternative measures in a common framework.
    Keywords: TFP;Solow residual;Index numbers;Input-output;DEA
    JEL: O47 C67
    Date: 2006
  2. By: Eleanor Doyle (University College Cork / Ireland); Inmaculada Martínez-Zarzoso (Georg-August-Universität Göttingen / Germany and Universitat Jaume I , Castellón / Spain)
    Abstract: Given the nature and range of investigations of the trade/productivity relationship, we now know that possible reverse causation must be a consideration in empirical research. Indeed, some research finds that estimates of productivity gains attributed to trade capture instead the roles of institutions and geography. Here we estimate the relationship between productivity and trade for a panel of countries over the period 1980 to 2000 using instrumental-variables estimation of a productivity equation. The endogeneity of trade and institutional quality is accounted for by using instruments. We extend the specification used by Frankel and Romer (1999) using real openness as the measure of trade (following Alcala and Ciccone, 2004). The trade instrument is based on a gravity equation. The instruments for institutional quality come from Gwartney, Holcombe and Lawson (2004). This approach allows for identification of channels through which trade and production scale affect productivity.
    Date: 2006–06–27
  3. By: Bulent Unel; Harm Zebregs
    Abstract: China's growth record since the start of its economic reforms in 1978 has been extraordinary. Yet, this impressive performance has been associated with an increasing regional income disparity. We use a recently developed nonparametric approach to analyze the variation in labor productivity growth across China's provinces. This approach imposes less structure on the data than the standard growth accounting framework and allows for a breakdown of labor productivity into capital deepening, efficiency gains, and technological progress. Like other studies before us, we do not find strong evidence of convergence in labor productivity across China's provinces during 1978-98. However, our results show that provinces converged in efficiency levels, while they diverged in capital deepening and technological progress.
    Keywords: Economic growth , China , Labor productivity , Data analysis ,
    Date: 2006–03–09
  4. By: Raa,Thijs ten (Tilburg University, Center for Economic Research)
    Abstract: If more productive firms grow relatively fast, an industry performs better, even when no firm exhibits technical or efficiency change. In other words, the two well-known sources of productivity growth-technology and efficiency-can be augmented by a third one, namely the industrial organization effect. In this paper the efficiency of an industrial organization and its contribution to performance are measured by benchmarking all firms on the industry. More precisely, efficiency is measured by the proximity between a firm and the best practices. Aggregation of firm efficiencies is imperfect. The bias is used to measure the efficiency of the industrial organization. In benchmarking, change transmitted by a firm represents productivity growth and change transmitted by the best practices represents technical change. Although I use a nonparametric framework, which requires only input and output information, duality analysis reveals the Solow residual. In discrete time Malmquist indices capture the measurement of the industrial organization effect, efficiency changes, and technical change. The industrial organization of Japanese banking is analyzed.
    Keywords: Industrail organization;Efficiency;Aggregation;Productivity
    JEL: L10 D24 O47
    Date: 2006
  5. By: Mohnen, Pierre (UNU-MERIT); Mairesse, Jacques (UNU-MERIT); Dagenais, Marcel (University of Montreal)
    Abstract: This paper proposes a framework to account for innovation similar to the usual accounting framework in production analysis and a measure of innovativity comparable to that of total factor productivity. This innovation accounting framework is illustrated using micro-aggregated firm data from the first Community Innovation Surveys (CIS1) for seven European countries: Belgium, Denmark, Ireland, Germany, the Netherlands, Norway and Italy for the year 1992. Based on the estimation of a generalized Tobit model and measuring innovation as the share of total sales due to improved or new products, it compares the propensity to innovate, and the innovation intensity conditional and unconditional on being innovative, across the seven countries and low- and high-tech manufacturing sectors. Even with relatively few explanatory variables our innovation framework already accounts for sizeable differences in country innovation intensity. It also shows that differences in innovativity across countries can be nonetheless very large.
    Keywords: Innovation, Research and development, comparison, self-selection, Europe
    JEL: C35 L60
    Date: 2006
  6. By: Albrecht Ritschl
    Abstract: Recent research on international productivity comparisons with historical data has encountered large discrepancies between benchmark comparisons and time series extrapolations from other benchmarks. Broadberry and Burhop (2005) have recently argued that for Hoffmann’s (1965) widely accepted time series for German industrial output, there is no such productivity paradox, while for a revision of that series recently suggested by Ritschl (2004), the discrepancy between the Anglo-German benchmark and the time series projection is considerable. Attempting to reconcile the time series evidence and the productivity benchmarks, they discard the revised series in favor of the original, disregarding mounting evidence on its lacking reliability. The present paper restates this productivity paradox and proposes a possible resolution. We draw on recent archival discoveries by Fremdling and Staeglin (2003) and Fremdling (2005) that confirm the revisions to the Hoffmann series. We also draw on recent advances in the reconstruction of a German industry census of 1936, and argue that the productivity paradox is largely the consequence of mismeasurement in all versions of the German series. Correcting for the omissions, much of the Anglo-German productivity paradox disappears.
    Keywords: productivity, benchmark comparisons, Britain, Germany
    JEL: N10 N60
    Date: 2006–05
  7. By: Sang Nguyen; B.K. Atrostic
    Abstract: Business use of computers in the United States dates back fifty years. Simply investing in information technology is unlikely to offer a competitive advantage today. Differences in how businesses use that technology should drive differences in economic performance. Our previous research found that one business use – computers linked into networks – is associated with significantly higher labor productivity. In this paper, we extend our analysis with new information about the ways that businesses use their networks. Those data show that businesses conduct a variety of general processes over computer networks, such as order taking, inventory monitoring, and logistics tracking, with considerable heterogeneity among businesses. We find corresponding empirical diversity in the relationship between these on-line processes and productivity, supporting the heterogeneity hypothesis. On-line supply chain activities such as order tracking and logistics have positive and statistically significant productivity impacts, but not processes associated with production, sales, or human resources. The productivity impacts differ by plant age, with higher impacts in new plants. This new information about the ways businesses use information technology yields vital raw material for understanding how using information technology improves economic performance.
    Keywords: Information Technology, E-business Processes, Productivity
    Date: 2006–06
  8. By: Stabley W. Black
    Abstract: The obstacles to economic growth in Mongolia are modeled with a supply-side growth model calibrated to represent inefficient use of resources and intermediation. Progressive removal of inefficiencies over time by means of privatization of banks and industrial enterprises potentially leads to increased productivity and increased capital accumulation, raising economic growth and per capita output.
    Keywords: Transition economies , Economic growth , Mongolia , Capital , Labor , Privatization , Economic models ,
  9. By: Alexander Pivovarsky
    Abstract: This paper investigates the relationship between ownership concentration and enterprise performance in Ukraine. Using data on 376 medium and large enterprises, it finds that ownership concentration is positively associated with enterprise performance in Ukraine. The paper also finds that concentration of ownership by foreign companies and banks is associated with better performance than ownership concentrated by the domestic owners. Ownership by Ukrainian investment funds and holding companies does not have a positive effect on performance. In contrast to predictions by many observers of early transition, privatization methods had a lasting effect on ownership structure in Ukraine.
    Keywords: Privatization , Ukraine , Governance , Transition economies ,
  10. By: Marko Simoneti; Aleksandra Gregoric
    Abstract: The Slovenian post-privatisation period has been characterised by a decline in the ownership by non-managerial owners (employees) and state-controlled funds. On the other hand, domestic and foreign non-financial firms, Privatisation Investment Funds and managers have been increasing their holdings. The latter, namely the growing managerial ownership, is likely to feature in future ownership dynamics in Slovenia. In fact, in 2002 the desired (optimal) ownership stakes estimated by Slovenian managers were 10.8 percentage points higher than their actual stakes. The aim of our paper is to describe the main trends in the ownership of Slovenian corporations in the post-privatisation period and to provide an answer to the basic economic question: what is the influence of the ongoing consolidation of managerial ownership on the performance of Slovenian firms. The empirical analysis testing this relationship is based on a panel of 182 Slovenian firms in the 1995-99 period and does not provide relevant evidence of any positive effects of the increasing managerial control on Slovenian firms' performance. If any, a positive incentive effect is only observed in those firms whose managers' holdings exceed 10-percent, only with regards to firms' financial performance (but not total factor productivity) and only in firms that are not listed on the capital market. Further, the negative effect of the current gap between the desired and actual managerial ownership seems to exceed any positive incentive effect arising out of managerial ownership.
    JEL: G30
    Date: 2004–12–01

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