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on Efficiency and Productivity |
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Issue of 2006‒08‒19
ten papers chosen by |
| By: | Gustavo Crespi; Chiara Criscuolo; Jonathan Haskel |
| Abstract: | Case study evidence suggests that exporting firms learn from their clients. But econometric evidence,mostly using exporting and TFP growth, is mixed. We use a UK panel data set with firm-levelinformation on exporting and productivity. Our innovation is that we also have direct data on thesources of learning (in this case about new technologies). Controlling for fixed effects we have twomain findings. First, we find firms who exported in the past are more likely to then report that theylearnt from buyers (relative to learning from other sources). Second, firms who had learned frombuyers (more than they learnt from other sources) in the past are more likely to then have productivitygrowth. This suggests some support for the learning-by-exporting hypothesis. |
| Keywords: | Productivity, Exporting, Learning |
| JEL: | F12 L1 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0726&r=eff |
| By: | Fedderke, Johannes W.; Bogetic; Zeljko |
| Abstract: | Empirical explorations of the growth and productivity impacts of infrastructure have been characterized by ambiguous (countervailing signs) results with little robustness. A number of explanations of the contradictory findings have been proposed. These range from the crowd-out of private by public sector investment, non-linearities generating the possibility of infrastructure overprovision, simultaneity between infrastructure provision and growth, and the possibility of multiple (hence indirect) channels of influence between infrastructure and productivity improvements. The authors explore these possibilities using panel data for South Africa over the 1970-2000 period, and a range of 19 infrastructure measures. Using a number of alternative measures of productivity, the prevalence of ambiguous (countervailing signs) results, with little systematic pattern is also shown to hold for their data set in estimations that include the infrastructure measures in simple growth frameworks. The authors demonstrate that controlling for potential endogeneity of infrastructure in estimation robustly eliminates virtually all evidence of ambiguous impacts of infrastructure, due for example to possible overinvestment in infrastructure. Controlling for the possibility of endogeneity in the infrastructure measures renders the impact of infrastructure capital not only positive, but of economically meaningful magnitudes. These findings are invariant between the direct impact of infrastructure on labor productivity, and the indirect impact of infrastructure on total factor productivity. |
| Keywords: | Transport Economics Policy & Planning,Economic Theory & Research,Public Sector Economics & Finance,Economic Growth,Inequality |
| Date: | 2006–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3989&r=eff |
| By: | Fernandes, Ana M. |
| Abstract: | The author studies the determinants of total factor productivity (TFP) for manufacturing firms in Bangladesh using data from a recent survey. She obtains TFP measures by making use of firm-specific deflators for output and inputs. Controlling for industry, location, and year fixed effects, she finds that: (1) firm size and TFP are negatively correlated; (2) firm age and TFP exhibit an inverse-U shaped relationship; (3) TFP improves with the quality of the firm ' s human capital; (4) global integration improves TFP; (5) firms with research and development activities and quality certifications have higher TFP, while more advanced technologies improve TFP only in the presence of significant absorptive capacity; (6) power supply problems cost firms heavily in terms of TFP losses; and (7) the presence of crime dampens TFP. |
| Keywords: | Water and Industry,Economic Growth,Microfinance,Small Scale Enterprise,Economic Theory & Research |
| Date: | 2006–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3988&r=eff |
| By: | Sergio Clavijo; Carlos I. Rojas; Camila Salamanca; Germán Montoya |
| Abstract: | Colombia has witnessed a renewed interest in merging and acquiring financial institutions during 2003-2005. These have been “complementary mergers” that seek to exploit economies scale and scope. This process contrasts favorably with those mergers & acquisitions that occurred during the mid-1990s, which involved mainly “twin institutions” that lacked potential for gaining multiproduct efficiency. This document analyzes the need to remove some of the regulatory constraints that obstruct further exploitation of such economies of scale-scope and quantifies the “cost efficiencies” shown by the Colombian banking sector (1994-2005). At the aggregate level, we found (absolute) banking efficiency to be around 63%, a similar value to those found in related studies post-crisis. This implies that banks operating in Colombia have been able to recover their efficiency levels during postcrisis 2003-2005, except for mortgage institutions. We highlight regulatory barriers that could be removed to help the banking system move closer to the optimal production frontier. |
| Date: | 2006–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:col:001036:002571&r=eff |
| By: | Nick Bloom; John Van Reenen |
| Abstract: | We use an innovative survey tool to collect management practice data from 732 medium sized manufacturingfirms in the US, France, Germany and the UK. These measures of managerial practice are strongly associatedwith firm-level productivity, profitability, Tobin's Q, sales growth and survival rates. Management practicesalso display significant cross-country differences with US firms on average better managed than Europeanfirms, and significant within-country differences with a long tail of extremely badly managed firms. We findthat poor management practices are more prevalent when (a) product market competition is weak and/or when(b) family-owned firms pass management control down to the eldest sons (primo geniture). European firmsreport lower levels of competition, while French and British firms also report substantially higher levels ofprimo geniture due to the influence of Norman legal origin and generous estate duty for family firms. Wecalculate that product market competition and family firms account for about half of the long tail of badlymanaged firms and up to two thirds of the American advantage over Europe in management practices. |
| Keywords: | management practices, productivity, competition, family firms |
| JEL: | L2 M2 O32 O33 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0716&r=eff |
| By: | Jose E. Gomez-Gonzalez; Nicholas M. Kiefer |
| Abstract: | This paper identifies the main bank specific determinants of time to failure during the financial crisis in Colombia using duration analysis. Using partial likelihood estimation, it shows that the process of failure of financial institutions during that period was not a merely random process; instead, it can be explained by differences in financial health and prudence existing across institutions. Among the relevant indicators that explain bank failure, the capitalization ratio appears to be the most significant one. Increases in this ratio lead to a reduction in the hazard rate of failure at any given moment in time. Of special relevance, this ratio exhibits a non-linear component. Other important variables explaining bank failure dynamics are profitability of assets and the ratio of non-performing loans to total loans. Leverage appears to affect the hazard rate also, but with lower statistical significance. |
| Keywords: | Banks, financial institutions; Bankruptcy, liquidation; Colombia. |
| JEL: | G21 G23 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:400&r=eff |
| By: | Buchm, Claudia M.; Schertler, Andrea; von Westernhagen, Natalja |
| Abstract: | This paper studies the sectoral and geographical dimensions of the response of bank lending to sectoral growth. We use several bank-level datasets provided by the Deutsche Bundesbank for the 1996-2002 period. Our results show that bank heterogeneity affects how lending responds to domestic sectoral growth. We document that banks’ total lending to German firms reacts procyclically to domestic sectoral growth, while lending exceeding a threshold of €1.5 million to German and foreign firms does not. Moreover, we find that the response of lending depends on bank characteristics such as the banking groups, the banks’ asset size, and the degree of sectoral portfolio concentration. We find that total domestic lending by savings banks and credit cooperatives (including their regional institutions), smaller banks, and banks whose portfolios are heavily concentrated in specific sectors responds positively and, in relevant cases, more strongly to domestic sectoral growth. |
| Keywords: | bank lending, heterogeneity, sectoral growth |
| JEL: | F3 G21 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdp2:4511&r=eff |
| By: | Bogetic, Zeljko; Fedderke, Johannes W. |
| Abstract: | The paper provides a first, systematic benchmarking of infrastructure performance in the Southern African Customs Union (SACU) countries (South Africa, Botswana, Lesotho, Namibia, and Swaziland) in four major sectors-electricity, water and sanitation, information and communication technology, and transportation-against the relevant group of comparator countries using a new World Bank international data base with objective and perception-based indicators of infrastructure performance from over 200 countries. The analysis suggests important comparative gaps in all major infrastructure sectors, although performance varies widely across the SACU region. Performance shortfalls are particularly acute in rural areas where most of the poor live. The benchmarking is envisaged as a comparative input into deeper analyses of infrastructure performance, especially in the context of the ongoing scaling-up efforts (for example, South Africa, Lesotho, and Botswana). |
| Keywords: | Transport Economics Policy & Planning,Infrastructure Regulation,Energy Production and Transportation,Infrastructure Economics,Economic Theory & Research |
| Date: | 2006–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:3987&r=eff |
| By: | Hayden, Evelyn; Porath, Daniel; von Westernhagen, Natalja |
| Abstract: | Should banks be diversified or focused? Does diversification indeed lead to enhanced performance and, therefore, greater safety for banks, as traditional portfolio and banking theory would suggest? This paper investigates the link between banks’ profitability (ROA) and their portfolio diversification across different industries, broader economic sectors and geographical regions measured by the Herfindahl Index. To explore this issue, we use a unique data set of the individual bank loan portfolios of 983 German banks for the period from 1996 to 2002. The overall evidence we provide shows that there are no large performance benefits associated with diversification since each type of diversification tends to reduce the banks’ returns. Moreover, we find that the impact of diversification depends strongly on the risk level. However, it is only for moderate risk levels and in the case of industrial diversification that diversification significantly improves the banks’ returns. |
| Keywords: | focus, diversification, monitoring, bank returns, bank risk |
| JEL: | G21 G28 G32 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdp2:4536&r=eff |
| By: | Dorothea Schäfer; Yuriy Gorodnichenko; Oleksandr Talavera |
| Abstract: | Using a unique, large panel of German firms, we examine whether participation in business groups reduces the sensitivity of investment to cash flow. The main finding is that the reduction in the sensitivity is small for small firms and negligible for medium and large firms. We argue that by virtue of the continental business model, gains from business groups should be in better contract enforcement and coordination rather than in internalizing capital markets. |
| Keywords: | concern, business group, investment, liquidity constraints. |
| JEL: | G32 G34 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp590&r=eff |