New Economics Papers
on Efficiency and Productivity
Issue of 2006‒10‒14
eleven papers chosen by

  1. Technological Progress, Structural Change and Productivity Growth in Manufacturing Sector of South Korea By Singh, Lakhwinder
  2. Farmer management of production risk on degraded lands: the role of wheat genetic diversity in Tigray Region, Ethiopia By Di Falco, Salvatore; Chavas, Jean-Paul; Smale, Melinda
  3. Endogenous productivity and development accounting By Roc Armenter; Amartya Lahiri
  4. Mesure de la performance des agences bancaires par une approche DEA By Aude Hubrecht; Michel Dietsch; Fabienne Guerra
  5. Hours per Capita and Productivity: Evidence from Correlated Unobserved Components Models. By Arabinda Basistha
  6. Team Performance in UEFA Champions League 2005-06 By Papahristodoulou, Christos
  7. Benchmarking Efficiency of Telecommunication Industries in the US and Major European Countries : A Stochastic Possibility Frontiers Approach By Georg Erber
  8. The impact of competition on productive efficiency in European railways By Gertjan Driessen; Mark Lijesen; Machiel Mulder
  9. Firm ownership and FDI spillovers in China By Galina Hale; Cheryl Long
  10. Economies of Scale in the Canadian Food Processing Industry By Gervais, Jean-Philippe; Bonroy, Olivier; Couture, Steve
  11. Bank efficiency, ownership, and market structure : why are interest spreads so high in Uganda ? By Beck, Thorsten; Hesse, Heiko

  1. By: Singh, Lakhwinder
    Abstract: This paper focuses on the impact of technology, structural change on the aggregate productivity growth in manufacturing sector of South Korea, using the eight firm size classes over the period 1970-2000. The conventional shift-share analysis is used to measure the impact of shift of both labor and capital inputs. The results show that structural change on average has been conducive to productivity growth during the 1970s and this pattern reversed afterwards. Small and medium industries were more dynamic in terms of reallocation of resources, however, their positive impact out-weighed because of the dominance of large sized firms in the manufacturing sector. Deliberate state policy favoring large sized firms has impeded restructuring process facilitated by technical progress may have a penalty in terms of forgone growth.
    Keywords: Productivity growth; structural share analysis; technological change; manufacturing employment growth; South Korea
    JEL: L6 O4 O33
    Date: 2006–10–04
  2. By: Di Falco, Salvatore; Chavas, Jean-Paul; Smale, Melinda
    Abstract: "This paper investigates the effects of wheat genetic diversity and land degradation on risk and agricultural productivity in less favored production environments of a developing agricultural economy. Drawing production data from household survey conducted in the highlands of Ethiopia, we estimate a stochastic production function to evaluate the effects of variety richness, land degradation, and their interaction on the mean and the variance of wheat yield. Ethiopia is a centre of diversity for durum wheat and farmers manage complex variety mixtures on multiple plots. Econometric evidence shows that variety richness increases farm productivity. Variety richness also reduces yield variability but only for high levels of genetic diversity. Simulations with estimated parameters illustrate how planting more diverse durum wheat varieties on multiple plots contributes to improving farmer's welfare." Authors' abstract
    Keywords: Land degradation, Wheat production, productivity, Risk, Genetic diversity, Household surveys, Stochastic analysis,
    Date: 2006
  3. By: Roc Armenter; Amartya Lahiri
    Abstract: Cross-country data reveal that the per capita incomes of the richest countries exceed those of the poorest countries by a factor of thirty-five. We formalize a model with embodied technical change in which newer, more productive vintages of capital coexist with older, less productive vintages. A reduction in the cost of investment raises both the quantity and productivity of capital simultaneously. The model induces a simple relationship between the relative price of investment goods and per capita income. Using cross-country data on the prices of investment goods, we find that the model does fairly well in quantitatively accounting for the observed dispersion in world income. For our baseline parameterization, the model generates thirty-five-fold income gaps and six-fold productivity differences between the richest and poorest countries in our sample.
    Keywords: Productivity ; Wealth ; Income ; Capital
    Date: 2006
  4. By: Aude Hubrecht (Université de Bourgogne); Michel Dietsch (Université de Strasbourg 3); Fabienne Guerra (FUCAM - Mons)
    Abstract: (VF)Dans le cadre de l’approche DEA («Data Envelopment Analysis») nous développons de nouveaux indicateurs de la performance pour les réseaux de distribution intégrés. Nous détaillons les développements méthodologiques utiles à la construction d’un indicateur de productivité des points de vente qui respecte les critères de contrôlabilité, de cohérence transversale. Ensuite, nous modélisons le lien entre un indicateur de performance de la tête de réseau et l’indicateur de productivité des points de vente pour garantir la cohérence hiérarchique. Et enfin, nous insérons ces indicateurs dans un outil d’aide à la décision conforme à l’organisation verticale des réseaux de distribution : un système de tableau de bord prospectif.(VA)In a DEA framework («Data Envelopment Analysis»), we develop new performance indicators for the integer retail network. We detail the methodological improvement to propose a productivity indicator which respects the criteria of controllability and transversal coherence. Next, we formalise the relation between a performance indicator of the headquarter and the productivity of the retailers. Finally, we insert these new indicators into a making help decision tool modified to be in accordance with the vertical organisation of the retail network: a system of balanced scorecard.
    Keywords: Data Envelopment Analysis;agences bancaires;système de tableaux de bord prospectifs;contrôlabilité; cohérence transversale;cohérence hiérarchique;bank branches;balanced scorecards system;controllability;transversal coherence;hierarchical coherence.
    JEL: G21 L11 D21 D24 M42
    Date: 2005–06
  5. By: Arabinda Basistha (Department of Economics, West Virginia University)
    Abstract: Recent studies debate the effect of a permanent productivity shock on hours per capita within a structural VAR context. This paper examines the issue using a correlated unobserved components (UC) framework. The estimates show that permanent shocks to productivity are negatively correlated with transitory shocks to hours. This result is robust for non-stationary, levels stationary and differenced stationary specifications of hours. A comparison of the UC framework to the structural VAR framework shows that the UC framework with hours in levels performs better.
    Keywords: Stochastic trend, Correlated unobserved components model
    JEL: E31 E32 E50
    Date: 2006
  6. By: Papahristodoulou, Christos
    Abstract: This study uses a multi-output multi-input Data Efficiency Analysis (DEA) to estimate the performance of all thirty-two participated football teams in the UEFA Champions League (CL) tournament 2005-06. The estimates are based on official match statistics from all 125 matches.
    Keywords: team; performance; efficiency; goals; points
    JEL: L83 Z0
    Date: 2006–09–05
  7. By: Georg Erber
    Abstract: The impact of ICT on the efficiency of different national telecommunication industries of the US, Germany, France, the UK and the Netherlands is analysed by using a stochastic production possibility frontier approach. The relative inefficiencies of these industries measured as distances to the general production possibility frontier are estimated by a multi-country panel maximum-likelihood-estimation. By determining the technology efficiency effect frontiers for each single country one obtains a measure for the evolution of relative inefficiencies over time for each country's industry. Looking at these different patterns a common characteristic shape of stylised J-curves is revealed. This can be interpreted as J-curves of adoption of innovations in different national telecommunication industries. Since the troughs of these J-curves occur in different years for different countries a phase delay in adoption of innovations occurs differing from country to country. The time period covered by the data include a time when the deregulation of the telecommunication industries in these countries took place and the rapid diffusion of two key innovations - the Internet and mobile communications - changed the technological and organisational foundations everywhere. The results show that even if the US telecommunication industry led in this wave of major innovations as a first mover in comparison to the others and diminished by this their relative efficiency disadvantage opposite the European countries the EU countries still maintain a comparative efficiency advantage inherited from the early 1980's. In particular after their delayed adoption of the recent innovations like deregulation and Internet began there during the late 1990's the rapid catch up of the US telecommunication industry relative to the European industries has stalled. However, overall the inefficiency differences between national telecommunication industries have decreased in the long-run. Differences in the capability to establish and maintain a competitive and innovative national industry, however, still prevail between these countries even if they have become less pronounced as before.
    Keywords: Benchmarking, Production Possibility Frontiers, Efficiency/Inefficiency Measurement, J-Curve of Adoption of Innovations, Convergence
    JEL: L96 O33 O47 O57
    Date: 2006
  8. By: Gertjan Driessen; Mark Lijesen; Machiel Mulder
    Abstract: This paper empirically explores the relationship between competition design and productive efficiency in the railway industry. We use Data Envelopment Analysis (DEA) to construct efficiency scores, and explain these scores, using variables reflecting institutional factors and competition design. Our results suggest that competitive tendering improves productive efficiency, which is in line with economic intuition as well as with expectations on the design of competition. We also find that free entry lowers productive efficiency. A possible explanation for this result is that free entry may disable railway operators to reap economies of density. Our final result is that more autonomy of management lowers productive efficiency. Most of the incumbent railway companies are state owned and do not face any competitive pressure. As a consequence, increased independence without sufficient competition and adequate regulation may deteriorate incentives for productive efficiency.
    Keywords: Rail transport; Efficiency; competition design
    JEL: D24 H42 L22 L25 L33 L92
    Date: 2006–09
  9. By: Galina Hale; Cheryl Long
    Abstract: Using firm-level data, we find that the presence of foreign firms in China is positively associated with the performance of private firms, but is negatively associated with the performance of state owned enterprises (SOEs). In particular: (1) the presence of foreign direct investment (FDI) is aggravating the differences in the wages and the quality of skilled workers between SOEs and private firms; (2) the total factor productivity (TFP) and market share tend to be lower in the presence of FDI for SOEs, but not for the private firms; (3) FDI presence is positively associated with private firms' sales, especially their sales to foreign firms and foreign consumers, but not with the sales of SOEs. We argue that these differences are due to the fact that private firms have more flexible wage and personnel policies, which allows them to attract talents that facilitate positive FDI spillovers. In addition, we find that regulatory environment has improved for private firms in the cities and industries with high FDI presence.
    Keywords: Investments, Foreign ; China
    Date: 2006
  10. By: Gervais, Jean-Philippe; Bonroy, Olivier; Couture, Steve
    Abstract: Cost functions for three Canadian manufacturing agri-food sectors (meat, bakery and dairy) are estimated using provincial data from 1990 to 1999. A translog functional form is used and the concavity property is imposed locally. The Morishima substitution elasticities and returns to scale elasticities are computed for different provinces. Inference is carried out using asymptotic theory as well as bootstrap methods. In particular, the ability of the double bootstrap to provide refinements in inference is investigated. The evidence suggests that there are significant substitution possibilities between the agricultural input and other production factors in the meat and bakery sectors. Scale elasticity parameters indicate that increasing returns to scale are present in small bakery industries. While point estimates suggest that increasing returns to scale exist at the industry level in the meat sector, statistical inference cannot rule the existence of decreasing returns to scale. To account for supply management in the dairy sector, separability between raw milk and the other inputs was introduced. There exists evidence of increasing returns to scale at the industry level in the dairy industries of Alberta and New Brunswick. The scale elasticity for the two largest provinces (Ontario and Quebec) is greater than one, but inference does not reject the null hypothesis of increasing returns to scale.
    Keywords: Translog cost function; Canadian food processing industry; returns to scale; double bootstrap
    JEL: C30 D24
    Date: 2006–08
  11. By: Beck, Thorsten; Hesse, Heiko
    Abstract: Using a unique bank-level data set on the Ugandan banking system during 1999-2005, the authors explore the factors behind consistently high interest rate spreads and margins. While foreign banks charge lower interest rate spreads, they do not find a robust and economically significant relationship between privatization, foreign bank entry, market structure, and banking efficiency. Similarly, macroeconomic variables can explain little of the over-time variation in bank spreads. Bank-level characteristics, on the other hand, such as bank size, operating costs, and composition of loan portfolio explain a large proportion of cross-bank, cross-time variation in spreads and margins. However, time-invariant bank-level fixed effects explain the largest part of bank variation in spreads and margins. Further, the authors find tentative evidence that banks targeting the low end of the market incur higher costs and therefore higher margins.
    Keywords: Banks & Banking Reform,Economic Theory & Research,Investment and Investment Climate,Financial Crisis Management & Restructuring,Financial Intermediation
    Date: 2006–10–01

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