nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2006‒12‒01
fourteen papers chosen by
Angelo Zago
Universita degli Studi di Verona

  1. Learning-by-Doing, Learning-by-Exporting, and Productivity: Evidence from Colombia By Ana M. Fernandes; Alberto E. Isgut
  2. The impact of globalisation and trade on the productivity performance of the Irish food manufacturing sector By Carol Newman
  3. Development under Regulation : The Way of the Ukrainian Insurance Market By Oleg Badunenko; Bogdana Grechanyuk; Oleksandr Talavera
  4. Ownership, Contractual Practices and Technical Efficiency: The Case of Urban Public Transport in France By William Roy; Anne Yvrande-Billon
  5. Cross-Border Flows of People, Technology Diffusion and Aggregate Productivity By Thomas Barnebeck Andersen; Carl-Johan Dalgaard
  6. Catch Up at the Micro-Level: Evidence from an Industry Case Study Using Manufacturing Census Data By Michiel Van Dijk; Adam Szirmai
  7. Employment, Innovation, and Productivity: Evidence from Italian Microdata. By Hall, Bronwyn H.; Mairesse, Jacques; Lotti, Francesca
  8. International Patent Pattern and Technology Diffusion By Kurt A. Hafner
  9. The Impact on Productivity and Efficiency of US Listed Companies By BECCHETTI LEONARDO; DI GIACOMO STEFANIA; PINNACCHIO DAMIANO
  10. Deteriminants of Economic Growth in Uruguay: 1955-2003 A Total Factor Productivity Analysis By Federica Hughes Fossati; Rafael Mantero Salvatore; Virginia Olivella Moppett
  11. The Quest for Productivity Growth in Agriculture and Manufacturing By María Dolores Guilló; Fidel Pérez Sebastián
  12. Technological Backwardness in Agriculture: Is It due to Lack of R&D Expenditures, Human Capital and Openness to International Trade? By Rodolfo Cermeño; Sirenia Várquez
  13. Price-Induced Technical Progress in Italian Agriculture By Roberto ESPOSTI; Pierpaolo PIERANI
  14. Public Infrastructure and Economic Growth in Mexico By Antonio Noriega; Matias Fontenla

  1. By: Ana M. Fernandes; Alberto E. Isgut
    Abstract: The empirical evidence on whether participation in export markets increases plant-level productivity has been inconclusive so far. We explain this inconclusiveness by drawing on Arrow's (1962) characterization of learning-by-doing, which suggests focusing on young plants and using measures of export experience rather than export participation. We find strong evidence of learning-by-exporting for young Colombian manufacturing plants between 1981 and 1991: total factor productivity increases 4%-5% for each additional year a plant has exported, after controlling for the effect of current exports on total factor productivity. Learning-by-exporting is more important for young than for old plants and in industries that deliver a larger percentage of their exports to high-income countries.
    Keywords: learning, trade, total factor productivity, exports, export-led growth
    Date: 2005–06
  2. By: Carol Newman
    Abstract: Globalisation and international integration can yield efficiency gains through the promotion of competition and trade in markets for internationally traded goods. At the firm level, exposure to competitive pressures has created a necessity for firms to operate as close as possible to the technology frontier in order to survive. Furthermore, increased integration has lead to an influx of investment by Multinational corporations who bring with them technological innovations. This has the effect of improving overall productivity by shifting the best practice technology frontier while at the same time making it increasingly difficult for smaller competitors to survive. In an Irish context, the food industry has recently been acknowledged in national policy as an important sector for future development. The aim of this paper is to measure the productivity performance of the food processing industry in Ireland and establish the extent to which globalisation has brought about efficiency and productivity gains to the industry.
    Keywords: Food Industry, Ireland, Productivity, Stochastic Production Function
    Date: 2006–11–16
  3. By: Oleg Badunenko; Bogdana Grechanyuk; Oleksandr Talavera
    Abstract: This study is intended to assess the introduction of increased capitalization requirements for Ukrainian insurance firms. To do so, we employ up-to-date frontier efficiency analysis. The analysis suggests that an increase in size occurs not only because of the regulator's requirements, but also because all scale inefficient firms have been persistently operating under increasing returns to scale. Additionally, we show that the Ukrainian insurance industry experiences significant increases in technical efficiency. Our analysis identifies winners and losers among small, medium and large companies. The findings are consistent with the hypothesis that regulation forces firms to concentrate on efficiency.
    Keywords: insurance industry, efficiency and productivity analysis, returns to scale, bootstrap, Ukraine
    JEL: G22 G28 C15
    Date: 2006
  4. By: William Roy (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Anne Yvrande-Billon (ATOM - Analyse Théorique des Organisations et des Marchés - [Université Panthéon-Sorbonne - Paris I])
    Abstract: This paper investigates the impact of ownership structure and contractual choices on technical efficiency in the French urban public transport sector. The central proposition, which relies on classical contract theory arguments, is that ownership regime and contractual practices are key determinants of performances.<br />To test this proposition, we use an original panel data set covering 135 different French urban transport networks over the period 1995-2002 and we apply a stochastic frontier methodology.<br />The econometric results corroborate our proposition: the technical efficiency of urban public transport operators depends on the ownership regime and on the type of contract governing their transactions.
    Keywords: Contracts ; Contractual Incentives ; Contractual arrangements ; Ownership ; Efficiency ; Performance ; Urban Public Transport ; Public Service Governance
    Date: 2006–10–18
  5. By: Thomas Barnebeck Andersen; Carl-Johan Dalgaard
    Abstract: A number of empirical studies have investigated the hypothesis that cross-border flows of goods (international trade) and capital (FDI) lead to international technology diffusion. The contribution of the present paper consists in examining an as yet neglected vehicle for technology diffusion: cross-border flows of people. We find that increasing the intensity of international travel, for the purpose of business and otherwise, by 1% increases the level of aggregate total factor productivity and GDP per worker by roughly 0.2%.
    Keywords: Technology diffusion, Productivity, IV estimation
    Date: 2006–06
  6. By: Michiel Van Dijk; Adam Szirmai
    Abstract: In this paper we provide a first attempt to analyse catch up at the micro level, not possible in conventional macro-studies. The Indonesian pulp and paper industry has been selected as case-study because it experienced spectacular investment and growth, becoming one of the world’s largest exporters and producers of paper in the world. We apply stochastic frontier analysis to compare technical efficiency of Indonesian paper mills with Finnish plants, which can be considered as the world technological leaders in the industry. The analysis is performed on a pooled dataset based on manufacturing census data for the period 1975-1997. In the paper we address the following questions: What is the distribution of Indonesian plant performance vis-à-vis the technological frontier? What is the role of entry, exit and survival on catch up? And, what are the characteristics of catching-up plants. Although we find that on average the Indonesian paper industry has closed the gap with the technology frontier during the 1990s, catch up has been a highly localised process in which only a few large establishments have achieved near best-practice performance, while most other plants have stayed behind.
    Date: 2005–06
  7. By: Hall, Bronwyn H. (UNU-MERIT); Mairesse, Jacques (UNU-MERIT); Lotti, Francesca (Economics Research Department, Bank of Italy)
    Abstract: Italian manufacturing firms have been losing ground with respect to many of their European competitors. This paper presents some empirical evidence on the effects of innovation on employment growth and therefore on firms' productivity with the goal of understanding the roots of such poor performance. We use firm level data from the last three surveys on Italian manufacturing firms conducted by Mediocredito-Capitalia, which cover the period 1995-2003. Using a modified version of the model proposed by Harrison, Jaumandreu, Mairesse and Peters (2005), which separates employment growth rates into those associated with old and new products, we provide robust evidence that there is no employment displacement effect stemming from process innovation. The sources of employment growth during the period are split equally between the net contribution of product innovation and the net contribution from sales growth of old products. However, the contribution of product innovation is somewhat lower than that for the four comparison European countries considered by Harrison et al.
    Keywords: innovation, employment, productivity, Italy
    JEL: L60 O31 O33
    Date: 2006
  8. By: Kurt A. Hafner
    Abstract: The paper focuses on the impact of business related R&D spending on input factor productivity (IFP) using international patent applications as a technology diffusion channel. Considering the relationship amongst research and productivity, international patent pattern reflect the link between the source (R&D) and the use (IFP). To estimate patent related spill-over effects, I use the estimation techniques developed and proposed by Kao and Chiang (1998) in order to deal with nonstationary and cointegration and to obtain reliable coefficients. I find that patent related foreign R&D spillover effects are present and that impact on labor productivity for Non-G7 countries is higher due to foreign than domestic R&D activities.
    Keywords: Productivity, R&D, Technology Diffusion, Nonstationary Panels
    JEL: C12 C23 O30 O40
    Date: 2005–06
    Abstract: We investigate whether inclusion and permanence in the Domini social index affects corporate performance on a sample of around 1000 firms in a 13-year interval by controlling for size, industry, business cycle and time invariant firm idiosyncratic characteristics. Our results find partial support to the hypothesis that corporate social responsibility (CSR) generates a transfer of wealth from shareholders to stakeholders. On the one side, the combination of entry and permanence into the Domini is shown to increase (reduce) significantly total sales per employee (returns on equity). On the other side, lower returns on equity seem nonetheless to be accompanied by relatively lower conditional volatility and lower reaction to extreme shocks of Domini stocks with respect to the control sample. The first two econometric findings match intrinsic characteristics since they are paralleled by significant differences in fixed effects between the control sample and firms which will become Domini affiliated in the sample period. Our conclusion is that Domini affiliation significantly reinforces traits of corporate identity which were already in place before entry.We also show that exit from Domini has strong negative effects on total sales per employee, returns on equity, investment and capital employed. An explanation for the “transfer of wealth” effect, suggested by the inspection of Domini criteria, is that social responsibility implies, on the one side, decisions leading to higher cost of labour and of intermediate output, but may, on the other side, enhance involvement, motivation and identification of the workforce with company goals with positive effects on productivity.
    Date: 2005–01
  10. By: Federica Hughes Fossati; Rafael Mantero Salvatore; Virginia Olivella Moppett
    Abstract: During the period 1955-2003 Uruguayan economic growth showed two main characteristics. First, considerable volatility, and second a low average growth rate, even for a developing economy. The objective of this paper is to analyse the determinants of economic growth for the Uruguayan economy in the period 1955-2003, seeking to explain these two stylized facts. For this matter, the approach followed here consists of a two step procedure. First, we study the “proximate” determinants of Uruguayan growth in 1955-2003, using annual data. Based on a standard growth accounting exercise and a potential growth accounting exercise, we are able to conclude that the evolution of Total Factor Productivity is the key to explain both the volatility of Uruguayan economic growth as well as its low average growth rate. These findings are consistent with recent economic literature on the subject. Hence, the second step of this paper is to analyse the factors that determine Total Factor Productivity (TFP), which, based on the above results, are the “ultimate” determinants of Uruguayan economic growth. The analysis is divided into short run and long run TFP determinants. For the short run, an econometric model is estimated, using the cyclical component of TFP (obtained applying a Hodrick-Prescott filter to the original TFP series) as the dependent variable. Exclusion test performed to the model, and the construction of a “variable incidence indicator” allow to conclude that short run TFP (and therefore the better part of Uruguayan economic growth volatility) is mainly explained by financial capital flows and by the level of activity of Argentina. Other variables like the level activity of USA, the Terms of Trade and Real Interest Rates, provide also significant explanatory power. With respect to long run TFP, both international and domestic literature seems to highlight the importance of institutional factors, although insufficient historical data does not permit similar econometric modeling.
    Date: 2005–06
  11. By: María Dolores Guilló; Fidel Pérez Sebastián
    Abstract: We develop a theory to explain the transition from stagnation to modern growth. We focus on the forces that shaped the evolution of total factor productivity in agriculture and manufacturing across history. More specifically, we build a multisector model of endogenous technical-change and economic growth. We consider an expanding-variety setup with rising labor specialization and two different R&D technologies, one for agriculture and another for manufacturing. As a consequence, total factor productivity in the model can increase via two different channels. First, population growth allows larger levels of specialization of land and labor in the economy that bring efficiency gains. This type of productivity improvement is capital saving, but can not generate sustained growth. Technical change is also possible by investing in R&D. Unlike specialization, new technologies generated in this way are land and labor augmenting, and are the key to modern growth. In the model, the economy has not incentives to invest in R&D until a minimum knowledge base is available to researchers. This is in line with ideas contained in Mokyr (2005). To make possible the accumulation of this minimum knowledge base, we assume that learning-by-doing is the implicit underlying force that leads to specialization. However, land and labor specialization is based on knowledge whose nature differs in agriculture and in manufacturing. More specifically, whereas this knowledge is farm-specific in agriculture, mainly concern with the acquisition of uncodified information about local conditions of soil and whether, specialization in manufacturing is the result of general knowledge, mainly codified, that contributes at a larger extent to the knowledge base.
    Keywords: stagnation, modern growth, specialization, learning-by-doing, R&D, Knowledge base
    JEL: O13 O14 O41
    Date: 2006–06
  12. By: Rodolfo Cermeño; Sirenia Várquez
    Abstract: In this paper we investigate the relationship between the agricultural technological level and R&D expenditures, human capital and openness to international trade using cross country information for a sample of 104 countries and various sub samples over the period 1961-1991. We first model the unobservable technological level as a dynamic stochastic process in the context of a general translog production function, and then we relate the implied technological levels to the aforementioned variables. For comparison, alternative specifications of the production and its associated technological process are also considered. We find that the proposed model outperforms all of the alternative specifications. The results suggest that the technological gap between developed and less developed countries in agriculture has increased considerably over this period of time and that, overall, the technological levels are directly related to R&D expenditures, human capital and openness, although this relationship is not robust across the different groups of countries considered.
    Keywords: Agricultural production function, Agricultural technology, Dynamic error components models, Non-linear models, R&D expenditures, Human capital, Openness
    Date: 2005–06
  13. By: Roberto ESPOSTI (Universita' Politecnica delle Marche, Dipartimento di Economia); Pierpaolo PIERANI ([n.a.])
    Abstract: In this paper we aim at investigating the price-induced innovation hypothesis in Italian agriculture. We generalize the framework of analysis proposed by Peeters and Surry (2000). The generalization includes a short-run specification of the dual technology as well as a quadratic spline in a time variable. We argue that the temporary equilibrium setting gives a more realistic representation of how relative prices may steer innovation and variable input bias over time, while the quadratic function has desirable properties with respect the splined variable, i.e., a more flexible treatment of exogenous technical change.;Results provide evidence in favour of price-induced innovation in Italian agriculture over the years 1951 to 1991.
    Keywords: SGM restricted cost function, induced innovation, italian agriculture
    JEL: O30 Q16
    Date: 2006–11
  14. By: Antonio Noriega; Matias Fontenla
    Abstract: We develop a model where investment in infrastructure complements private investment. We then provide time series evidence for Mexico on both the impact of public infrastructure on output, and on the optimality with which levels of infrastructure have been set. In particular, we look at the long-run effects of shocks to infrastructure on real output. We compute Long-Run Derivatives for kilowatts of electricity, roads and phone lines, and find that shocks to infrastructure have positive and significant effects on real output for all three measures of infrastructure. For electricity and roads, the effect becomes significant after 7 and 8 years, respectively, whereas for phones, the effect on growth is significant only after 13 years. These effects of infrastructure on output are in agreement with growth models where long-run growth is driven by endogenous factors of production. However, our results indicate that none of these variables seem to be set at growth maximizing levels.
    Date: 2005–06

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