New Economics Papers
on Efficiency and Productivity
Issue of 2007‒04‒28
ten papers chosen by

  1. Labour Productivity and Rice Production in Bangladesh By Selim, Sheikh
  2. Internationalization Strategies and Productivity: Evidence from Foreign Owned Companies Operating in the Greek Manufacturing Sector By Halkos, George; Tzeremes, Nickolaos
  3. Policy Reforms and Incentives in Rice Production in Bangladesh By Selim, Sheikh; Parvin, Naima
  4. Does regulation reduce productivity? evidence from regulation of the U.S. beet-sugar manufacturing industry during the Sugar Acts, 1934-74 By Benjamin Bridgman; Shi Qi; James A. Schmitz, Jr.
  5. Efficiency versus Effectiveness: Interpreting Education Production Studies. By Christopher C. Klein
  6. The Micro-Dynamics of Catch Up in Indonesian Paper Manufacturing: An International Comparison of Plant-Level Performance By Szirmai, Adam; Van Dijk, Michiel
  7. What determines the efficiency of regional innovation systems? By Michael Fritsch; Viktor Slavtchev
  8. Information Technology Use and Productivity at the Individual Level By Gandal, Neil; King III, Charles; Van Alstyne, Marshall W.
  9. Cost and Production Duality with Time Utilization of Capital. By Christopher C. Klein
  10. Intra- and Inter-Sectoral Knowledge Spillovers and TFP Growth Rates By Quella, Núria

  1. By: Selim, Sheikh (Cardiff Business School)
    Abstract: We examine the significance of labour productivity and use of inputs in explaining technical efficiency of rice production in Bangladesh. We find negative output elasticity of labour, which is consistent with the evidence of a predominantly informal agricultural labour market in Bangladesh. We find that higher labour productivity can stimulate high efficiency gains, but increased use of inputs (except land) induces negative marginal effect on technical efficiency. While more use of land, improved seeds and fertilizers contributes to the rate of labour-productivity induced marginal efficiency gain, any additional labour depresses this rate. Given the agricultural policy reform history in Bangladesh, our findings imply that rather than providing input subsidy or output price support, future reforms should put more emphasis on providing incentives to enhance labour productivity and encourage formalization of the agricultural labour market.
    Keywords: Stochastic frontier; non-neutral frontier; technical efficiency
    JEL: C33 C51 O13 Q12
    Date: 2007–04
  2. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper using Malmquist productivity indexes analyzes the impact of internalization on productivity efficiency and competitive advantage for a sample of 395 firms with foreign ownership operating in the Greek manufacturing sector. A number of different factors in respect to firms’ productivity performance and creation of competitive advantage are been explored. The productive and most competitive firms with foreign ownership seem to have definite and strong characteristics relative to their size. Our empirical results imply that the resources (tangible and intangible) which are utilized and obtained through the firms internationalization strategies have a direct impact on the firms’ productivity and hence to their competitive advantage.
    Keywords: Foreign Owned Firms; Internationalisation; Malmquist Productivity Index; Productivity Efficiency
    JEL: O30 F23 L25 L60
    Date: 2005–10–04
  3. By: Selim, Sheikh (Cardiff Business School); Parvin, Naima
    Abstract: We estimate an institutional production function to capture incentive induced growth in total factor productivity (TFP) of rice production in Bangladesh. The incentive component of TFP assists in explaining farmers' response to incentives due to major policy reforms during 1980s and 1990s.
    Keywords: Bangladesh; Incentives; TFP
    JEL: C33 C51 O13 Q12
    Date: 2007–04
  4. By: Benjamin Bridgman; Shi Qi; James A. Schmitz, Jr.
    Abstract: We study the impact of regulation on productivity and welfare in the U.S. sugar manufacturing industry. While this U.S. industry has been protected from foreign competition for nearly 150 years, it was regulated only during the Sugar Act period, 1934–74. We show that regulation significantly reduced productivity, with these productivity losses leading to large welfare losses. Our initial results indicate that the welfare losses are many times larger than those typically studied—those arising from higher prices. We also argue that the channels through which regulation led to large productivity and welfare declines in this industry were also present in many other regulated industries, like banking and trucking.
    Keywords: Sugar
    Date: 2007
  5. By: Christopher C. Klein
    Abstract: To gain analytical insight into whether input resources matter in public education, a Becker/Peltzman/Stigler model of the determination of local educational budgets and outputs by political authorities is constructed. The model results are consistent with empirical findings that resources don’t matter, even when all schools are efficient, if errors in measurement and specification occur. When all outputs are not observed, one cannot distinguish an inefficient school district from one that chooses an idiosyncratic output mix. Blind application of efficiency measurement techniques in this context yields perverse or counterintuitive findings. Interpretation of feasible approaches to education production studies are discussed.
    Keywords: Education, Efficiency, Productivity.
    JEL: I12
  6. By: Szirmai, Adam (UNU-MERIT); Van Dijk, Michiel (Centre for Research on Multinational Corporations (SOMO))
    Abstract: In this study we analyze the micro-dynamics of catch up in Indonesian paper manufacturing using a two-country plant-level data set for the period 1975-1997. The Indonesian paper industry is selected as a case-study because it experienced spectacular investment and growth. It became one of the world's largest exporters and producers of paper in the world. We apply Data Envelopment Analysis (DEA) to compare the technical efficiency of Indonesian paper mills with that of Finnish mills, which are considered to be the world technological leaders in paper making. We address three questions: What is the distribution of Indonesian plant performance vis-à-vis the technological frontier? What is the role of entry, exit and survival for catch up? What are the characteristics of catching-up plants? We find that on average the Indonesian paper industry moved closer to the technological frontier during the 1990s. However, catch up has been a highly localized process in which only a few large establishments have achieved near best-practice performance, while most other plants have stayed behind
    Keywords: economic development, economic growth, technological change, paper industry, Indonesia
    JEL: L6
    Date: 2007
  7. By: Michael Fritsch (University of Jena, School of Busniess and Economics, Max Planck Institute of Economics Jena, and Institute for Economic Research (DIW Berlin)); Viktor Slavtchev (University of Jena, School of Busniess and Economics)
    Abstract: We assess the efficiency of regional innovation systems (RIS) in Germany by means of a knowledge production function. This function relates private sector research and development (R&D) activity in a region to the number of inventions that have been registered by residents of that region. Different measures and estimation approaches lead to rather similar assessments. We find that both spillovers within the private sector as well as from universities and other public research institutions have a positive effect on the efficiency of private sector R&D in the respective region. It is not the mere presence and size of public research institutions, but rather the intensity of interactions between private and public sector R&D that leads to high RIS efficiency. We find that relationship between the diversity of a regions’ industry structure and the efficiency of its innovation system is inversely u-shaped. Regions dominated by large establishments tend to be less efficient than regions with a lower average establishment size.
    Keywords: Knowledge, innovation, technical efficiency, spillovers, patents, regional analysis
    JEL: O31 O18 R12
    Date: 2007–04–20
  8. By: Gandal, Neil; King III, Charles; Van Alstyne, Marshall W.
    Abstract: We employ a unique data set on white-collar workers that combines direct observations of individual use of information technology as well as objective information on individual performance. The main hypothesis we examine is whether heavier users of IT are more productive, and if heavier users of IT are indeed more productive, how does this increase in productivity manifest itself? Our results suggest that, controlling for other factors, the size of an individual’s internal email network is more highly correlated with revenues generated by that individual than age, experience or education. Further, the number of unique electronic contacts is more significant than the number of messages, external network size, and all other measures of email communication including declared time spent on email. Additionally, even after accounting for the individual’s number of unique contacts within the firm, the social network measure of “betweenness” is also highly correlated with revenues. We attribute the strength of these results to the fine grain detail of the data on this form of task-based white collar work.
    Keywords: information technology; productivity; social networks
    JEL: J24 L86 O14
    Date: 2007–04
  9. By: Christopher C. Klein
    Abstract: This article fills in some notable gaps in the literature on the existence and empirical implementation of dual cost and production models embodying the time utilization of capital. A proof of the existence of such dual cost and production functions is provided; previous results of Betancourt (1986) and Klein (1984) are extended to the general N-input-factor, continuously variable time-utilization case; and the restrictive conditions under which a conventional neoclassical empirical cost model captures the characteristics of a capital-utilization technology are derived. The general specification of cost functions that capture utilization effects is indicated.
    Keywords: duality, capital utilization, time in production.
    JEL: C81 D24 L23
  10. By: Quella, Núria
    Abstract: In this paper I estimate unobserved labor-generated knowledge spillovers within and between six large macroeconomic sectors covering the US civilian economy from 1948 to 1991 and relate them to observed productivity changes. I construct a series of sectoral knowledge spillover matrices that show the changes in the magnitude and direction of intraand inter-sectoral spillovers for each sector. I show that the productivity slowdown in the US economy of the early seventies is associated with a decline of intra-sectoral spillovers and the emergence of inter-sectoral spillovers. This change coincides with trade taking over manufacturing as the main source and destination of new knowledge flows. The analysis of technology flows, measured as the production and use of patents, corroborates this finding. Furthermore, I also compute the gap between the market, which ignores knowledge spillovers, and the optimal allocation of labor across sectors, and the wedge between market and optimal wage rates by sector. I show that optimal employment in manufactures is 32% higher than the market allocation, and that optimal wages in the overall economy are 31% above market wages.
    Keywords: Knowledge spillovers; technology; productivity slowdown.
    JEL: O30 J24 D24 O40
    Date: 2007–04

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