New Economics Papers
on Efficiency and Productivity
Issue of 2007‒11‒24
eleven papers chosen by

  1. Measuring Productivity in the System of National Accounts By Diewert, Erwin
  2. Innovation, R&D Spillovers and Productivity: The Role of Knowledge-Intensive Services By Agustí Segarra-Blasco
  3. The devil is in the shadow : Do institutions affect income and productivity or only official income and official productivity? By Axel Dreher; Pierre-Guillaume Méon; Friedrich Schneider
  4. The Impact of Exporting on Firm Productivity: A Meta-Analysis By Pedro S. Martins; Yong Yang
  5. The Role of the Human Capital and Managerial Skills in Explaining the Productivity Gaps between East and West By Wolfgang Steffen; Johannes Stephan
  6. Intellectual Capital and Productivity: Identification and the Measurement of the Relationship at Company-level By Antti Lönnqvist
  7. Changing Income Structure, Ownership and Performance: An Empirical Analysis of Indian Banking Sector By Umakrishnan, K U; Bandyopadhyay, Arindam
  8. Transforming Incentives: Analysis of Personnel and Employee Output Data in a Large J apanese Auto Sales Firm By Tsuyoshi Tsuru
  9. Training and Hiring Strategies to Improve Firm Performance By Mika Maliranta; Rita Asplund
  10. Labour Turnover and Firm Performance By Sarah Brown; Gaia Garino; Christopher Martin
  11. A constant elasticity of profit production function By Beard, Rodney

  1. By: Diewert, Erwin
    Abstract: The paper reviews some of the measurement problems that are associated with measuring sectoral Total Factor Productivity growth rates. The paper notes that the production accounts in the present System of National Accounts (SNA) need to be extended somewhat in order to be suitable as a data base for measuring sectoral productivity growth rates. In particular, the treatment of exports, imports and indirect taxes is not completely adequate for productivity measurement purposes in the present SNA. Finally, the paper considers some of the problems that are associated with the measurement of banking sector outputs and the System of National Accounts FISIM (Financial Intermediation Services Indirectly Measured) imputations.
    JEL: C43 C67 C82 D24 D57 D92 E22 F11
    Date: 2007–11–16
  2. By: Agustí Segarra-Blasco (Grup de Recerca en Indústria i Territori(GRIT), Departament d'Economia, Universitat Rovira i Virgili.)
    Abstract: This paper analyses the performance of companies’ R&D and innovation and the effects of intra- and inter-industry R&D spillover on firms’ productivity in Catalonia. The paper deals simultaneously with the performance of manufacturing and service firms, with the aim of highlighting the growing role of knowledge-intensive services in promoting innovation and productivity gains. We find that intra-industry R&D spillovers have an important effect on the productivity level of manufacturing firms, and the inter-industrial R&D spillovers related to computer and software services also play an important role, especially in high-tech manufacturing industries. The main conclusion is that the traditional classification of manufactured goods and services no longer makes sense in the ‘knowledge economy’ and in Catalonia the regional policy makers will have to design policies that favour inter-industrial R&D flows, especially from high-tech services.
    Keywords: Innovation, R&D spillovers, KIS services, Productivity
    JEL: L10
    Date: 2007–11
  3. By: Axel Dreher (KOF Swiss Economic Institute, ETH Zurich); Pierre-Guillaume Méon (University of Brussels, DULBEA, Belgium); Friedrich Schneider (Department of Economics, Johannes Kepler University of Linz, Austria)
    Abstract: This paper assesses the relationship between institutions, output, and productivity, when official output is corrected for the size of the shadow economy. Our results confirm the usual positive impact of institutional quality on official output and total factor productivity, and its negative impact on the size of the underground economy. However, once output is corrected for the shadow economy, the relationship between institutions and output becomes weaker. The impact of institutions on total (“corrected”) factor productivity even becomes insignificant. Differences in corrected output must then be attributed to differences in factor endowments. These results survive several tests for robustness.
    Keywords: shadow economy, income, aggregate productivity, development accounting
    JEL: O11 O17 O47 O5
    Date: 2007–10
  4. By: Pedro S. Martins; Yong Yang
    Abstract: We conduct a meta-analysis of more than 30 papers that study the causal relationship between exporting and firm productivity. Our results, robust to different specifications and to different weights for each observation, indicate that the impact of exporting upon productivity is higher 1) at developing economies (when compared to developed economies); 2) in the first year that firms start exporting (compared to later years); 3) with other estimators than OLS; and 4) when the sample used in the paper is not restricted to matched firms. Moreover, we find no evidence of publication bias.
    Keywords: Productivity, Globalisation, Publication Bias
    JEL: F15 F20
    Date: 2007–10
  5. By: Wolfgang Steffen; Johannes Stephan
    Abstract: This paper assess determinants of productivity gaps between firms in the European transition countries and regions and firms in West Germany. The analysis is conducted at the firm level by use of a unique database constructed by field work. The determinants tested in a simple econometric regression model are focussed upon the issue of human capital and modern market-oriented management. The results are novel in as much as a solution was established for the puzzling results in related research with respect to a comparison of formal qualification between East and West. Furthermore, the analysis was able to establish that the kind of human capital and expertise mostly needed in the post-socialist firms are related to the particular requirements of a competitive marketbased economic environment. Finally, the analysis also finds empirical support for the role of capital deepening in productivity catch-up, as well as the case that the gaps in labour productivity are most importantly rooted in a more labour-intense production, which does not give rise to a competitive disadvantage.
    Keywords: Productivity gap, Central East Europe, East Germany, firm-level analysis 1
    JEL: L6 M2
    Date: 2007–11
  6. By: Antti Lönnqvist
    Abstract: ABSTRACT : A company’s intellectual capital consists of a set of various non-physical sources of value, such as employee competencies, stakeholder relationships and patents. This paper examines the relationship between intellectual capital and productivity at company-level. It is based on a conceptual study aiming to understand the relationship as well as two statistical studies aiming to describe it empirically. The empirical examination is based on information gathered from the financial statements of Finnish companies between 2001 and 2003. Altogether around 20.000 companies are included in the analysis, in which the results of intellectual capital measures and productivity measures are examined. The conceptual study suggests that the company-level relationship between IC and productivity is a complex and case-specific phenomenon. The biggest problems in studying the relationship are related to IC measurement. Valid and comparable IC measures are missing, and due to the case-specific nature of IC, measures that would be generic and still relevant in different companies may be very difficult to create. Although it seems most probable that there is a strong relationship between IC and productivity it is difficult to ascertain the relationship empirically. Also in this paper, the empirical relationship was not clearly shown. However, instead of discussing about the generic relationship between IC and productivity it might be more useful to focus on various interrelated relationships between different IC-factors and productivity.
    Keywords: intellectual capital, management, measurement, productivity, profitability
    Date: 2007–11–20
  7. By: Umakrishnan, K U; Bandyopadhyay, Arindam
    Abstract: This paper investigates the relationship between the changing patterns of bank’s source of income and risk adjusted performance. A database of 77 banks over the period of 1999 to 2004 is constructed for the 27 public sector banks, 22 private banks, 25 foreign banks and 3 cooperative banks to compare their change in income composition. Bank’s performance is measured by risk adjusted return on BIS risk allocated capital (RARORAC). To examine the relationship between ownership pattern and performance, we compare the difference between new generation private sector banks and foreign banks with their public sector and cooperative banks counterparts. We argue that in a competitive financial market in order to change the profitability drivers in banking, Indian banks need to improve their non-interest income and also augment risk adjusted interest income through better risk based pricing.
    Keywords: Banking; Value creation and performance
    JEL: L11 G32 D60 G21
    Date: 2005–12–31
  8. By: Tsuyoshi Tsuru
    Abstract: This paper analyzes the economic consequences of performance-oriented human resource (HR) system reform at Auto Japan (pseudonym), one of the largest Japanese auto sales firms, using personnel and employee output data. The author overviews the three major components of the HR reform: base wages, performance-based pay, and performance rating systems. Then the author examines the productivity effect of the reform. The performance-based pay was changed from combining a base wage with a simple performance pay system to instead a scheme kinked around a draw line (representing aggregate base pay) to intensify incentives. The introduction of the draw formula performance-based pay system raised the productivity of the new car sales staff, but generally failed to raise the productivity of the used car sales staff. The evidence suggests that while Auto Japanfs performance-oriented HR system reform, which was typical of reforms instituted among major Japanese firms in the late 1990s, changed the wage structure and grading pattern of employees, it brought only slight improvement in individual productivity. Incentives have been the essence of economics and firm organization. Pay for performance has drawn great interest from both personnel economists and HR practitioners. Yet, it has been difficult to capture the relationship between pay and productivity in most industries and occupations. In path-breaking works, Lazear (2000) and Paarsh and Shearer (1999, 2000) show that the introduction of performance-based pay has the effect of stimulating employee effort. However, the jobs analyzed in those studies are too simple to hold much meaning for professional occupations. The purpose of this paper is to examine the economic consequences of performance-oriented human resource (HR) system reform at Auto Japan (pseudonym), one of the largest Japanese auto sales firms, using personnel and employee output data.
    Date: 2007–08
  9. By: Mika Maliranta; Rita Asplund
    Abstract: ABSTRACT : We study how upgrading the skills of the personnel affects a firm’s performance. Two different strategies are examined : 1) providing formal training and 2) strategic recruitment and separation policy. The use of register-based longitudinal employer-employee data supplemented with a survey on vocational training provides an opportunity to shed fresh light on the issue and allows us to address the usual econometric problems. We find that internally (but not externally) organized training stimulates subsequent growth of performance but only when combined with the implementation of new process or product technology. Hiring highly skilled workers is initially costly to firms but is productivity-enhancing in the long run.
    Keywords: productivity, profitability, training, education, hiring
    JEL: J24 M5 O3 D2
    Date: 2007–11–16
  10. By: Sarah Brown; Gaia Garino; Christopher Martin (Department of Economics, The University of Sheffield)
    Keywords: Firm Performance; Labour Turnover; Quit Rates
    JEL: J21 J23 E3 F4
    Date: 2007–09
  11. By: Beard, Rodney
    Abstract: Impact analysis of changes in production inputs may be simplified if one can apply a constant adjustment factor to profit. In particular, if a production function can be found for which the elasticity of profit is constant and this function has desirable properties, then one can use the input elasticity of profit to study the impact of input changes on profit. In this paper such a production function is derived from first principles.
    Keywords: Impact analysis; Production economics; elasticities
    JEL: D24 M21
    Date: 2007–11

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