New Economics Papers
on Efficiency and Productivity
Issue of 2008‒02‒02
five papers chosen by

  1. Productivity in the National Health Service By Peter Hart
  2. Exports and productivity comparable evidence for 14 countries By International Study Group on Exports and Productivity
  3. Unions, Training, and Firm Performance By Addison, John T.; Belfield, Clive R.
  4. Axiomatic Foundations of Efficiency Measurement on Data-Generated Technologies By R. Robert Russell; William Schworm
  5. Competition versus Efficiency: What drives franchise values in European banking? By O. DE JONGHE; R. VANDER VENNET

  1. By: Peter Hart (Centre for Institutional Performance, Department of Economics, University of Reading Business School)
    Date: 2007
  2. By: International Study Group on Exports and Productivity
    Abstract: We use comparable micro level panel data for 14 countries and a set of identically specified empirical models to investigate the relationship between exports and productivity. Our overall results are in line with the big picture that is by now familiar from the literature: Exporters are more productive than non-exporters when observed and unobserved heterogeneity are controlled for, and these exporter productivity premia tend to increase with the share of exports in total sales; there is strong evidence in favour of self-selection of more productive firms into export markets, but nearly no evidence in favour of the learning-by-exporting hypothesis. We document that the exporter premia differ considerably across countries in identically specified empirical models. In a meta-analysis of our results we find that countries that are more open and have more effective government report higher productivity premia. However, the level of development per se does not appear to be an explanation for the observed cross-country differences.
    Keywords: Exports, productivity, micro data, international comparison
    JEL: D21 F14
    Date: 2007
  3. By: Addison, John T. (University of South Carolina); Belfield, Clive R. (Queens College, CUNY)
    Abstract: The present paper uses a combination of workplace and linked employee-workplace data from the 1998 Workplace Employee Relations Survey and the 2004 Workplace Employment Relations Survey to examine the impact of unions on training incidence, training intensity/coverage, and training duration. It also examines the impact of unions and training on earnings and a measure of establishment labour productivity. In addition, the implications of training for the firm’s bottom line are evaluated. Union effects on training emerge as fairly subtle, and are more positive when using individual rather than plant-wide training data. A positive impact of training on earnings is detected in both the individual and plant-wide wage data, albeit only for the earlier survey. Consistent with other recent findings, the effects of union recognition on earnings are today rather muted, while union-training interaction effects vary greatly. Instrumenting training provides positive results for the labour productivity outcome and, in the case of the earlier survey, for the financial performance indicator as well. However, some negative effects of unions are now also detected.
    Keywords: labour productivity, union recognition, bargaining structure, employer-provided training, training Incidence, training intensity/coverage, training duration, earnings, financial performance
    JEL: J24 J33 J51
    Date: 2008–01
  4. By: R. Robert Russell (University of California, Riverside); William Schworm (School of Economics, The University of New South Wales)
    Abstract: Dmitruk and Koshevoy [1991 JET] provided a complete characterization of the class of technologies for which there exists an efficiency index satisfying the Fare-Lovell [1978 JET] axioms. The technologies implicit in the standard mathematical-programming methods of measuring efficiency, data envelopment analysis (DEA) and free-disposal-hull (FDH) analysis, belong to this class. We assess the ability of three well-known indexes, the Debreu-Farrell index, the Fare-Lovell index, and the Zieschang index, to satisfy not only the Fare-Lovell axioms but also continuity axioms (for technologies as well as input quantities), on this restricted class of technologies. Our principal conclusions are that (a) restriction to these data-based technologies adds continuity in input quantities to the properties satisfied by the Fare-Lovell and the Zieschang indexes (thus eliminating a salient advantage of the Debreu-Farrell index), but (b) none of the indexes satisfies all Fare-Lovell axioms (nor all continuity axioms) on either DEA or FDH technologies, and hence (c) trade-offs among the indexes remain. These findings provide motivation for the search for an index that does satisfy these axioms on DEA and FDH technologies.
    Keywords: Technical efficiency indexes; technical efficiency axioms
    JEL: C43 C61 D24
    Date: 2007–12
    Abstract: This paper investigates how stock market investors perceive the impact of market structure and efficiency on the long-run performance potential of European banks. To that end, a modified Tobin’s Q ratio is introduced as a measure of bank franchise value. This measure is applied to discriminate between the Market Structure and Efficient-Structure hypotheses in a coherent forward-looking framework, in which differences in banks’ horizontal and vertical differentiation strategies are controlled for. The results show that banks with better management or production technologies possess a long-run competitive advantage. In addition, bank market concentration does not affect all banks equally. Only the banks with a large market share in a concentrated market are able to generate non-competitive rents. The paper further documents that the forward-looking, long-run perspective and the noise adjustment of the performance measure overcome most of the drawbacks associated with testing these hypotheses in a multi-country set-up. Finally, notwithstanding the international expansion of bank activities, the harmonization of regulation and the macroeconomic convergence in the European Union (EU15), we still find that country-specific macroeconomic variables have a significant impact on bank performance. The findings indicate that there is a trade-off between competition and stability that should be taken into account when assessing mergers or acquisitions.
    Keywords: charter value, market power, efficiency, Tobin’s Q, stochastic frontier
    JEL: G21 G28 G32 L11
    Date: 2007–12

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