New Economics Papers
on Efficiency and Productivity
Issue of 2008‒02‒23
twelve papers chosen by

  1. Malmquist Indices of Pre and Post-Deregulation Productivity, Efficiency and Technological Change in the Singaporean Banking Sector By Boon L. Lee; Andrew C. Worthington; Wai Ho Leong
  2. Why are some Spanish regions so much more efficient than others? By Jaume Puig; Jaime Pinilla
  3. Exports and productivity – comparable evidence for 14 countries By The International Study Group on Exports and Productivity; Mauro Pisu
  4. Productivity Gains from Offshoring: an Empirical Analysis for the Netherlands By Frank A.G. den Butter; Christiaan Pattipeilohy
  5. Agglomeration Economies: Microdata Panel Estimates from Canadian Manufacturing By Baldwin, John R.; Brown, W. Mark; Rigby, David
  6. Productivity, Multinationals and Knowledge Spillovers: Evidence from the UK Retail Sector By Anon-Higon, Dolores; Vasilakos, Nicholas
  7. Exporting Spillovers: Firm-Level Evidence from Argentina By F. Albornoz, M. Kugler
  8. Convergence in Bangladesh Agriculture By Rahmatullah Abul Bashar Md
  9. Productivity polarization across regions in Europe By Roberto Basile
  10. Industrial Activity in Indian States: The Role of Infrastructure By Dutta, Jayasri; Horsewood, Nicholas; Vasilakos, Nicholas
  11. Ethnic Scientific Communities and International Technology Diffusion By William R. Kerr
  12. Dynamic Adjustments to Terms of Trade Shocks: The USA Productivity Boom and Australia By Richard G. Harris; Peter E. Robertson

  1. By: Boon L. Lee (School of Economics and Finance, Queensland University of Technology, Brisbane, Queensland, Australi); Andrew C. Worthington (Department of Accounting, Finance and Economics, Griffith University, Nathan, Queensland, Australia); Wai Ho Leong (Economics Division, Ministry of Trade and Industry, Singapore)
    Abstract: By the end of the 1990s, the Singaporean government had recognised the need to open up its banking sector so as to remain competitive in the global economy. The Monetary Authority of Singapore thus began deregulation of the banking sector in 1999 to strengthening the competitiveness of local banks relative to their foreign competition through mergers. This paper employs a nonparametric Malmquist productivity index to provide measure of productivity, technological change and efficiency gains over the period 1995-2005. The findings reveal some total factor productivity growth associated with deregulation and scale efficiency improvement largely from mergers amongst the local banks.
    Keywords: Efficiency, productivity; deregulation; Malmquist indices; banking
    JEL: G21 D24
  2. By: Jaume Puig; Jaime Pinilla
    Abstract: This article investigates the main sources of heterogeneity in regional efficiency. We estimate a translog stochastic frontier production function in the analysis of Spanish regions in the period 1964-1996, to attempt to measure and explain changes in technical efficiency. Our results confirm that regional inefficiency is significantly and positively correlated with the ratio of public capital to private capital. The proportion of service industries in the private capital, the proportion of public capital devoted to transport infrastructures, the industrial specialization, and spatial spillovers from transport infrastructures in neighbouring regions significantly contributed to improve regional efficiency.
    Keywords: Regional efficiency, Regional spillovers, Human capital, Public capital
    JEL: C23 H54 R11 R53
    Date: 2008–02
  3. By: The International Study Group on Exports and Productivity; Mauro Pisu (National Bank of Belgium, Research Department)
    Abstract: Consisting of teams working with firm level data, the International Study Group on Exports and Productivity has used comparable micro level panel data for 14 countries and a set of identically specified empirical models to investigate the relationship between exports and productivity. The 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. The authors document that the exporter premia differ considerably across countries in identically specified empirical models. In a meta-analysis of the results they 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: F14 D21
    Date: 2008–02
  4. By: Frank A.G. den Butter (VU University Amsterdam); Christiaan Pattipeilohy (VU University Amsterdam, and Frisch Center, Oslo)
    Abstract: A major question in the globalization debate is whether outsourcing and offshoring activities are beneficial to the home country. This paper investigates the effects on productivity and trade from the perspective of transaction costs, using a recent theory on trade in tasks. A production function is estimated for the Netherlands for the period 1972-2001. It suggests that the effect of offshoring manufacturing and services on total factor productivity (TFP) is positive and larger than the effect of R&D on productivity.
    Keywords: globalization; offshoring; foreign direct investments; transaction costs; total factor productivity
    JEL: F10 F43 O47
    Date: 2007–11–23
  5. By: Baldwin, John R.; Brown, W. Mark; Rigby, David
    Abstract: Productivity and wages tend to be higher in cities. This is typically explained by agglomeration economies, which increase the returns associated with urban locations. Competing arguments of specialization and diversity undergird these claims. Empirical research has long sought to confirm the existence of agglomeration economies and to adjudicate between the models of Marshall, Arrow and Romer (MAR) that suggest the benefits of proximity are largely confined to individual industries, and the claims of Jacobs (1969) that such benefits derive from a general increase in the density of economic activity in a particular place and are shared by all occupants of that location. The primary goal of this paper is to identify the main sources of urban increasing returns, after Marshall (1920). A secondary goal is to examine the geographical distance across which externalities flow between businesses in the same industry. We bring to bear on these questions plant-level data organized in the form of a panel across the years 1989 and 1999. The panel data overcome selection bias resulting from unobserved plant-level heterogeneity that is constant over time. Plant-level production functions are estimated across the Canadian manufacturing sector as a whole and for five broad industry groups, each characterized by the nature of their output. Results provide strong support for Marshall's (1920) claims about the importance of buyer-supplier networks, labour market pooling and spillovers. The data show spillovers enhance plant productivity within industries rather than between them and that these spillovers tend to be more spatially extensive than previous studies have found.
    Keywords: Manufacturing, Business performance and ownership, Economic accounts, Regional and urban profiles, Productivity accounts
    Date: 2008–02–05
  6. By: Anon-Higon, Dolores; Vasilakos, Nicholas
    Abstract: This paper discusses the impact of foreign-ownership presence on the productivity performance of domestically-owned British retailers. In specific, we investigate the existence of productivity spillovers in the form of knowledge transfer. To guide our estimations, we develop a simple Hotelling model in which we show how the transfer of operational knowledge from MNE to non-MNE retailers, may result to an increase in the productivity of the latter and increased economic activity in the regions with relatively higher concentration of foreign investment. Our empirical estimations lend support to the assumptions upon which the theoretical model is built, while confirming the positive and highly significant impact of these spillovers on the productivity performance of domestic firms. More specifically, using data from the Annual Respondent Dataset (ARD), we find that positive spillovers exist but are mostly confined to the region in which foreign subsidiaries locate. Furthermore, the productivity benefit from regional FDI spillovers increases with the absorptive capacity of domestic retailers.
    Keywords: FDI; Multinationals; Productivity; Retailing; Spillovers
    JEL: L25 F23 L81 D24
    Date: 2008–02
  7. By: F. Albornoz, M. Kugler (Wilfrid Laurier University)
    Abstract: We investigate whether exporting firms generate possibilities for productivity enhancement by other firms through spillovers. While spillovers have been analyzed when domestic learn from foreign-owned firms, we consider the possibility of learning from firms that export, irrespective of ownership origin. We find evidence consistent with learning from exporters to upstream producers. Foreign-owned firms that do not export do not generate spillovers. Therefore, our results suggest that export activity, as opposed to foreign direct investment (FDI) per se, is associated with knowledge diffusion to input suppliers. Indeed, the results suggest that FDI subsidies to foster technology spillovers may well be dominated by certain export promotion strategies. In addition, removing barriers to exports can prove less costly than removing barriers to FDI inflows.
    Keywords: Exporting, Spillovers, FDI, Supply-Chain Linkages
    JEL: O30 F10
    Date: 2008
  8. By: Rahmatullah Abul Bashar Md (American International University Bangladesh)
    Abstract: We address the issue of convergence in agricultural productivity among districts in Bangladesh. We employed cross-section convergence test, and convergence, and panel unit root convergence test. The coefficient of the initial productivity level is negative and significant in convergence test indicating convergence in agricultural productivity. The result of convergence test shows that there has been a decrease in the cross-districts dispersion of productivity in agriculture over the entire time period. The panel unit root test supports the conventional test, and therefore, we may conclude that dispersion of productivity is stationary providing strong evidence that the districts do exhibit long run convergence.
    Date: 2008–01
  9. By: Roberto Basile
    Abstract: The regional distribution of labor productivity in Western Europe is characterised by a Core-Periphery spatial pattern: high (low) productivity regions are in a proximate relationship with other high (low) productivity regions. Over the last twenty years, intra-distribution dynamics has generated long-run multiple equilibria with the formation of two clubs of convergence. The observed dynamics can be only marginally explained by nonlinear effects in the accumulation of physical capital. In contrast, the joint effect of spatial dependence and nonlinearities in growth behavior plays a key role in determining multiple equilibria and reinforcing polarization of labor productivity.
    Keywords: distribution dynamics, convergence, spatial dependence, Europe
    JEL: R11 R12 C14 C21
    Date: 2007–04–10
  10. By: Dutta, Jayasri; Horsewood, Nicholas; Vasilakos, Nicholas
    Abstract: We use panel data for fourteen Indian states to assess the influence of public infrastructure on industrial activity, namely productivity, employment, real wages and investment, at the state level and over the period 1974-1998. Our results indicate that the length of national highways has on average the greatest impact on each of the four measures of industrial activity. While the length of national highways and electricity generating capacity are found to be important determinants of state real wages and productivity, total highway length is a key variable in determining the level of investment in fixed capital in each state.
    Keywords: Industrial activity; productivity; infrastructure; wages; investment
    JEL: H54 R12 D24
    Date: 2007–07
  11. By: William R. Kerr (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: This study explores the importance of knowledge transfer for international technology diffusion by examining ethnic scientific and entrepreneurial communities in the US and their ties to their home countries. US ethnic research communities are quantified by applying an ethnic-name database to individual patent records. International patent citations con.rm knowledge diffuses through ethnic networks, and manufacturing output in foreign countries increases with an elasticity of 0.1-0.3 to stronger scientific integration with the US frontier. To address reverse-causality concerns, reduced-form specifications exploit exogenous changes in US immigration quotas. Consistent with a model of sector reallocation, output growth in less developed economies is facilitated by employment gains, while more advanced economies experience sharper increases in labor productivity. The ethnic transfer mechanism is especially strong in high-tech industries and among Chinese economies. The findings suggest channels for transferring codified and tacit knowledge partly shape the effective technology frontiers of developing and emerging economies.
    Keywords: Technology Transfer, Tacit Knowledge, Productivity, Patents, Innovation, Research and Development, Entrepreneurship, Immigration, Networks.
    JEL: F22 J44 J61 O31 O32 O33 O41 O57
    Date: 2005–11
  12. By: Richard G. Harris (Department of Economics, Simon Fraser University); Peter E. Robertson (School of Economics, The University of New South Wales)
    Abstract: How has the USA’s “new economy” productivity boom affected Australia? We consider this question using a dynamic multi-sector growth model of the Australian and USA economies. We find that productivity growth in the USA durables sector generates small but important gains to Australia. We find that the transmission of growth is generated through increased export demand for Agriculture. Consequently we find that the USA’s productivity growth tends to favour Australia’s traditional export sectors. Likewise it increases the relative demand for less skilled labour in Australia and reduces the demand for skilled labour and higher education.
    Keywords: Terms of Trade; Productivity; Economic Growth; Human Capital; Computable General Equilibrium Models
    Date: 2007–06

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