New Economics Papers
on Efficiency and Productivity
Issue of 2008‒04‒04
three papers chosen by

  1. Are Indian Firms too Small? A Nonparametric Analysis of Cost Efficiency and Industry Structure of Indian Manufacturing By Subhash Ray
  2. From Average to the Frontier: A Nonparametric Performance Approach for Analyzing Externalities and Regions’ Innovativeness By Tom Broekel
  3. Resolving the Anglo-German Industrial Productivity Puzzle, 1895-1935 : A Response to Professor Ritschl By Broadberry, Stephen; Burhop, Carsten

  1. By: Subhash Ray (University of Connecticut)
    Abstract: In this paper we use the 2004-05 Annual Survey of Industries data to estimate the levels of cost efficiency of Indian manufacturing firms in the various states and also get state level measures of industrial organization (IO) efficiency. The empirical results show the presence of considerable cost inefficiency in a majority of the states. Further, we also find that, on average, Indian firms are too small. Consolidating them to attain the optimal scale would further enhance efficiency and lower average cost.
    Keywords: Data Envelopment Analysis; Efficient Production Scale; Industry Efficiency
    JEL: C61 D21 L60
    Date: 2008–03
  2. By: Tom Broekel
    Abstract: Although a rich literature has emerged analyzing the impact of localization, urbanization, and Jacobs externalities on regional innovativeness, the findings are still contradictory. Traditional studies differ mainly in the employed data but rely on similar empirical approaches. This paper argues in favor of using in this context production frontier approaches instead of the commonly employed production function approaches. In addition, a nonparametric frontier approach is used to empirically examine the influence of the externalities on regions’ innovativeness. For four different industries positive effect of localization and urbanization externalities are found. In contrast, with the exception of the transport equipment industry, Jacobs externalities seem to be of minor importance.
    Keywords: regional innovation performance, nonparametric frontier analysis, German electrics, electronics industry
    JEL: R12 O18 O31
    Date: 2008–03
  3. By: Broadberry, Stephen (Department of Economics, University of Warwick,); Burhop, Carsten (Max Planck Institute for Research on Collective Goods)
    Abstract: This paper offers a critical appraisal of the claim of Ritschl (2008) to have found a “possible resolution” to what he calls the “Anglo-German industrial productivity puzzle”. To understand the origins of this term, it is necessary to describe some recent developments in comparisons of industrial labour productivity between Britain and Germany. The Anglo-German industrial productivity puzzle really arose as the result of a new industrial production index produced by Ritschl (2004), which differed very substantially from the widely used index of Hoffmann (1965). Broadberry and Burhop (2007) pointed out that if the Ritschl (2004) index is combined with an index of German employment from Hoffmann (1965) and time series of UK output and employment from Feinstein (1972), it implies an implausibly high German labour productivity lead over Britain in 1907, when projected back from a widely accepted Germany/UK labour productivity benchmark for 1935/36.
    Date: 2008

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