nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2008‒04‒15
ten papers chosen by
Angelo Zago
University of Verona

  1. Productivity and Proximity By Don Webber; Paul White
  2. Innovation and Firms' Productivity Growth in Slovenia: Sensitivity of Results to Sectoral Heterogeneity and to Estimation Method By Joze P. Damijan; Crt Kostevc; Matija Rojec
  4. What Drives the Productive Efficiency of a Firm? - the importance of industry, location, R&D, and size By Badunenko, Oleg; Fritsch, Michael; Stephan, Andreas
  5. Privatization and Enterprise Performance in Nigeria: Case Study of Some Privatized Enterprises By Afeikhena Jerome
  6. International Business Visits and the Technology Frontier By Dowrick, Steve; Tani, Massimiliano
  7. The OECD System of Unit Labour Cost and Related Indicators By Richard McKenzie; David Brackfield
  8. The Contribution of Restructuring and Reallocation to China's Productivity and Growth By Haiyan Deng; Robert H. McGuckin; John C. Haltiwanger; Xu Jianyi; Liu Yaodong; Liu Yuqi
  9. Input Price Variation Across Locations and a Generalized Measure of Cost Efficiency By Subhash C. Ray; Lei Chen; Kankana Mukherjee
  10. Product Market Regulation and economic performance across Indian States By Paul Conway; Richard Herd; Thomas Chalaux

  1. By: Don Webber (School of Economics, University of the West of England, Bristol); Paul White (Department of Mathematics and Statistics, University of the West of England, Bristol, UK)
    Abstract: Abstract: Papers examining a developed nation’s labour productivity frequently ignore spatial effects. We present empirical results indicating that geographical proximity matters for plant-level productivity.
    Keywords: distance; labour productivity
    JEL: C21 R32
    Date: 2008–03
  2. By: Joze P. Damijan; Crt Kostevc; Matija Rojec
    Abstract: The paper examines implications of endogenous growth theory on the relationship between firm productivity, innovation as well as productivity growth by combining information on firm-level innovation (CIS) with accounting data for a large sample of Slovenian firms in the period 1996-2002. We employ several different estimation methods in order to control for the endogeneity of innovation (Crépon-Duguet- Mairesse - CDM - approach) and idiosyncratic firm characteristics (matching and average treatment effects). We find a significant and robust link between productivity levels and firm propensity to innovate, while the results on the link between innovation activity and productivity growth are not robust to different econometric approaches. OLS estimates seem to provide some empirical support to the thesis of positive impact of innovation on productivity growth. More detailed empirical tests, however, reveal that these results are mainly driven by the exceptional performance of a specific group of services firms located in the fourth quintile with respect to size, productivity and R&D propensity measure. Estimates based on the matching techniques do not reveal any significant positive effects of innovation on productivity growth, regardless of the sectors, firm size and type of innovation.
    Keywords: Research and development, innovation, knowledge spillovers, productivity growth
    JEL: D24 F14 F21
    Date: 2008
  3. By: Goncharuk, Anatoliy G.
    Abstract: The paper states empirical results of inter-branch research of efficiency of the industry of Ukraine as the first and one of the basic stages of the three-level analysis of efficiency (Goncharuk 2007). By results of the analysis groups of high, low and medium efficient industries are determined. Dynamics of efficiency and impact of major factors on it are revealed.
    Keywords: industry; factors; super-efficiency; Data envelopment analysis; Ukraine
    JEL: C14 D24 L60
    Date: 2008–03–28
  4. By: Badunenko, Oleg (DIW Berlin); Fritsch, Michael (Friedrich Schiller University Jena, Max Planck Institute of Economics Jena and DIW); Stephan, Andreas (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper investigates the factors that explain the level and dynamics of manufacturing firm productive efficiency. In our empirical analysis, we use a unique sample of about 39,000 firms in 256 industries from the German Cost Structure Census over the years 1992-2005. We estimate the efficiencies of the firms and relate them to firm-specific and environmental factors. We find that (1) about half the model’s explanatory power is due to industry effects, (2) firm size accounts for another 20 percent, and (3) location of headquarters explains approximately 15 percent. Interestingly, most other firm characteristics, such as R&D intensity, outsourcing activities, or the number of owners, have extremely little explanatory power. Surprisingly, our findings suggest that higher R&D intensity is associated with being less efficient, though higher R&D spending increases a firm’s efficiency over time.
    Keywords: Frontier analysis; determinants of efficiency; firm performance; industry effects; regional effects; firm size
    JEL: D24 L10 L25
    Date: 2008–04–02
  5. By: Afeikhena Jerome
    Abstract: Despite an impressive level of privatization activity across Africa and the upsurge in research on the operating performance of privatized firms in both developed and developing economies, our empirical knowledge of the privatization programme in Africa is limited. This study appraises the post-privatization performance of some privatized enterprises in Nigeria. The specific indicators examined are profitability, productive efficiency, employment, capital investment, output, prices and taxes. The study measures the change in any given indicator of performance by comparing its average value five years before and five years after privatization. Data envelopment analysis (DEA) is also deployed to assess changes in the level of technical efficiency in the selected enterprises. The results, albeit mixed, show significant increases in these indicators. Privatization is also associated with increase in technical efficiency in the affected enterprises. Reduction of politically motivated resource allocation has unquestionably been the principal benefit of privatization in Nigeria.
    Date: 2008–02
  6. By: Dowrick, Steve (Australian National University); Tani, Massimiliano (Macquarie University, Sydney)
    Abstract: This paper studies the impact of international business trips on the stock of knowledge available to an economy. It develops a theoretical model to analyse the possible effects, and presents an empirical application using productivity data for a panel of twelve Australian industries during 1991/2-2005/6. Business trips emerge as a significant source of productivity growth. As the knowledge transferred through business visits is non-rival, both countries of origin and destination can gain from the human capital of travellers. As a result, even countries traditionally disadvantaged by geography, size, or level of economic development have the opportunity to access the latest technology and information to stimulate growth.
    Keywords: international labour movements, face-to-face meetings, business trips, growth, productivity
    JEL: F2 J6
    Date: 2008–03
  7. By: Richard McKenzie; David Brackfield
    Abstract: This paper outlines in detail the methodology and statistical processes used for compiling the outputs of the OECD System of Unit Labour Cost and Related Indicators. This new System has been developed by the OECD in response to concerns from the international community of economic analysts on the limited availability of internationally comparable data concerning labour costs, particularly in activities outside of Manufacturing and on a sub-annual basis. The outputs of this System, which are updated at the end of each quarter, consist of long time series of annual and quarterly unit labour cost and related indicators compiled using a specific methodology to maximise comparability across countries. The related indicators include annual time series for: labour productivity; labour compensation per unit labour input (including PPP adjusted); exchange rate adjusted unit labour costs and; labour income share ratios. Data are available for all OECD Member countries and the Euro area for a wide range of economic activities including Total Economy, Manufacturing & Industry, Market Services and the Business Sector. The release of this new product represents the outcome of four years of development work by the OECD that has benefited from contributions by academia and national consultants, and involved extensive consultation with national statistics offices, national central banks, and the OECD Economics Department. <BR>Cet article décrit de façon détaillée la méthodologie et les procédés statistiques utilisés dans le calcul des résultats du Système OCDE des coûts unitaires de la main d'euvre et d?indicateurs associés. L'OCDE a développé ce nouveau système en réponse aux préoccupations de la communauté internationale des analystes économiques sur la disponibilité limitée de coûts de la main d'oeuvre comparables à l'échelle internationale, notamment sur une base infra-annuelle et pour des activités autres que manufacturières. Les résultats de ce système, mis à jour à la fin de chaque trimestre, sont des séries chronologiques longues de coûts unitaires de la main d'oeuvre trimestriels et annuels et d'indicateurs associés. Ces séries sont calculées selon une méthodologie spécifique maximisant la comparabilité entre les pays. Les indicateurs associés incluent des séries chronologiques annuelles pour : la productivité du travail ; la rémunération du travail par unité de main d'oeuvre (y compris un ajustement par les PPA) ; les coûts unitaires de la main d'oeuvre ajustés des taux de change et la part des revenus du travail dans la valeur ajoutée (ratios). Les donnée sont disponibles pour tous les pays membres de l'OCDE et la Zone euro pour un large éventail d'activités économiques : Économie totale, activités de fabrication et industrie, services marchands et secteur marchand. La publication de ce nouveau produit représente le fruit de quatre années de développement par l'OCDE, qui a bénéficié des contributions de consultants académiques et nationaux, et a impliqué une large consultation avec les instituts statistiques nationaux, les banques centrales nationales et le département des affaires économiques de l'OCDE.
    Date: 2008–03–21
  8. By: Haiyan Deng (The Conference Board); Robert H. McGuckin (The Conference Board); John C. Haltiwanger (University of Maryland); Xu Jianyi (NBS); Liu Yaodong (NBS); Liu Yuqi (NBS)
    Abstract: China has exhibited very rapid measured aggregate productivity growth. At the same time, the structure of its markets and the structure of businesses have been changing at an equally rapid rate. In this paper, we measure the extent of restructuring and the reallocation of resources (including the reallocation of jobs) and then quantify the contribution of the reallocation and restructuring to the aggregate productivity growth of China's industrial structure. Our gross job flow analysis illustrates that reallocation and restructuring took many forms including shedding of jobs by government controlled enterprises and the increasing share of employment for FDI joint ventures. However, the analysis shows that it is not just shifts between firm types that are important but also reallocation and restructuring within firm types. For example, we find a high pace of job reallocation within SOEs and FDI joint ventures over and above what is needed to accommodate the net changes for these firm types (as high as 28 and 22 percent, respectively). We find evidence that the restructuring and reallocation contributed significantly to the high productivity growth. For example, our analysis shows that more than half of the labor productivity growth in 2001 is due to reallocation and restructuring. In that year, the industrial sector exhibited a labor productivity growth rate of around 22 percent which in the absence of reallocation and restructuring would have been around 10 percent.
    Date: 2007–12
  9. By: Subhash C. Ray (University of Connecticut); Lei Chen (University of Connecticut); Kankana Mukherjee (Worcester Polytechnic Institute)
    Abstract: We propose a nonparametric model for global cost minimization as a framework for optimal allocation of a firm's output target across multiple locations, taking account of differences in input prices and technologies across locations. This should be useful for firms planning production sites within a country and for foreign direct investment decisions by multi-national firms. Two illustrative examples are included. The first example considers the production location decision of a manufacturing firm across a number of adjacent states of the US. In the other example, we consider the optimal allocation of US and Canadian automobile manufacturers across the two countries.
    Keywords: Cost minimization; Data Envelopment Analysis; Heterogeneous technology; Location efficiency
    Date: 2008–03
  10. By: Paul Conway; Richard Herd; Thomas Chalaux
    Abstract: This paper uses the OECD's indicators of product market regulation to assess the extent to which the regulatory environment affects economic performance across Indian states. The degree to which product market regulation is supportive of competition is found to vary considerably across states. Furthermore, regression results indicate that these differences in regulation have a significant impact on both labour and total factor productivity. States in which the regulatory environment restricts competition have lower productivity growth in comparison to states in which regulation is more supportive of competition. Relatively liberal states are also found to attract more foreign investment and have a larger share of employment in the organised sector in comparison to states with a more restrictive regulatory environment. State governments that have enacted a relatively liberal regulatory framework have also been more successful at infrastructure provision. Ongoing reform of product market regulation is necessary to improve productivity growth further and ensure that the benefits of reform are distributed more widely across the country. This working Paper relates to the 2007 Economic Survey of India ( <P>Réglementation des marchés de produits et performances économiques dans les États de l'Union indienne <BR>Nous utilisons dans ce document les indicateurs de réglementation des marchés de produits (RMP) de l'OCDE pour évaluer les répercussions de l'environnement réglementaire sur les performances économiques des États de l'Union indienne. Nous parvenons à la conclusion que la mesure dans laquelle la réglementation des marchés de produits favorise la concurrence varie considérablement suivant les États. En outre, les résultats obtenus par analyse de régression indiquent que ces différences de réglementation ont un impact sensible tant sur la productivité de la main-d'oeuvre que sur la productivité totale des facteurs. Les États où l'environnement réglementaire restreint la concurrence enregistrent des gains de productivité plus faibles que ceux dans lesquels la réglementation est plus propice au libre jeu des forces du marché. Nous montrons également que les États relativement libéraux attirent davantage l'investissement étranger, qu'ils ont de meilleures infrastructures, et que le secteur organisé y représente une proportion plus importante de l'emploi que dans les États ayant un cadre réglementaire plus restrictif. Les États qui ont décrété un système réglementaire relativement libéral sont aussi ceux qui ont connu le plus de réussite dans l'approvisionnement en infrastructure. Les autorités doivent aller plus loin dans la réforme de la réglementation des marchés de produits pour renforcer encore la croissance de la productivité, et veiller à ce que les fruits des réformes soient plus largement distribués dans l'ensemble du pays. Ce document de travail se rapporte à l'Étude économique de l'Inde 2007 (
    Keywords: productivity convergence, institutions and growth, convergence de la productivité, institutions et croissance
    JEL: K2 L5 O1 O4
    Date: 2008–03–28

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