New Economics Papers
on Efficiency and Productivity
Issue of 2008‒05‒17
nine papers chosen by

  1. The return to the technological frontier: The conditional effect of plants’ R&D on their productivity in Finnish manufacturing By Böckerman, Petri; Eero , Lehto; Huovari, Janne
  2. Internationalization and economic performance of enterprises: evidence from firm-level data By Hagemejer, Jan; Kolasa, Marcin
  3. Performance of European Airports: Regulation, Ownership and Managerial Efficiency By Carlos Pestana Barros; Rui Cunha Marques
  4. Trade Liberalization and Productivity Dynamics: Evidence from Canada By Lileeva, Alla
  5. Technical Efficiency and Heterogeneity of Argentina Pension Funds By Carlos Pestana Barros; Gustavo Ferro; Carlos Romero
  6. How does FDI inflow affect productivity of domestic firms? The role of horizontal and vertical spillovers, absorptive capacity and competition By Kolasa, Marcin
  7. "Industrial Development, Firm Dynamics and Patterns of Productivity Growth: The Case of the Cotton Spinning Industry in Prewar Japan, 1894-1924" By Tetsuji Okazaki
  8. Cartels, managerial incentives, and productive efficiency in German coal mining, 1881-1913 By Carsten Burhop; Thorsten Luebbers
  9. Panel Data Estimates Of The Production Function And Product And Labor Market Imperfections By Sabien Dobbelaere; Jacques Mairesse

  1. By: Böckerman, Petri; Eero , Lehto; Huovari, Janne
    Abstract: This paper examines, through the use of plant-level data, whether R&D’s productivity impact is contingent on the distance of a plant’s productivity from the industry’s technological frontier. R&D is specified as an accumulated stock from R&D investments. We analyse the productivity effect of a plant’s own R&D as well as the productivity impact of the plant’s parent firm’s and other firms’ proximity-weighted R&D stocks. The results show that a plant’s own and a parent firm’s R&D have a positive productivity impact and that the former impact decreases as the distance from the industry’s technological frontier increases. Furthermore, the productivity effect of other firms’ proximity-weighted R&D is, on average, positive, but this impact increases in the distance from the technological frontier. Another important finding is that all the plants tend to converge towards the industry’s technological frontier despite the size of external R&D spillovers.
    Keywords: productivity; efficiency; technological frontier; spillovers; convergence
    JEL: D24 L00
    Date: 2008–05–12
  2. By: Hagemejer, Jan; Kolasa, Marcin
    Abstract: This paper provides evidence on the relative performance of internationalized firms using Polish firm-level data spanning over the period of 1996-2005. We distinguish between three modes of internationalization: exporting, importing of capital goods and foreign direct investment. Our results point strongly at superior performance of exporters vs. non-exporters importers vs. non-importers and foreign affiliates vs. domestic firms. We also find evidence for significant horizontal and backward productivity spillovers from all three types of international activity.
    Keywords: internationalization; productivity; panel firm-level data
    JEL: F15 L25 F23 O12
    Date: 2008–05
  3. By: Carlos Pestana Barros; Rui Cunha Marques
    Abstract: This paper analyzes regulation, ownership and unobserved managerial ability as factors affecting the performance of a representative sample of European airports by means of frontier models. The Alvarez, Arias and Greene (2004) frontier model is used. These airports are ranked according to their technical efficiency during the period 2001-2004 and homogenous and heterogeneous variables are disentangled in the cost function, which leads us to advise the implementation of common policies as well as policies by segments. Economic implications arising from the study are also considered.
    Keywords: Europe; airports; stochastic frontier models; regulation, ownership and unobserved managerial ability.
    Date: 2008–04
  4. By: Lileeva, Alla
    Abstract: This paper investigates the productivity effects of the Canada-United States Free Trade Agreement (FTA) on Canadian manufacturing. It finds that Canadian tariff cuts increased exit rates among moderately productive non-exporting plants. This led to the reallocation of market share toward highly productive plants, which helps explain why aggregate productivity gains were observed when Canadian tariffs were reduced. The paper also finds that all of the within-plant productivity gains resulting from the U.S. tariff cuts involved exporters and, especially, new entrants into the export market. It demonstrates that any lack of output responses and labour-shedding as a consequence of the FTA were experienced by Canadian plants who were non-exporters, while exporters captured the gains from the FTA.
    Keywords: International trade, Manufacturing, Business performance and ownership, Business adaptation and adjustment
    Date: 2008–05–07
  5. By: Carlos Pestana Barros; Gustavo Ferro; Carlos Romero
    Abstract: This paper examines the technical efficiency of Argentinean pension funds management companies using a random stochastic frontier model to rank the pension funds management companies, taking into account heterogeneity in the data. The empirical findings reveal that efficiency measures have a significant effect on pension funds efficiency. The implications for managers and policy makers are discussed.
    Keywords: Argentina; pension funds; efficiency; stochastic frontier models.
    JEL: G23
    Date: 2008–03
  6. By: Kolasa, Marcin
    Abstract: This paper examines the existence of externalities associated with FDI in a host country by exploiting firm-level panel data covering the Polish corporate sector. The main findings are as follows. Local firms benefit from foreign presence in the same industry and in downstream industries. Absorptive capacity of domestic firms is highly relevant to the size of spillovers. Competitive pressure facilitates backward spillovers, while market power increases the extent of forward spillovers. Host country equity participation in foreign firms is consistent with higher unconditional productivity spillovers to domestic firms.
    Keywords: foreign investment; spillovers; productivity; firm-level data
    JEL: F23 O33
    Date: 2007–03
  7. By: Tetsuji Okazaki (Faculty of Economics, University of Tokyo)
    Abstract: This paper explores the relationship between patterns of productivity growth and the development stage of an industry, using firm-level data on the cotton spinning industry in Japan in the late nineteenth century. It is found that patterns of productivity growth depend on the development stage of the industry. In the earlier stage of industrial development, productivity growth of each firm, namely the within effect, was the sole major source of aggregate productivity growth. On the other hand, once the industry had matured, resource reallocation across firms became a major source of aggregate productivity growth, along with the within effect. This relationship between patterns of productivity growth and the development stage of an industry is considered to reflect the stage-dependent patterns of innovation and competition.
    Date: 2008–05
  8. By: Carsten Burhop (Max Planck Institute for Research on Collective Goods); Thorsten Luebbers (Max Planck Institute for Research on Collective Goods)
    Abstract: In this paper, we evaluate the impact of cartelisation and managerial incentives on the productive efficiency of German coal mining corporations. We focus on coal mining in the Ruhr district, Germany’s main mining area. We use stochastic frontier analysis and an unbalanced dynamic panel data set for up to 28 firms for the years 1881-1913 to measure productive efficiency. We show that coal was mined with decreasing returns to scale. Moreover, it turns out that cartelisation did not affect productive efficiency. Controlling for corporate governance variables shows that stronger managerial incentives were significantly correlated with productive efficiency, whereas the debt-equity ratio did not influence it.
    Keywords: Economic history; Germany pre-1913; Cartel; Productive efficiency; Corporate Governance
    JEL: N53 L41 L71
    Date: 2008–04
  9. By: Sabien Dobbelaere; Jacques Mairesse
    Abstract: Embedding the efficient bargaining model into the R. Hall (1988) approach for estimating price-cost margins shows that both imperfections in the product and labor markets generate a wedge between factor elasticities in the production function and their corresponding shares in revenue. This article investigates these two sources of discrepancies both at the industry level and the firm level using an unbalanced panel of 10646 French firms in 38 manufacturing industries over the period 1978-2001. By estimating standard production functions and comparing the estimated factor elasticities for labor and materials and their shares in revenue, we are able to derive estimates of average price-cost mark-up and extent of rent sharing parameters. For manufacturing as a whole, our estimates of these parameters are of an order of magnitude of 1.17 and 0.44 respectively. Our industry-level results indicate that industry differences in these parameters and in the underlying estimated factor elasticities and shares are quite sizeable. Since firm production function, behavior and market environment are very likely to vary even within industries, we also investigate firm-level heterogeneity in estimated mark-up and rent-sharing parameters. To determine the degree of true heterogeneity in these parameters, we adopt the P.A. Swamy (1970) methodology allowing to correct the observed variance in the firm-level estimates from their sampling variance. The median of the firm estimates of the price-cost mark-up ignoring labor market imperfections is of 1.10, while as expected it is higher of 1.20 when taking them into account and the median of the corresponding firm estimates of the extent of rent sharing is of 0.62. The Swamy corresponding robust estimates of true dispersion are of about 0.18, 0.37 and 0.35, showing indeed very sizeable within-industry firm heterogeneity. We find that firm size, capital intensity, distance to the industry technology frontier and investing in R&D seem to account for a significant part of this heterogeneity.
    JEL: C23 D21 J51 L13
    Date: 2008–05

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