New Economics Papers
on Efficiency and Productivity
Issue of 2008‒09‒05
eight papers chosen by

  1. Demand Fluctuations and Productivity of Service Industries By MORIKAWA Masayuki
  2. Heterogeneity, trust, human capital and productivity growth: Decomposition analysis. By yamamura, eiji
  3. Total Factor Productivity Growth when Factors of Production Generate Environmental Externalities By Vouvaki, Dimitra; XEPAPADEAS, Anastasios
  4. Organizational Redesign, Information Technologies and Workplace Productivity By Benoit Dostie; Rajshri Jayaraman
  5. Divestiture Policy and Operating Efficiency in U.S. Electric Power Distribution By Kwoka, J.; Ozturk, S.; Pollitt, M.G.
  6. Does Ownership Matter? The Performance and Efficiency of State Oil vs. Private Oil (1987-2006) By Wolf, C
  7. Effects of Income Inequality on Growth through Efficiency Improvement and Capital Accumulation. By Yamamura, Eiji; Shin, Inyong
  8. Using regulatory benchmarking techniques to set company performance targets: the case of US electricity By Nillesen, P.; Pollitt, M.G.

  1. By: MORIKAWA Masayuki
    Abstract: The purpose of this paper is to investigate empirically the relationship between demand fluctuations and productivity of service industries. Specifically, by using unique establishment-level data on service industries in Japan, this paper estimates production functions for six narrowly defined personal-service industries. In almost all the examined service industries, statistically and economically significant negative effects of demand variation on establishment-level productivity are found. This result suggests dispersing holidays may have positive effects on the productivity of service industries.
    Date: 2008–08
  2. By: yamamura, eiji
    Abstract: This paper uses panel data from Japan to decompose productivity growth measured by the growth of output per labor unit into three components of efficiency improvement, capital accumulation and technological progress. It then examines their determinants through a dynamic panel model. In particular, this paper focuses on the question of how inequality, trust and humans affect the above components. The main findings derived from empirical estimations are: (1) Inequality impedes not only improvements in efficiency but also capital accumulation. (2) A degree of trust promotes efficiency improvements and capital accumulation at the same time. However, human capital merely enhances improvements in efficiency.
    Keywords: Heterogeneity; Inequality; Trust; DEA analysis
    JEL: E25 O15 O4
    Date: 2007–10–24
  3. By: Vouvaki, Dimitra; XEPAPADEAS, Anastasios
    Abstract: Total factor productivity growth (TFPG) has been traditionally associated with technological change. We show that when a factor of production, such as energy, generates an environmental externality in the form of CO₂ emissions which is not internalized because of lack of environmental policy, then TFPG estimates could be biased. This is because the contribution of environment as a factor of production is not accounted for in the growth accounting framework. Empirical estimates confirm this hypothesis and suggest that part of what is regarded as technology's contribution to growth could be attributed to the use of environment in output production.
    Keywords: Total Factor Productivity; Sources of Growth; Environmental Externalities; Energy; Environmental Policy
    JEL: Q56 O4
    Date: 2008–08–28
  4. By: Benoit Dostie; Rajshri Jayaraman
    Abstract: Using a large longitudinal, nationally representative workplace-level dataset, we explore the productivity gains associated with computer use and organizational redesign. The empirical strategy involves the estimation of a production function, augmented to account for technology use and organizational design, correcting for unobserved heterogeneity. We find large returns associated with computer use. We also find that computer use and organizational redesign may be complements or substitutes in production, and that the productivity gains associated with organizational redesign are industry-specific. <P>Dans cet article, nous estimons les rendements en termes de productivité au niveau de l'établissement associés aux nouvelles technologies et aux nouvelles pratiques organisationnelles. Notre stratégie d'estimation repose sur la spécification d'une fonction de production Cobb-Douglas où nous tenons compte de l'utilisation des nouvelles technologies et du design organisationnel de l'établissement, tout en corrigeant pour l'hétérogénéité non-observée. Nous trouvons que les nouvelles technologies sont complémentaires à certaines pratiques organisationnelles et substituts pour d'autres. Nous trouvons aussi que les mécanismes menant à des gains de productivité sont souvent spécifiques à l'industrie.
    Keywords: productivity, workplace practices, linked employer-employee data, information technologies, données employeur-employé liées, pratiques organisationnelles, productivité, nouvelles technologies
    Date: 2008–08–01
  5. By: Kwoka, J.; Ozturk, S.; Pollitt, M.G.
    Abstract: This study examines the effects of divestiture policy on the operating efficiency of US distribution utilities. We focus on the decisive 1994-2003 period when state utility commissions required or pressured utilities to create standalone generation facilities, and thereby almost incidentally standalone distribution systems. The analytical foundation of this study is the measurement of the operating efficiency of 73 distribution units of major U.S. electric utilities in each of those ten years through the use of data envelopment analysis (DEA). Using this panel of data and controlling for other possible influences, we then evaluate the effects on measured efficiency from the divestitures that many of the utilities underwent during the study period. We find that while all divestitures as a group do not significantly affect distribution efficiency, those mandated by state public utility commissions have resulted in large and statistically significant adverse effects on efficiency.
    Keywords: Divestiture, electricity distribution, efficiency analysis
    JEL: L94
    Date: 2008–07
  6. By: Wolf, C
    Abstract: This paper investigates whether there are systematic performance and efficiency differentials between National Oil Companies (NOCs) and privately-owned oil companies. The dataset is based on a survey published by Energy Intelligence and covers 1,001 firm observation years in the period 1987 to 2006. After summarising the main trends emerging from the data and discussing some key issues of comparing ‘State Oil’ and ‘Private Oil’, I find that non-OPEC NOCs underperform their private sector counterparts in terms of labour and capital efficiency, revenue generation and profitability. I also find that much of these differences could be bridged through a change in ownership. OPEC producers show higher efficiency metrics than the private sector, which might be related to exogenous asset quality. All NOCs produce a significantly lower annual percentage of their upstream reserves. This paper complements the time-series analysis of oil privatisations in Wolf and Pollitt (2008) and suggests that a political preference for State Oil usually comes at an economic cost.
    Keywords: Ownership, performance, efficiency, NOC, IOC, OPEC
    JEL: C21 G32 L20 L71 M21 Q40
    Date: 2008–06
  7. By: Yamamura, Eiji; Shin, Inyong
    Abstract: In the present paper, the inverted-U shape relationship between growth and inequality found in Chen(2003), is reexamined. We decompose productivity growth into efficiency improvement, capital accumulation and technological progress and then ascertain their determinants by employing a fixed effects and dynamic panel models. In particular, this paper focuses on the question of how economic inequality affects capital accumulation and efficiency improvement. Key findings are that inequality enhances efficiency improvement as well as capital accumulation and then undermines them as inequality widens. However, other factors such as human capital, openness, and government consumption have different effects on them.
    Keywords: Inequality; Growth; Fixed effects
    JEL: E25 O15
    Date: 2008–04–23
  8. By: Nillesen, P.; Pollitt, M.G.
    Abstract: Consolidation in many sectors has lead to the formation of “groups of companies”. Extracting all the potential cost savings from these independent or separate operating units is a challenge given asymmetric information. We develop a step-by-step approach that applies regulatory benchmarking techniques to set efficiency targets for operating units. Holding company management – like a regulator – will want to set targets to encourage efficient operation but in the absence of full information on effort, costs and environmental conditions. Our approach using the parallel with regulation incorporates issues such as measurement error and potential environmental factors that could influence the underlying efficiency score. We demonstrate the approach using data from the US electricity distribution sector and show that substantial savings can be extracted using this approach that was originally developed for regulatory purposes.
    Keywords: benchmarking, regulation, operating companies, electricity distribution
    JEL: L98 M21
    Date: 2008–08

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