New Economics Papers
on Efficiency and Productivity
Issue of 2008‒10‒07
fifteen papers chosen by

  1. An exploration of local R&D spillovers in France By Jacques MAIRESSE (CREST-ENSAE, UNU-MERIT & NBER); Benoît MULKAY (LEREPS-GRES)
  2. Trade in intermediate goods and total factor productivity By Ferreira, Pedro Cavalcanti; Trejos, Alberto
  3. Factor Adjustments After Deregulation: Panel Evidence from Colombian Plants By M. Eslava, J. Haltwanger, A. Kugler, M. Kugler
  4. Regional Knowledge base and productivity growth: the evidence of italian manufacturing By Quatraro Francesco
  5. Information technology and efficiency in trucking By Philippe Barla; Denis Bolduc; Nathalie Boucher; Jonathan Watters
  6. Understanding the Contributions of Reallocation to Productivity Growth : Lessons from a Comparative Firm-Level Analysis By J. David Brown; John S. Earle
  7. Returns to Scale for EU Regional Manufacturing By Alvaro Angeriz; John McCombie; Mark Roberts
  8. Comparing Input- and Output-Oriented Measures of Technical Efficiency to Determine Local Returns to Scale in DEA Models By Subhash C. Ray
  9. Export destinations and learning-by-exporting : Evidence from Belgium By Mauro Pisu
  10. Foreign direct investment in services and manufacturing productivity growth: evidence for Chile By Fernandes, Ana M.; Paunov, Caroline
  11. Direction and intensity of technical change: a micro-founded growth model By zamparelli, luca
  12. The efficiency frontier as a method for gauging the performance of public expenditure : a Belgian case study By Bruno Eugène
  13. The Evolution of Bulgarian Banks' Efficiency During the Twenties: A Dea Approach By Nikolay Nenovsky; Martin Ivanov; Gergana Mihaylova
  14. Learning-by-Exporting or Managerial Quality? Evidence from the Czech Republic By Branislav Saxa
  15. Labour Productivity in Auckland Firms By David C. Maré

    Abstract: This paper is an attempt to assess the existence and magnitude of local research spillovers in France. We rely on the model of an extended production function (Cobb-Douglas and Translog) with both local and neighborhood R&D capital stocks. We estimate this model on 312 employment areas as of 1999, first for the whole economy, then separately for five large manufacturing industries. We find estimates of R&D capital elasticities with respect to productivity which are significant and plausible both within own-area and across neighboring areas, as well as within own-industry but not across different industries.
    Keywords: Productivity, R&D, Local R&D Spillovers, Spatial Econometrics
    JEL: O30 O32 O47 C21
    Date: 2008
  2. By: Ferreira, Pedro Cavalcanti; Trejos, Alberto
    Date: 2008–05
  3. By: M. Eslava, J. Haltwanger, A. Kugler, M. Kugler (Wilfrid Laurier University)
    Abstract: We analyze employment and capital adjustments using plant data from the Colombian Annual Manufacturing Survey. We estimate adjustment functions for capital and labor as a non-linear function of the gaps between desired and actual factor levels, allowing for interdependence in adjustments of the two factors. In addition to non-linear employment and capital adjustments in response to market fundamentals, we find that capital shortages reduce hiring and labor surpluses reduce capital shedding. We also find that after factor market deregulation in Colombia in 1991, factor adjustment hazards increased on the job destruction and capital formation margins. Finally, we find that completely eliminating frictions in factor adjustment would yield a substantial increase in aggregate productivity through improved allocative efficiency. Yet, the actual impact of the Colombian deregulation on aggregate productivity through factor adjustment was modest.
    Keywords: Reallocation, joint factor adjustment, irreversibility, deregulation
    JEL: E22 E24 O11 C14 J63
    Date: 2008
  4. By: Quatraro Francesco (University of Turin)
    Abstract: This paper empirically analyzes the effects of regional knowledge base on differential growth rates. Beyond the traditional view of knowledge as an homogenous asset, it considers further characteristics that qualify its heterogeneous features. The results of the empirical estimations provide support to the idea that knowledge characteristics are fare more important than knowledge capital. The check for spatial dependence suggests that crossregional externalities exert additional triggering effects on productivity growth, but without debasing the effects of knowledge. Important policy implications stem from the analysis, in that regional innovation strategies ought to be carefully coordinated so as to reach a higher degree of internal coherence and exert positive effects on productivity.
    Date: 2008–09
  5. By: Philippe Barla; Denis Bolduc; Nathalie Boucher; Jonathan Watters
    Abstract: In this paper, we develop an econometric model to estimate the impacts of Electronic Vehicle Management Systems (EVMS) on the load factor (LF) of heavy trucks using data at the operational level. This technology is supposed to improve capacity utilization by reducing coordination costs between demand and supply. The model is estimated on a subsample of the 1999 National Roadside Survey, covering heavy trucks travelling in the province of Quebec. The LF is explained as a function of truck, trip and carrier characteristics. We show that the use of EVMS results in a 16 percentage points increase of LF on backhaul trips. However, we also find that the LF of equipped trucks is reduced by about 7.6 percentage points on fronthaul movements. This last effect could be explained by a rebound effect: higher expected LF on the returns lead carriers to accept shipments with lower fronthaul LF. Overall, we find that this technology has increased the tonne-kilometers transported of equipped trucks by 6.3% and their fuel efficiency by 5%.
    Keywords: Information and Communication Technology, Efficiency, Load factor, Trucking, Energy Efficiency
    JEL: O33 Q55 R40
    Date: 2008–04
  6. By: J. David Brown; John S. Earle
    Keywords: productivity, reallocation, industry dynamics, creative destruction, reform, transition, Georgia, Hungary, Lithuania, Romania, Russia, Ukraine
    JEL: E32 O47 P23
    Date: 2008
  7. By: Alvaro Angeriz; John McCombie; Mark Roberts
    Abstract: Recent theoretical advances have emphasised the importance of localised increasing returns to scale in understanding both the regional growth and agglomeration processes. However, considerable empirical controversy still exists over whether returns to scale are constant or increasing. Consequently, this study aims to provide some new estimates of the degree of returns to scale for EU regional manufacturing. It does so within the framework of the Verdoorn law. Unlike previous studies, issues of specification of fundamental importance to recent theoretical developments are brought to attention. Overall, the paper concludes that localised increasing returns in EU regional manufacturing are substantial.
    Keywords: increasing returns, Verdoorn law, manufacturing, productivity growth, spatial econometrics
    JEL: O18 O33 R11
    Date: 2008–08
  8. By: Subhash C. Ray (University of Connecticut)
    Abstract: This paper shows how one can infer the nature of local returns to scale at the input- or output-oriented efficient projection of a technically inefficient input-output bundle, when the input- and output-oriented measures of efficiency differ.
    Keywords: Most Productive Scale Size; Convex Technologies, Nonparametric Efficiency Analysis
    JEL: D2 C6
    Date: 2008–09
  9. By: Mauro Pisu (National Bank of Belgium, Research Department)
    Abstract: This paper evaluates the causal effects of exports to different destination countries using a comprehensive dataset on Belgian manufacturing firms from 1998 to 2005. Initial evidence suggests that, before export market entry, exporters to more developed economies have superior productivity levels than non-exporters and firms exporting to less developed countries. Moreover, they seem to experience higher productivity growth rates in the post-entry period, suggesting learning-by-exporting effects. However, applying matching methodology to formally evaluate the causal effects of export market entry on productivity reveals no such impact. Thus, the productivity advantage of firms exporting to developed countries appears to be driven solely by self-selection.
    Keywords: Learning-by-exporting, export destinations, productivity
    JEL: L1 D24
    Date: 2008–09
  10. By: Fernandes, Ana M.; Paunov, Caroline
    Abstract: During the 1990s, foreign direct investment in producer service sectors in Latin America was massive. Such investment may increase the quality of services, reduce their cost, and offer opportunities for knowledge spillovers to downstream users of the services. This paper examines the effects of foreign direct investment in services on manufacturing productivity growth in Chile between 1992 and 2004. The authors estimate an extended production function where plant output growth depends on input growth and a weighted measure of foreign direct investment in services. The novelty of the approach is that the authors are able to assess the intensity of usage of various types of services at the plant level and use that information in the estimation of the importance of foreign direct investment in those services. The econometric results show a positive and significant effect of foreign direct investment in services on productivity growth of Chilean manufacturing plants which is robust to a multitude of tests. The economic impact of the estimates is that forward linkages from foreign direct investment in services account for almost 5 percent of the observed increase in Chilean manufacturing productivity growth during the sample period. This evidence therefore suggests that reducing the barriers restricting foreign direct investment in services in many developing economies may help accelerate productivity growth in their manufacturing sectors.
    Keywords: Banks&Banking Reform,ICT Policy and Strategies,E-Business,Knowledge Economy,Education for the Knowledge Economy
    Date: 2008–09–01
  11. By: zamparelli, luca
    Abstract: This paper develops a growth model combining elements of endogenous growth and induced innovation literatures. In a standard induced innovation model firms select at no cost innovations from an innovation possibilities frontier describing the trade-off between increasing capital or labor productivity. The model proposed allows firms to choose not only the direction but also the size of innovation by representing the innovation possibilities through a cost function of capital and labor augmenting innovations. By so doing, it provides a micro-foundation both of the intensity and of the direction of technical change. The policy analysis implies that an increase in subsidies to R&D as opposed to capital accumulation raises per capita steady state growth, employment rate and wage share.
    Keywords: Induced innovation; endogenous growth; direction of technical change
    JEL: O33 O31 O40
    Date: 2008–02
  12. By: Bruno Eugène (National Bank of Belgium, Research Department)
    Abstract: This paper uses the Free Disposal Hull framework in order to assess the relative efficiency of Belgian general government in the field of health care, education and public order and safety. In order to do so, this paper aggregates a large number of outcome indicators. Several drawbacks indicate that results must be interpreted cautiously. These drawbacks aside, the analysis reveals that Belgium is relatively efficient in the field of health care. As a whole, the Belgian education system is more expensive but also produces better results than the European average. However, an analysis based on a limited set of indicators reveals that the French-speaking education sector is very inefficient while the Flemish Community’s efficiency is markedly better. As far as public order and safety are concerned, major improvements could and should be made, either to improve service or cut costs
    Keywords: Public spending efficiency, FDH
    JEL: H11 H51 H52 H59
    Date: 2008–09
  13. By: Nikolay Nenovsky (Bulgarian National Bank, University of Orleans and ICER); Martin Ivanov (Institute of History, Sofia); Gergana Mihaylova (Agency for Economic Analysis and Forecasting, Sofia)
    Abstract: This paper studies the dynamics of the bank efficiency in Bulgaria in the years 1923 and 1928. In the course of research several interdependencies were detected, related mainly to the reaction of different types of banks to the financial crisis and the financial stabilization. Official bank balance sheets were used as well as the profit and loss statements of 50 Bulgarian credit institutions. After their classification into subgroups different variations of DEA (data envelopment analysis), in particular the intermediation approach, were applied to the banks’ financial positions. The DEA overcomes several deficiencies in the traditional accounting measurement of bank efficiency, which has made it very popular in latest literature. To our knowledge this method has not been applied so far to historical data.
    Keywords: Bulgarian monetary history; Banking system; Âanking efficiency; DEA modelling.
    JEL: N24 G21
    Date: 2008–07
  14. By: Branislav Saxa
    Abstract: This paper employs firm-level panel data from the Czech Republic to investigate the empirical relevance of the learning-by-exporting hypothesis. To provide convincing estimates, one must be able to disentangle learning-by-exporting from changes in company management that induce the company to both start exporting and introduce productivity increasing measures. Therefore, I compare estimates based on matching on propensity score, which do not control for potential management changes, to estimates based on an instrumental variables strategy. Specifically, I focus on firms that start exporting due to changes in the industry-specific exchange rate and industry-specific ratio of producer prices on domestic and foreign markets. The results suggest that learning-by-exporting in the Czech Republic is not significant, either statistically or economically, irrespective of the method used.
    Keywords: Exporting, productivity, matching on propensity score, local average treatment effect.
    JEL: D24 D83 F13 C23
    Date: 2008–08
  15. By: David C. Maré (Motu Economic and Public Policy Research)
    Abstract: This paper examines labour productivity in Auckland, New Zealand's largest city, using microdata from Statistics New Zealand's Prototype Longitudinal Business Database. It documents a sizeable productivity premium in Auckland, around half of which is due to industry composition. There is a cross sectional correlation between productivity and employment density, reflecting differences in both physical productivity and prices. This correlation is evident both within Auckland, and comparing Auckland with other areas. The relationship between changes in density and changes in productivity is less strong. The relationship between productivity and overall or own-industry employment density varies across industries, suggesting that the nature and extent of agglomeration benefits varies. Overall, localisation effects appear stronger than urbanisation, with productivity being more strongly related to own-industry density than to overall density.
    Keywords: Labour productivity, Urban premium, Agglomeration
    JEL: L25 R12 R3
    Date: 2008–09

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