|
on Efficiency and Productivity |
|
Issue of 2009‒01‒31
twelve papers chosen by |
| By: | Kui-Wai Li (City University of Hong Kong, Hong Kong SAR); Tung Liu (Department of Economics, Ball State University); Lihong Yun (City University of Hong Kong, Hong Kong SAR) |
| Abstract: | This paper examines and applies the theoretical foundation of the decomposition of economic and productivity growth to the thirty provinces in China’s post-reform economy. The four attributes of economic growth are input growth, adjusted economies of scale effect, technical progress, and efficiency growth. A stochastic frontier model is used to estimates the growth attributes, and a human capital variable is incorporated in the translog production function. The empirical results show that input growth is the major contributor to economic growth and human capital is inadequate even though it has a positive and significant effect on growth. Technical progress is the main contributor to productivity growth and the scale economies has become important in recent years, but technical efficiency has edged downwards in the sample period. The relevant policy implication for a sustainable post-reform China economy is the need to promote human capital accumulation and improvement in technical efficiency. |
| Keywords: | technical progress, technical efficiency, economies of scale, human capital, China economy |
| JEL: | C2 D24 O4 O53 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:bsu:wpaper:200806&r=eff |
| By: | Wilko Bolt; David Humphrey |
| Abstract: | There are numerous ways to indicate the degree of banking competition across countries. Antitrust authorities rely on the structure-conduct-performance paradigm while academics prefer price mark-ups (Lerner index) or correlations of input costs with output prices (H-statistic). These measures are not always strongly correlated when contrasted across countries or positively correlated within countries over time. Frontier efficiency analysis is used to devise an alternative indicator of competition and rank European countries by their dispersion from a \competition frontier". The frontier is determined by how well payment and other costs explain variations in loan-deposit rate spread and non-interestactivity revenues. |
| Keywords: | Banking competition; frontier analysis; European banks |
| JEL: | C31 F21 F23 F43 O47 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:194&r=eff |
| By: | Pierre van der Eng |
| Abstract: | This paper revisits the discussion about the contribution of Total Factor Productivity (TFP) growth to Indonesia’s economic growth during 1970-2007. It re-estimates the contribution of TFP to economic growth during this period on the basis of new estimates of GDP, capital stock, education-adjusted employment, and factor income shares. After accounting for the growth of capital stock and education-adjusted employment, the residual TFP growth was on average -0.2% per year during 1971- 2007. Capital stock growth and education-augmented employment growth explained 70% and 34%, respectively, and TFP growth -4%. Only during 2000-07 was TFP growth 1.7% per year, explaining 33% of GDP growth. The paper doubts that these results imply that the Indonesian economy did not experience the impact of technological change, as much of it may be embodied in the capital stock estimates. |
| Keywords: | economic growth, Indonesia, productivity |
| JEL: | N15 O11 O47 O53 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2009-01&r=eff |
| By: | Ortega-Argilés, Raquel (European Commission); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Potters, Lesley (Utrecht School of Economics); Vivarelli, Marco (Università Cattolica del Sacro Cuore) |
| Abstract: | This paper discusses the link between R&D and productivity across the European industrial and service sectors. The empirical analysis is based on both the European sectoral OECD data and on a unique micro longitudinal database consisting of 532 top European R&D investors. The main conclusions are as follows. First, the R&D stock has a significant positive impact on labour productivity; this general result is largely consistent with previous literature in terms of the sign, the significance and the magnitude of the estimated coefficients. More interestingly, both at sectoral and firm levels the R&D coefficient increases monotonically (both in significance and magnitude) when we move from the low-tech to the medium and high-tech sectors. This outcome means that corporate R&D investment is more effective in the high-tech sectors and this may need to be taken into account when designing policy instruments (subsidies, fiscal incentives, etc.) in support of private R&D. However, R&D investment is not the sole source of productivity gains; technological change embodied in gross investment is of comparable importance on aggregate and is the main determinant of productivity increase in the low-tech sectors. Hence, an economic policy aiming to increase productivity in the low-tech sectors should support overall capital formation. |
| Keywords: | R&D, productivity, high-tech sectors, innovation, industrial policy |
| JEL: | O33 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3945&r=eff |
| By: | Tatahi, Motasam (European Business School London); Heshmati, Almas (Seoul National University) |
| Abstract: | This paper examines the change in operating and financial performance of Swedish firms that were either partly or fully privatized during the period of 1989-2007. Two different methods are used to empirically investigate the performance of privatized firms. First, accounting data prior to and after the privatization are employed to measure the operating performance of privatized firms. We have found no significant difference in performances under state and private ownerships. Second, a return-based event study is found useful to measure the financial performance of privatized firms, since all the firms in the sample that were privatized have used an initial public offering (IPO). This approach allows comparison to the rest of the IPOs that were launched in the same period. It is found that the cumulative returns for the privatized firms are significantly different to private counterparts. Overall results, however, show that the privatization in Sweden was not as successful as it might have been expected and in comparison with those in other countries. |
| Keywords: | Sweden, efficiency, performance measure, privatization, ratio analysis, event-study, public and private relationship |
| JEL: | C12 D21 L25 L33 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3953&r=eff |
| By: | Bee Yan Aw; Mark J. Roberts; Daniel Yi Xu |
| Abstract: | A positive correlation between productivity and export market participation has been well documented in producer micro data. Recent empirical studies and theoretical analyses have emphasized that this may reflect the producer's other investment activities, particularly investments in R&D or new technology, that both raise productivity and increase the payoff to exporting. In this paper we develop a dynamic structural model of a producer's decision to invest in R&D and participate in the export market. The investment decisions depend on the expected future profitability and the fixed and sunk costs incurred with each activity. We estimate the model using plant-level data from the Taiwanese electronics industry and find a complex set of interactions between R&D, exporting, and productivity. The self- selection of high productivity plants is the dominant channel driving participation in the export market and R&D investment. Both R&D and exporting have a positive direct effect on the plant's future productivity which reinforces the selection effect. When modeled as discrete decisions, the productivity effect of R&D is larger, but, because of its higher cost, is undertaken by fewer plants than exporting. The impact of each activity on the net returns to the other are quantitatively unimportant. In model simulations, the endogenous choice of R&D and exporting generates average productivity that is 22.0 percent higher after 10 years than an environment where productivity evolution is not affected by plant investments. |
| JEL: | F14 O31 O33 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14670&r=eff |
| By: | Repkine, Alexandre |
| Abstract: | This study explores the link between telecommunications capital intensity and the aggregate production efficiency in the framework of meta-frontier analysis. The latter makes it possible to compare technical efficiency levels between countries operating under different technological frontiers. Our analysis suggests that increases in per capita levels of telecommunication capital will be most helpful in increasing the efficiency with which the existing technological knowledge and production resources are used, but not the technological frontier itself. We thus identify countries where additional investments in telecommunications are desirable as the ones where the technological lag is relatively small and efficient usage of productive resources is a problem. Africa appears to be the region where policies providing incentives for firms and households to purchase more telecommunications equipment will produce the most sizeable effect. In contrast, in the OECD countries where production practices are already the most efficient ones globally and the existing per capita telecommunications capital stock is high, further increases in the latter are not likely to result in any sizable production efficiency gains. |
| Keywords: | telecommunications; meta-frontier analysis; economic growth; production efficiency |
| JEL: | O3 O4 |
| Date: | 2009–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13059&r=eff |
| By: | Enjing Li; Paavo Suni; Yanyun Zhao |
| Abstract: | ABSTRACT : This study focuses on the labour cost competitiveness of the chemical industries in China and Finland in particular, using the corresponding German, the US and Estonian industries as a point of comparison in the early 2000s. This study deepens the analysis of the earlier study of the cost competitiveness of the manufacturing industries in the same group of countries. Separate studies focusing on the labour cost competitiveness are carried out in a parallel manner on the fabricated metal industries and paper industries. The results of these three sector studies deepen the knowledge about the change of competitiveness and its level. Large unit labour cost differences in a common currency were obviously a key factor behind exceptionally rapidly changing international production and trade structures in the late 1990s and early 2000s. The Chinese chemicals and chemical products and rubber and plastic products industries grew by 21 and 23 per cent per year in 2000-2007 as the average annual growth of the value added of world manufacturing volume was only 3 per cent in 2000-2006. Nominal wages as such do not imply good international competitiveness. Chinese wages are, however, low even if the Chinese low labour productivity is taken into account and costs per unit of production are compared in a common currency. The relative levels of the Chinese unit labour costs vis-à-vis Germany, using the unit value ratios (UVR) to make the production volumes comparable, were estimated to be about 6 and 2 per cent in the chemicals and chemical products and rubber and plastic products industries, respectively. In the case of the chemicals and chemical products industry, the ratio has even declined in the course of the 2000s, while in the rubber and plastic products industry it has been stable. Improving labour productivity in China had compensated for the effects of rapidly rising wages and an appreciating Renminbi Yuan in the case of the chemicals and chemical products industry and it had even more than compensated for it in the case of the rubber and plastic products industry. |
| Date: | 2008–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1171&r=eff |
| By: | Bruno Amable (Centre d'Economie de la Sorbonne); Lilas Demmou (Ministère des Fiances - DGTPE); Ivan Ledezma (Centre d'Economie de la Sorbonne) |
| Abstract: | According to a recent literature, the positive effect of competition is supposed to be growing with the proximity to the technological frontier. Using a variety of indicators, the paper tests the effect of competition and regulation on innovative activity measured by patenting. The sample consists of a panel of 15 industries for 17 OECD countries over the period 1979-2003. Results show no evidence of a positive effect of competition growing with the proximity to the frontier. Two main configurations emerge. First, regulation has a positive effect whatever the distance to the frontier and the magnitude of its impact is higher the closer the industry is to the frontier. Second, the effect of regulation is negative far from the frontier and becomes positive (or non significant) when the technology gap decreases. These results contradict the belief in the innovation-boosting effect of product market deregulation such as taken into account in the Lisbon Strategy. |
| Keywords: | Innovation, competition, distance to frontier. |
| JEL: | O30 L16 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:r08064&r=eff |
| By: | Leonardo Becchetti (University of Rome Tor Vergata); Pierluigi Conzo (University of Rome Tor Vergata); Giuseppina Gianfreda (University of Tuscia) |
| Abstract: | We analyse the impact of Fair Trade and organic farming on a sample of Fair Trade organic rice producers in Thailand. We find that per capita income from agriculture is positively and significantly affected by organic certification and FT affiliation years. Such effect does not translate into higher productivity due to a concurring increase in worked hours. FT and organic certification contributions are however downward biased if we do not take into account the relatively higher share of self- consumption of affiliated farmers. Our main findings are robust when we control for selection bias and endogeneity with instrumental variables, propensity score matching and by restricting the sample to affiliated producers only. We also test which of the two (organic and FT) effects is stronger and find that the latter prevails. |
| Keywords: | organic production, Fair Trade, productivity |
| JEL: | O18 O19 O22 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ent:wpaper:wp05&r=eff |
| By: | Nils Braakmann (Institute of Economics, University of Lüneburg); Joachim Wagner (Institute of Economics, University of Lüneburg) |
| Abstract: | We use a unique rich newly built data set for German manufacturing enterprises to investigate the product differentiation – firm performance relationship. We find that an increase in the degree of product diversification has a negative impact on profitability when observed and unobserved firm characteristics are controlled for. The effects are statistically significant and large from an economic point of view. This helps to understand the – at least, at a first glance – surprising fact that nearly 40 percent of all manufacturing enterprises with at least 20 employees in Germany are singleproduct firms according to a detailed classification of products, and that multi-product enterprises with a large number of goods are a rare species. |
| Keywords: | Product differentiation, profitability. Germany |
| JEL: | D21 L60 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:115&r=eff |
| By: | Emmanuel F. Jurczenko (ESCP-EAP); Bertrand Maillet (A.A.Advisors-QCG (ABN AMRO)Variances, Centre d'Economie de la Sorbonne et EIF); Paul M. Merlin (A.A.Advisors ( ABN AMRO) Variances et Centre d'Economie de la Sorbonne) |
| Abstract: | This article proposes a non-parametric portfolio selection criterion for the static asset allocation problem in a robust higher-moment framework. Adopting the Shortage Function approach, we generalize the multi-objective optimization technique in a four-dimensional space using L-moments, and focus on various illustrations of a four-dimensional set of the first four L-moment primal efficient portfolios. our empirical findings, using a large European stock database, mainly rediscover the earlier works by Jean (1973) and Ingersoll (1975), regarding the shape of the extended higher-order moment efficient frontier, and confirm the seminal prediction by Levy and Markowitz (1979) about the accuracy of the mean-variance criterion. |
| Keywords: | Efficient frontier, portfolio selection, robust higher L-moments, shortage function, goal attainment application. |
| JEL: | G14 C45 G11 G12 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:bla08062&r=eff |