New Economics Papers
on Efficiency and Productivity
Issue of 2009‒04‒25
ten papers chosen by

  1. Productivity Spillovers from Foreign Direct Investment in Polish Manufacturing 1993-2006 By Anna Golejewska
  2. Does Size Matter? Economies of Scale in the German Mutual Fund Industry By Raimond Maurer; Alexander Schaefer
  3. The Japan-U.S. Exchange Rate, Productivity, and the Competitiveness of Japanese Industries By Robert Dekle; Kyoji Fukao
  4. Sizing the Government By De Witte, Kristof; Moesen, Wim
  5. Gaming in a benchmarking environment. A non-parametric analysis of benchmarking in the water sector By De Witte, Kristof; Marques, Rui
  6. Can age discrimination be justified with a lower productivity of older workers? By Barthel, Jens
  7. Ranking Economics Departments in Terms of Residual Productivity: New Zealand Economics Departments, 2000-2006 By David L. Anderson; John Tresler
  8. The mark-ups in the Spanish economy: international comparison and recent evolution By Ãngel Estrada
  9. Do Banks Have Private Information? Bank screening and ex-post small firm performance By HOSONO Kaoru; XU Peng
  10. When is concentration beneficial? Evidence from U.S. manufacturing By Rigoberto A. López; Elena López; Carmen Liron-Espana

  1. By: Anna Golejewska (Faculty of Economics, University of Gdansk)
    Abstract: Using panel data this paper examines the impact of firms with foreign capital on labor productivity of local firms in Poland. To examine productivity spillovers from foreign direct investment in Polish manufacturing I make two hypotheses: the contagion and technology gap hypothesis. The first one assumes that productivity spillovers from foreign firms to local ones increase in line with the growing share of foreign-owned firm in total production. The second one presumes that the bigger technological gaps between foreign and local firms the more intensive technology spillovers. Estimation results indicate the lack of spillovers in Polish manufacturing as a whole. Considering different groups of industries, I observe both: positive and negative productivity spillovers. The bigger technology gap between foreign and local firms is reflected in less intensive spillovers.
    Keywords: Foreign Direct Investment, Spillovers, Productivity
    JEL: C51 F21 F23
    Date: 2009–04
  2. By: Raimond Maurer; Alexander Schaefer
    Abstract: In this paper, we analyze economies of scale for German mutual fund complexes. Using 2002-2005 data of 41 investment management companies, we specify a hedonic translog cost function. Applying a fixed effects regression on a one-way error component model there is clear evidence of significant overall economies of scale. On the level of individual mutual fund complexes we find significant economies of scale for all of the companies in our sample. With regard to cost efficiency, we find that the average mutual fund complexes in all size quartiles deviate considerably from the best practice cost frontier.
    JEL: G2 L25
    Date: 2009–04
  3. By: Robert Dekle; Kyoji Fukao
    Abstract: In this paper, we focus on the movements of the yen on Japanese industries, and on the sectoral reallocation of Japanese employment. We show that the appreciation episodes of 1985 and 1995 have significantly hurt the ability of Japanese industries to compete with U.S. industries, by raising the relative production costs of Japanese industries. This relative cost gap with U.S. industries narrowed from 1995, owing to faster wage growth in the U.S., and especially to higher productivity growth in some Japanese industries. In fact, in these high productivity Japanese manufacturing industries such as chemicals and transport equipment, relative production costs were essentially back to pre-1985, pre-Plaza Accord levels by 2004. In contrast, the relative production costs of Japanese low productivity manufacturing industries such as textiles and wood products have remained high. Clearly, in the aggregate, the appreciation of the yen was not matched by an increase in Japanese productivity. What then is the appreciation of the aggregate real exchange rate consistent with these Japan-U.S. differences in industrial productivities? To answer this question, we build a three-sector (high productivity manufacturing, low productivity manufacturing, and services) equilibrium macroeconomic-trade model of Japan and the U.S. We find that while the yen was gundervaluedh before 1985, it was significantly govervaluedh after 1985, and especially since 1995. In our model simulations, the Balassa-Samuelson effect is observed: the equilibrium real exchange rate is appreciating over time, owing to strong relative growth in the Japanese high productivity manufacturing sector, but very poor relative productivity growth in the Japanese services sector. Interestingly, the continued appreciation of the equilibrium real exchange rate meant that the actual real exchange rate was near its equilibrium value by 2003-2004, when the nominal yen dollar rate was about 120 yen to the dollar.
    Date: 2009–03
  4. By: De Witte, Kristof; Moesen, Wim
    Abstract: Is there such a thing as an optimal government size? We investigate by the non-parametric Data Envelopment Analysis (DEA) the so-called `Armey curve' which claims an inverted U-shaped relationship between government size and economic performance. The DEA scores are linked to control variables as initial per capita income, openness, population density, urbanization, country size and family size. For 23 OECD-countries we estimate the country specific efficiency scores, which reveal the extent to which a country uses excess public resources to achieve the observed growth rate of GDP.
    Keywords: Data Envelopment Analysis; Government size; Public sector performance; Armey-curve.
    JEL: H10 H21
    Date: 2009–04–22
  5. By: De Witte, Kristof; Marques, Rui
    Abstract: This paper discusses the use of benchmarking in general and its application to the drinking water sector. It systematizes the various classifications on performance measurement, discusses some of the pitfalls of benchmark studies and provides some examples of benchmarking in the water sector. After presenting in detail the institutional framework of the water sector of the Belgian region of Flanders (without benchmarking experiences), Wallonia (recently started a public benchmark) and the Netherlands (introduced already in 1997 a public benchmark), we non-parametrically measure the productivity gains by the use of a dynamic Malmquist index. The three regions, each at a different stage of the benchmarking circle, exhibit different performance trends. The ‘carrot’ and the ‘stick’ of benchmarking seem to offer an effective incentive to trigger performance. In addition, the Malmquist decompositions provide some evidence on the ‘gaming’ of the stakeholders by the water utilities.
    Keywords: Benchmarking; gaming; Malmquist decomposition; regulation; water sector.
    JEL: C14 L95
    Date: 2009–04–12
  6. By: Barthel, Jens
    Abstract: The connection between age and productivity is a widely discussed topic in the empirical literature. The present paper's aim is to contribute to the explanation of an apparant lower productivity of older individuals. If we introduce uncertainty about the future working conditions depending on present success, a decrease of productivity over the working life can be observed despite a constant a priori productivity.
    Keywords: age discrimination; productivity
    JEL: J14 J71
    Date: 2008–12–12
  7. By: David L. Anderson (Queen's University); John Tresler (University of Waikato)
    Abstract: This paper considers a new approach for ranking the research productivity of academic departments. Our approach provides rankings in terms of residual research output after controlling for the key characteristics of each department’s academic staff. More specifically, we estimate residual research output rankings for all of New Zealand’s economics departments based on their publication performance over the 2000 to 2006 period. We do so after taking into account the following characteristics of each department’s academic staff: gender, experience, seniority, academic credentials, and academic rank. The paper concludes with a comparison of rankings generated by the residual research approach with those generated by traditional approaches to research rankings.
    Keywords: economics departments; university rankings; research output; economics research
    JEL: A19 C81 J24
    Date: 2009–03–31
  8. By: Ãngel Estrada (Banco de España)
    Abstract: This paper estimates the steady state mark-ups of 23 branches of activity in seven developed countries (USA, Japan, Germany, France, UK, Italy and Spain). The empirical methodology departs from the Hall (1988) seminal approach and incorporates the possibility of non-competitive labour markets. Besides, it is used a time varying parameter (TVP) estimation technique in order to compute the evolution of steady state mark-ups. Looking at the constant parameter estimations, it emerges a clear dichotomy between two groups of countries: USA and UK, with the lowest mark-ups, and Japan and Germany, in the other side of the spectrum; Italy and Spain keep an intermediate position. With respect to the bargaining power of trade unions, the dichotomy between Anglo-Saxon countries, where it is almost inexistent, and Central European countries is even more marked. Allowing these parameters to evolve in time, the results are also interesting: there have been increases in mark ups in Italy, France and Germany; on the contrary, in USA, Japan, UK and Spain they have diminished. In the case of the bargaining power of the trade unions, all these countries have shown reductions since 1980, with the only exception of Germany. Finally, the paper finds a quite robust inverse relation between productivity growth, mark ups and the bargaining power of trade unions, although the quantitative effects are moderated.
    Keywords: Mark-ups, labour market, productivity
    JEL: E23 J51 L10
    Date: 2009–04
  9. By: HOSONO Kaoru; XU Peng
    Abstract: This paper examines whether commercial banks screen loan applications based on private information on firms' future profitability, and consequently how banks' ex-ante private information and screening decisions affect firms' ex-post profitability. Using a dataset of banks' loan application screenings and the ex-post firm performance for Japanese SMEs, we obtained strong evidences suggesting that banks' ex-ante private information was related to firms' ex-post performance. We found this relationship to be especially strong for small, mature firms, which supports the relationship-lending hypothesis.
    Date: 2009–04
  10. By: Rigoberto A. López (Department of Agricultural and Resource Economics, University of Conneticut.); Elena López (Departamento de Fundamentos de Economía e H.E. , Universidad de Alcalá.); Carmen Liron-Espana (System Planning, ISO-NE.)
    Abstract: This article estimates the impact of industrial concentration on market power and cost and then links the ensuing welfare changes to market structure characteristics using a sample of 232 U.S. manufacturing industries. Empirical results indicate that further increases in concentration would enhance welfare in 70% of the industries due to widespread efficiency gains, although these would generally not be passed on to consumers. From a social standpoint, further concentration is more likely to be beneficial in industries with economies of size, high export intensity, which are engaged in consumer-oriented goods, face larger markets, and have low or moderate levels of initial concentration.
    Keywords: Concentration, Welfare, Economies of size, Market power, Manufacturing.
    JEL: L11 L60 D43 D61 F12
    Date: 2009

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.