New Economics Papers
on Efficiency and Productivity
Issue of 2009‒05‒02
seventeen papers chosen by

  1. The Impact of Privatisation on the Efficiency of Train Operation in Britain By Luisa Affuso; Alvaro Angeriz; Michael Pollitt
  2. Does Farm Size Really Converge? The Role of Unobserved Farm Efficiency By Dolev, Yuval; Kimhi, Ayal
  3. On R&D, medium and high-tech industries and productivity: an application to the Portuguese case By Celeste Amorim Varum; Bruno Cibrão
  4. Export, Productivity and Product Switching: The Case of Italian Manufacturing Firms By Sergio de Nardis; Carmine Pappalardo
  5. Banks' Types of Ownership and Efficiency: Evidence from Indonesia By Rasyad A. Parinduri; Yohanes E. Riyanto
  6. Productivity Change in USA Airports: The Gillen and Lall Approach Revisited By Carlos Pestana Barros and Albert Assef
  7. Systematized and Path-independent Measurement of Biased Technical Change By Tsunehiro Otsuki
  8. Measuring Changes in Competitiveness in Chinese Manufacturing Industries Across Regions in 1995-2004: an Unit Labor Cost Approach By Vivian W. Chen; Harry X. Wu; Bart van Ark
  9. Trade Reforms and Market Selection: Evidence from Manufacturing Plants in Colombia By Marcela Eslava; John C. Haltiwanger; Adriana D. Kugler; Maurice Kugler
  10. NHS input and productivity growth 2003/4 - 2007/8 By Andrew Street; Padraic Ward
  11. Performance and Merton-Type Default Risk of Listed Banks in EU: a panel VAR approach By Anastasia Koutsomanoli-Filippaki; Emmanuel Mamatzakis
  12. Land Policy and Farm Efficiency: The Lessons of Moldova By Cimpoies, Dragos; Lerman, Zvi
  13. The Impact of Trade Costs on Firm Entry, Exporting, and Survival in Korea By Kim, Sooil; Reimer, Jeffrey J.; gopinath, Munisamy
  14. GM Technology Adoption, Production Risk and On-farm Varietal Diversity By Krishna, Vijesh V.; Zilberman, David; Qaim, Matin
  15. Global Imbalances: The Role of Non-TradableTotal Factor Productivity in Advanced Economies By Nicoletta Batini; Pietro Cova; Massimiliano Pisani; Alessandro Rebucci
  16. The Cost of Food Safety Technologies in the Meat and Poultry Industries. By Ollinger, Michael
  17. The Effects of General and Firm-Spesific Training on Wages and Performance: Evidence from Banking By Derek Jones; Panu -Kauhanen Kalmi

  1. By: Luisa Affuso; Alvaro Angeriz; Michael Pollitt
    Abstract: Twenty-five train operating companies (TOCs) were created between 1994-1997, as part of the restructuring process of the railway industry in Great Britain. The TOCs operate monopoly franchises for the provision of passenger rail services over certain routes - some of which continue to receive government subsidies. This paper investigates how the efficiency of these train operating companies evolved prior to the October 2000 Hatfield crash (which caused significant disruption to the network) using data envelopment analysis and stochastic frontier analysis. Our data allows us to look at the relative efficiency and productivity through the privatisation, to control the efficiency scores for environmental data and to correlate these results with safety and quality indicators. The analysis sheds some light on the successes and failures of the UK’s most controversial privatisation to date.
    Keywords: Railways, Comparative Efficiency, Data Envelopment Analysis, Stochastic Frontier Analyisis, Malmquist Productivity Index, Train Operating Companies, Privatisation
    JEL: L51 L52 L92 M21
    Date: 2009–04
  2. By: Dolev, Yuval; Kimhi, Ayal
    Abstract: We analyze the growth of family farms in Israeli cooperative villages between 1981 and 1995, using longitudinal data. We use instrumental variables to account for the endogeneity of initial farm size, and correct for selectivity due to farm survival. We also include a technical efficiency index, derived from the estimation of a stochastic frontier production model, as an explanatory variable. We find that technical efficiency is an important determinant of farm growth, and that not controlling for technical efficiency could seriously bias the results. The size distribution of Israeli family farms is found to be mostly diverging, while without technical efficiency farm growth seemed to be predominantly random.
    Keywords: farm size, farm growth, farm survival, instrumental variables, sample selection, technical efficiency, Q12, L25, C34,
    Date: 2008–12
  3. By: Celeste Amorim Varum (Departamento de Economia e Gestão Industrial, Universidade de Aveiro); Bruno Cibrão (Departamento de Economia e Gestão Industrial, Universidade de Aveiro)
    Abstract: This paper investigates the potential impact of increased R&D efforts and structural changes in Portugal on labour productivity. The paper addresses Portugal’s ambition, expressed in the 2005 Technological Plan. Based on existing literature on the relation between R&D expenditures, structural change and productivity, we evaluate the contribution of R&D and medium to high-tech industries on productivity over the last 30 years. Our results confirm the importance of governement’s R&D and of business R&D in the medium to high-tech sectors, as they stimulate productivity growth. However, we cannot hypothesize that productivity growth was primarily rooted on the development of medium-high technology industries.
    Keywords: Manufacturing, Productivity, Structural Change, R&D, High-tech industries
    JEL: O30 O40
    Date: 2008–12
  4. By: Sergio de Nardis (ISAE-Institute for Studies and Economic Analyses); Carmine Pappalardo (ISAE-Institute for Studies and Economic Analyses)
    Abstract: During the first half of the current decade, with rising competitive pressures, Italian manufacturing firms were forced to undertake a process of restructuring which had positive repercussions on export performance. This paper carries out empirical analysis using a panel of exporting firms obtained by matching firm-level information gathered by ISTAT and ISAE surveys. Two main channels of adjustment are investigated: inter and intra-firm. On the inter-firm side, we find that exporters were actually more productive: exporting was an essential outcome of pre-existing productivity advantages that led to self-selection of more productive businesses in international markets. As for the intra-firm adjustment, we show that the high frequency of product switching behaviour within exporting firms was significantly correlated with firm-level productivity growth, and that it contributed to a reallocation of economic activity within firms to more productive uses.
    Keywords: heterogeneity, exporting, productivity, product switching.
    JEL: F10 J24 L11 L25
    Date: 2009–03
  5. By: Rasyad A. Parinduri (Nottingham University Business School - Malaysia Campus); Yohanes E. Riyanto (Department of Economics, National University of Singapore)
    Abstract: We examine the relationship between banks' types of ownership and banks' efficiency using Greene's "true" panel data stochastic frontier model. We find that, even after taking unobserved heterogeneity more properly into account, state-owned banks in Indonesia are the least efficient banks and joint-venture banks are the most efficient ones.
    Keywords: Banking; Ownership types; Efficiency; Stochastic frontier
    JEL: C23 G21
    Date: 2009–04
  6. By: Carlos Pestana Barros and Albert Assef
    Abstract: This study uses the Bootstrap methodology to measure the productivity changes of US airports with a Malmquist index, from the 2002-2007 adopting the Gillen and Lall (1997, 2001) approach. The results are mixed for the sample of airports analyzed. The study relates the results to the current and past trends of the US aviation industry and also provides directions for future research. Key words: Airports, US, Productivity, Malmquist, Bootstrap
    Date: 2009–03
  7. By: Tsunehiro Otsuki (Osaka School of International Public Policy, Osaka University)
    Abstract: The sample-specificity and path-dependence of the data envelopment analysis (DEA) based technical change index as a component of Malmquist indexes prevent us from obtaining overall and systematic information on technical change. This paper develops a pathindependent method to estimate technical change using a systematized set of controlled input- output vectors and visualization of the DEA frontiers. The application to the panel datasets of agricultural production in the Brazil Amazon in 1975-1995 indicates non-Hicks-neutral technical change, with crossings of frontiers in both the 1975-1985 and the 1985-1995 periods. The alternative measure of overall technical change shows that moderate technological progress may have occurred on the whole in 1975-1995. The results also show heterogeneous trends across products. The mean of the sample-specific technical change scores are found to be quite different from the overall technical change measure.
    Keywords: Data envelopment analysis, Path dependence, Agricultural intensification
    JEL: D24 O30
    Date: 2009–04
  8. By: Vivian W. Chen (The Conference Board); Harry X. Wu (The Hong Kong Polytechnic University); Bart van Ark (The Conference Board and University of Groningen)
    Abstract: Using an industry-by-region data set, based on China’s Third Industrial Census for 1995 and First Economic Census for 2004, and covering 28 industries and 30 provinces, this paper examines the trend of labor compensation (ALC), labor productivity (ALP) and unit labor cost (ULC) by manufacturing industry across regions (provinces or groups of provinces). At the aggregate level, it shows that productivity growth was generally faster than that of labor compensation and hence resulted in a significant decline in unit labor cost for all regions in China. Furthermore, compared to more developed regions, less developed regions exhibited even stronger productivity growth relative to compensation, thus leading to a convergence across regions over this period. However, we observe a substantial variation in growth rates and convergence trends across regions for individual industries. Logit regression shows that labor intensive industries are more likely to converge in productivity, compensation and unit labor cost while skill intensive industries tend to increase inequality in unit labor cost. This is confirmed by estimating a growth regression, which shows that in provinces characterized by higher skill levels of the labor force, skill intensive industries experienced faster decline in ULC.
    Keywords: Labor productivity, average labor compensation, unit labor cost, and regional convergence
    JEL: J30
    Date: 2008–06
  9. By: Marcela Eslava; John C. Haltiwanger; Adriana D. Kugler; Maurice Kugler
    Abstract: We use plant output and input prices to decompose the profit margin into four parts: productivity, demand shocks, mark-ups and input costs. We find that each of these market fundamentals are important in explaining plant exit. We then use variation across sectors in tariff changes after the Colombian trade reform to assess whether the impact of market fundamentals on plant exit changed with increased international competition. We find that greater international competition magnifies the impact of productivity, and other market fundamentals, on plant exit. A dynamic simulation that compares the distribution of productivity with and without the trade reform shows that improvements in market selection from trade reform help to weed out the least productive plants and increase average productivity. In addition, we find that trade liberalization increases productivity of incumbent plants and improves the allocation of activity within industries.
    JEL: F43 L25 O47
    Date: 2009–04
  10. By: Andrew Street (Centre for Health Economics, University of York, UK); Padraic Ward (Centre for Health Economics, University of York, UK)
    Abstract: Productivity growth is measured by comparing the rate of output growth with the rate of input growth. In an earlier report we calculated output growth in the English NHS for the period 2003/4 to 2006/7 (Castelli et al., 2008). This report concentrates on input growth, detailing methods and calculating growth from 2003/4 to 2007/8.
    Date: 2009–04
  11. By: Anastasia Koutsomanoli-Filippaki (Council of Economic Advisors, Ministry of Economy and Finance, Greece); Emmanuel Mamatzakis (Department of Economics, University of Macedonia)
    Abstract: This paper provides empirical evidence that sheds new light into the dynamic interactions between risk and efficiency, a highly debated issue in the literature. Using a large panel data set that includes 251 listed banks operating in the enlarged European Union over the period 1998 to 2006 this study exploits a three-step procedure. First, we estimate three alternative measures of bank performance, based on alternative efficiency definitions, by employing a directional distance function framework, along with a cost frontier and a profit function. As a second step, we calculate a Merton type bank default risk, based on the Black and Scholes (1973) option pricing theory. Then, we employ a Panel-VAR analysis, which allows the examination of the underlying relationships between efficiency and risk without applying any a-priori restrictions. Most evidence shows that the effect of a one standard deviation shock of the distance to default on inefficiency is negative and substantial. There is some evidence of a reverse causation, but the impact of a shock in bank inefficiency on risk is small and lasts for a short period of time. As part of a sensitivity analysis, we extent our study to investigate the relationship between efficiency and default risk for banks with different types of ownership structures and across financial systems with different levels of development.
    Keywords: bank inefficiency, default risk, panel VAR, causality.
    JEL: G21 G28 D21
    Date: 2009–04
  12. By: Cimpoies, Dragos; Lerman, Zvi
    Keywords: Farm Management, Land Economics/Use,
    Date: 2008
  13. By: Kim, Sooil; Reimer, Jeffrey J.; gopinath, Munisamy
    Abstract: This study uses a unique firm-level dataset to examine how falling trade costs from 1993-2001 affected entry, exit, productivity, and exporting in the Korean manufacturing sector. We verify many of the predictions of recent heterogeneous-firm models of international trade. For example, falling trade costs reduced entry by new Korean firms, increased their probability of exit, and reduced the market share of surviving firms. We also find that small firms had a particularly high level of dynamism over the sample period. Small firms were more likely to enter and exit, and marginally more likely to gain market share, enter export markets for the first time, and improve their productivity.
    Keywords: Employment, Exit, Exports, Firm deaths, Survival, Trade costs, Agribusiness, Industrial Organization, International Development, International Relations/Trade, Labor and Human Capital, Marketing, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, F10, D24,
    Date: 2009
  14. By: Krishna, Vijesh V.; Zilberman, David; Qaim, Matin
    Abstract: This paper examines the impact of transgenic technology adoption on varietal diversity. Transgenic pest-resistant varieties are hypothesized to reduce farmersâ demand for on-farm diversity through an act of substitution, as both serve as production risk reducing instruments. This adverse agro-biodiversity impact might be partially counteracted by an expanding seed sector, supplying a large number of transgenic varieties. The case of Bt cotton in India is taken for empirical illustration. The production function analyses show that both Bt technology and on-farm varietal diversity enhance yield, while reducing the production risk. With few Bt varieties available in the first years, technology adoption entailed a reduction in on-farm varietal diversity. This effect, however, was partially offset by more Bt varieties becoming available over time.
    Keywords: Agro-biodiversity, Bt cotton, production risk, transgenic technology, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Productivity Analysis, Risk and Uncertainty,
    Date: 2009
  15. By: Nicoletta Batini; Pietro Cova; Massimiliano Pisani; Alessandro Rebucci
    Abstract: This paper investigates the role played by total factor productivity (TFP) in the tradable and nontradable sectors of the United States, the euro area, and Japan in the emergence and evolution of today's global trade imbalances. Simulation results based on a dynamic general equilibrium model of the world economy, and using the EU KLEMS database, indicate that TFP developments in these economies can account for a significant fraction of the total deterioration in the U.S. trade balance since 1999, as well as account for some the surpluses in the euro area and Japan. Differences in TFP developments across sectors can also partially explain the evolution of the real effective value of the U.S. dollar during this period.
    Keywords: Payments imbalances , United States , European Union , Japan , Developed countries , Productivity , Balance of trade , Economic models , Time series , Cross country analysis ,
    Date: 2009–03–24
  16. By: Ollinger, Michael
    Abstract: This paper uses plant-level micro-data from the 2002 Census of Manufactures, Food Safety Inspection Service, and the Economic Research Service in a translog cost function to examine the costs of effort devoted to the performance of sanitation and process control tasks and levels of food safety technology use. Results suggest that more effort devoted to performance of sanitation and process control tasks and greater use of food safety technologies modestly reduce long run costs.
    Keywords: food safety, food safety technologies, translog cost function, long run costs, meat and poultry industry, Food Consumption/Nutrition/Food Safety, Industrial Organization, Production Economics,
    Date: 2009–07
  17. By: Derek Jones; Panu -Kauhanen Kalmi
    Abstract: ABSTRACT : By using new panel data for Finnish banks we study the impact of training on wages and performance. To the best of our knowledge, ours is the first paper to compare explicitly the effects of general and firmspecific workplace training on outcomes for both employees and firms. Unlike much existing literature, we find stronger evidence that training improves worker outcomes rather than organizational performance. Depending upon specification, the estimated wage elasticity with respect to training is in the range of 3-7%, whereas the performance effects vary widely depending on the measures of training intensity. The other key finding is that general training is associated with higher wage and performance effects than is firm-specific training. YLEISEN JA YRITYSKOHTAISEN KOULUTUKSEN VAIKUTUKSET PALKKOIHIN JA MENESTYMISEEN : Näyttöä pankkitoimialalta
    JEL: M53 J24 G21
    Date: 2009–04–22

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