nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2009‒05‒23
twenty-two papers chosen by
Angelo Zago
University of Verona

  1. Research Efficiency in Manufacturing : An Application of DEA at the Industry Level By Jens Schmidt-Ehmcke; Petra Zloczysti
  2. Productivity evolution and Scale effects in Brazilian Electricity Distribution Industry. Evidence from 1998-2005 period By Beatriz Tovar; Francisco Javier Ramos-Real; Edmar Fagundes de Almeida
  3. Productivity Spillovers from Competitive Reallocation: Evidence from Canadian Manufacturing Plants By Gellatly, Guy; Baldwin, John R.
  4. Innovation, R&D Efficiency and the Impact of the Regulatory Environment : A Two-Stage Semi-Parametric DEA Approach By Astrid Cullmann; Jens Schmidt-Ehmcke; Petra Zloczysti
  5. Mergers, Innovation, and Productivity: Evidence from Japanese manufacturing firms By HOSONO Kaoru; TAKIZAWA Miho; TSURU Kotaro
  6. Knowledge Coherence, Variety and Productivity Growth: Manufacturing Evidence from Italian Regions By Francesco Quatraro
  7. Is corporate R&D investment in high-tech sectors more effective? Some guidelines for European research policy By Raquel Ortega-Argiles; Mariacristina Piva; Lesley Potters; Marco Vivarelli
  8. Comparative Output and Labour Productivity in Manufacturing for China, Japan, Korea and the United States in Circa 1935 by a Production PPP Approach By Fukao, Kyoji; Wu, Harry X.; Yuan, Tangjun
  9. Factor-Augmenting Technical Change: An Empirical Assessment By Enrica De Cian
  10. Localized Technological Change and Efficiency Wages: the Evidence across European Regions By Antonelli Cristiano; Quatraro Francesco
  11. What Are Cities Worth? Land Rents, Local Productivity, and the Capitalization of Amenity Values By David Albouy
  12. Employment-Productivity Trade-off and Labour Composition By Hervé Boulhol; Laure Turner
  13. The Japan-U.S. Exchange Rate, Productivity, and the Competitiveness of Japanese Industries By Dekle, Robert; Fukao, Kyoji
  14. The Missing Link Between Financial Constraints and Productivity By Marialuz Moreno Badia; Veerle Slootmaekers
  15. The politico-economic determinants and productivity effects of regional transport investment in Europe By Kemmerling , Achim; Stephan, Andreas
  16. Productivity convergence in Brazil: The case of grain production By Magalhaes, Eduardo; Diao, Xinshen
  17. Unionisation Structures, Productivity, and Firm Performance By Sebastian Braun
  18. Regional and Sector Environmental Efficiency Empirical Evidence from Structural Shift-share Analysis of NAMEA data By Massimiliano Mazzanti; Anna Montini
  19. Trends in Kenyan Agricultural Productivity: 1997-2007 By Betty Kibaara; Joshua Ariga; John Olwande; T.S. Jayne
  20. Trends in Kenyan Agricultural Productivity: 1997-2007 By Betty Kibaara; Joshua Ariga; John Olwande; T.S. Jayne
  21. Assessment of Green Public Procurement as a Policy Tool: Cost-efficiency and Competition Considerations By Brännlund, Runar; Lundberg, Sofia; Marklund, Per-Olov
  22. Does the Firm Size Matter? An Empirical Enquiry into the Performance of Indian Manufacturing Firms By Bhattacharyya, Surajit; Saxena, Arunima

  1. By: Jens Schmidt-Ehmcke; Petra Zloczysti
    Abstract: This paper analyzes research efficiency at the industry level in manufacturing for 13 European member and four nonmember countries during 2000 and 2004. A unique dataset was compiled that matches patent applications at the European Patent Office (EPO) to industry-specific R&D inputs from EU KLEMS. We find that Germany, the United States, and Denmark have the highest efficiency scores on average in total manufacturing. The main industries that are at the technology frontier are those involved in electrical and optical equipment and machinery. Separate frontier estimations for these industries, conducted without the constraint of a constant technology frontier, provide additional support for our results.
    Keywords: R&D efficiency, industry level, data envelopment analysis, manufacturing
    JEL: C14 L60 O31 O57
    Date: 2009
  2. By: Beatriz Tovar; Francisco Javier Ramos-Real; Edmar Fagundes de Almeida
    Abstract: This paper estimates the productivity evolution of the Brazilian electricity distribution industry decomposing it in terms of technical efficiency, scale-efficiency and technical change. This exercise aims to understand one important issue that has not been analyzed in previous papers, that is the impact of firm’s size in efficiency and productivity evolution. It employs stochastic frontier analysis on a panel of 18 Brazilian firms from 1998-2005. The results allow us to conclude that company size is an important issue in the evolution of the industry’s productivity and, therefore, a key aspect to consider when making decisions affecting the organization and composition of electricity distribution.
    Date: 2009–04
  3. By: Gellatly, Guy; Baldwin, John R.
    Abstract: This paper uses plant-level data on productivity growth and changes in market share over different periods during the 1970s, 1980s, and 1990s to investigate whether plants with declining market shares obtain productivity spillovers from more successful producers and whether the impact of spillovers is affected by the distance between plants. We are primarily interested in the extent to which productivity externalities moderate the centrifugal forces that separate growing plants from declining rivals because of the productivity advantages enjoyed by the former. The paper focuses on the productivity performance of plants with declining market shares as potential receivers of productivity spillovers. Two possible sources for these spillovers are examined rival plants operating at the technological frontier and rivals that are actively gaining market share. The analysis advances a model of the externality process in which the productivity of declining plants is influenced by (1) the economic distance of the declining plant from its technological frontier at the beginning of any period, (2) contemporaneous productivity gains in rival plants that are actively wresting market share away from decliners, and (3) the distance between rival plants. We evaluate the existence and magnitude of these sources of spillovers frontier plants and market-share gainers because of what they reveal about the types of productive information that struggling plants may be able to assimilate from rivals. Spillovers from the plants at the existing frontier are likely to reflect the established best practices of industry leaders; spillovers coming from market-share gainers involve new sources of productive knowledge that emerge as the frontier is actively being re-established. Our model also incorporates geographic information on the proximity of declining plants to both frontier plants and market-share gainers to test whether productivity spillovers are spatially circumscribed. The resu
    Keywords: Manufacturing, Economic accounts, Productivity accounts
    Date: 2009–05–19
  4. By: Astrid Cullmann; Jens Schmidt-Ehmcke; Petra Zloczysti
    Abstract: This paper assesses the relative efficiency of knowledge production in the OECD using a nonparametric DEA approach. Resources allocated to R&D are limited and should therefore be used efficiently given the institutional and legal constraints. This paper presents efficiency scores based on an intertemporal frontier estimation for the period 1995 to 2004 and analyzes the impact of the regulatory environment using the single bootstrap procedure suggested by Simar and Wilson (2007). The empirical evidence supports the hypothesis that barriers to entry, aimed at reducing competition, lower research efficiency by attenuating the incentive to innovate and to allocate resources efficiently.
    Keywords: R&D efficiency, data envelopment analysis, truncated regression, regulation
    JEL: C14 C24 L50 O31 O57
    Date: 2009
  5. By: HOSONO Kaoru; TAKIZAWA Miho; TSURU Kotaro
    Abstract: We investigate the impact of merger on innovation and efficiency using a micro dataset of Japanese manufacturing firms including unlisted firms during the period of 1995-1999. We find that the acquirer's total factor productivity (TFP) decreases immediately after mergers and does not significantly recover to the pre-merger level within three years after mergers. We also find that the R&D intensity does not significantly change after mergers in spite of a significant increase in the debt-to-asset ratio. Our results suggest that the costs of business integration are large and persistent. To take into considering large integration costs, we also analyze the post-merger performance from one year after mergers, finding no significant increase in TFP or R&D intensity up to three years after mergers. Given the heterogeneity of mergers, we analyze the post-merger performance by classifying merger types. We find that the recovery of TFP after mergers is significant for mergers across industries or within the same business group, suggesting that a synergy effect works well and integration costs are small for those types of mergers.
    Date: 2009–04
  6. By: Francesco Quatraro
    Abstract: This paper analyzes the effects of the evolution of knowledge base in the manufacturing sectors on regional productivity growth. Knowledge is viewed as a heterogeneous asset, and an evolutionary perspective is adopted. The results of the empirical estimations corroborate the hypothesis that beyond the traditional measure of knowledge stock, knowledge coherence and variety matter in shaping productivity dynamics. The check for spatial dependence suggests that cross-regional externalities exert additional triggering effects on productivity growth, without debasing the effects of knowledge. Important policy implications stem from the analysis, in that regional innovation strategies should be carefully coordinated so as to reach a higher degree of internal coherence and exert positive effects on productivity.
    Keywords: knowledge, variety, regional growth, productivity
    JEL: O33 R11
    Date: 2009–02
  7. By: Raquel Ortega-Argiles (European Commission, Joint Research Centre (JRC); Institute for Prospective Technological Studies (IPTS), Sevilla); Mariacristina Piva (Universita Cattolica del Sacro Cuore, Milano); Lesley Potters (European Commission, Joint Research Centre (JRC); Institute for Prospective Technological Studies (IPTS), Sevilla; Utrecht School of Economics, Utrecht); Marco Vivarelli (European Commission, Joint Research Centre (JRC); Institute for Prospective Technological Studies (IPTS), Sevilla; Universita' Cattolica del Sacro Cuore, Milano; Institute for the Study of Labour (IZA), Bonn)
    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 and industrial policy
    JEL: O33
    Date: 2009–05–19
  8. By: Fukao, Kyoji; Wu, Harry X.; Yuan, Tangjun
    Abstract: Following the standard methodology for measuring industry-of-origin or productionside PPPs, this study compares the unit values of manufacturing products in China, Japan, Korea and the US to calculate unit value ratios (UVRs) and hence estimates PPPs for individual manufacturing industries using the US as the base country in circa 1935. Based on the products that could be matched between these countries, the estimated manufacturing production PPPs for China, Japan and Korea are only from half to two thirds of the prevailing market exchange rates, suggesting much lower cost of production in manufacturing in these countries than in the US. The estimated PPPs are used to calculate industry-level output and labour productivity in China, Japan and Korea relative to those of the US in circa 1935. The results show that the size of factory manufacturing in Japan was 12 percent of the US level whereas in China it was only one percent and even lower in Korea. In terms of comparative labour productivity, measured as PPP$ per hour worked with the US as the reference, Japanese and Korean manufacturing was 24 and 23 percent of the US level, whereas Chinese manufacturing was only 7 percent of the US level.
    Keywords: Production (industry-of-origin) purchasing power parity (PPP), unit value ratio, comparative output and labour productivity, comparative advantage, economic development
    JEL: L60 O47 P52
    Date: 2009–03
  9. By: Enrica De Cian (Fondazione Eni Enrico Mattei and School of Advanced Studies in Venice)
    Abstract: Starting from a system of factor demands, an empirical model that allows estimating factor-augmenting technical change is derived. Factor-augmenting technical change is defined as the improvement in factor productivities that can occur either exogenously or endogenously, with changes in other macroeconomic variables. This paper provides additional estimates for the substitution possibilities among inputs and it offers new empirical evidence on the direction and sources of factor-augmenting technical change, an issue that has not yet been explored by the empirical literature on growth determinants. The empirical findings suggest that technical change is directed. Technical change tends to be more energy-saving than capital- and labour-saving. Both R&D investments and international trade are important determinants of growth in energy and capital productivity whereas technical change for labour is positively related to education expenditure. Therefore, the sources of factor-augmenting technical change go beyond R&D investments, as proposed in the theory of directed technical change, and they differ across inputs. In other words, not only is technical change directed, the sources of factor-augmenting technical change appear to be input specific.
    Keywords: Factor-Augmenting Technical Change, Technology Spillovers, Panel Data
    JEL: C3 O47 Q55 Q56
    Date: 2009–03
  10. By: Antonelli Cristiano (University of Turin); Quatraro Francesco (University of Turin)
    Abstract: Internal labour markets and industrial relations in Continental Europe are characterized by substantial rigidity of employed labour. The rigidity of employed labor adds and augments the irreversibility of fixed capital. This rigidity affects both the rate and the direction of technological change. The irreversibility of both production factors induces the localized introduction of biased technological change directed towards the more intensive use of inputs that are becoming more expensive. The localized introduction of biased technological change contrasts the classical inducement hypothesis according to which new biased technologies are directed towards the most intensive use of inputs that are becoming less expensive. In our theoretical underpinning the localized introduction of biased technological change is induced, instead, towards the more productive use of the inputs that are becoming more expensive because they are characterized by substantial rigidity and irreversibility. Firms, localized in a limited portion of the technical space by the competence and expertise acquired by learning processes in the proximity of the techniques in use and by the quasi-irreversibility of their stocks of both capital and labour, react to the changes in the levels of wages by means of the introduction of new biased technologies directed towards the more intensive use of labour that in the European experience can be characterized as a rigid production factor. The localized introduction of directed and biased technological innovations has clear effects on total factor productivity levels. The empirical evidence on the determinants and the effects of the localized introduction of directed technological changes across a sample of European regions in the years 1995-2004 provides significant support to the hypotheses and confirms both the significant role of the changes in wages in the increase of the output elasticity of labour and its significant effects on multi factor productivity.
    Date: 2009–04
  11. By: David Albouy
    Abstract: Estimates of local land rents and firm productivity from wage and housing-cost data should incorporate parameters from the housing production function. Across cities, differences in amenity values are capitalized into the sum of local land values and federal-tax payments. Improved modeling is used to predict how amenities affect wages and housing costs, estimate quality-of-life and firm-productivity differences across U.S. cities, and revise estimates of the value of public-infrastructure investments. Private land values vary mainly from quality-of-life differences, while social land values vary mainly from firm-productivity differences. Highly valuable cities are typically coastal, temperate, sunny, and have large or well-educated populations.
    JEL: H2 H4 J30 Q5 R1
    Date: 2009–05
  12. By: Hervé Boulhol; Laure Turner
    Abstract: This paper formalises the analysis of the employment-productivity trade-off by extending the framework developed by Gordon (1997) to account for labour heterogeneity. The extent of the trade-off is determined by the extent of the adjustment of capital to effective labour and by the changes in aggregate labour quality. The main experiment reported in the paper consists of assessing the labour utilisation and productivity impacts in OECD countries of aligning group-specific employment rates to the US levels. Matching the US employment performance defined in that sense would enable low-employment OECD countries to reduce only half of the aggregate employment-rate gap vis-à-vis the United States, the other half being mechanically due to differences in the population structure by age and educational attainment. In this experiment, a 1% gain in employment is associated with a decrease of 0.24% in labour productivity on average across countries, and of 0.35% in low-employment countries.<P>Compromis emploi - productivité et effets de composition<BR>Cette étude formalise l’analyse du compromis entre emploi et productivité en étendant le cadre développé par Gordon (1997) pour prendre en compte l’hétérogénéité de la main-d’oeuvre. L’ampleur de ce compromis est déterminée par l’étendue de l’ajustement du capital à la main-d’oeuvre effective et par les changements dans la qualité de la main-d’oeuvre. La principale expérience rapportée dans l’étude consiste en l’évaluation de l’impact sur l’utilisation de la main-d’oeuvre et sur la productivité du travail de l’alignement, pour chaque pays de l’OCDE, des taux d’emplois par groupe de population sur ceux des États-Unis. Répliquant la performance des États-Unis ainsi définie permettrait aux pays de l’OCDE ayant un faible niveau d’emplois de réduire seulement la moitié de l’écart de taux d’emploi agrégé vis-à-vis des États-Unis, l’autre moitié étant due mécaniquement à la structure de la population par âge et niveau d’éducation. Dans cette expérience, des gains de 1% en termes d’emplois sont associés à une baisse de 0.24% de la productivité du travail en moyenne pour les pays de l’OCDE et de 0.35% pour les pays ayant les niveaux d’emplois les plus bas.
    Keywords: démographie, aggregate employment, emploi agrégé, qualité de l'emploi, quality of labour, labour productivity, productivité du travail, demographics
    JEL: E24 J10 J21 J31
    Date: 2009–05–14
  13. By: Dekle, Robert; Fukao, Kyoji
    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 "undervalued" before 1985, it was significantly "overvalued" 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
  14. By: Marialuz Moreno Badia; Veerle Slootmaekers
    Abstract: The global financial crisis has reopened the debate on the potential spillover effects from the financial sector to the real economy. This paper adds to that debate by providing new evidence on the link between finance and firm-level productivity, focusing on the case of Estonia. We contribute to the literature in two important respects: (i) we look explicitly at the role of financial constraints; and (ii) we develop a methodology that corrects for the misspecification problems of previous studies. Our results indicate that young and highly indebted firms tend to be more financially constrained. Overall, a large number of firms shows some degree of financial constraints, with firms in the primary sector being the most constrained. More importantly, we find that financial constraints do not lower productivity for most sectors.
    Keywords: Financial sector , Estonia , Productivity , Nonbank financial sector , Credit expansion , Private investment , Corporate sector , Economic models ,
    Date: 2009–04–17
  15. By: Kemmerling , Achim (Jacobs University Bremen); Stephan, Andreas (Jonkoping International Business School)
    Abstract: We study the determinants and productivity effects of regional transportation infrastructure investment in France, Germany, Italy, and Spain. We estimate productivity effects with regional production functions for each country controlling for the potential endogeneity of public infrastructure investment. In analyzing the determinants of public infrastructure investment two broad categories are considered: First, the normative principles such as efficiency, equity, and redistribution; and second, political factors such as electoral competition and electoral rents. The evidence shows that road infrastructure positively contributes to regional production. As to the determinants, efficiency and redistribution are consistently found to be the dominant norms while equity considerations appear to be less important. However, we find remarkable differences across countries regarding the political determinants. Which political factors matter for infrastructure investment is related to the different political systems of the various countries.
    Keywords: transport infrastructure; regional growth; political economy
    JEL: H54 O40 R10
    Date: 2008–07–18
  16. By: Magalhaes, Eduardo; Diao, Xinshen
    Abstract: "In recent years, Brazil has become a considerable player in agricultural markets for a number of commodities. Such agricultural growth in Brazil has largely been the result of gains in productivity over the last several decades. Still, there remain some sub-national regions and states that lag behind in both agricultural productivity and levels of per capita income. In this paper, we investigate whether technological spillovers in agriculture have reached the poorer or less productive regions with focus on the evolution and patterns of land productivity. To assess such spillovers, we examine three cereal crops: maize, rice and wheat, as these crops are grown by commercial and subsistence farmers throughout the country. We first apply a generalized entropy (GE) method to assess whether inequality in productivity has changed over time. The entropy analysis indicates that the trends for overall entropy did not increase over time for all three crops. Moreover, declining trends in between-group inequality were observed for maize and wheat and remained constant for rice. This result suggests that yields in less productive micro-regions, indeed, have grown faster than yields in more productive micro-regions, at least in the case of maize and wheat. Next, two types of econometric estimations are used to measure whether convergence has occurred in yields of the three crops. The econometric findings are consistent with the GE results and suggest that conditional convergence has occurred in all three crops, which demonstrates that yields in less productive regions converge to those in productive regions, given the control of other factors. However, the process has been rather slow." from authors' abstract
    Keywords: productivity, Convergence, Spillovers, Development strategies,
    Date: 2009
  17. By: Sebastian Braun
    Abstract: This paper studies how different unionisation structures affect firm productivity, firm performance, and consumer welfare in a monopolistic competition model with heterogeneous firms and free entry. While centralised bargaining induces tougher selection among hetero- geneous producers and thus increases average productivity, firm-level bargaining allows less productive entrants to remain in the market. Centralised bargaining also results in higher average output and profit levels than either decentralised bargaining or a competitive labour market. From a welfare perspective, the choice between centralised and decentralised bar- gaining involves a potential trade-off between product variety and product prices. Extending the model to a two-country setup, I furthermore show that the positive effect of centralised bargaining on average productivity can be overturned when firms face international low-wage competition.
    Keywords: Trade Unions, Productivity, Firm Performance, International Competition
    JEL: J50 D43 F16
    Date: 2009–05
  18. By: Massimiliano Mazzanti (University of Ferrara); Anna Montini (niversity of Bologna, CERIS CNR)
    Abstract: This paper provides new empirical evidence on regional–national disparities in environmental efficiency, based on case studies of Italy and the Lazio region, which includes the city of Rome. Shift-share analyses provide evidence on the drivers of environmental efficiency and on sector specificity. This confirms the usefulness of this method for studying the environmental economics realm, in order to investigate structural and efficiency factors at the level of within country environmental efficiency performance, even in light of the different shares of services. Our evidence shows that although the Rome region has achieved higher environmental performance compared to Italy mainly thanks to its being less industry based, some critical points in the energy sector and in some services should be taken into account in shaping the future development of the region. Environmental, industrial and sector-oriented policy making may also derive valuable information from the evidence provided by our study.
    Keywords: NAMEA, Shift Share, Regional Development, RAMEA, Emission Efficiency, Economic Efficiency
    JEL: C67 D57 O4 O18 Q53 Q56
    Date: 2009–02
  19. By: Betty Kibaara; Joshua Ariga; John Olwande; T.S. Jayne
    Abstract: Agriculture continues to be a fundamental instrument for sustainable development, poverty reduction and enhanced food security in developing countries. Agricultural productivity levels in Sub Sahara Africa are far below that of other regions in the world, and are well below that required to attain food security and poverty reduction goals. On the other hand, the rate of agricultural productivity growth since the early 2000s has been quite impressive in many African countries, including Kenya, yet this is no cause for complacency. Sustained and accelerated growth requires a sharp increase in productivity of smallholder farmers. The Strategy to Revitalize Agriculture (SRA), Kenya Vision 2030, Comprehensive African Agricultural Development Program (CAADP) and Alliance for Green Revolution in Africa (AGRA) have underscored the importance of increasing agricultural productivity in the fight against poverty. In the past, agricultural production was largely a function of acreage, but further growth in production will have to be driven by productivity growth.
    Keywords: Africa, Kenya, productivity
    JEL: Q10
    Date: 2008–09
  20. By: Betty Kibaara; Joshua Ariga; John Olwande; T.S. Jayne
    Abstract: Agriculture continues to be a fundamental instrument for sustainable development, poverty reduction and enhanced food security in developing countries. Agricultural productivity levels in Sub Sahara Africa are far below that of other regions in the world, and are well below that required to attain food security and poverty reduction goals. On the other hand, the rate of agricultural productivity growth since the early 2000s has been quite impressive in many African countries, including Kenya, yet this is no cause for complacency. Sustained and accelerated growth requires a sharp increase in productivity of smallholder farmers. The Strategy to Revitalize Agriculture (SRA), Kenya Vision 2030, Comprehensive African Agricultural Development Program (CAADP) and Alliance for Green Revolution in Africa (AGRA) have underscored the importance of increasing agricultural productivity in the fight against poverty. In the past, agricultural production was largely a function of acreage, but further growth in production will have to be driven by productivity growth.
    Keywords: Africa, Kenya, productivity
    JEL: Q10
    Date: 2008–09
  21. By: Brännlund, Runar (Department of Economics, Umeå University); Lundberg, Sofia (Department of Economics, Umeå University); Marklund, Per-Olov (Department of Economics, Umeå University)
    Abstract: Public procurement is officially regarded as an effective means to secure environmental improvement. Estimates by the European Commission indicate that public authorities within the European Union typically purchase goods and services corresponding to approximately 16 percent of GNP per annum. Hence, it is believed, private firms can be stimulated to invest in sustainable production technologies if the market power of public bodies is exerted through Green Public Procurement (GPP) policies. In this paper we assess whether GPP is a cost-efficient policy tool, and if so whether its implementation can, from a welfare perspective, deter or stimulate entry to procurement markets.
    Keywords: Competitive Bidding; Cost-efficiency; Procurement auctions; Sustainability
    JEL: H57 Q01 Q28
    Date: 2009–05–11
  22. By: Bhattacharyya, Surajit; Saxena, Arunima
    Abstract: The Law of Proportionate Effect depicts that firm’s growth rate is independent of its size; Gibrat (1931). Some of the existing studies support the Gibrat’s Law: Hymer and Pashigian (1962), Mansfield (1962), among others. However, Gale (1972), Shepherd (1972) and recently Punnose (2008) report a positive relationship, while Haines (1970) and Evans (1987) observe an inverse relationship between firm size and profitability. Baumol (1959) opined that rate of return increases with firm size. Therefore, the extant empirical research on the firm size – performance relationship provides inconclusive results. Manufacturing firms’ data from the Steel and Electrical & Electronics (EE) industries are taken from CMIE Prowess database for the period 2004-05 to 2006-07. Results show that firm size affects current profitability: positively in the Steel and negatively in the other. Some more determinants of firm performance are explored. Retained earnings have negative impact on profitability in Steel but, positive in EE. Bank credit is found negatively significant in both the industries. Market share of firms and industry concentration ratio (CR4) although inconsistently are the other significant determinants of firms’ performance. Firms’ market value (Q) is found positively significant for both the industries. This signifies that high market value of firms reflects their goodwill, knowledge stock and prospective investment opportunities which positively influence the firms’ performance. The significance of having high brand equity which the corporate firms thrive for becomes apparent. Interestingly, the impact of size is affected by firms’ market value: firm size positively affects profitability both in Steel and EE. Furthermore, ineffectiveness of Law of Proportionate Effect is strengthened when tested over the combined data of Steel and EE firms. The short-run dynamism in firm performance is also impacted by presence of Tobin’s Q.
    Keywords: Gibrat’s law, firm size, profitability, Tobin’s Q, manufacturing firms.
    JEL: L6 M21
    Date: 2009–01–09

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