New Economics Papers
on Efficiency and Productivity
Issue of 2009‒07‒17
eight papers chosen by

  1. Productivity and Characteristics of Firms: An application of a bootstrapped data envelopment analysis to Japanese firm-level data By KATO Atsuyuki
  2. Efficiency, Technical Change, and Returns to Scale in Large U.S. Banks: Panel Data Evidence from an Output Distance Function Satisfying Theoretical Regularity By Guohua Feng; Apostolos Serletis
  3. Convergence of firm-level productivity, globalisation, information technology, and competition: evidence from France. By Chevalier, P-A.; Lecat, R.; Oulton, N.
  4. The role of production technology for productivity spillovers from multinationals: Firm-level evidence for Hungary By Holger Görg; Alexander Hijzen; Balázs Muraközy
  5. PRODUCTIVITY SPILLOVERS IN INDIAN MANUFACTURING FIRMS By Mita Bhattacharya; Jong-Rong Chen; V. Pradeep Author-X-Name- V
  6. Imported Inputs and Productivity By László Halpern; Miklós Koren; Adam Szeidl
  7. Evaluating Greek Equity Funds Using Data Envelopment Analysis By Vassilios Babalos; Guglielmo Maria Caporale; Nikolaos Philippas
  8. Measuring the Technical Efficiency of Municipal Water Suppliers: the Role of Environmental Factors By Steven Renzetti; Diane Dupont

  1. By: KATO Atsuyuki
    Abstract: This paper examines the relationships between productivity growth and characteristics of firms using Japanese firm-level data during the period 1995-2004. Applying a bootstrapped Malmquist index approach and weighted least squares (WLS) to two retail trade industries, we estimate the firm-level productivity growth rates and the effects of firms' characteristics on those growth rates. In addition, decomposing productivity growth into technical efficiency change and technical progress, we discuss mechanisms of productivity growth in detail. Our estimation reveals that productivity growth of department stores and supermarkets was stagnant during the sample period. It also indicates that positive technical efficiency changes are usually offset by technical regress and vice versa. Furthermore, effects of firms' characteristics on both productivity components are sometimes conflicting as well. In view of these findings, industrial policies should be carefully devised, based upon their efficiency distribution.
    Date: 2009–06
  2. By: Guohua Feng; Apostolos Serletis
    Abstract: This paper provides parametric estimates of technical change, efficiency change, economies of scale, and total factor productivity growth for large banks (those with assets in excess of $1 billion) in the United States, over the period from 2000 to 2005. This is done by estimating an output distance function subject to theoretical regularity within a Bayesian framework. We find that failure to incorporate theoretical regularity conditions results in mismeasured shadow revenue and/or cost shares, which in turn leads to perverse conclusions regarding productivity growth. Our results from the regularity-constrained model show that total factor productivity of the large U.S. banks grew at an average rate of 1.98% over the sample period. However, our estimates also show a clear downward trend in the growth rate of total factor productivity and our decomposition of the primal Divisia total factor productivity growth index into its three components - technical change, efficiency change, and economies of scale - indicates that technical change is the driving force behind this decline.
    Keywords: Productivity decomposition; Translog output distance function.
    JEL: C11 D24 G21
    Date: 2009–06–24
  3. By: Chevalier, P-A.; Lecat, R.; Oulton, N.
    Abstract: Studies of firm-level data have shown that there is a huge dispersion of productivity across firms even when industries are narrowly defined. So there is a significant opportunity for the least productive firms to catch up to the most productive. The formers’ convergence could therefore constitute an important part of productivity growth at the macroeconomic level. This article sheds light on this convergence process in the 1990s and the 2000s in France and on some of the factors which can explain it. Productivity convergence was stronger for labour productivity than for total factor productivity. But most importantly the speed of convergence has slowed during the course of the 1990s, a fact which is explained principally by the acceleration of the productivity of firms on the technological frontier. Three possible explanations of these stylised facts are considered: globalisation, information technology, and competition. Globalisation and information technology may have benefited the most productive firms more and the growth of competition may at the same time have stimulated the productivity of firms at the frontier while discouraging the convergence of the least productive firms.
    Keywords: Convergence ; productivity ; TFP ; globalisation ; ICT ; competition.
    JEL: D24 D40 F10 J24 L11 O33
    Date: 2009
  4. By: Holger Görg; Alexander Hijzen; Balázs Muraközy
    Abstract: This paper analyses the potential for productivity spillovers from inward foreign direct investment using administrative panel data on firms for Hungary. We hypothesise that the potential for spillovers is related to observable characteristics of the production process of foreign affiliates, and evaluate this empirically. We further explore the role of competition in explaining productivity spillovers within industries. Our empirical analysis yields a number of important findings. First, we show that the potential for spillovers is importantly related to the production technology of the sectors and foreign affiliates. Firms that relocate labour-intensive activities to Hungary to exploit differences in labour costs are unlikely to generate productivity spillovers, while spillovers increase in the capital intensity of foreign affiliates. Second, we find that spillovers differ markedly in the early and later stages of transition, and that there are differences between small and large firms. Furthermore, foreign presence tends to affect the productivity of domestic firms negatively whenever MNEs produce for the domestic market
    Date: 2009–02–01
  5. By: Mita Bhattacharya; Jong-Rong Chen; V. Pradeep Author-X-Name- V
    Abstract: Indian economic reform since early 1990s aims at improving productivity and competitiveness of major industries. The paper examines spillovers from foreign direct investment (FDI), research and development (R&D) and exporting activities on productivity both for foreign and domestic manufacturing firms. The data is obtained from the PROWESS database provided by the Centre for Monitoring Indian Economy (CMIE). Balanced panel of over 1,000 manufacturing firms in India between 1994 and 2006 are considered for our empirical analysis. Findings indicate that foreign presence has a significant spillover effect on the productivity of the Indian manufacturing firms compared to the alternative spillovers such as from R&D and export initiatives.
    Keywords: Productivity, Spillovers, Indian manufacturing, FDI.
    JEL: F21 O47 O53
    Date: 2009–06
  6. By: László Halpern; Miklós Koren; Adam Szeidl
    Abstract: How do imported inputs affect firm productivity? We address this question by estimating a structural model of importers using product-level data for all Hungarian manufacturing firms during 1992-2003. We have three main findings. (1) Imported inputs have large productivity effects: increasing the share of imported goods from 0 to 100 percent increases productivity by 11 percent. (2) About 60 percent of this gain is due to imperfect substitution, i.e., the idea that combining different inputs is "more than the sum of the parts." This is consistent with Hirschman's (1958) view about the importance of complementarities along a production chain for economic development. (3) Tariff cuts have a highly non-linear effect on productivity, due to firm entry into import markets for new varieties. This non-linearity can rationalize differences between estimated tariff effects in different studies, and shows how firm level analysis helps understand macro facts. Our structural approach can also be used for counterfactual policy analysis, and to study the different implications of the quality and complementarity mechanisms.
    Date: 2009–04–01
  7. By: Vassilios Babalos; Guglielmo Maria Caporale; Nikolaos Philippas
    Abstract: This study assesses the relative performance of Greek equity funds employing a non-parametric method, specifically Data Envelopment Analysis (DEA). Using an original sample of cost and operational attributes we explore the effect of each variable on funds' operational efficiency for an oligopolistic and bank-dominated fund industry. Our results have significant implications for the investors' fund selection process since we are able to identify potential sources of inefficiencies for the funds. The most striking result is that the percentage of assets under management affects performance negatively, a conclusion which may be related to the structure of the domestic stock market. Furthermore, we provide evidence against the notion of funds' mean-variance efficiency.
    Keywords: Data envelopment analysis, portfolio efficiency, performance evaluation
    JEL: G14 G15 G21 G23
    Date: 2009
  8. By: Steven Renzetti (Department of Economics, Brock University); Diane Dupont (Department of Economics, Brock University)
    Abstract: This paper extends the multistage procedure set out in Fried et al (1999) to examine the importance of environmental factors when assessing the technical efficiency of water agencies. However, following Simar and Wilson's (2007) critique of multistage efficiency analyses, the paper uses a bootstrapping approach in order to have consistent inference. Data are from a cross-section of municipal water agencies in Ontario, Canada during 1996. The main findings are that environmental factors explain some of the observed variation in efficiency scores and that water agencies' relative efficiency scores are changed substantially after controlling for environmental factors.
    Keywords: Water utility, Efficiency, DEA Autoregression
    JEL: Q25 D21
    Date: 2009–01

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