New Economics Papers
on Efficiency and Productivity
Issue of 2009‒08‒22
six papers chosen by

  1. Measuring Total Factor Productivity and Variable Factor Utilisation: Sector Approach, The Case of Latvia By Ludmila Fadejeva; Aleksejs Melihovs
  2. Effects of Organizational Change on Firm Productivity By Håkansson, Christina
  3. Microeconomic foundations of geographical variations in labour productivity By Don J. Webber; Michael Horswell
  4. ICT, corporate restructuring and productivity By Laura Abramovsky; Rachel Griffith
  5. One-third codetermination at company supervisory boards and firm performance in German manufacturing Industries: First direct evidence from a new type of enterprise data By Joachim Wagner
  6. Productivity Growth and Capital Flows: The Dynamics of Reforms By Francisco J. Buera; Yongseok Shin

  1. By: Ludmila Fadejeva; Aleksejs Melihovs
    Abstract: This research constructs estimates of total factor productivity (TFP) growth for six sectors of the Latvian economy for the period 2000-2008, using a sectoral quarterly data set. Estimates are obtained by controlling for qualitative changes in production factors and assuming a mechanism for capturing changes in the utilisation of labour and capital. The paper delivers two main results. First, the use of indicators for labour and capital utilisation intensity allows for minimisation of fluctuations in the TFP measure and makes it less output growth dependent compared with the Solow residual approach. Second, the comparison of both methods shows that the estimate of the TFP growth obtained by the Solow residual approach might be undervalued for manufacturing, electricity, gas and water supply, wholesale and retail trade as well as hotels and restaurants, while overvalued for the growth in the transport, storage and communication sector of the Latvian economy.
    Keywords: Total Factor Productivity, Solow residual, factor utilisation
    JEL: C22 D24
    Date: 2009–08–13
  2. By: Håkansson, Christina (Institute for International Economic Studies, IIES.)
    Abstract: An increasing use of IT facilitates firms to use more efficient organiza- tional forms. Significant reorganizations of business processes around IT capital can thereby boost productivity growth. The aim of this study is to empirically examine how …rm productivity growth is affected by orga- nizational changes and investments in IT using a Difference-in-Difference approach on a panel of Swedish firms over the years 1997-2005. The empirical results show a positive and significant effect on total factor pro- ductivity growth for firms that invested above median in IT and at the same time undertook organizational changes.
    Keywords: information technology; productivity; organizational change
    JEL: D24 E22 L22 O33
    Date: 2009–06–01
  3. By: Don J. Webber (Department of Business Economics, Auckland University of Technology and Department of Economics, UWE, Bristol); Michael Horswell (Faculty of the Built and Natural Environment, University of the West of England, UK)
    Abstract: This paper initially presents an exploratory spatial data analysis which indicates the presence of small-scale geographical variations in levels and standard deviations of labour productivity across England and Wales in 2005. We identify the presence of spatial autocorrelation for both measures. This finding motivates a subsequent review and extension of theories which suggest the possible presence of small-scale geographical patterns of labour productivity.
    Keywords: Labour productivity; standard deviation; districts and local authorities; geographical autocorrelation
    JEL: R39
    Date: 2009–08
  4. By: Laura Abramovsky (Institute for Fiscal Studies); Rachel Griffith (Institute for Fiscal Studies and University College London)
    Abstract: <p><p>Stronger productivity growth in the US than the EU over the late 1990s is widely attributed to faster, more widespread adoption of information and communication technology (ICT). The literature has emphasised complementarities in production between ICT and internal restructuring as an important mechanism. We investigate the idea that increased use of ICT has facilitated outsourcing of business services, and that these are complementary activities in production because they allow firms to focus on their core competencies. This is consistent with evidence from the business literature and aggregate trends, and we show evidence from microdata that is consistent with this idea. </p></p>
    JEL: D2 O3 O4
    Date: 2009–04
  5. By: Joachim Wagner (Institute of Economics, University of Lüneburg)
    Abstract: This paper contributes to the empirical literature on the co-determination – firm performance nexus by using a new type of data that combines information on the co-determination status of enterprises from a commercial data base and supplementary information collected from the firms with comprehensive data on the firms from official statistics. The data allow for the first time a direct comparison of enterprises from the same size class with and without codetermination at the supervisory board level. It is shown that one-third codetermination at the supervisory board level in limited-liability companies from West German manufacturing industries seems to be neither positively nor negatively related to two core firm performance indicators, productivity and profitability.
    Keywords: One –third co-determination, firm performance, Germany
    JEL: J50
    Date: 2009–08
  6. By: Francisco J. Buera; Yongseok Shin
    Abstract: Why doesn’t capital flow into fast-growing countries? In this paper, we provide a quantitative framework incorporating heterogeneous producers and underdeveloped domestic financial markets to study the joint dynamics of total factor productivity (TFP) and capital flows. When an unexpected once-and-for-all reform eliminates non-financial distortions and liberalizes capital flows, the TFP of our model economy rises gradually and capital flows out of it. The rise in TFP reflects efficient reallocation of capital and talent, a process drawn out by frictions in domestic financial markets. The concurrent capital outflows are driven by the positive response of domestic saving to higher returns, and by the sluggish response of domestic investment to the higher TFP—the latter being another ramification of domestic financial frictions. We use our model to analyze the welfare consequences of opening up capital accounts. We find that the marginal welfare effect of capital account liberalization is negative for workers and positive for entrepreneurs and wealthy individuals.
    JEL: E44 F21 F32 F43 O16
    Date: 2009–08

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