New Economics Papers
on Efficiency and Productivity
Issue of 2009‒09‒11
nine papers chosen by

  1. Productivity of Tax Offices in Norway By Førsund, Finn R.; Edvardsen, Dag Fjeld; Kittelsen, Sverre A. C,; Lindseth, Frode
  2. Bank Productivity in China 1997-2007: An Exercise in Measurement By Kent Matthews; Nina Zhang
  3. Financial Services Sector as a Driver of Productivity Growth in Hong Kong By Frank Leung; Gaofeng Han; Kevin Chow
  4. Does IT standardization help to boost cost and profit efficiency? Empirical evidence from German savings banks By Felix Noth; Constantin F. Slotty; Andreas Hackethal
  5. Human Capital and Economic Growth in Spain, 1850-2000 By Leandro Prados de la Escosura; Joan R. Roses
  6. Productive efficiency of specialty and conventional coffee farmers in Costa Rica: Accounting for technological heterogeneity and self-selection By Meike Wollni; Bernhard Brümmer
  7. Returms-to-scale Properties in DEA Models: The Fundamental Role of Interior Points By Krivonozhko, Vladimir; Førsund, Finn R.
  8. Relative Performance and R&D Competition By Toshihiro Matsumura; Noriaki Matsushima; Susumu Cato
  9. Bank Competition and Firm Growth in the Enlarged European Union By Gábor Pellényi; Tamás Borkó

  1. By: Førsund, Finn R. (Dept. of Economics, University of Oslo); Edvardsen, Dag Fjeld (SINTEF Building and Infrastructure,); Kittelsen, Sverre A. C, (Ragnar Frisch Centre for Economic Research); Lindseth, Frode (The Norwegian Directorate of Taxes)
    Abstract: The performance of local tax offices of Norway is studied over a three-year period using Data Envelopment Efficiency analysis and calculating Malmquist productivity indices. One input, labour, is used, and six output categories of the main service activities carried out by tax offices are specified. A bootstrap approach recently developed for DEA models is applied to establish confidence intervals for the individual indices enabling an identification of units that have either significant productivity decline or growth, or no change. A specially developed graphic display gives a visual test and grouping into the three possible categories. Looking at change in labour use and productivity change together the productivity development of individual offices is classified into the four categories efficient labour increase, efficient labour savings, inefficient labour savings and inefficient labour increase.
    Keywords: Tax office; Malmquist productivity index; DEA; bootstrap
    JEL: C60 D24 L89
    Date: 2009–06–30
  2. By: Kent Matthews (Hong Kong Institute for Monetary Research, Cardiff University, Wales); Nina Zhang (Citibank (China), Cardiff University, Wales)
    Abstract: This study examines the productivity growth of the nationwide banks of China and a sample of city commercial, banks for the eleven years to 2007. Estimates of total factor productivity growth are constructed with appropriate confidence intervals, using a bootstrap method for the Malmquist index. The study adjusts for the quality of the output by accounting for the non-performing loans on the balance sheets of the banks and tests for the robustness of the results by examining alternative sets of outputs. The productivity growth of the state-owned commercial banks (SOCBs) is compared with the joint-stock banks (JSCBs) and city commercial banks (CCBs). The weak average growth of TFP of the SOCBs disguises strong technical innovation. As a result, the inefficient banks have a greater efficiency gap to make up. This picture is similar but to a lesser extent for the JSCBs. In contrast the CCBs show strong TFP growth driven by efficiency gains and less so by technical innovation.
    Keywords: Bank Efficiency, Productivity, Malmquist Index, Bootstrap
    JEL: D24 G21
    Date: 2009–07
  3. By: Frank Leung (Research Department, Hong Kong Monetary Authority); Gaofeng Han (Research Department, Hong Kong Monetary Authority); Kevin Chow (Research Department, Hong Kong Monetary Authority)
    Abstract: Hong Kong has seen strong growth in labour productivity since 2002. Sectoral breakdown shows that the advance in output per labour has been mainly supported by the expansion in financial and trade related activities attributable to the vibrant increase in offshore trade and exports of financial services. Using the data envelopment analysis (DEA) method, we find that the observed increase in labour productivity has been underpinned by the rise in total factor productivity (TFP). Based on a panel dataset of major economic sectors, regression analysis suggests that exports of services and the China factor are the two key determinants of TFP growth in Hong Kong.
    Keywords: Total factor productivity, labour productivity, economic integration
    JEL: D24 F15
    Date: 2009–08
  4. By: Felix Noth; Constantin F. Slotty; Andreas Hackethal
    Abstract: This paper investigates the impact of IT standardization on bank performance based on a panel of 457 German savings banks over the period from 1996 to 2006. We measure IT standardization as the fraction of IT expenses for centralized services over banks' total IT expenses. Bank efficiency, in turn, is measured by traditional accounting performance indicators as well as by cost and profit efficiencies that are estimated by a stochastic frontier approach. Our results suggest that IT standardization is conducive to cost efficiency. The relation is positive and robust for small and medium-sized banks but vanishes for very large banks. Furthermore, our study confirms the often cited computer paradox by showing that total IT expenditures negatively impact cost efficiency and have no influence on bank profits. To the best of our knowledge, this paper is first to empirically explore whether IT standardization enhances efficiency by employing genuine data of banks' IT expenditures.
    JEL: C23 G21
    Date: 2009–07
  5. By: Leandro Prados de la Escosura; Joan R. Roses
    Abstract: We investigate human capital accumulation in Spain using alternative approaches based on the concept of ‘labor quality’ and on the idea of education. We, then, assess the effect of human capital accumulation on labor productivity growth and discuss the implications of the different measures for TFP growth. While long-run trends in human capital are similar with either measure, the skill premium approach fits better Spanish historical experience. Human capital provided a positive albeit small contribution to labor productivity growth facilitating technological innovation. Broad capital accumulation and efficiency gains appear complementary in Spain’s long-term growth.
    Keywords: Human Capital, Growth, Labor Productivity, Total Factor
    JEL: E24 J24 O47 N33 N34
    Date: 2009–08
  6. By: Meike Wollni (University of Göttingen); Bernhard Brümmer (University of Göttingen)
    Abstract: A steep decline in coffee prices at the producer level led to considerable pressure for farmers in Costa Rica and producer countries all over the world. One possible reaction was moving to specialty markets, where price pressure was perceived to be lower. We use original survey data from 2002/03 and 2003/04 to analyze the factors influencing efficiency levels of conventional and specialty coffee farmers. Controlling for selectivity bias, we find that technical efficiency in the two subsamples is influenced by both identical and divergent factors. Among the former, additional income activities increase efficiency. Among the divergent factors, experience, bookkeeping, and the number of adult household members are found to have a significant impact in the specialty coffee model. In the case of conventional coffee farmers, membership in cooperatives leads to higher farm-level efficiency. Based on the results, we derive policy recommendations to improve farmers’ production performance and ability to cope with the effects of the coffee crisis. These policy measures include the provision of extension services with respect to accounting methods, the creation of income opportunities in rural areas, and the support of farmer-owned cooperatives.
    Keywords: Coffee; Costa Rica; Stochastic frontier analysis; Sample Selectivity; Specialty markets; Technological heterogeneity
    JEL: Q12 D24
    Date: 2009–09–03
  7. By: Krivonozhko, Vladimir (Institute for Systems Analysis, Academy of Sciences, Moscow); Førsund, Finn R. (Dept. of Economics, University of Oslo)
    Abstract: Attempts can be found in the DEA literature to identify returns to scale at efficient interior points of the production possibility set on the basis of returns to scale at points of the corresponding reference sets. However, an opposite approach is put forward in this paper, advocating that returns-to-scale properties of efficient reference units should be found by identifying first returns to scale of an efficient interior unit that is a radial projection to the frontier of an inefficient unit. Returns-to-scale properties of both the corresponding reference units and units supporting the face in question can then be established.
    Keywords: Returns to scale; DEA; Interior points; Vertices
    JEL: C61 D20
    Date: 2009–08–04
  8. By: Toshihiro Matsumura; Noriaki Matsushima; Susumu Cato
    Abstract: This paper formulates a duopoly model in which firms care about relative profits as well as their own profits. Our purpose is to investigate the relationship between the weight of relative performance and R&D expenditure. We find a non-monotone relationship between the weight of relative performance in their objectives and their R&D levels. Both highly reciprocal (altruism) and negative reciprocal attitudes yield high levels of R&D, while the intermediate situations yield low levels of R&D.
    Date: 2009–08
  9. By: Gábor Pellényi; Tamás Borkó
    Abstract: We examine the impact of bank competition and institutional factors on net firm entry in a sample of European manufacturing industries over the 1995-2006 period. Taking into account industry differences in the need for external finance, we find that bank competition helps firm entry. In addition, better institutions - especially legal structure and property rights - also have a positive impact, particularly through a better functioning financial system.
    Keywords: market structure, banks, market entry, manufacturing, financial development
    JEL: D4 G21 L11 L60 O16
    Date: 2009

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