New Economics Papers
on Efficiency and Productivity
Issue of 2010‒03‒28
thirteen papers chosen by

  1. Competition and Firm Productivity: Evidence from Firm-Level Data By Sandra Ospina; Marc Schiffbauer
  2. Firm Productivity, Innovation and Financial Development By Geneviève Verdier; Erasmus Kersting; Era Dabla-Norris
  3. Opportunities and constraints in agriculture: A gendered analysis of cocoa production in Southern Cameroon By Wokia-azi N. Kumase; Herve Bisseleua; Stephan Klasen
  4. Estimating Agroforestry's Effect on Productivity in Kenya: An Application of a Treatment Effects Model By Tsunehiro Otsuki
  5. Family Ownership and Firm Performance: A Closer Look at the Evidence from Public Companies in Chile By Claudio A. Bonilla; Mariela Carvajal; Jean Sepúlveda
  6. Antidumping protection hurts exporters : firm-level evidence from France By KONINGS, Jozef; VANDENBUSSCHE, Hylke
  7. Efficiency in the Japanese trust banking industry: A stochastic distance function approach By Yamori, Nobuyoshi; Harimaya, Kozo
  8. R&D Productivity and the Organization of Cluster Policy: An Empirical Evaluation of the Industrial Cluster Project in Japan By Junichi Nishimura; Hiroyuki Okamuro
  9. The pro-competitive effect of imports from China: an analysis of firm-level price data By Matteo Bugamelli; Silvia Fabiani; Enrico Sette
  10. Productive Development Policies in Costa Rica: Market Failures, Government Failures, and Policy Outcomes By Ricardo Monge-Gonzalez; Luis Rivera; Julio Rosales-Tijerino
  11. The Conservation Reserve Program, Off-Farm Work, and Farm Household Technical Efficiencies By Chang, Hung-Hao; Boisvert, Richard N.
  12. The effects of focus versus diversification on bank performance: Evidence from Chinese banks By Berger, Allen N.; Hasan, Iftekhar; Zhou, Mingming
  13. Localized Spillovers and Knowledge Flows: How Does Proximity Influence the Performance of Plants? By Rikard Eriksson

  1. By: Sandra Ospina; Marc Schiffbauer
    Abstract: This paper presents empirical evidence on the impact of competition on firm productivity. Using firm-level observations from the World Bank Enterprise Survey database, we find a positive and robust causal relationship between our proxies for competition and our measures of productivity. We also find that countries that implemented product-market reforms had a more pronounced increase in competition, and correspondingly, in productivity: the contribution to productivity growth due to competition spurred by product-market reforms is around 12-15 percent.
    Date: 2010–03–17
  2. By: Geneviève Verdier; Erasmus Kersting; Era Dabla-Norris
    Abstract: How do firm-specific actions-in particular, innovation-affect firm productivity? And what is the role of the financial sector in facilitating higher productivity? Using a rich firm-level dataset, we find that innovation is crucial for firm performance as it directly and measurably increases productivity. Moreover, its effects on productivity are mediated through the financial sector; firms reap the maximum benefits from innovation in countries with well-developed financial sectors. This effect is particularly important for firms in high-tech sectors, which typically have higher external financing needs.
    Keywords: Access to capital markets , Capital , Cross country analysis , Development , Economic growth , Financial sector , Industrial production , Labor productivity , Private sector , Productivity ,
    Date: 2010–02–26
  3. By: Wokia-azi N. Kumase (Georg-August University Goettingen); Herve Bisseleua (Georg-August University Goettingen); Stephan Klasen (Georg-August University Goettingen)
    Abstract: In this paper we examine gender differences in cocoa production in Cameroon using a survey of about 1000 cocoa producers in Southern Cameroon. We find that women farmers have access to land (of similar size to men), but through different mechanisms than men. They are strongly disadvantaged when it comes to access to extension services and marketing and control of proceeds. Despite these disadvantages, the productivity in terms of output per unit of land is similar to that of their male colleagues. Productivity analyses suggest that a slight disadvantage in productivity on female plots turns into a slight advantage when controlling for all the factors affecting productivity. The policy message from this is quite clear: Independent women farmers are a reality in Cameroon that need equal access to inputs and technologies, and support. If given equal opportunities, their productivity is at least as high as that of men.
    Keywords: Gender inequality; cocoa farming; Cameroon
    JEL: J71 Q12 O13
    Date: 2010–03–19
  4. By: Tsunehiro Otsuki (Associate Professor, Osaka School of International Public Policy (OSIPP))
    Abstract: This study investigates the effects of adopting agroforestry and other soil conservation technologies (SCTs) on agricultural productivity in Kenya, using plot-level data on agricultural production. Using a treatment effects model, it is found that adopting agroforestry methods, as well as manure, chemical fertilizer, and terracing/trenching, increases total factor productivity (TFP) and land productivity. The TFP gain is estimated to be 40.7 percent from agroforestry. The average treatment effect for the adopters, however, turns slightly negative due to the negative self-selection effect, possibly because the agroforestry adopters tend to perceive adverse conditions on their land, which motivates them to adopt SCTs. In this sense, agroforestry and the other SCTs are preventive actions predominantly taken by farmers facing adverse conditions. The analysis demonstrates that both the simple mean comparison and the least squares estimation, due to their failure to reflect those complexities, could obscure the real benefits of SCTs.
    Keywords: soil conservation technology; sustainability and agricultural productivity; self-selected participation; treatment effects model
    JEL: O13 H43 Q57
    Date: 2010–03
  5. By: Claudio A. Bonilla (Universidad del Desarrollo); Mariela Carvajal (Universidad de Chile); Jean Sepúlveda (Universidad del Desarrollo)
    Abstract: We revisit the evidence presented in Martinez et al. (2007) using new data and estimation techniques that take into account unobserved firm heterogeneity. The results of the earlier study are found to be robust to the new procedures since performance of family firms continues to be superior to non-family firms. We then add the risk dimension to the earlier analysis using a risk-adjusted ROA variable, and family firms again performed better. A test of the standard deviations of ROA for both firm categories revealed that family firms not only perform better but also show less volatility in their returns.
    Keywords: Family firms, performance.
    JEL: G32
    Date: 2010–02
  6. By: KONINGS, Jozef (Catholic University of Leuven and LICOS, Department of Economics); VANDENBUSSCHE, Hylke (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Keywords: antidumping, firm-level exports, intensive margin, extensive margin, productivity, dif-in-dif
    JEL: F13 L41 O30 C2
    Date: 2009–07–01
  7. By: Yamori, Nobuyoshi; Harimaya, Kozo
    Abstract: This paper aims to assess the technical efficiency of Japanese trust banks by using the stochastic distance function approach, which is suitable for analyzing complex trust banks but has never applied for Japanese trust banks. Although the trust banking industry has been one of the most restricted financial sectors in Japan, it has recently been deregulated, particularly in terms of entry restrictions. Most noteworthy was the approval of the entry of the foreign-owned trust banks that represented the financial liberalization at that time. The traditional theory expects that allowing new entry makes market more competitive and therefore players become more efficient to survive. Therefore, it is interesting to investigate whether the liberalization made Japanese banks more efficient. The results indicate that the traditional domestic trust banks possess a technical efficiency superior to new entrants (i.e., foreign-owned trust banks). However, we failed to find an apparent tendency for trust banks to be more efficient now than in the pre-liberalization period.
    Keywords: Japanese trust banking industry; Deregulation; Foreign-owned banks; Technical efficiency
    JEL: G28 G21
    Date: 2010–03–06
  8. By: Junichi Nishimura; Hiroyuki Okamuro
    Abstract: Industrial clusters have attracted increasing attention as important locations of innovation. Therefore, several countries have started promotion policies for industrial clusters. However, there are few empirical studies on cluster policies. This paper examines the effects of the “Industrial Cluster Project” (ICP) in Japan on the R&D productivity of participants, using a unique dataset of 229 small firms, and discusses the conditions necessary for the effective organization of cluster policies. Different from former policy approaches, the ICP aims at building collaborative networks between universities and industries and supports the autonomous development of existing regional industries without direct intervention in the clustering process. Thus far, the ICP is similar to indirect support systems adopted by successful European clusters. Our estimation results suggest that participation in the cluster project alone does not affect R&D productivity. Moreover, research collaboration with a partner in the same cluster region decreases R&D productivity both in terms of the quantity and quality of patents. Therefore, in order to improve the R&D efficiency of local firms, it is also important to construct wide-range collaborative networks within and beyond the clusters, although most clusters focus on the network at a narrowly defined local level. However, cluster participants apply for more patents than others without reducing patent quality when they collaborate with national universities in the same cluster region.
    Keywords: Industrial cluster; University-industry partnership; Small and medium enterprise; R&D; Patent
    JEL: O23 O32 O38 R38
    Date: 2010
  9. By: Matteo Bugamelli (Bank of Italy); Silvia Fabiani (Bank of Italy); Enrico Sette (Bank of Italy)
    Abstract: The entry of China into world markets has been one of the strongest recent shocks to world trade and advanced countries. industrial sectors. This is particularly true for Italy where labour-intensive, low-technology production represents a large share of output. Using Italian manufacturing firm-level data on output prices over the period 1990-2006, we test whether increased import competition from China has affected firms’ pricing strategies causing a reduction in the dynamics of prices and markups. After controlling for other price determinants (demand and cost, domestic competition and import penetration), we find that this is indeed the case. Comparing China’s share of world exports to Italy with China’s total world export market share proves the causal nature of the relationship we find. Inspired by and in line with recent advances in the literature on international trade, we also show that the price effects of Chinese competitive pressures are stronger in less technologically advanced sectors and, within these sectors, on smaller firms.
    Keywords: import competition, China, firms' prices and productivity
    JEL: F14 F15 L2 E31
    Date: 2010–01
  10. By: Ricardo Monge-Gonzalez; Luis Rivera; Julio Rosales-Tijerino
    Abstract: This paper analyzes five Productive Development Policies (PDPs) implemented in Costa Rica, finding that they are not optimally addressing market failures. Moreover, government failures rather than market failures represent the main justification for PDPs. Even in the presence of market failures, the policy instruments applied are not necessarily the most economically efficient but rather the most politically feasible options. In addition, the lack of policy evaluation and monitoring prevents adjustments and corrections of such policies. Addressing the arguments for policy intervention and incorporating the results of evaluation into policy design and reform are necessary conditions for success. In spite of positive policy outcomes, limitations to enhance competitiveness and create the conditions for productivity growth are still present. An umbrella approach in the case of those PDPs that reinforce each other is necessary for productivity growth.
    Keywords: Policy Analysis, Policy Making, Industrial Policy, Costa Rica
    JEL: L52 D78
    Date: 2010–03
  11. By: Chang, Hung-Hao; Boisvert, Richard N.
    Abstract: Using data from a national survey of farm households in the United States, this paper examines the effects of farm householdsâ decisions to participate in the Conservation Reserve Program (CRP) and to work off the farm on the technical efficiency of farm household production. After controlling for the self selection bias in estimating the multiple output-oriented distance functions, results show that operatorsâ decisions to work off the farm (both separately and combined with participation in CRP) lead to higher technical efficiencies for farm household productionâ implying improvements in the resource allocation between farm and other productive activities by farm households. The technical efficiencies of household production of those farm households participating only in the CRP are lower.
    Keywords: Conservation Reserve Program, off-farm work, household technical efficiency, Agribusiness, Agricultural Finance, Farm Management,
    Date: 2009–12–20
  12. By: Berger, Allen N.; Hasan, Iftekhar; Zhou, Mingming
    Abstract: This paper investigates the effects of focus versus diversification on bank performance using data on Chinese banks during the 1996-2006 period. We construct a new measure, economies of diversification, and compare the results to those of the more conventional focus index, which is based on the sum of squares of shares in different products or regions. Diversification is captured in four dimensions: loans, deposits, assets, and geography. We find that all four dimensions of diversification are associated with reduced profits and higher costs. These results are robust regardless of alternative measures of diversification and performance. Furthermore, we observe that banks with foreign ownership (both majority and minority ownership) and banks with conglomerate affiliation – are associated with fewer diseconomies of diversification, suggesting that foreign ownership and conglomerate affiliation play an important mitigating role. This analysis may provide important implications for bank managers and regulators in China as well as in other emerging economies.
    Keywords: Diversification, Focus, Efficiency, Chinese Banking
    JEL: G21 G28 G34
    Date: 2009–11
  13. By: Rikard Eriksson
    Abstract: By means of a unique longitudinal database with information on all plants and employees in the Swedish economy, this paper analyzes how geographical proximity influences the impact of spillovers and knowledge flows on the productivity growth of plants. Concerning the effects of spillovers, we show that the density of economic activities as such mainly contributes to plant performance within a very short distance and that the composition of economic activities is more influential further away. Regarding the influence of local industrial setup, proximity increases the need to be located near different, but related, industries whereas increased distance implies a greater effect of intra-industry spillovers. The analyses also demonstrate that knowledge flows via the mobility of skilled labor is primarily a sub-regional phenomenon. Only inflows of skills that are related to the existing knowledge base of plants and come from less than 50 kilometers away have a positive effect on plant performance. Concerning outflows of skills, the results indicate that it is less harmful for a dispatching plant if a former employee remains within the local economy as compared to leaving for a job in another part of the national economy.
    Keywords: agglomeration economies, knowledge spillovers, labor mobility, plant performance, geographical proximity, related variety
    JEL: R11 Q12 O18
    Date: 2010–03

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