New Economics Papers
on Efficiency and Productivity
Issue of 2010‒04‒24
fifteen papers chosen by

  1. Determinants of Profitability: An Analysis of Large Australian Firms By Andreas Stierwald
  2. Productivity distribution, firm heterogeneity, and agglomeration: Evidence from firm-level data By OKUBO Toshihiro; TOMIURA Eiichi
  3. Tariff Rates, Offshoring and Productivity: vidence from German and Austrian Firm-Level Data By Thorsten Hansen
  4. Technical Efï¬ciency, Farm Size and Tropical Deforestation in the Brazilian Amazonian Forest By Sébastien MARCHAND
  5. Corporate Social Responsibility and Corporate Financial Performance: Evidence from Korea By Choi, Jong-Seo; Kwak, Young-Min; Choe, Chongwoo
  6. Productivity, wages, and the returns to firm-provided training: who is grabbing the biggest share? By Ana Sofia Lopes; Paulino Teixeira
  7. Industrial Relocation Policy and Heterogeneous Plants Sorted by Productivity: Evidence from Japan By OKUBO Toshihiro; TOMIURA Eiichi
  8. Foreign direct investment and innovation in Central and eastern Europe : evidence from Estonia By Masso, Jaan; Roolaht, Tõnu; Varblane, Urmas
  9. Efficiency frontier and matching process on the labor market: Evidence from Tunisia By Drine, Imed; Bou Abid , Anis
  10. Options for Energy Efficiency in India and Barriers to Their Adoption: A Scoping Study By Bhattacharya, Soma; Cropper, Maureen L.
  11. Death of Canadian Manufacturing Plants: Heterogeneous Responses to Changes in Tariffs and Real Exchange Rates By Baldwin, John R.; Yan, Beiling
  12. Using Innovation Surveys for Econometric Analysis By Jacques Mairesse; Pierre Mohnen
  13. Models of Growth and Firm Heterogeneity By Erzo G. J. Luttmer
  14. The (Evolving) Role of Agriculture in Poverty Reduction: An Empirical Perspective By Christiaensen,Luc; Demery,Lionel and Kuhl, Jesper

  1. By: Andreas Stierwald (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: This paper identifies the determinants of firm profitability and quantifies their relative importance. Using a panel of large Australian firms for the period 1995 to 2005, the analysis estimates a dynamic profit model that, unlike most existing research, directly includes measures of productivity and productivity persistence. Descriptive statistics illustrate that the sample is characterized by a large amount of profit heterogeneity, and that substantial differences exist between industries and across firms. Estimation results indicate that firm profitability is predominantly determined by firm-level characteristics, and that sector effects are relevant, but to a much smaller extent. The analysis also reveals that, among firm effects, productivity and productivity persistence enhance profitability.
    Keywords: Firm Performance, Determinants of Profit, Dynamic Panel Bias, Total Factor Productivity
    JEL: C23 D24 L25
    Date: 2010–04
  2. By: OKUBO Toshihiro; TOMIURA Eiichi
    Abstract: This paper empirically examines how productivity distributions of firms vary across regions based on Japanfs manufacturing census data. We confirm the established finding of higher average productivity in core regions, but find that firm productivity is distributed with wide dispersions, especially in core regions. Our firm-level estimates demonstrate that the productivity distribution of firms tends to be noticeably left-skewed deviating from the normal distribution, especially in regions with weak market potential but also in agglomerated or urbanized regions. These findings suggest that agglomeration economies are likely to accommodate heterogeneous firms to co-exist in the same region.
    Date: 2010–04
  3. By: Thorsten Hansen (University of Munich)
    Abstract: This paper studies the impact of trade liberalization in terms of tariff cuts within the Eastern European enlargement on German and Austrian firm productivity. Unique matching of data from 1994 to 2003 suggests that tariff reductions raise parent firm productivity significantly. A ten percentage point decrease in tariff rates can lead to total factor productivity gains of up to 2 percent. The data allow distinction between three types of tariffs: output, intra-firm and input tariff rates. The size of the results strongly depends on the type of tariff and country analyzed.
    JEL: F12 F13 F23 L22 L23 O14
    Date: 2010–04
  4. By: Sébastien MARCHAND
    Abstract: This paper analyses the impact of farm productivity as well as farm size on deforestation in Brazil. A two step econometric approach is adopted. A bootstrapped translog stochastic fron- tier that is a posteriori checked for functional consistency is used in order to estimate technical efï¬ciency of which estimates are introduced in a land use model to assess the impact of pro- ductivity and farm size on deforestation. Analysis of agricultural census tract data suggests that "technical efï¬ciency" has a non-linear (convex) effect: less and more efï¬cient farms use more land for agricultural activities and so they have a positive effect on deforestation. However, the majority of farms are on the ascendant slope so that efï¬ciency implies more deforestation in Brazilian Legal Amazon. Moreover, farmsize has a robust negative effect on deforestation. Con- trary to many studies, this result suggests that small farms convert more natural (forested) land into agricultural land than large ones.
    Keywords: tropical deforestation, productivity, Farm size, Stochastic frontier model, Land usemodel, Brazil.
    JEL: Q24 Q12
    Date: 2010
  5. By: Choi, Jong-Seo; Kwak, Young-Min; Choe, Chongwoo
    Abstract: This paper studies the empirical relation between corporate social responsibility (CSR) and corporate financial performance in Korea using a sample of 1122 firm-years during 2002-2008. We measure corporate social responsibility by both an equal-weighted CSR index and a stakeholder-weighted CSR index suggested by Akpinar et al. (2008). Corporate financial performance is measured by ROE, ROA and Tobin’s Q. We find a positive and significant relation between corporate financial performance and the stakeholder-weighted CSR index, but not the equal-weighted CSR index. This finding is robust to alternative model specifications and several additional tests, providing evidence in support of instrumental stakeholder theory.
    Keywords: corporate social responsibility; corporate financial performance; KEJI index; instrumental stakeholder theory
    JEL: M14 D21 L21 G30
    Date: 2010–04–17
  6. By: Ana Sofia Lopes (Departamento de Gestão e Economia, ESTG/Instituto Politécnico de Leiria, Portugal, and GEMF); Paulino Teixeira (GEMF/Faculdade de Economia, Universidade de Coimbra, Portugal)
    Abstract: In spite of the importance of workplace training in human capital accumulation, relatively little is known on its returns for workers and firms. Our investigation tries to fill this gap by developing an alternative modelling that examines the determinants of firm productivity and wages, on the one hand, and the internal rate of return to firm training investments, on the other. Our estimates, obtained using a firm-level dataset in which we have detailed information on firm-provided training, indicate that an additional hour of training per worker implies some 0.1 percent increase in productivity. We also found that 2/3 of the gains in productivity are captured by firms and 1/3 by workers. In turn, the internal rate of return for an average firm in our sample is equal to 11 percent while for workers it is considerably higher at 24 percent. As expected, the dispersion across firms is very high, with 66 percent of firms having a positive internal rate of return for an annual depreciation rate of 35 percent.
    Keywords: Firm-Provided Training, Internal Rate of Return, Human Capital, Productivity, Earnings.
    JEL: J24 J31 I2
    Date: 2010–04
  7. By: OKUBO Toshihiro; TOMIURA Eiichi
    Abstract: In an economic geography model with firm heterogeneity, Baldwin and Okubo (2006) show that regional policies for promoting periphery development attract low-productivity firms and adversely affect the productivity gap within a country. This paper empirically examines their theoretical prediction by using plant-level data during active relocation policies in Japan. Our estimation results from plant-level regressions and propensity-score matching that are generally consistent with the theory. Compared to other regions, those targeted by policies, especially by industrial relocation subsidy programs, tend to have low-productivity plants.
    Date: 2010–04
  8. By: Masso, Jaan; Roolaht, Tõnu; Varblane, Urmas
    Abstract: A growing literature is trying to analyse the productivity gap between domestic and foreign firms with differences in innovation indicators. In our paper we analyse the relationship between inward and outward FDI at either company or industry level and the innovation behaviour of companies in Estonia. We use company-level data from three waves of the Community Innovation Surveys, which are combined with financial data from the Estonian Business Register and FDI data from the balance of payments statistics. For the analysis we apply a structural model involving equations on innovation expenditure, innovation outcome and productivity, and also innovation accounting and propensity score matching approaches. Our results show that the higher innovation output of foreign owned companies vanishes after various company characteristics are controlled for, but there were significant differences in innovation inputs such as the higher use of knowledge sourcing and the lower importance of various impeding factors. Outward investment has a positive influence on innovativeness among both domestic and foreign owned companies
    Keywords: innovation, internationalisation, foreign direct investments, catching-up countries
    JEL: F10 F23 O30
    Date: 2010–04–14
  9. By: Drine, Imed; Bou Abid , Anis
    Abstract: The purpose of this paper is to study the determinants of the inefficient functioning of the Tunisian labour market. The study takes advantage of the recent development in the stochastic frontier techniques and estimates, the matching function for Tunisia using disaggregated data. We include control variables as determinants of matching efficiency and regional disparities. We confirm that the persistently high rate of unemployment is the result of not only excess labour supply but is also related to a shortfall between supply and demand (sector, location, qualification).
    Keywords: labour market; structural unemployment; technical efficiency; matching across regions; developing country.
    JEL: C23 J64
    Date: 2010–01
  10. By: Bhattacharya, Soma; Cropper, Maureen L. (Resources for the Future)
    Abstract: We review the economics literature on energy efficiency in India, as a guide for further research in the area. The empirical literature has focused on four questions: How does energy efficiency in India compare with energy efficiency in other countries? What would be the energy savings (and cost savings) from adopting certain energy-efficient technologies? Why are these technologies being -- or not being -- adopted? What policies should be implemented to encourage their adoption? Most of the literature focuses on answers to the first two questions. Studies are needed that quantify factors affecting the rate of diffusion of energy-efficient technologies and rigorously evaluate reforms implemented by the Government of India, beginning in the 1990s, that could affect energy efficiency.
    Keywords: energy efficiency, energy use, India
    JEL: O33 Q4
    Date: 2010–04–15
  11. By: Baldwin, John R.; Yan, Beiling
    Abstract: We examine the simultaneous effects of real-exchange-rate movements and of tariff reductions on plant death in Canadian manufacturing industries between 1979 and 1996. We find that both currency appreciation and tariff cuts increase the probability of plant death, but that tariff reductions have a much greater effect. Consistent with the implications of recent international-trade models involving heterogeneous firms, we further find that the effect of exchange-rate movements and tariff cuts on exit are heterogeneous across plants - particularly pronounced among least efficient plants. Our results reveal multi-dimensional heterogeneity that current models featuring one-dimensional heterogeneity (efficiency differences among plants) cannot fully explain. There are significant and substantial differences between exporters and non-exporters, and between domestic- and foreign- controlled plants. Exporters and foreign-owned plants have much lower failure rates; however, their survival is more sensitive to changes in tariffs and real exchange rates, whether differences in their efficiency levels are controlled or not.
    Keywords: Manufacturing, Business performance and ownership, Business adaptation and adjustment, Entry, exit, mergers and growth
    Date: 2010–04–14
  12. By: Jacques Mairesse; Pierre Mohnen
    Abstract: After presenting the history, the evolution and the content of innovation surveys, we discuss the characteristics of the data they contain and the challenge they pose to the analyst and the econometrician. We document the two uses that have been made of these data: the construction of scoreboards for monitoring innovation and the scholarly analysis of various issue related to innovation. In particular we review the questions examined and the results obtained regarding the determinants, the effects, the complementarities, and the dynamics of innovation. We conclude by suggesting ways to improve the data collection and their econometric analysis. <P>Dans cet article de survol sur les utilisations des enquêtes innovation, nous commençons par présenter leur historique et les informations qu’elles apportent. Nous discutons en détail les caractéristiques des données fournies et les difficultés qu’elles peuvent poser pour les analyses. Nous considérons successivement les deux usages auxquelles ces données servent principalement : la construction d'indicateurs et de « scoreboard » de l'innovation et les études économétriques sur différents thèmes ayant trait à l'innovation. Nous passons ainsi en revue les questions posées et les résultats obtenus par les études sur les déterminants de l’innovation, sur ses effets, sur les complémentarités entre types d’innovation et sur sa dynamique. Nous concluons par une liste de suggestions pour améliorer la conception et l’organisation des enquêtes innovation et pour progresser dans leur analyse économétrique.
    Keywords: innovation survey, econometrics, complementarity, productivity, R&D, collaboration. , enquêtes innovation, économetrie, complémentarité, productivité, R&D, collaboration
    JEL: O30 O50 C35 C81
    Date: 2010–04–01
  13. By: Erzo G. J. Luttmer (Department of Economics, University of Minnesota and Federal Reserve Bank of Minnesota)
    Abstract: Although employment at individual firms tends to be highly non-stationary, the employment size distribution of all firms in the United States appears to be stationary. It closely resembles a Pareto distribution. There is a lot of entry and exit, mostly of small firms. This paper surveys general equilibrium models that can be used to interpret these facts and explores the role of innovation by new and incumbent firms in determining aggregate growth. The existence of a balanced growth path with a stationary employment size distribution depends crucially on assumptions made about the cost of entry. Some type of labor must be an essential input in setting up new firms.
    Keywords: firm size distribution, organization capital, heterogeneous productivity, selection.
    JEL: L1 O4
    Date: 2010–04–13
  14. By: Christiaensen,Luc; Demery,Lionel and Kuhl, Jesper
    Abstract: The role of agriculture in development remains much debated. This paper takes an empirical perspective and focuses on poverty, as opposed to growth alone. The contribution of a sector to poverty reduction is shown to depend on its own growth performance, its indirect impact on growth in other sectors, the extent to which poor people participate in the sector, and the size of the sector in the overall economy. Bringing together these different effects using cross-country econometric evidence indicates that agriculture is significantly more effective than nonagriculture in reducing poverty among the poorest of the poor (as reflected in the $1-day squared poverty gap). It is also up to 3.2 times better at reducing $1-day headcount poverty in low-income and resource-rich countries (including those in sub-Saharan Africa), at least when societies are not fundamentally unequal. However, when it comes to the better-off poor (reflected in the $2-day measure), non-agriculture has the edge. These results are driven by the much larger participation of poorer households in growth from agriculture and the lower poverty-reducing effect of non-agriculture in the presence of extractive industries.
    Keywords: agriculture, economic growth, poverty, sub-Saharan Africa
    Date: 2010
  15. By: Francesco Aiello; Valeria Pupo; Fernanda Ricotta (Dipartimento di Economia e Statistica, Università della Calabria)
    Abstract: Questo lavoro presenta un'analisi territoriale della produttività totale dei fattori (PTF) in Italia dal 1998 al 2006, utilizzando dati di impresa. L'aspetto territoriale è approfondito scomponendo la PTF negli effetti within-firms e between-firm. Queste due componenti sono calcolate per l'intero campione e per sottogruppi di imprese in modo da tener conto dell'appartenenza settoriale delle imprese, del contenuto innovativo delle produzioni, nonché della loro internazionalizzazione. I risultati dell'articolo sono tre. Il primo conferma il ruolo della PTF quale fattore in grado di spiegare l'andamento in Italia della produttività del lavoro. Il secondo risultato indica che in Italia si è avviato un ammodernamento del sistema industriale che ha consentito di ridurre gli effetti derivanti dal rallentamento della produttività. Infine, si mostra come questo processo di ristrutturazione abbia avuto esiti differenti nelle diverse aree del paese, senza tuttavia modificare il dualismo tecnologico dell'economia italiana.
    Keywords: Settore manifatturiero, Produttività totale dei fattori, Mezzogiorno.
    JEL: L60 O14 R11
    Date: 2010–04

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