nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2010‒06‒18
ten papers chosen by
Angelo Zago
University of Verona

  1. Productivity
 Changes
 and
 Intangible
 Assets
:
 Evidence
 from
 French
 Plants By Corinne Autant-Bernard; Jean-Pascal Guironnet; Nadine Massard
  2. Mark-up, Productivity and Imperfect Competition: An empirical analysis of the Japanese retail trade industry By KATO Atsuyuki
  3. Global Links and Local Bonds: The Role of Ownership and Size in Productivity Growth By Erol Taymaz; Ebru Voyvoda; Kamil Yilmaz
  4. Productivity Premia for German Manufacturing Firms Exporting to the Euro-Area and Beyond: First Evidence from Robust Fixed Effects Estimations By Verardi, Vincenzo; Wagner, Joachim
  5. Efficiency and Input - and Output - Substitutability in English Higher Education 1996/97 to 2007/08: A Parametric Distance Function Approach By Jill Johnes
  6. Trade, Capital Redistribution and Firm Structure By Qiu, Larry D; Wen Zhou, Wen
  7. Efficiency and risk in european banking By Franco Fiordelisi; David Marques-Ibanez; Phil Molyneux
  8. Climate Change, Total Factor Productivity, and the Tanzanian Economy: A Computable General Equilibrium Analysis By Bezabih, Mintewab; Chambwera, Muyeye; Stage, Jesper
  9. Pay for Performance and Corporate Governance Reform By Hristos Doucouliagos; Janto Haman; T.D. Stanley
  10. School Responsiveness to Quality Rankings: An Empirical Analysis of Secondary Education in the Netherlands By Koning, Pierre; van der Wiel, Karen

  1. By: Corinne Autant-Bernard (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Jean-Pascal Guironnet (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Nadine Massard (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)
    Abstract: This paper investigates the effect of inter-firm and intra-firm spillovers on the productivity of firms, using French data. The Luenberger Productivity Indicator (LPI) is used to estimate the productivity and to break it down into several components (e.g. efficiency, biased technical progress, scale effects, etc.). Using this approach, negative productivity changes are found due to the unfavourable economic situation over 2000-2002. Intangible assets underlying productivity change are then investigated through a Maximum Likelihood Random Effect (MLRE) model. Spillover effects – influencing Total Factor Productivity (TFP) and its correspondent components, technological and efficiency changes – are found.
    Keywords: Productivity Change ; Luenberger Indicator ; Knowledge Externalities
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:hal:journl:halshs-00489260_v1&r=eff
  2. By: KATO Atsuyuki
    Abstract: This paper examines mark-up and productivity of retail trade industries under imperfect competition. Applying a newly developed approach by Martin (2010) to Japanese retail trade firm data, we estimate the firm-specific mark-up and productivity without price information and discuss their dispersion. Our results reveal that some assumptions largely used in productivity analysis such as constant returns to scale and perfect competition possibly bias estimates of productivity. Higher mark-up do not always mean higher productivity while firms with lower mark-ups are less productive. Relative levels of firm-specific mark-up and productivity are persistent. The performance of mark-up and productivity are heterogeneous across various retail trade industries. Among them, food retailers have both lower market power and lower productivity. Furthermore, regression results indicate that effects of deterministic factors on mark-ups do not coincide with those of productivity. It implies that competition-friendly policies possibly lead to unsuccessful results where firms pursue profit maximisation by pursuing pricing power rather than by raising productivity. Ignoring market power may produce misunderstandings concerning how various factors affect productivity and may thus lead to misleading policy implications.
    Date: 2010–06
    URL: http://d.repec.org/n?u=RePEc:eti:dpaper:10031&r=eff
  3. By: Erol Taymaz (Middle East Technical University); Ebru Voyvoda (Middle East Technical University); Kamil Yilmaz (Koc University)
    Abstract: This paper examines direct and indirect contributions of foreign firms and small and medium-sized enterprises (SMEs) to aggregate productivity growth. We focus our attention on foreign firms and small firms for three reasons. First, industrial policy in almost all countries is oriented towards supporting SMEs and attracting foreign investment. Second, these two categories of firms contribute to micro-heterogeneity in all industries. Third, the recent industrial dynamics literature on foreign investment and small firms emphasizes the potential benefits of foreign firms and SMEs in generating new technologies, and creating new jobs. Using the data for Turkish manufacturing plants, we estimate production functions for all ISIC 4-digit level industries for the 1983-2001 period. We decompose productivity growth into its components (structural change, entry and exit, technical change, efficiency change, and scale effects) by firm ownership and size. The decomposition analysis by firm ownership and size allows us to understand the sources of productivity contributions by foreign firms and small firms.
    Keywords: Productivity dynamics, decomposition, foreign direct investment, small and medium sized enterprises
    JEL: D24 L25 L60
    Date: 2010–06
    URL: http://d.repec.org/n?u=RePEc:koc:wpaper:1020&r=eff
  4. By: Verardi, Vincenzo (Free University of Brussels); Wagner, Joachim (Leuphana University Lüneburg)
    Abstract: This paper makes three contributions. (1) It summarizes in tabular form a recent literature made of 36 micro-econometric studies for 16 different countries on the relationship between export destination and firm performance. (2) It reports estimates of the productivity premium of German firms exporting to the Euro-zone and beyond, controlling for unobserved time invariant firm specific effects, and tests for self-selection of more productive firms into exporting beyond the Euro-zone. (3) It corrects a serious flaw in hitherto published studies that ignore the potentially disastrous consequences of extreme observations, or outliers. The paper shows that estimates of the exporter productivity premium by destination are driven by a small share of outliers. Using a "clean" sample without outliers the estimated productivity premium of firms that export to the Euro-zone only is no longer much smaller that the premium of firms that export beyond the Euro-zone, too, and the premium itself over firms that serve the German market only is tiny. Furthermore, an ex-ante differential that is statistically significant and large only shows up for enterprises that exported to the Euro-zone already and start to export to countries outside the Euro-zone. These conclusions differ considerably from those based on non-robust standard regression analyses.
    Keywords: robust estimation, panel data, exporter productivity premium, export destinations
    JEL: F14 C23 C81 C87
    Date: 2010–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp4964&r=eff
  5. By: Jill Johnes
    Abstract: HEIs are likely to face tight fiscal constraints in the future. This paper uses random effects and stochastic frontier techniques to estimate an output distance function over the period 1997/97 to 2007/08 in order to investigate the efficiency of higher education institutions (HEIs) and to examine the opportunities for substitution between inputs. Mean efficiency across the whole sector is estimated to be 70%, and further investigation reveals that the pattern of production in the typical institution in the highest efficiency quartile is closest to the pattern of production of the average pre-1992 university. The Morishima elasticities calculated from the parameter estimates suggest that the main possibilities for substitution are out of undergraduates into other inputs and from administration into other inputs (except academic services). Opportunities for substitution are generally much more limited from postgraduate inputs, staff and academic services. A simple examination of the effects of merger activity reveals that it takes place amongst institutions which are typically performing at the same level as non-merging HEIs, and that it has beneficial effects in terms of efficiency.
    Keywords: higher education; efficiency; stochastic frontier analysis; distance functions; Morishima elasticities
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:lan:wpaper:006718&r=eff
  6. By: Qiu, Larry D; Wen Zhou, Wen
    Abstract: A model of heterogeneous firms with multiple products and two production factors (labor and capital) is used to study how trade liberalization affects firms’choices through both product and factor markets. Trade liberalization is shown to always redistribute capital toward more efficient firms and always to improve an industry’s total factor productivity. However, it may reduce capital prices and cause labor productivity to drop. Low efficiency firms are affected mainly by changes in the factor market, while high efficiency firms are affected mainly by changes in the product market. In response to trade liberalization, low efficiency firms always reduce their product scope, but high efficiency firms may expand their scope. The model demonstrates the importance of the interplay between product and factor markets.
    Keywords: firm heterogeneity, trade liberalization, multiproduct, multifactor, firm structure, scale, scope, mergers and acquisitions
    JEL: F12 F13 F15 L11 L25
    Date: 2010–05
    URL: http://d.repec.org/n?u=RePEc:hit:ccesdp:33&r=eff
  7. By: Franco Fiordelisi (Faculty of Economics, University of Rome III, Via S. D’Amico 77, 00182, Rome, Italy.); David Marques-Ibanez (European Central Bank, Directorate General Research, Financial Research Division, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Phil Molyneux (European Central Bank, Directorate General Research, Financial Research Division, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.)
    Abstract: We analyze the impact of efficiency on bank risk. We also consider whether bank capital has an effect on this relationship. We model the inter-temporal relationships among efficiency, capital and risk for a large sample of commercial banks operating in the European Union. We find that reductions in cost and revenue efficiencies increase banks’ future risks thus supporting the bad management and efficiency version of the moral hazard hypotheses. In contrast, bank efficiency improvements contribute to shore up bank capital levels. Our findings suggest that banks lagging behind in their efficiency levels might expect higher risk and subdued capital positions in the near future. JEL Classification: G21, D24, C23, E44.
    Keywords: banking risk, capital, efficiency.
    Date: 2010–06
    URL: http://d.repec.org/n?u=RePEc:ecb:ecbwps:20101211&r=eff
  8. By: Bezabih, Mintewab; Chambwera, Muyeye; Stage, Jesper
    Abstract: This paper analyzes the economic impacts of climate change-induced adjustments on the performance of the Tanzanian economy, using a countrywide CGE (computable general equilibrium) model. The general equilibrium framework enables comparison of the effects of climate change to the overall growth of the economy because responsiveness to shocks is likely to depend on the macroeconomic structure of the economy. Effect of overall climate change on agricultural productivity is projected to be relatively limited until approximately 2030 and become worse thereafter. Our simulation results indicate that, despite the projected reduction in agricultural productivity, the negative impacts can potentially be quite limited. This is because the time scales involved and the low starting point of the economy leave ample time for factor substitutability (i.e., replacing reduced land productivity with increased use of capital and labor) and increased overall productivity. This indicates that policies that give farmers opportunity to invest in autonomous climate adaptation, as well as policies that improve the overall performance of the economy, can be as important for reducing the impacts of climate change in the economy as direct government policies for climate adaptation. The study results can inform policymakers when choosing between direct climate-change adaptation policies or measures aimed at strengthening the fundamentals of the economy, as ways of insulating against external shocks.
    Keywords: climate change, agriculture, total factor productivity, Tanzania, CGE model
    JEL: Q18 C02
    Date: 2010–06–08
    URL: http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-14-efd&r=eff
  9. By: Hristos Doucouliagos; Janto Haman; T.D. Stanley
    Abstract: Directors’ pay and corporate governance continue to generate public outrage and calls for reform. Our meta-regression analysis of all comparable UK pay-for-performance estimates finds little, if any, meaningful association between directors’ pay and corporate performance. However, there is evidence of the effectiveness of past ‘comply-or-explain’ rules, especially the Cadbury Report. Unfortunately, the effects of past reform efforts tend to erode over time. The paper also explores differences between pay-performance estimates, finding that these are largely explained by how pay and performance are measured by a given study.
    Keywords: Directors’ pay, governance reform, meta-regression analysis
    JEL: G3 M52 J33
    Date: 2010–06–07
    URL: http://d.repec.org/n?u=RePEc:dkn:econwp:eco_2010_04&r=eff
  10. By: Koning, Pierre (CPB Netherlands Bureau for Economic Policy Analysis); van der Wiel, Karen (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This paper analyzes the response of secondary schools to changes in their quality ratings. The current analysis is the first to address the impact of quality scores that have been published by a newspaper (Trouw), rather than public interventions. Our research design exploits the substantial lags in the registration and publication of the Trouw scores and that takes into account all possible outcomes of the ratings, instead of the lowest category only. Overall, we find evidence that school quality performance does respond to Trouw quality scores. Both average grades increase and the number of diplomas go up after receiving a negative score. For schools that receive the most negative ranking, the short-term effects (one year after a change in the ranking of schools) of quality transparency on final exam grades equal 10% to 30% of a standard deviation compared to the average of this variable. The estimated long run impacts are roughly equal to the short-term effects that are measured.
    Keywords: school quality, school accountability
    JEL: H75 I20 D83
    Date: 2010–05
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp4969&r=eff

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