New Economics Papers
on Efficiency and Productivity
Issue of 2010‒06‒26
nine papers chosen by

  1. Agricultural Productivity Growth, Efficiency Change and Technical Progress in Latin America and the Caribbean By Carlos Ludena
  2. Measuring the technical efficiency of airports in Latin America By Perelman, Sergio; Serebrisky, Tomas
  4. Do product market regulations in upstream sectors curb productivity growth? Panel data evidence for OECD countries By Bourlès, R.; Cette, G.; Lopez, J.; Mairesse, J.; Nicoletti, G.
  6. Exporting, Productivity and Government Interventions: Is There a Link? By Elena Besedina
  7. The Importance of Skill Measurement for Growth Accounting By Nilsen, Øivind Anti; Raknerud, Arvid; Rybalka, Marina; Skjerpen, Terje
  8. Does Firm Boundary Matter? The effect of offshoring on productivity of Japanese firms By ITO Banri; TOMIURA Eiichi; WAKASUGI Ryuhei
  9. The job satisfaction-productivity nexus: A study using matched survey and register data By Böckerman, Petri; Ilmakunnas , Pekka

  1. By: Carlos Ludena
    Abstract: This paper analyzes total factor productivity growth in agriculture in Latin America and the Caribbean between 1961 and 2007 employing the Malmquist Index, a non-parametric methodology that uses data envelopment analysis (DEA) methods. The results show that among developing regions, Latin America and the Caribbean shows the highest agricultural productivity growth. The highest growth within the region has occurred in the last two decades, especially due to improvements in efficiency and the introduction of new technologies. Within the region, land-abundant countries consistently outperform land-constrained countries. Within agriculture, crops and non-ruminant sectors have displayed the strongest growth between 1961 and 2001, and ruminant production performed the worst. Additional analysis of the cases of Brazil and Cuba illustrates potential effects of policies and external shocks on agricultural productivity; policies that do not discriminate against agricultural sectors and that remove price and production distortions may help improve productivity growth.
    Keywords: Total factor productivity, Agriculture, Crops, Livestock, Latin America and the Caribbean, Malmquist Index
    JEL: O13 O47 O54
    Date: 2010–05
  2. By: Perelman, Sergio; Serebrisky, Tomas
    Abstract: This paper studies the technical efficiency of airports in Latin America. The evolution of productive efficiency in the region has seldom been studied, mainly due to lack of publicly available data. Relying on a unique dataset that was obtained through questionnaires distributed to airport operators, the authors use Data Envelopment Analysis methods to compute an efficient production frontier and compare the technical efficiency of Latin American airports relative to airports around the world. In a second stage, they estimate a truncated regression to study the drivers of observed differences in airport efficiency. According to the results, institutional variables (private/public operation), the socioeconomic environment (level of gross domestic product), and airport characteristics (hub airport, share of commercial revenues) matter in explaining airport productive efficiency. Finally, the authors compute total factor productivity changes for Latin American airports for 1995-2007. The region has implemented a wide variety of private sector participation schemes for the operation of airports since the mid 1990s. The results show that private operators have not had higher rates of total factor productivity change.
    Keywords: Airports and Air Services,Transport Economics Policy&Planning,Infrastructure Economics,Export Competitiveness,Knowledge for Development
    Date: 2010–06–01
  3. By: Samy Ben Naceur (Laboratoire d’Economie et Finance Appliquées (LEFA) and Institut des Hautes Etudes Commerciales (IHEC)); Hichem Ben-Khedhiri; Barbara Casu
    Abstract: In the past two decades, both developed and developing countries have deregulated their banking and financial systems with the aim of improving the efficiency, productivity and profitability of the sectors and increasing international competitiveness. This study attempts to examine the effect of institutional and financial variables on the banking industry performance of selected Middle Eastern and North African (MENA) countries. Evaluating bank efficiency in a non-parametric setting (Data Envelopment Analysis, DEA), we then employ a second-stage Tobit regression to investigate the impact of regulatory variables on banks’ efficiency. The first stage indicates that Morocco and Tunisia have more efficient banking systems compared to the other selected MENA countries, although banks in Jordan seem to catch up with best practice from 2003 onwards. The Tobit regressions show a robust association of some environmental measures with cost efficiency. In this context, our results reveal that higher bank efficiency in our sample is influenced by the quality of the legal system, well capitalized and liquid banks. We also find that banking sector development measured by credit to private sector by banks in low regulated environments—like the one in our sample countries—tends to reduce bank efficiency. However, the impact of stock market development is positive and significant in all specification confirming the complementary role of bank and capital market. Besides, a highly concentrated banking sector in our sample reduces significantly the efficiency of banks. Finally, efficiency is improving in our sample thanks to the financial reforms variables not accounted for in our control variables and Egyptian banks display the lowest efficiency in the region for the entire sample period.
    Date: 2009–08
  4. By: Bourlès, R.; Cette, G.; Lopez, J.; Mairesse, J.; Nicoletti, G.
    Abstract: The paper focuses on the influence of upstream competition for productivity outcomes in downstream sectors. This relation is illustrated with a neo-Schumpeterian theoretical model of innovation (Aghion et al., 1997) with market imperfections in the production of intermediate goods. In this context, upstream market imperfections create barriers to competition in downstream markets and upstream producers use their market power to share innovation rents sought by downstream firms. Thus, lack of competition in upstream markets curbs incentives to improve productivity downstream, negatively affecting productivity outcomes. We test this prediction by estimating an error correction model that differentiates the potential downstream effects of lack of upstream competition in situations close and far from the global technological frontier. We measure competition upstream with regulatory burden indicators derived from OECD data on sectoral product market regulation and the industry-level efficiency improvement and the distance to frontier variables by means of a multifactor productivity (MFP) index. Panel regressions are run for 15 OECD countries and 20 sectors over the 1985-2007 period with country, sector and year fixed effects. We find clear evidence that anticompetitive regulations in upstream sectors have curbed MFP growth downstream over the past 15 years. These effects tend to be strongest for observations (i.e. country/sector/period triads) that are close to the global technological frontier. Our results suggest that, measured at the average distance to frontier and average level of anticompetitive regulations, the marginal effect of increasing competition by easing such regulations is to increase MFP growth by between 1 and 1.5 per cent per year in the OECD countries covered by our sample. Our results are robust to changes in the way MFP and the regulatory burden indicators are constructed, as well as to variations in the sample of countries and/or sectors.
    Keywords: Productivity, Growth, Regulations, Competition, Catch-up.
    JEL: O43 L5 O57 L16 C23
    Date: 2010
  5. By: Rim Ben Ayed Mouelhi (Department of Economics, ISCAE, University of La Manouba, Tunisia)
    Abstract: This paper aims at measuring the impact of information and communication technologies (ICT) use on the efficiency of the Tunisian manufacturing sector, at the firm level within a simple theoretical framework. We use a firm-level panel data for the manufacturing sector in Tunisia to investigate whether adoption of ICT influences efficiency in factors use. The analysis is conducted through the use of a parametric method to measure technical efficiency. We estimate a stochastic production frontier and the relationship aimed to explain technical efficiency differentials in a single stage as suggested by Battese and Coelli (1995). The results confirm the presence of positive returns to ICT capital. We find that the impact of ICT on efficiency is strong. Our results also suggest that it is important to carefully control for human capital related characteristics of employment when studying the effect of ICT. The evidence shows that achieving benefits from investment in ICT requires complementary investments and changes in human capital. This means that the combined use of ICT and human capital in a firm would enhance its efficiency beyond the direct effects of these factors taken alone.
    Date: 2009–10
  6. By: Elena Besedina (Kyiv School of Economics, Kyiv Economic Institute)
    Abstract: Recent theoretical models postulate that only the most productive firms become exporters due to the existence of costs of exporting. Empirical evidence does suggest that exporters are on average more productive than their domestic counterparts. However, contrary to the theory the productivity distribution for exporters and non-exporters overlaps. Motivated by this empirical finding, I extend an existing model of heterogeneous firms by adding endogenous trade policy based on a political economy argument. Using Ukrainian data I identify firms that receive explicit government support in the form of preferential tax policy, subsidies and other exclusive benefits. I find that explicit political support is positively associated with firms’ size, voter turnout and state ownership but not efficiency.
    Keywords: TFP, Exporting, Subsidy, Electoral Competition
    JEL: D24 D72 P26
    Date: 2010–06
  7. By: Nilsen, Øivind Anti (Norwegian School of Economics and Business Administration); Raknerud, Arvid (Statistics Norway); Rybalka, Marina (Statistics Norway); Skjerpen, Terje (Statistics Norway)
    Abstract: In a growth accounting context one usually constructs a quality adjusted index of labor services by aggregating over predefined groups of workers, using the groups' relative wage bills as weights. In this article we suggest a method based on decomposing individual predicted wages into a skill-related part and a part unrelated to skill, where the former consists of both observed and unobserved components. The predicted wages, associated with individual skill attributes, are sorted and classified into deciles. The median predicted skill-related wage in each decile is used to construct an alternative skill-adjusted index of labor services. We find that Total Factor Productivity (TFP) growth decreases significantly when using the latter method. This means that when using the alternative method one explains more of the growth in labor productivity than what a more traditional labor quality adjustment procedure does.
    Keywords: TFP growth, skill measures, wage equation
    JEL: C23 D24 J24 J31
    Date: 2010–06
  8. By: ITO Banri; TOMIURA Eiichi; WAKASUGI Ryuhei
    Abstract: Recently, great interest has been aroused in the examination of the impact of offshore sourcing, which has increased rapidly across the world and expanded to cover a variety of tasks. Theoretical studies have shown that offshore sourcing contributes to higher productivity. This paper aims to provide evidence of the effect of offshore sourcing on productivity, on the basis of original survey data of offshore sourcing of Japanese firms. The estimation results show that offshore in-sourcing within multinationals has a positive impact on productivity but there is a time-lag in the appearance of the impact. On the other hand, it is found that offshore outsourcing through armfs-length contracting out did not appear to affect productivity despite the expectation that the reallocation of resources to more advanced production processes contributes to productivity.
    Date: 2010–06
  9. By: Böckerman, Petri; Ilmakunnas , Pekka
    Abstract: This paper examines the role of job satisfaction in the determination of establishment-level productivity. The matched data contain both information on job satisfaction from the ECHP (European Community Household Panel) and information on establishment productivity from longitudinal register data that can be linked to the ECHP. The estimates for the effect of a one point increase in the establishment average level of employee job satisfaction, on a scale 1-6, on productivity vary depending on the specification of the model. The preferred estimate, based on the IV estimation that uses satisfaction with housing conditions as an instrument for job satisfaction, shows that the effect on value added per hours worked is ~20% in the manufacturing sector. The economic size of this effect is modest, because the observations are bunched towards the higher end of the satisfaction scale making it very difficult to increase the average level of job satisfaction in the establishment by one point.
    Keywords: Job satisfaction; employee well-being; productivity; performance
    JEL: J28 D24
    Date: 2010–06–17

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