New Economics Papers
on Efficiency and Productivity
Issue of 2010‒07‒03
sixteen papers chosen by

  1. Analyse comparée de la productivité des firmes européennes à partir de données comptables: L'effet pays en cause By Denis Carré; Nadine Levratto; Messaoud Zouikri
  2. Technical Efficiency of Automobiles – A Nonparametric Approach Incorporating Carbon Dioxide Emissions By Hampf, Benjamin; Krüger, Jens
  3. The cost-efficiency of French banks By Jimborean, Ramona; Brack, Estelle
  4. Unveiling Historical Occupational Structures and its Implications for Sectoral Labour Productivity Analysis in Japan's Economic Growth By Osamu Saito; Tokihiko Settsu
  5. Efficiency of Root Crop Production in the Fiji Islands By Henry Haszler; Phillip Hone; Mary Graham; Chris Doucouliagos
  6. Market Power in the Russian Banking Industry By Zuzana Fungacova; Laura Solanko; Laurent Weill
  7. Interpreting Wage Gaps of Disabled Men: The Roles of Productivity and Discrimination By Longhi S; Nicoletti C; Platt L
  8. Corruption and Productivity Firm-level Evidence from the BEEPS Survey By Donato De Rosa; Nishaal Gooroochurn; Holger Görg
  9. The last fifteen years of stagnation in Italy: A Business Cycle Accounting Perspective By R. Orsi; F. Turino
  10. Management Matters By Michelle Alexopoulos; Trevor Tombe
  11. Foreign Presence Spillovers and Firms’ Export Response:Evidence from the Indonesian Manufacturing By Dionisius Narjoko
  12. Do process innovations boost SMEs productivity growth? By Juan Antonio Máñez Castillejo; Amparo Sanchis Llopis; Juan A. Sanchis Llopis; María Engracia Rochina Barrachina
  13. Corruption and productivity : firm-level evidence from the BEEPS survey By De Rosa, Donato; Gooroochurn, Nishaal; Gorg, Holger
  14. Does capacity utilisation help estimating the TFP cycle? By Christophe Planas; Werner Roeger; Alessandro Rossi
  15. Ownership versus Management Effects on Performance in Family and Founder Companies: A Bayesian Analysis By Joern, Block; Peter, Jaskiewicz; Danny, Miller
  16. Output complexity, environmental conditions, and the efficiency of municipalities: a robust metafrontier approach By Emili Tortosa Ausina; Diego Prior Jiménez; María Teresa Balaguer-Coll

  1. By: Denis Carré; Nadine Levratto; Messaoud Zouikri
    Abstract: This paper aims at measuring the productivity gap between firms located in six European countries over the period 1996-2007 and to provide some explanations of the observed differences. Our approach is original for two reasons. Firstly the value added and the productivity are valued from the BACH database that proposes harmonized balance sheets. Secondly, we take into account the influence of environment and institutional factors on the firms' performance thanks to the use of a fixed effects panel data model that allows to assess the unobserved heterogeneity in a sample. This analysis is made at the national level for the whole economy, for three industries (manufacturing industry, construction and services) and for three groups of size (small, medium and large). The results allow to highlight the existence of different productive configurations attested by the different levels of firms' productivity according to size or industry. They also point out a «country effect» that embeds a set of organizational and institutional elements besides production factors.
    Keywords: productivity, BACH database, country effects
    JEL: C23 O47 P17
    Date: 2010
  2. By: Hampf, Benjamin; Krüger, Jens
    Abstract: We conduct an empirical analysis of the technical efficiency of cars sold in Germany in 2010. The analysis is performed using traditional data envelopment analysis (DEA) as well as directional distance functions (DDF). The approach of DDF allows incorporating the reduction of carbon dioxide emissions as an environmental goal in the efficiency analysis. A frontier separation approach is used to gain deeper insight for different car classes and regions of origin. Natural gas driven cars and sports-utility-vehicles are also treated as different groups. The results show that the efficiency measurement is significantly influenced by the incorporation of carbon dioxide emissions. Moreover, we find that there is indeed a trade-off between technological performance and environmental performance.
    Keywords: nonparametric efficiency measurement, directional distance function, automobiles, air pollution
    Date: 2010–06
  3. By: Jimborean, Ramona; Brack, Estelle
    Abstract: The paper addresses the issue of French banks efficiency, compared to their homologous from Europe and the United States. The analysis is realized on a sample formed by the ten biggest banks from France, Germany, Italy, Spain, the United Kingdom and the United States, over the period 1994-2006. The Data Envelopment Analysis (DEA) method is employed. The results show an improvement in cost-efficiency of French and Spanish banks, while in the other countries a decline in cost-efficiency is noted. We proceed to several tests of convergence, showing that inefficient banks have reduced the gap during the period 1994-2006. In a second step analysis, we focus on the factors standing behind the efficiency scores obtained through DEA methodology. These are bank-specific variables, the macro environment, the regulatory regime and the non-bank financial sector development. We use a standard censured Tobit model and show that capitalized, newly established banks, with tighter ratios of Tier 1 capital and operating in a country with a lower GDP per capita record the highest cost-efficiency scores.
    Keywords: Cost-efficiency; Banking systems; Data envelopment analysis
    JEL: C6 L25 C14 D24 G21
    Date: 2010–03
  4. By: Osamu Saito; Tokihiko Settsu
    Abstract: This paper aims to offer new estimates of gainfully occupied workers in Japan between 1885 and 1940. The estimates are made by taking explicitly widespread farm-family by-employment into account, and then they will be allocated into the primary, secondary and tertiary (PST) sectors. With the new workforce statistics and revised estimates of net output in the tertiary sector for the same period, we would also like to examine the levels of differentials in average labour productivity between the three sectors. The paper will show that labour productivity differentials between agriculture and manufacturing in early stages of Japan's industrialisation were not as wide as both Gerschenkronian and dual structurist arguments tended to assume for late industrialisers.
    Date: 2010–06
  5. By: Henry Haszler; Phillip Hone; Mary Graham; Chris Doucouliagos
    Abstract: Improvements in the efficiency of agricultural production represent an important source of growth for the Fiji Islands economy. An analysis of the nature and extent of efficiency differences between root crop farmers suggests that there are modest, but economically significant gains that can be made from improving farm level efficiency. On average, around 25% of root crop production is lost due to technical inefficiency. Although our results did not show that larger producers were more efficient than smaller semi-subsistence producers we did find that focus on a smaller range of crops and concentration on farming in terms of work time both tended to improve the efficiency of farmers that produced dalo. The implications of these results for the agricultural R&D system are discussed. The key policy finding is that given the modest gains in production that are feasible from improving technical efficiency, a major growth in root crop production and consumption is likely to be more dependent on the introduction of new technology than the better dissemination of the existing technology.
    Date: 2010–06–21
  6. By: Zuzana Fungacova (BOFIT, Bank of Finland); Laura Solanko (BOFIT, Bank of Finland); Laurent Weill (LaRGE Research Center, Université de Strasbourg)
    Abstract: The aim of this paper is to analyze bank competition in Russia by measuring the market power of Russian banks and its determinants over the period 2001-2007 with the Lerner index. Earlier studies on bank competition have focused on developed countries whereas this paper contributes to the analysis of bank competition in emerging markets. We find that bank competition has only slightly improved during the period studied. The mean Lerner index for Russian banks is of the same magnitude as those observed in developed countries, which suggests that the Russian banking industry is not plagued by weak competition. Furthermore, we find no greater market power for state-controlled banks nor less market power for foreign-owned banks. We would consequently qualify the procompetitive role of foreign bank entry and privatization. Finally, our analysis of the determinants of market power enables the identification of several factors that influence competition, including market concentration and risk as well as t the nonlinear influence of size.
    Keywords: Market power, bank competition, Russia.
    JEL: G21 P34
    Date: 2010
  7. By: Longhi S (Institute for Social and Economic Research); Nicoletti C (Institute for Social and Economic Research); Platt L (Institute for Social and Economic Research)
    Abstract: Using the UK Labour Force Survey, we study wage gaps for disabled men after the introduction of the Disability Discrimination Act. We estimate wage gaps at the mean and at different quantiles of the wage distribution, and decompose them into the part explained by differences in workersÂ’ and job characteristics, the part that can be ascribed to health-related reduced productivity, and a residual part which we can more confidently interpret as discrimination. For physically disabled workers, most of the wage gap can be attributed to differences in productivity, while for mentally disabled people we find evidence of wage discrimination.
    Date: 2010–06–17
  8. By: Donato De Rosa; Nishaal Gooroochurn; Holger Görg
    Abstract: Using enterprise data for the economies of Central and Eastern Europe and the CIS, this study examines the effects of corruption on productivity. Corruption is defined as a “bribe tax” and is compared to another form of institutional inefficiency, which is often believed to be closely linked with corruption: the “time tax” imposed on firms by red tape. When testing their effects in the full sample, only the bribe tax appears to have a negative effect on firm-level productivity, while the effect of the time tax is insignificant. At the same time, there is no evidence of a trade-off between the time and the bribe taxes, implying that bribing does not emerge as a second-best option to achieve higher productivity by helping circumvent cumbersome bureaucratic requirements. When the sample is split between EU and non-EU countries, the time tax turns out to have a negative effect only in EU countries and the bribe tax only in non-EU countries. This suggests that the institutional environment influences the way in which firm behaviour affects firm performance. In particular, the impact of bribing for individual firms appears to vary depending on overall institutional quality: in countries where corruption is more prevalent and the legal framework is weaker, bribery is more harmful for firm-level productivity
    Keywords: Keywords: corruption, firm performance, productivity, bribe tax
    JEL: O14 P37
    Date: 2010–06
  9. By: R. Orsi; F. Turino
    Abstract: In this paper, we investigate possible sources of declining economic growth performance in Italy starting around the middle of the ’90s. A long-run data analysis suggests that the poor performance of the Italian economy cannot be ascribed to an unfortunate business cycle contingency. The rest of the euro area countries have shown better performance, and the macroeconomic data show that the Italian economy has not grown as rapidly as these other European economies. We investigate the sources of economic fluctuations in Italy by applying the Business Cycle Accounting procedure introduced by Chari, Kehoe and McGrattan (2007). We analyze the relative importance of efficiency, labor, investment and government wedges for business cycles in Italy over the 1982-2008 period. We find that different wedges have played different roles during the period, but the efficiency wedge is revealed to be the main factor responsible for the stagnation phase beginning around 1995. Our findings also show that the improvement in labor market distortions that occurred in Italy during the ’90s provided an alleviating effect, preventing an even stronger slowdown in per capita output growth.
    JEL: E65 O41 O52
    Date: 2010–06
  10. By: Michelle Alexopoulos; Trevor Tombe
    Abstract: New indications of managerial innovations are created and then used to show that changes in organizational technologies are an important source of economic growth. Specifically, the analysis demonstrates that, first, in response to a positive managerial technology shock, output, productivity and hours significantly increase in the short run, second, these types of innovations are as important as non-managerial ones in explaining movements in these variables at business cycle frequencies, and, third, product and process innovations promote the development of new managerial techniques.
    Keywords: Business Cycles; Productivity; Management techniques; Technical Change
    JEL: E3 M1 M5 O3 O4
    Date: 2010–06–21
  11. By: Dionisius Narjoko (Dionisius Narjoko Economic Research Institute for ASEAN and East Asia (ERIA), Indonesia)
    Abstract: This paper examines the existence of spillovers associated with the presence of multinational enterprises (MNEs) on a firm’s decision to export, and on export intensity. It utilizes data from Indonesian manufacturing for the census years 1996 and 2006. Channels through which MNEs can affect other firms’ export behavior are considered and tested. The econometric analysis suggests that the contribution of MNEs in improving technological knowledge raises the likelihood that domestic firms will enter the export market, and improves export performance. The analysis finds weak evidence to support the hypothesis that competition, created by the operation of MNEs, facilitates entry into export markets. Further analysis however shows that the impact of competition depends on the level of productivity of the domestic firms. In particular, the more productive firms are suggested to have been able to benefit more than the less productive ones. The overall analysis suggests that given the mixed evidence, policies to promote MNEs are still worth pursuing. The most obvious justification comes from the positive impact of the increased pool of technological knowledge. Other than this, strengthening trade facilitation seems to be a positive proposition, given the finding that many of the new domestic exporters seem to have been constrained in increasing their exports.
    Date: 2009–12–01
  12. By: Juan Antonio Máñez Castillejo (Universitat de València); Amparo Sanchis Llopis (Universitat de València); Juan A. Sanchis Llopis (Universitat de València); María Engracia Rochina Barrachina (Universitat de València)
    Abstract: In this paper we explore in depth the effect of process innovations on total factor productivity growth for small and medium enterprises (SMEs), taking into account the potential endogeneity problem that may be caused by self selection into these activities. First, we analyse whether the ex-ante most productive SMEs are those that start introducing process innovations; then, we test whether process innovations boost SMEs productivity growth using matching techniques to control for the possibility that selection into introducing process innovations may not be a random process. We use a sample of Spanish manufacturing SMEs for the period 1991-2002, drawn from the Encuesta sobre Estrategias Empresariales. Our results show that the introduction of process innovations by a first-time process innovator yields an extra productivity growth as compared to a non-process innovator, and that the life span of this extra productivity growth has an inverted U-shaped form. En este artículo se exploran los posibles efectos de la introducción de innovaciones de proceso en el crecimiento de la productividad de las pequeñas y medianas empresas (PYMES). Para ello se presta especial atención a la existencia de un problema de selección no aleatorio en la implementación de tales innovaciones. En primer lugar, se analiza si son aquellas empresas ex-ante más productivas las que introducen innovaciones de proceso. A continuación, se utilizan técnicas de matching para contrastar si la implementación de innovaciones de proceso acelera el crecimiento de la productividad de las PYMES. La utilización de técnicas de matching permite controlar la posible existencia de un proceso de selección no aleatorio en la implementación de innovaciones de proceso. El análisis empírico se lleva cabo usando una muestra de PYMES manufactureras españolas extraída de la Encuesta sobre Estrategias Empresariales. Nuestros resultados muestran que la implementación de innovaciones de proceso por parte de PYMES sin experiencia previa en la introducción de tales innovaciones, produce un crecimiento extra de la productividad de estas PYMES en comparación con el de aquellas PYMES que no implementan innovaciones de proceso. Adicionalmente, nuestros resultados sugieren la existencia de una relación en forma de U invertida entre el crecimiento extra de la productividad y el tiempo transcurrido desde la introducción de la innovación de proceso.
    Keywords: innovaciones de proceso, PTF, dominancia estocástica, técnicas de matching. process innovations, TFP, stochastic dominance, matching techniques.
    JEL: C12 C14 D2 D24 L6 O3 L26
    Date: 2009–10
  13. By: De Rosa, Donato; Gooroochurn, Nishaal; Gorg, Holger
    Abstract: Using enterprise data for the economies of Central and Eastern Europe and the Commonwealth of Independent States, this study examines the effects of corruption on productivity. Corruption is defined as a"bribe tax"and is compared with another form of institutional inefficiency, which is often believed to be closely linked with corruption: the"time tax"imposed on firms by red tape. When testing their effects in thefull sample, only the bribe tax appears to have a negative effect on firm-level productivity, while the effect of the time tax is insignificant. At the same time, there is no evidence of a trade-off between the time and the bribe taxes, implying that bribing does not emerge as a second-best option to achieve higher productivity by helping circumvent cumbersome bureaucratic requirements. When the sample is split between European Union and non-European Union countries, the time tax turns out to have a negative effect only in European Union countries and the bribe tax only in non-European Union countries. This suggests that the institutional environment influences the way in which firm behavior affects firm performance. In particular, the impact of bribing for individual firms appears to vary depending on overall institutional quality: in countries where corruption is more prevalent and the legal framework is weaker, bribery is more harmful for firm-level productivity.
    Keywords: Environmental Economics&Policies,Public Sector Corruption&Anticorruption Measures,Economic Theory&Research,Political Economy,Emerging Markets
    Date: 2010–06–01
  14. By: Christophe Planas; Werner Roeger; Alessandro Rossi
    Abstract: In the production function approach, accurate output gap assessment requires a careful evaluation of the TFP cycle. In this paper we propose a bivariate model that links TFP to capacity utilization and we show that this model improves the TFP trend-cycle decomposition upon univariate and Hodrick-Prescott filtering. In particular, we show that estimates of the TFP cycle that load information about capacity utilization are less revised than univariate and HP estimates, both with 2009 and real-time TFPdata vintages. We obtain this evidence for twelve pre-enlargement EU countries.
    JEL: C11 E23 E32
    Date: 2010–05
  15. By: Joern, Block; Peter, Jaskiewicz; Danny, Miller
    Abstract: There are ongoing debates in the literature concerning the performance of family firms: some studies find superior performance among these companies, others find negative or neutral per-formance effects. In this research we employ agency theory to argue that the effects of family ownership vs. family management will be quite different: the former is expected to contribute positively to performance, the latter is argued to erode performance. Previous studies, due to problems of omitted variables or multicollinearity have been unable to distinguish these effects. Using a Bayesian approach that avoids these problems, we find that whereas family and founder ownership are associated with superior performance, the results for family management and even founder management are far more ambiguous. Our results have implications regarding the own-ership and management of lone founder and family firms.
    Keywords: Family firms; lone founder firms; performance; Bayesian analysis; agency theory
    JEL: L2 G3 M13
    Date: 2010–06–21
  16. By: Emili Tortosa Ausina (Universitat Jaume I); Diego Prior Jiménez (Universidad Autónoma de Barcelona); María Teresa Balaguer-Coll (Universitat Jaume I)
    Abstract: Over the last few years, many studies have analyzed the productive efficiency of local governments in different countries. An accurate definition of their output bundles -i.e., the services and facilities they provide to their constituencies- is essential to this research. However, several difficulties emerge in this task. First, since in most cases the law only establishes the minimum amount of services and facilities to provide, it may well be the case that some municipalities go beyond the legal minimum and, consequently, might be labeled as inefficient when compared to other municipalities which stick to the legal minimum. Second, municipalities face very different environmental conditions, which raises some doubts about the plausibility of an unconditional analysis. This study tackles these problems by proposing a metafrontier analysis in which the efficiency of municipalities is evaluated after splitting them into clusters according to various criteria (output mix, environmental conditions, size). We perform our estimations using order-m frontiers, given their robustness to outliers and immunity to the curse of dimensionality. We provide an application to Spanish municipalities, and results show that both output mix and, more especially, environmental conditions, should be controlled for, since efficiency differences between municipalities in different groups are notable. Durante los últimos años muchos trabajos han venido analizando la eficiencia productiva de las corporaciones locales de una gran variedad de países. Para este tipo de estudios resulta crucial una definición precisa de los servicios e infraestructuras que los municipios proporcionan a sus ciudadanos. Sin embargo, esta tarea presenta varias dificultades. En primer lugar, dado que en muchas circunstancias la ley únicamente establece los servicios mínimos que debe proporcionar un municipio, puede darse el caso de que algunos municipios vayan más allá de este mínimo legal y, consecuentemente, sean clasificados como ineficientes al compararlos con otros municipios que se ciñen al mínimo. En segundo lugar, las corporaciones locales operan en condiciones ambientales muy dispares, lo cual genera dudas acerca de la factibilidad de un análisis incondicional. Este trabajo aborda estas cuestiones proponiendo un análisis metafrontera en el que la eficiencia de las corporaciones locales se evalúa tras clasificarlas en distintos grupos de acuerdo con criterios múltiples (output mix, condiciones ambientales, tamaño). Las estimaciones son llevadas a cabo utilizando fronteras orden-m, debido a la robustez que presentan frente a observaciones atípicas y la inmunidad a la ¿maldición de la dimensionalidad¿ (curse of dimensionality). Llevamos a cabo una aplicación a los municipios españoles, y los resultados indican que tanto el output mix como, sobre todo, las condiciones ambientales, deberían ser tenidas en cuenta al evaluar la eficiencia, pues las diferencias en la eficiencia de los municipios en los distintos grupos son notables.
    Keywords: eficiencia, condiciones ambientales, gobierno local, metafrontera, orden-m efficiency, environmental conditions, local government, metafrontier, order-m
    JEL: D24 D60 H71 H72
    Date: 2010–03

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