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on Efficiency and Productivity |
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Issue of 2010‒08‒06
eleven papers chosen by |
| By: | Tseveen Gantumur; Andreas Stephan |
| Abstract: | To quickly adapt to technological change and developments, and thus remain competitive, firms increasingly resort to the use of external technology. This paper investigates whether and to what extent the acquisition of external disembodied technology affects the efficiency and productivity in innovation of technology acquiring firms. Using the stochastic frontier analysis combined with a difference-in-difference matching approach and firm-level panel from the German Innovation Survey for the period 1992-2004, we find that manufacturing firms that acquire disembodied technology experience more growth in innovative productivity than non-acquiring firms do. Thus, this study provides evidence on complementarity between internal and external R&D in innovation production, which is attributed by increasing returns to R&D scale and increasing technical efficiency. Moreover, we find that firm size significantly contributes to innovative efficiency and productivity of external technology acquirers. |
| Keywords: | Technology acquisition, innovative efficiency, innovative productivity, SFA, Difference-in-difference matching |
| JEL: | O30 L24 L25 L60 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1035&r=eff |
| By: | Raimund Scheffler (Institute of Transport Economics, Muenster); Karl-Hans Hartwig (Institute of Transport Economics, Muenster); Robert Malina (Institute of Transport Economics, Muenster) |
| Abstract: | This paper quantifies the technical efficiency of German bus companies and elaborates on the main factors influencing their performance. Efficiency is measured with a stochastic production frontier. We test for the impact on efficiency of ownership structure and participation at tendering. Furthermore, we investigate the influence on efficiency when a bus company is a part of a multi-product enterprise. The results yield insights how public bus companies might improve their performance in order to cope with the changing market environment. The mean technical efficiency of the investigated bus companies is around 87 percent. Bus companies with participation at tendering show a significantly higher mean efficiency than other companies. The ownership structure has no influence on technical efficiency. |
| Keywords: | Stochastic Frontier Analysis, Production Function, Public Transport, Efficiency Analysis, |
| JEL: | C13 C23 L92 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:mut:wpaper:14&r=eff |
| By: | Alice Shiu, Valentin Zelenyuk (Kyiv School of Economics, Kyiv Economics Institute) |
| Abstract: | In this study, we explore the pattern of efficiency among enterprises in China‘s 29 provinces across different ownership types in heavy and light industries and across different regions (coastal, central and western). We do so by performing a bootstrap-based analysis of group efficiencies (weighted and non-weighted), estimating and comparing densities of efficiency distributions, and conducting a bootstrapped truncated regression analysis. We find evidence of interesting differences in efficiency levels among various ownership groups, especially for foreign and local ownership, which have different patterns for light and heavy industries. |
| Keywords: | efficiency, data envelopment analysis, bootstrapping, ownership, China |
| JEL: | C13 C15 O11 O18 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:kse:dpaper:33&r=eff |
| By: | KIYOTA Kozo |
| Abstract: | This paper examines the relationship between productivity, markup, scale economies, and the business cycle. The paper contributes to the literature by presenting a simple econometric framework that permits simultaneous estimation of the changes in productivity, markup, and scale economies from a panel of firm-level data. The framework is then applied to Japanese firm-level data for 1994-2006. The results indicate that productivity is procyclical even after the changes in markup and scale economies are controlled for. However, both markup and scale economies are neither procyclical nor countercyclical once the changes in productivity are taken into account. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:10040&r=eff |
| By: | Fabio Pammolli (IMT Lucca Institute for Advanced Studies); Massimo Riccaboni (University of Trento); Laura Magazzini (Department of Economics (University of Verona)) |
| Abstract: | We analyze the decline of R&D productivity in pharmaceuticals and its determinants. Since the molecular biology revolution, science has dramatically expanded the set of plausible therapeutic targets. However, innovation has become more difficult to achieve, and attrition rates of R&D projects have increased, especially in late-phase clinical trials. We show that the R&D productivity slowdown is associated with a higher concentration of R&D investments in high-risk domains, corresponding to unsolved therapeutic needs and unexploited biological mechanisms. We compare the strategies of European and US companies, finding differences in the composition of R&D portfolios, but no evidence of any productivity gap. |
| Keywords: | R&D productivity, pharmaceutical industry |
| JEL: | O31 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:06/2010&r=eff |
| By: | Alex Coad; Agustà Segarra; Mercedes Teruel |
| Abstract: | Our empirical literature review shows that little is known about how firm performance changes with age, presumably because of the paucity of data on firm age. For Spanish manufacturing firms, we analyse the firm performance related to firm age between 1998 and 2006. We find evidence that firms improve with age, because ageing firms are observed to have steadily increasing levels of productivity, higher profits, larger size, lower debt ratios, and higher equity ratios. Furthermore, older firms are better able to convert sales growth into subsequent growth of profits and productivity. On the other hand, we also found evidence that firm performance deteriorates with age. Older firms have lower expected growth rates of sales, profits and productivity, they have lower profitability levels (when other variables such as size are controlled for), and also that they appear to be less capable to convert employment growth into growth of sales, profits and productivity. |
| Keywords: | firm age, firm growth, LAD, financial structure, vector autoregression Length 31 pages |
| JEL: | L25 L20 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2010-06&r=eff |
| By: | Renaud Bourlès; Gilbert Cette; Jimmy Lopez; Jacques Mairesse; Giuseppe Nicoletti |
| Abstract: | Based on an endogenous growth model, we show that intermediate goods markets imperfections can curb incentives to improve productivity downstream. We confirm such prediction by estimating a model of multifactor productivity growth in which the effects of upstream competition vary with distance to frontier on a panel of 15 OECD countries and 20 sectors over 1985-2007. Competitive pressures are proxied with sectoral product market regulation data. We find evidence that anticompetitive upstream regulations have curbed MFP growth over the past 15 years, more strongly so for observations that are close to the productivity frontier.<P>Les réglementations du marché des produits dans les secteurs amont limitent-elles la croissance de la productivité ? Résultats de données de panel pour les pays de l’OCDE<BR>En s?appuyant sur un modèle de croissance endogène, nous montrons dans cette étude que les imperfections de marché dans les secteurs amont abaissent les incitations à améliorer la productivité en aval. Cette conjecture est confirmée empiriquement par l?estimation d?un modèle qui différencie les effets potentiels, sur la productivité globale des facteurs (PGF), d?une concurrence insuffisante dans les secteurs amont selon la distance à la frontière technologique sectorielle. Ces estimations sont réalisées sur un panel de 15 pays de l?OCDE et 20 secteurs d?activité sur la période 1985-2007. La concurrence en amont est mesurée par des indicateurs sectoriels de régulation sur les marchés des biens. Les résultats montrent que, sur les 15 dernières années, les régulations anticompétitives dans les secteurs amont ont affaibli les gains de PGF, tout particulièrement pour les observations proches de la frontière technologique. |
| Keywords: | growth, productivity, competition, regulation, catching-up, productivité, croissance, régulation, rattrapage, compétition |
| JEL: | C23 L16 L5 O43 O57 |
| Date: | 2010–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:791-en&r=eff |
| By: | Badri Narayanan G. |
| Abstract: | This paper analyses the determinants of competitiveness of auto industry in India, based on a field survey and a quantitative analysis of secondary data. It highlights that all segments of Indian auto sector are growing at a fairly high rates and their productivity as well as export intensity is on the rise. Domestic sales are rising, but they have declined in certain sub-segments of vehicles. However, the R&D expenditure has been scarce. Effective rate of protection of automobile assembly is far higher than that of auto-components manufacturing. Unorganised sector, which is quite significant in auto-component manufacturing, has grown more rapidly in the urban areas than in the rural areas. The econometric analysis suggests various measures that could be taken by the government, particularly, the credit facilitation for SMEs. A field survey comprising auto manufacturers in India underlines various constraints faced by the sector, such as the shortage of skilled manpower along with poor infrastructure, fluctuating steel prices and unavailability of land at reasonable price. This suggests that the government could facilitate the industry in becoming more competitive by taking steps such as structural fiscal reforms, cut in import duties of raw materials and capital goods, promotion of R&D and FDI, training facilities, research-backed negotiations of FTAs, roadmap for harmonising emission norms across the country and infrastructure improvement. Industry, on the other hand, should improve its R&D capabilities and market research. [ICRIER Working Paper No. 201] |
| Keywords: | Indian Auto Industry, Competitiveness, Efficiency and Indian Auto Policy |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2713&r=eff |
| By: | Nicholas Bloom; Carol Propper; Stephan Seiler; John van Reenan |
| Abstract: | In this paper we examine the causal impact of competition on management quality. We analyze the hospital sector where geographic proximity is a key determinant of competition, and English public hospitals where political competition can be used to construct instrumental variables for market structure. Since almost all major English hospitals are government run, closing hospitals in areas where the governing party has a small majority is rare due to fear of electoral punishment. We find that management quality - measured using a new survey tool - is strongly correlated with financial and clinical outcomes such as survival rates from emergency heart attack admissions (AMI). More importantly, we find that higher competition (as indicated by a greater number of neighboring hospitals) is positively correlated with increased management quality, and this relationship strengthens when we instrument the number of local hospitals with local political competition. Adding another rival hospital increases the index of management quality by one third of a standard deviation and leads to a 10.7% reduction in heart-attack mortality rates. |
| Keywords: | management, hospitals, competition, productivity |
| JEL: | J45 F12 I18 J31 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:10/237&r=eff |
| By: | Ibrahim Soliman; Jacinto F. Fabiosa (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); Mohamed Gaber Amer; Siham Kandil |
| Abstract: | From 1986 to 2007 Egypt's agricultural policy transitioned from a tightly controlled to a more liberalized regime. This study examines the impact of this change on the performance of the wheat (imported grain) and rice (exported grain) sectors. In terms of profitability, we found that the cost of production increased substantially in both grains, driven primarily by the rise in land rent and labor wage. But the wheat and rice sectors' profitability did not suffer significantly, as advances in new seed technologies and adoption of better farm practices including farm mechanization increased yield and compensated for the higher cost. Considering market efficiency, we found that over the study period the farmer's share of the consumer's expenditure dropped from 51% to 37% in the case of wheat, while it increased from 24% to 26% in the case of rice. The reverse happened for wholesale and retail margin share, where it increased for wheat and decreased for rice. It is likely that the discipline from foreign suppliers of imported wheat and foreign market opportunities for exported rice may explain the difference in the changes of the distribution of consumer expenditure. Finally, we found that area response elasticity decreased over time from 0.58 to 0.12 for rice and 0.60 to 0.38 for wheat. The lack of response in rice area despite rising prices is attributed to the land limit strictly imposed by the Government of Egypt because of water supply constraint considerations. On the other hand, the lack of response in wheat area despite rising wheat prices may be attributed to the rising competitiveness of Egyptian clover, which is a main feed ingredient for the growing livestock sector. |
| Keywords: | agricultural liberalization, area response elasticity, market efficiency, profitability. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ias:fpaper:10-wp509&r=eff |
| By: | Cyrille Schwellnus |
| Abstract: | Productivity growth has declined since the late 1990s, slowing the catching-up process. Structural reforms to strengthen competition, entrepreneurship and innovation would go a long way toward enhancing it. Recent competition policy reforms that strengthen enforcement of cartel law must now be implemented effectively. The National Economic Prosecutor should receive sufficient resources and the ceiling on fines against cartels, which has recently been raised, may need to be reviewed again. Entrepreneurship should be strengthened by reducing regulatory “red tape” for start-ups and simplifying bankruptcy procedures. Recent reforms to the innovation policy framework are welcome but the focus on sectoral priority clusters will need to be accompanied by appropriate monitoring procedures and sunset clauses for public support. This Working Paper relates to the 2010 Economic Survey of Chile (www.oecd.org/eco/surveys/Chile).<P>Chili : Augmenter la croissance de la productivité par le renforcement de la concurrence, l'entrepreneuriat et l'innovation<BR>Le déclin de la croissance de la productivité observé depuis la fin des années 90 ralentit le processus de rattrapage. Des réformes structurelles visant à renforcer la concurrence, l’entrepreneuriat et l’innovation ouvriraient largement la voie à un raffermissement de cette croissance. Il convient désormais de mettre concrètement en oeuvre les récentes réformes de la politique de la concurrence visant à consolider l’application de la législation sur les ententes. Il faut doter le Procureur économique national de ressources suffisantes et revoir éventuellement le plafond – déjà relevé il y a peu – des amendes frappant les auteurs d’ententes. L’entrepreneuriat doit être renforcé grâce à l’allègement de la réglementation qui pèse sur la création d’entreprise et à la simplification des procédures de faillite. Les toutes dernières réformes du cadre de la politique de l’innovation vont dans le bon sens mais il faudra assortir les pôles sectoriels prioritaires de procédures de suivi adaptées et de clauses de caducité du soutien de l’État. Ce document de travail se rapporte à l’Étude économique de l’OCDE du Chili 2010 (www.oecd.org/eco/etudes/Chili). |
| Keywords: | growth, productivity, competition, innovation, regulation, Chile, productivité, croissance, réglementation, innovation, concurrence, Chili |
| JEL: | F43 L16 L5 O3 O4 O54 |
| Date: | 2010–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:785-en&r=eff |