nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2010‒09‒25
thirteen papers chosen by
Angelo Zago
University of Verona

  1. The analysis of the total factors productivity growth in waemu banks:the x efficiency approach By Zoma, Isaїe Armand
  2. Performance evaluation using bootstrapping DEA techniques: Evidence from industry ratio analysis By Halkos, George; Tzeremes, Nickolaos
  3. How Robust is the R&D.Productivity relationship? Evidence from OECD Countries By Luintel, Kul B; Khan, Mosahid; Theodoridis, Konstantinos
  4. Integrating spatial dependence into stochastic frontier analysis By Areal, Francisco J; Balcombe, Kelvin; Tiffin, R
  5. Productivity growth, human capital and distance to frontier in Sub-Saharan Africa By Danquah, Michael; Ouattara, Osman; Speight, Alan
  6. Scientific Productivity and Academic Promotion: A Study on French and Italian Physicists By Francesco Lissoni; Jacques Mairesse; Fabio Montobbio; Michele Pezzoni
  7. The Relative Efficiency of Water Use in Bangladesh Agriculture By Naseema Tanveer Chowdhury
  8. Provision of an environmental output within a multi-output distance function approach By Areal, Francisco J; Tiffin, Richard; Balcombe, Kelvin
  9. Regional Tourism Competition in the Baltic States: a Spatial Stochastic Frontier Approach By Pavlyuk, Dmitry
  10. Risk-return Efficiency, Financial Distress Risk, and Bank Financial Strength Ratings By Changchun Hua; Li-Gang Liu
  11. Do health investments improve agricultural productivity? By McNamara, Paul E.; Ulimwengu, John M.; Leonard, Kenneth L.
  12. Spatial Competition and Cooperation Effects on European Airports' Efficiency By Pavlyuk, Dmitry
  13. The Solow Residual By Koumparoulis, Dimitrios

  1. By: Zoma, Isaїe Armand
    Abstract: In this paper, we make an analysis of productivity’s gaps in WAEMU’s banks; the intra-organizational strategy is privileged. For that purpose, we study the progression of the global factors productivity using the Data Envelopment Analysis (DEA), and then the X efficiency scores are calculated using stochastical frontier approach (SFA). The study period (2002 to 2006) corresponds to the post financial liberalization in the zone and to a changed banking and financial environment. We find that the global productivity of the factors remained relatively unchanged but that globally the X efficiency of the banks lightly decreased, remaining nevertheless at a relatively high level of the order of 80% .Big banks, of the viewpoint of their size and the private and semi-public banks, of the viewpoint of their capital structure, have the biggest mean scores of X efficiency.
    Keywords: bank; WAEMU; productivity; global productivity; X efficiency; DEA; SFA
    JEL: D24 G21
    Date: 2010–06
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:24470&r=eff
  2. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: In Data Envelopment Analysis (DEA) context financial data/ ratios have been used in order to produce a unified measure of performance metric. However, several scholars have indicated that the inclusion of financial ratios create biased efficiency estimates with implications on firms’ and industries’ performance evaluation. There have been several DEA formulations and techniques dealing with this problem including sensitivity analysis, Prior-Ratio-Analysis and DEA/ output–input ratio analysis for the assessment of the efficiency and ranking of the examined units. In addition to these computational approaches this paper in order to overcome these problems applies bootstrap techniques. Moreover it provides an application evaluating the performance of 23 Greek manufacturing sectors with the use of financial data. The results reveal that in the first stage of our sensitivity analysis the efficiencies obtained are biased. However, after applying the bootstrap techniques the sensitivity analysis reveals that the efficiency scores have been significantly improved.
    Keywords: Performance measurement; Data Envelopment Analysis; Financial ratios; Bootstrap; Bias correction
    JEL: C14 C15 C67
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:25072&r=eff
  3. By: Luintel, Kul B (Cardiff Business School); Khan, Mosahid; Theodoridis, Konstantinos (Cardiff Business School)
    Abstract: We examine the robustness of R&D and productivity relationship in a panel of 16 OECD countries. We control for fifteen productivity determinants predicted by different theoretical models. Following the advances in non-stationary panel data econometrics, we estimate four variants of thirteen specifications. All models appear co-integrated. Results are rigorously scrutinized through extensive bootstrap simulations and sensitivity checks. R&D and human capital emerge robust in all specifications making them universal drivers of productivity across nations. Most other determinants are also significant. Productivity relationships are heterogonous across countries depending on their accumulated stocks of knowledge and human capital.
    Keywords: R&D Capital Stocks; Multifactor Productivity; Heterogeneity; Panel Cointegration; Bootstrap Simulations
    JEL: F12 F2 O3 O4 C15
    Date: 2010–09
    URL: http://d.repec.org/n?u=RePEc:cdf:wpaper:2010/7&r=eff
  4. By: Areal, Francisco J; Balcombe, Kelvin; Tiffin, R
    Abstract: An approach to incorporate spatial dependence into Stochastic Frontier analysis is developed and applied to a sample of 215 dairy farms in England and Wales. A number of alternative specifications for the spatial weight matrix are used to analyse the effect of these on the estimation of spatial dependence. Estimation is conducted using a Bayesian approach and results indicate that spatial dependence is present when explaining technical inefficiency.
    Keywords: Spatial dependence; technical efficiency; Bayesian; spatial weight matrix
    JEL: C51 C13 C23 Q12 C11
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:24961&r=eff
  5. By: Danquah, Michael; Ouattara, Osman; Speight, Alan
    Abstract: Using the Malmquist productivity index and panel data methods, we study the role of total human capital and its composition in the technological "catch-up" process and productivity growth via the channels of innovation and adoption of technology in a panel of 19 sub -Saharan African countries between 1960 and 2003. Our findings indicate different roles played by the composition of human capital and a follow-on consistent and significant contribution of total human capital to productivity growth. Primary and secondary school attainment (unskilled labour) contribute significantly to the adoption of technology(the main source of productivity growth in sub-Saharan Africa) whilst tertiary school attainment (skilled labour) plays a significant role in local innovation. Total human capital on the other hand, contribute more significantly to the adoption of technology and innovation. Technological "catch-up" remains a significant element in productivity growth in sub-Saharan Africa and economies with higher tertiary school attainment(skilled labour) and higher total human capital tend to contribute significantly to productivity growth through the channel of technological "catch-up". Our results rather point towards a circuitous depiction of the symbiotic characteristics of the composition of human capital in enhancing productivity growth in sub-Saharan Africa and hence efforts in scaling- up investments in human capital by governments, development partners etc should not be too concentrated on one composition of human capital. --
    Keywords: Productivity growth,Human capital,Sub-Saharan Africa
    JEL: D24 O47 O55
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:zbw:gdec10:54&r=eff
  6. By: Francesco Lissoni; Jacques Mairesse; Fabio Montobbio; Michele Pezzoni
    Abstract: The paper examines the determinants of scientific productivity (number of articles and journals’ impact factor) for a panel of about 3600 French and Italian academic physicists active in 2004-05. Endogeneity problems concerning promotion and productivity are addressed by specifying a generalized Tobit model, in which a selection probit equation accounts for the individual scientist’s probability of promotion to her present rank, and a productivity regression estimates the effects of age, gender, cohort of entry, and collaboration characteristics, conditional on the scientist’s rank. We find that the size and international nature of collaborative projects and co-authors’ past productivity have very significant impacts on current productivity, while age and gender, and past productivity are also influential determinants of both productivity and probability of promotion. Furthermore we show that the stop-and-go policies of recruitment and promotion, typical of the Italian and French centralized academic systems of governance, can leave significant long-lasting cohort effects on research productivity.
    JEL: I23 I28 J24 J45 O31
    Date: 2010–09
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:16341&r=eff
  7. By: Naseema Tanveer Chowdhury
    Abstract: This study examines the marginal productivity of water and other inputs in dry season rice production in Bangladesh. Agriculture is the major water using sector in Bangladesh, but water is in short supply during the dry winter months. The study aims to understand how efficiently irrigated water is used in dry rice production. It estimates a translog production function for boro rice in seven hydrological regions and derives the marginal products of various inputs. These estimates are based on data collected by the International Rice Research Institute from a nationally representative sample of farm households in Bangladesh. [SANDEE WOrking Paper No. 49-10].
    Keywords: water, bangladesh, agriculture, rice, production, hydrological, winter, reserch, institute, data, Cobb-Douglas Production Function, elasticity, marginal returns, irrigation , boro rice,
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:ess:wpaper:id:2863&r=eff
  8. By: Areal, Francisco J; Tiffin, Richard; Balcombe, Kelvin
    Abstract: This paper redefines technical efficiency by incorporating provision of environmental goods as one of the outputs of the farm within a multi-outptut distance function framework. Permanent and rough grassland area are used as a proxy for the provision of environmental goods. The multi-output distance function approach is used to estimate technical efficiency. A Bayesian procedure involving the use of a Gibbs sampler is used to estimate the farm specific efficiency as well as the coefficients of the distance function. In addition, a number of explanatory variables for the efficiency were introduced in the analysis and posterior distributions of those were obtained. The methodology is applied to panel data on 215 dairy farms in England and Wales from the Defra Farm Business Survey. Results show that both farm efficiency rankings and determinants of inefficiency change when provision of environmental outputs by farms is incorporated in the efficiency analysis, which may have important political implications.
    Keywords: Technical efficiency; environmental good; multi-output
    JEL: C51 C13 C23 Q12 C11
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:25051&r=eff
  9. By: Pavlyuk, Dmitry
    Abstract: This paper aimed at a statistical analysis of competition for tourists between regions within Baltic states (Estonia, Latvia, Lithuania) and estimation relative efficiency levels of regions. We apply a modern approach called Spatial Stochastic Frontier and corresponded to spatial modification of a stochastic frontier model. We specify two alternative spatial stochastic frontier models – distance and travel-time based to identify an influence of existing transport network on research results. Using the model we analyse region-specific factors (tourism infrastructure, employment, geographical position and natural attractors) having an effect on a number of visitors and estimate regions' efficiency values. We discover a significant level of inefficiency of Baltic states regions and propose some ways to improve the situation.
    Keywords: spatial stochastic frontier; efficiency; competition; regional tourism; transport network
    JEL: C51 O18 R15 C31 L83 C33
    Date: 2010–08
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:25052&r=eff
  10. By: Changchun Hua; Li-Gang Liu (Asian Development Bank Institute)
    Abstract: This paper investigates whether there is any consistency between banks’ financial strength ratings (bank rating) and their risk-return profiles. It is expected that banks with high ratings tend to earn high expected returns for the risks they assume and thereby have a low probability of experiencing financial distress. Bank ratings, a measure of a bank’s intrinsic safety and soundness, should therefore be able to capture the bank’s ability to manage financial distress while achieving risk-return efficiency. We first estimate the expected returns, risks, and financial distress risk proxy (the inverse z-score), then apply the stochastic frontier analysis (SFA) to obtain the risk-return efficiency score for each bank, and finally conduct ordered logit regressions of bank ratings on estimated risks, risk-return efficiency, and the inverse z-score by controlling for other variables related to each bank’s operating environment. We find that banks with a higher efficiency score on average tend to obtain favorable ratings. It appears that rating agencies generally encourage banks to trade expected returns for reduced risks, suggesting that these ratings are generally consistent with banks’ risk-return profiles.
    Keywords: banking, financial strength ratings, risk-return profiles, stochastic frontier analysis
    JEL: D21 D24 G21 G24 G28 G32
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:eab:financ:2288&r=eff
  11. By: McNamara, Paul E.; Ulimwengu, John M.; Leonard, Kenneth L.
    Abstract: Determining the causality between health measures and both income and labor productivity remains an ongoing challenge for economists. This review paper aims to answer the question: Does improved population health lead to higher rates of agricultural growth? In attempting to answer this question, we survey the empirical literature at micro and macro levels concerning the link between health investments and agricultural productivity. The evidence from some micro-level studies suggests that inexpensive health interventions can have a very large impact on labor productivity. The macro-level evidence at the country and global level, however, is mixed at best and in some cases suggests that health care interventions have no impact on income, much less on agricultural productivity. At both micro and macro levels, the literature does not provide a clear-cut answer to the question under investigation. Overall, the review reveals a great deal of heterogeneity in terms of estimation methods, definition and measurement of health variables, choice of economic outcomes, single-equation versus multiple-equation approach, and static versus dynamic approach. The actual magnitude of estimated elasticities is difficult to assess in part due to estimation bias caused by the endogeneity of health outcomes. We also found significant gaps in the literature; for example, very little attention is given to demand for health inputs by rural populations and farmers.
    Keywords: Agriculture, Growth, health, Investment, Nutrition, productivity,
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:fpr:ifprid:1012&r=eff
  12. By: Pavlyuk, Dmitry
    Abstract: This paper is devoted to statistical analysis of spatial competition and cooperation between European airports. We propose a new multi-tier modification of spatial models, which allow estimating of spatial influence varying with the distance. Competition and cooperation effects don't diminish steadily with moving from a given airport, their structure is more complex. The suggested model is based on a set of distance tiers, with different possible effects inside each tier. We apply the proposed modification to the standard spatial stochastic frontier model and use it to estimation of competition and cooperation effects for European airport and airport's efficiency levels. We identify three tiers of spatial influence with different completion-cooperation ratio in each one. In the first, closest to an airport, tier we note significant advantage of cooperation effects over competition ones. In the second, more distant, tier we discover the opposite situation – significant advantage of completion effects. The last tier's airports doesn't influence significantly. In this paper we also consider some other possible applications of the proposed spatial multi-tier model.
    Keywords: spatial stochastic frontier; airport efficiency; competition; cooperation
    JEL: C51 L93 C31
    Date: 2010–08
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:25050&r=eff
  13. By: Koumparoulis, Dimitrios
    Abstract: The Solow growth model presents a theoretical framework for understanding the sources of economic growth, and the consequences for long-run growth of changes in the economic environment and in economic policy. But suppose that we wish to examine economic growth in a freer framework, without necessarily being bound to adopt in advance the conclusions of our economic theories. In order to conduct such a less theory-bound analysis, economists have built up an alternative framework called growth accounting to obtain a different perspective on the sources of economic growth.
    Keywords: Solow residual; total factor productivity; growth accounting
    JEL: O40
    Date: 2010
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:25041&r=eff

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