nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2011‒02‒19
seventeen papers chosen by
Angelo Zago
University of Verona

  1. El efecto de las empresas extranjeras y la competencia en la eficiencia del sector manufacturero uruguayo 1988-1994 By Ruben Tansini; Rosario Domingo
  2. Explaining Productivity Differentials in Eastern European Agriculture: Efficiency or Class Structure ? By Jean-Louis Arcand; Daniela Borodak
  3. Performance of islamic banks across the world: an empirical analysis over the period 2001-2008 By KABLAN, Sandrine; YOUSFI, Ouidad
  4. The Effects of Environmental Regulation on the Competiveness of U.S. Manufacturing By Michael Greenstone; John A. List; Chad Syverson
  5. Total Factor Productivity within the Tunisian manufacturing sectors and international convergence with OECD countries By Patrick Plane; Mohamed Chaffai; Dorra Triki
  6. A Monte Carlo Study of Old and New Frontier Methods for Efficiency Measurement By Krüger, Jens
  7. Plant-Level Productivity and Imputation of Missing Data in the Census of Manufactures By T. Kirk White; Jerome P. Reiter; Amil Petrin
  8. Learning versus Stealing: How Important are Market-Share Reallocations to India's Productivity Growth By Ann E. Harrison; Leslie A. Martin; Shanthi Nataraj
  9. Efficiency decomposition approach: A cross-country airline analysis By Gramani, Maria Cristina N.
  10. The Italian firms between crisis and the new globalization By Antonio Accetturo; Anna Giunta; Salvatore Rossi
  11. Endemic diseases and agricultural productivity: Challenges and policy response By Martine Audibert
  12. Outsourcing, Demand and Employment Loss in U.S. Manufacturing, 1990 – 2005 By James Burke; Gerald Epstein; Seung-Yun Oh
  13. The quality of public services in Italy By Amanda Carmignani; Francesco Bripi; Raffaela Giordano
  14. Protección y productividad: Causas y consecuencias de aislar sectores en una economía pequeña. By Cecilia Durán; Natalia Ferreira-Coimbra
  15. Towards a culture of environmental efficiency: An application of conditional partial nonparametric frontiers By Halkos, George; Tzeremes, Nickolaos
  16. Public sector efficiency and political culture By Raffaela Giordano; Pietro Tommasino
  17. Performance Analysis of Brazilian Hedge Funds By Jordão, Gustavo A.; Moura, Marcelo L.

  1. By: Ruben Tansini (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Rosario Domingo (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: In this study we estimated Stochastic Frontier Production Functions for different sub-samples of panel data of Uruguayan manufacturing firms, to evaluate the spillover effect of the presence of foreign affiliates and international competition on technical efficiency in locally-owned firms. The results suggest that the presence of FDI has a positive effect on the level of technical efficiency in local firms. Furthermore, we found that average technical efficiency in locally-owned firms in industries where foreign affiliates are present is higher than those of firms in industries with no foreign presence. We also found that significant spillover effects on technical efficiency arise when technology gap between local and foreign firms is moderate, and when the foreign affiliate’s sales are mainly oriented to the local market. Moreover, our results suggest that when foreign firms are present in an industry their positive impact on the technical efficiency of local firms seems to be greater than the impact of competition from imported goods.
    Keywords: Foreign direct investment, Spillovers, Technical efficiency, Productivity, Stochastic Frontier Production Functions
    JEL: C23 D24 F23 L60 O13 O33
    Date: 2010–11
  2. By: Jean-Louis Arcand (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Daniela Borodak (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: This paper considers whether it is differences in technical efficiency or differences in factor endowments that explain productivity differentials in Moldovan agriculture. We compute non-parametric measures of technical efficiency for a sample of Moldovan small-holders using the four-step Data Envelopment Analysis (DEA) approach suggested by Fried, Schmidt and Yaisawang (1999). We also consider a model of class structure inspired by the work of Eswaran and Kotwal (1986), and estimate a bivariate probit model that explains a household's labor market participation decisions (and hence class membership) in terms of its factor endowments. These constructs are then used in an effort to understand the determinants of output per hectare in Moldovan agriculture. We find that differences in technical efficiency explain very little of the great heterogeneity in productivity observed in our sample, while class membership is slightly more successful. Our empirical model of class structure suggests that self sufficient households will disappear and be replaced by a class of small capitalist farmers as land and credit markets develop.
    Keywords: transaction costs;Technical efficiency;household model;transitional economy;agrarian reform
    Date: 2011–02–09
  3. By: KABLAN, Sandrine; YOUSFI, Ouidad
    Abstract: Our study aims at analyzing Islamic bank efficiency over the period 2001-2008. We found that they were efficient at 92%. The level of efficiency could however vary according to the region where they operate. Asia displays the highest score with 96%. Indeed, country like Malaysia made reforms in order to allow these banks to better cope with the existing financial system, display the highest scores. On the contrary countries with Islamic banking system do not necessarily display efficiency scores superior to the average. The subprime crisis seems to have impacted those banks indirectly. And market power and profitability have a positive impact on Islamic banks efficiency, while it is the contrary for their size. The latter implies that they do not benefit from scale economy, may be because of the specificity of Islamic financial products.
    Keywords: Islamic Finance; Islamic Banks; performance; efficiency; stochastic frontier analysis.
    JEL: C23 G32 G21
    Date: 2011–02–07
  4. By: Michael Greenstone; John A. List; Chad Syverson
    Abstract: Whether and to what extent environmental regulations influence the competitiveness of firms remains a hotly debated issue. Using detailed production data from tens of thousands of U.S. manufacturing plants drawn from Annual Survey of Manufactures, we estimate the effects of environmental regulations—captured by the Clean Air Act Amendments’ division of counties into pollutant-specific nonattainment and attainment categories—on manufacturing plants’ total factor productivity (TFP) levels. We find that among surviving polluting plants, a nonattainment designation is associated with a roughly 2.6 percent decline in TFP. The regulations governing ozone have particularly discernable effects on productivity, though effects are also seen among particulates and sulfur dioxide emitters. Carbon monoxide nonattainment, on the other hand, appears to increase measured TFP, though this appears to be concentrated among refineries. When we apply corrections for two likely sources of positive bias in these estimates (price mismeasurement and sample selection on survival), we estimate that the total TFP loss for polluting plants in nonattaining counties is 4.8 percent. This corresponds to an annual lost output in the manufacturing sector of roughly $14.7 billion in 1987 dollars ($24.4 billion in 2009 dollars). These costs have important implications for both the intensity and location of firm expansions.
    Date: 2011–01
  5. By: Patrick Plane (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Mohamed Chaffai (Université de Sfax - Université de Sfax); Dorra Triki (Université de Tunis - Université de Tunis)
    Abstract: The purpose of this paper is to examine Total Factor Productivity (TFP) of six Tunisian manufacturing sectors and to compare these productivities with those of OECD countries. The analysis covers the period 1983-1999. First, TFP is measured and some of the main economic and financial determinants are identified. In carrying out this econometric exercise we are careful to take into account the problem of the direction of causality between variables. For the empirical analysis, panel data causality tests are conducted. The results suggest that TFP growth rates are sensitive to variables reflecting international openness. Secondly, the paper investigates the evolution of the TFP gaps between Tunisia and OECD countries. A stochastic convergence has been considered here. Two panel data unit root tests are employed. A global convergence is evidenced for five sectors.
    Keywords: cerdi
    Date: 2011–02–09
  6. By: Krüger, Jens
    Abstract: This study presents the results of an extensive Monte Carlo experiment to compare different methods of e�ciency analysis. In addition to traditional parametric-stochastic and nonparametric-deterministic methods recently developed robust nonparametric-stochastic methods are considered. The experimental design comprises a wide variety of situations with different returns-to-scale regimes, substitution elasticities and outlying observations. As the results show, the new robust nonparametric-stochastic methods should not be used without cross-checking by other methods like stochastic frontier analysis or data envelopment analysis. These latter methods appear quite robust in the experiments.
    Keywords: Monte Carlo experiment, efficiency measurement, nonparametric stochastic methods
    Date: 2011–02
  7. By: T. Kirk White; Jerome P. Reiter; Amil Petrin
    Abstract: In the U.S. Census of Manufactures, the Census Bureau imputes missing values using a combination of mean imputation, ratio imputation, and conditional mean imputation. It is wellknown that imputations based on these methods can result in underestimation of variability and potential bias in multivariate inferences. We show that this appears to be the case for the existing imputations in the Census of Manufactures. We then present an alternative strategy for handling the missing data based on multiple imputation. Specifically, we impute missing values via sequences of classification and regression trees, which offer a computationally straightforward and flexible approach for semi-automatic, large-scale multiple imputation. We also present an approach to evaluating these imputations based on posterior predictive checks. We use the multiple imputations, and the imputations currently employed by the Census Bureau, to estimate production function parameters and productivity dispersions. The results suggest that the two approaches provide quite different answers about productivity.
    Date: 2011–01
  8. By: Ann E. Harrison; Leslie A. Martin; Shanthi Nataraj
    Abstract: The new trade theory emphasizes the role of market-share reallocations across firms (ÒstealingÓ) in driving productivity growth, while the older literature focused on average productivity improvements (ÒlearningÓ). The authors use comprehensive, firm-level data from IndiaÕs organized manufacturing sector to show that market-share reallocations did play an important role in aggregate productivity gains immediately following the start of IndiaÕs trade reforms in 1991. However, aggregate productivity gains during the overall 20-year period from 1985 to 2004 were driven largely by improvements in average productivity. By exploiting the variation in reforms across industries, they document that the average productivity increases can be attributed to IndiaÕs trade liberalization and FDI reforms. Finally, they construct a panel dataset that allows them to track firms during this time period; their results suggest that while within-firm productivity improvements were important, much of the increase in average productivity also occurred because of firm entry and exit.
    JEL: F13 F14 F23
    Date: 2011–01
  9. By: Gramani, Maria Cristina N.
    Date: 2011–10
  10. By: Antonio Accetturo (Banca d'Italia); Anna Giunta (University of Rome - Roma tre); Salvatore Rossi (Banca d'Italia)
    Abstract: This paper analyzes the characteristics of Italian firms involved in global value chains (“intermediate” firms) by using the Bank of Italy survey on industrial companies. Intermediate firms show, on average, worse features than “final” firms: smaller size, lower share of white collars, lower productivity and export propensity. However we observe a strong heterogeneity, depending on the ability (and modalities) to upgrade along the value chains. There are wide differences between upgrading and non-upgrading (marginal) intermediate firms in terms of size, efficiency, human capital endowment and international competitiveness. During the 2008-09 crisis, marginal intermediate firms performed definitely worse; moreover, facing a collapse in world trade, firms that were upgrading by expanding their international linkages were more severely hit than those that were differentiating their internal functions.
    Keywords: fragmentation, offshoring, upgrading
    JEL: D23 L23 L24
    Date: 2011–01
  11. By: Martine Audibert (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: Contrary to Asian countries, the agricultural sector in Africa had not benefited from the green revolution success. After a long time of disinterest in the agriculture sector in Africa, several voices arise now in favour of greater efforts towards this sector. Several studies tend to show the crucial role of agriculture in African countries' growth and highlight the huge need of increasing the productivity in this sector. If increase in agriculture productivity requires both an expansion of irrigated areas and the adoption of high yield varieties, those innovations and their high development could be the source of negative health (and environmental) effects. Using a mega-analysis, this paper highlights first the links between health, disease and development and then agricultural productivity. The literature review shows that the negative effect of bad health was not systematically checked, and that the intensity of this effect depends of the disease, but also of the work productivity and the existence or not of a coping process. The second part of the paper focused on the development of high intensive agriculture as a risk factor for farmers' and rural inhabitants' health. This survey shows that whether irrigation and fertilizer and pest intensive use could be considered as highly health (and environmental) risk factors, appropriate control measures (such as for examples systematic maintenance of irrigation canals, alternate wetting and drying of irrigated fields or integrated pest management) considerably reduce this risk, while at the same time, increase the agriculture productivity.
    Keywords: agriculture;productivity;endemic disease;health risk factor;Africa
    Date: 2011–02–04
  12. By: James Burke; Gerald Epstein; Seung-Yun Oh
    Abstract: Burke, Oh, and Epstein focus on new measures of foreign outsourcing to track changes in the offshoring of manufacturing activity and to explore how offshoring along with other factors are related to the dramatic dislocation of workers in the US manufacturing sector in recent years. They present past studies that have explored the impact on workers of growing offshoring in manufacturing industries, introduce a new measure of imported inputs, and examine the growth of foreign outsourcing activity in manufacturing industries from 1987 to 2002. The authors present a counterfactual analysis as a way to show the loss of manufacturing industry employment resulting from rising foreign outsourcing between 1987 and 2005, and then explore the effect of foreign outsourcing on employment in US manufacturing industries for the period 1990 to 2005 using a regression analysis of industry data.
    Date: 2011
  13. By: Amanda Carmignani (Banca d'Italia); Francesco Bripi (Banca d'Italia); Raffaela Giordano (Banca d'Italia)
    Abstract: This paper provides a survey of a number of studies conducted in recent years, above all at the Bank of Italy, aiming at assessing the quality and the efficiency of public services in Italy. We consider services provided by the central government (education and civil justice), regional governments (health) and municipalities (local public transportation, waste disposal, water and gas supply, and childcare). The analysis shows in general that Italy lags behind noticeably compared with other countries and there are large regional differences in terms of both quality and efficiency, regardless of the level of government providing the service. The lags seem to be attributable, depending on the case, to agents’ incentives, citizens’ behaviour and the regulation. Furthermore, the analysis emphasizes the need for more information to enhance our understanding of the problems and improve the effectiveness of action taken to counter them.
    Keywords: public services, efficiency, decentralization
    JEL: H50 H75 H76
    Date: 2011–01
  14. By: Cecilia Durán (Asesoría Política y Comercial, Ministerio de Economía y Finanzas, Uruguay.); Natalia Ferreira-Coimbra (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: This paper aims to identify the productive sectors that can be isolated from international competition, analyzing the impact on productivity arising from a trade liberalization process. We focused on the case of Uruguay and select a basket of goods that show signs of not being competitive on a non-national scale and, at the same time, have a protection tool that takes the form of non-tariff barriers. In turn, we analyze the effects of protection on sector productivity through a difference-in-difference approach, finding that domestic protection in a context of economic liberalization has a negative impact on firms' productivity. Finally, a quick analysis from the political economy reveals that there are winners and losers in the process of trade liberalization. This makes the exclusion of sensitive sectors a viable mechanism for an opening that otherwise would not be a political equilibrium.
    Keywords: trade protection, non–tariff barriers, productivity, difference in–difference model
    JEL: F13
    Date: 2010–12
  15. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: Due to the fact that norms govern individual behavior, which in turn it is related to the environmental behaviour, this study tries to establish a link between human behavior (in terms of cultural values) and the environment. With the use of robust frontiers this paper constructs countries’ environmental efficiency ratios. Then it conditions these ratios with countries’ cultural values in order to capture their effect on the calculated environmental efficiency measures. The empirical results of the conditional and unconditional robust nonparametric frontiers of a sample of 17 OECD countries (for the census years of 1980, 1990 and 2000) reveal that countries’ national culture values have changed over the years from a neutral posture towards the enhancement of countries’ environmental efficiency. In addition, the results indicate that there is still much work to be done from countries’ environmental policy makers for the enhancement of an efficient environmental culture.
    Keywords: National culture; Environmental Efficiency; Robust Estimators
    JEL: Q50 Q00 C67 C60
    Date: 2011
  16. By: Raffaela Giordano (Bank of Italy); Pietro Tommasino (Bank of Italy)
    Abstract: The capability of a country's public sector to provide high-quality goods and services in a cost-effective way is crucial to fostering long-term growth. In this paper we study the determinants of public service efficiency (PSE) and in particular the role of citizens' political values. Indeed, we argue that citizens' willingness to invest time and effort monitoring public affairs is necessary if policy-makers are to be held accountable for what they do and deterred from wasting public resources. Contrary to other papers, our empirical analysis exploits within-country variation, therefore reducing the risk of omitted variable bias and implicitly controlling for differences in formal institutions. First, we compute PSE measures for several public services (namely education, civil justice, healthcare, childcare and waste disposal) for the 103 Italian provinces; then we show that a higher degree of political engagement increases PSE. This remains true even after controlling for the possible endogeneity of political culture. In our analysis, values specifically related to the political sphere are kept distinct from generically pro-social values. Our results suggest that the latter have no independent impact on PSE.
    Keywords: public spending, efficiency, culture
    JEL: C14 H50 H77 Z13
    Date: 2011–01
  17. By: Jordão, Gustavo A.; Moura, Marcelo L.
    Date: 2011–10

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