nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2011‒04‒02
nine papers chosen by
Angelo Zago
University of Verona

  1. Aggregation Issues in the Estimation of Linear Programming Productivity Measures By Shaik, Saleem; Mishra, Ashok; Atwood, Joseph
  2. Temporary job protection and productivity growth in EU economies By Mirella Damiani; Fabrizio Pompei; Andrea Ricci
  3. The Transatlantic Productivity Gap: Is R&D the Main Culprit? By Ortega-Argilés, Raquel; Piva, Mariacristina; Vivarelli, Marco
  4. Human capital and productivity By Angel de la Fuente
  5. Productivity of Banks and its Impact on the Capital Investments of Client Firms By MIYAKAWA Daisuke; INUI Tomohiko; SHOJI Keishi
  6. Structural development accounting By Gino Gancia; Andreas Müller; Fabrizio Zilibotti
  7. Agglomeration or Selection? The Case of the Japanese Silk-Reeling Clusters, 1908-1915 By Arimoto, Yutaka; Nakajima, Kentaro; Okazaki, Tetsuji
  8. Is Public Investment Productive in the Argentine Case? A Single Break Unit Root and Cointegration Analysis, 1960-2007 By Miguel Ramirez
  9. Bank Ownership and the Effects of Financial Liberalization: Evidence from India By Sanjaya Panth; Poonam Gupta; Kalpana Kochhar

  1. By: Shaik, Saleem; Mishra, Ashok; Atwood, Joseph
    Abstract: This paper demonstrates the sensitivity of the linear programming approach in the estimation of productivity measures in the primal framework using Malmquist productivity index and Malmquist total factor productivity index models. Specifically, the sensitivity of productivity measure to the number of constraints (level of dis-aggregation) and imposition of returns to scale constraints of linear programing is evaluated. Further, the shadow or dual values are recovered from the linear program and compared to the market prices used in the ideal Fisher index approach to illustrate sensitivity. Empirical application to U.S. state-level time series data from 1960-2004 reveal productivity change decreases with increases in the number of constraints. Further, the input and output shadow or dual values are skewed, leading to the difference in the productivity measures due to aggregation.
    Keywords: Aggregation, Share-weights, single and multiple output and input, Malmquist productivity index, Malmquist total factor productivity index, Agribusiness, Production Economics,
    Date: 2011–03
    URL: http://d.repec.org/n?u=RePEc:ags:nddaae:101783&r=eff
  2. By: Mirella Damiani; Fabrizio Pompei; Andrea Ricci
    Abstract: The present study examines cross-national and sectoral differences in Total Factor Productivity (TFP) in fourteen European countries and ten sectors from 1995 to 2007. The main aim is to ascertain the role of employment protection of temporary contracts on TFP by estimating their effects with a “difference-in-difference” approach. Results show that deregulation of temporary contracts negatively influences the growth rates of TFP in European economies and that, within sectoral analysis, the role of this liberalisation is greater in industries where firms are more used to opening short-term positions. By contrast, in our observation period, restrictions on regular jobs do not cause significant effects on TFP, whereas limited regulation of product markets and higher R&D expenses positively affect efficiency growth.
    Keywords: productivity, labour regulation.
    JEL: O40 O43 O47 J58
    Date: 2011–03–23
    URL: http://d.repec.org/n?u=RePEc:pia:wpaper:87/2011&r=eff
  3. By: Ortega-Argilés, Raquel (European Commission); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore)
    Abstract: The literature has pointed to different causes to explain the productivity gap between Europe and United States in the last decades. This paper tests the hypothesis that the lower European productivity performance in comparison with the US can be explained not only by a lower level of corporate R&D investment, but also by a lower capacity to translate R&D investment into productivity gains. The proposed microeconometric estimates are based on a unique longitudinal database covering the period 1990-2008 and comprising 1,809 US and European companies for a total of 16,079 observations. Consistent with previous literature, we find robust evidence of a significant impact of R&D on productivity; however – using different estimation techniques – the R&D coefficients for the US firms always turn out to be significantly higher. To see to what extent these transatlantic differences may be related to the different sectoral structures in the US and the EU, we differentiated the analysis by sectors. The result is that both in manufacturing, services and high-tech sectors US firms are more efficient in translating their R&D investments into productivity increases.
    Keywords: R&D, productivity, embodied technological change, US, EU
    JEL: O33
    Date: 2011–03
    URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp5586&r=eff
  4. By: Angel de la Fuente
    Abstract: This paper surveys the empirical literature on human capital and productivity and summarizes the results of my own work on the subject. On balance, the available evidence suggests that investment in education has a positive, significant and sizable effect on productivity growth.According to my estimates, moreover, the social returns to investment in human capital are higher than those on physical capital in most EU countries and in many regions of Spain.
    Keywords: human capital, productivity, growth, measurement error JEL Classification: O40, I20, O30, C19.
    Date: 2011–02
    URL: http://d.repec.org/n?u=RePEc:bbv:wpaper:1103&r=eff
  5. By: MIYAKAWA Daisuke; INUI Tomohiko; SHOJI Keishi
    Abstract: This paper proposes one measure for the productivity of banks and studies how it affects the sensitivity of a client firm's capital investment with respect to investment opportunity. As a direct measure for the productivity of banks, we employ the risk-adjusted profit of an individual bank, which is considered as output in a modified version of the FISIM (Financial Intermediation Services Indirectly Measured) concept, per its operating cost. We combine such productivity panel-data with bank and firm characteristics as well as the loan relationship data between Japanese listed companies and banks over the past three decades. The panel estimations for an extended investment equation based on Q-theory show, in a statistically and economically significant manner, that firms under cash flow constraints—as compared to those not—are more sensitive to capital investment opportunities, provided that these firms hold close relationships with a high performance bank. These results imply that it is necessary to relate firm performances not only to the discrete characteristics of banks, e.g., relations with the main bank, as in the extant literature, but to the continuously measured characteristics of the banks having relationships with the firms.
    Date: 2011–03
    URL: http://d.repec.org/n?u=RePEc:eti:dpaper:11016&r=eff
  6. By: Gino Gancia; Andreas Müller; Fabrizio Zilibotti
    Abstract: We construct and estimate a unifi…ed model combining three of the main sources of cross-country income disparities: differences in factor endowments, barriers to technology adoption and the inappropriateness of frontier technologies to local conditions. The key components are different types of workers, distortions to capital accumulation, directed technical change, costly adoption and spillovers from the world technology frontier. Despite its parsimonious parametrization, our empirical model provides a good fi…t of GDP data for up to 86 countries in 1970 and 122 countries in 2000. Removing barriers to technology adoption would increase the output per worker of the average non-OECD country relative to the US from 0.19 to 0.61, while increasing skill premia in all countries. Removing barriers to trade in goods amplifi…es income disparities, induces skill-biased technology adoption and increases skill premia in the majority of countries. These results are reverted if trade liberalization is coupled with international IPR protection.
    Keywords: Directed technology adoption, development accounting, distance to frontier, inappropriate technologies, skill-biased technical change, productivity, TFP differences
    JEL: F43 O11 O31 O33 O38 O41 O43 O47
    Date: 2011–03
    URL: http://d.repec.org/n?u=RePEc:zur:econwp:010&r=eff
  7. By: Arimoto, Yutaka; Nakajima, Kentaro; Okazaki, Tetsuji
    Abstract: We examine two sources of productivity improvement in the specialized industrial clusters of the early twentieth century Japanese silk-reeling industry. Agglomeration improves the productivity of each plant through positive externalities, shifting plant-level productivity distribution to the right. Selection expels less productive plants through competition, truncating distribution on the left. We find no evidence confirming a right shift in the distribution in clusters or that agglomeration promotes faster productivity growth. Rather, the distribution in clusters was severely left truncated, even for younger plants. These findings imply that the plant-selection effect was the source of higher productivity in the Japanese silk-reeling clusters.
    Keywords: Economic geography, Heterogenous firms, Industrial clusters, Productivity, R12, O18
    JEL: L10
    Date: 2011–03
    URL: http://d.repec.org/n?u=RePEc:hit:hitcei:2010-11&r=eff
  8. By: Miguel Ramirez (Department of Economics, Trinity College)
    Abstract: This paper addresses the important question of whether public investment spending on economic infrastructure enhances economic growth and labor productivity in Argentina. Following the lead of the endogenous growth literature, it presents a simple modified production function that explicitly includes the positive or negative externality effects generated by public investment. The paper estimates a dynamic labor productivity function for the 1960-2007 period that incorporates the impact of public and private investment spending and the labor force (rather than the rate of population growth). Single break (Zivot-Andrews) unit root and cointegration analysis suggest that (lagged) increases in public investment spending on economic infrastructureBas opposed to overall public investment spendingB have a positive and significant effect on the rate of labor productivity growth. In addition, the model is estimated for a shorter period (1970-2007) to capture the impact of foreign direct investment. The estimates suggest that foreign direct investment spending has a lagged positive and significant impact on labor productivity growth, while increases in the labor force have a negative effect . Thus, the findings call into question the politically expedient policy in many Latin American countries, including Argentina during the 1990s and early 2000s, of disproportionately reducing public capital expenditures to meet reductions in the fiscal deficit as a proportion of GDP.
    Keywords: Public investment, labor productivity, Argentina, single-break unit root, cointegration
    JEL: C22 O10 O40 O50
    Date: 2011–03
    URL: http://d.repec.org/n?u=RePEc:tri:wpaper:1101&r=eff
  9. By: Sanjaya Panth; Poonam Gupta; Kalpana Kochhar
    Abstract: Do financial sector reforms necessarily result in expansion of credit to the private sector? How does bank ownership affect the availability of credit to the private sector? Empirical evidence is somewhat mixed on these issues. We use the Indian experience with liberalization of the financial sector to inform this debate. Using bank-level data from 1991-2007, we ask whether public and private banks deployed resources freed up by reduced state preemption to increase credit to the private sector. We find that even after liberalization, public banks allocated a larger share of their assets to government securities than did private banks. Crucially, we also find that public banks were more responsive in allocating relatively more resources to finance the fiscal deficit even during periods when state pre-emption (measured in terms of the requirement to hold government securities as a share of assets) formally declined. These findings suggest that in developing countries, where alternative channels of financing may be limited, government ownership of banks, combined with high fiscal deficits, may limit the gains from financial liberalization.
    Keywords: Banks , Credit expansion , Financial sector , India , Private sector , Public enterprises ,
    Date: 2011–03–08
    URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:11/50&r=eff

This nep-eff issue is ©2011 by Angelo Zago. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.