New Economics Papers
on Efficiency and Productivity
Issue of 2011‒05‒07
fourteen papers chosen by

  1. Measuring Technical Efficiency of Dairy Farms with Imprecise Data: A Fuzzy Data Envelopment Analysis Approach By Mugera, Amin
  2. The Dynamics of Labor Productivity in Swiss Universities By Thomas Bolli; Mehdi Farsi
  3. Industry-Science Connections in Agriculture: Do public science collaborations and knowledge flows contribute to firm-level agricultural research productivity? By Toole, Andrew A; King, John L
  4. Efficiency Convergence Properties of Indonesian Banks 1992-2007 By Zhang, Tiantian; Matthews, Kent
  5. Sub-therapeutic Antibiotics and Impacts on U.S. Hog Farms By McBride, William; Key, Nigel; Mathews, Kenneth
  6. Innovation Activities and Competitiveness: Empirical Evidence on the Behaviour of Firms in the New EU Member States and Candidate Countries By Iraj Hashi; Nebojsa Stojcic; Shqiponja Telhaj
  7. Absorptive capacity, the allocation of scientists, and firms' research productivity By Andrea, Canidio
  8. LABOR MOBILITY AND SPATIAL DENSITY By Andersson, Martin; Thulin, Per
  9. The Heterogeneous Economic Consequences of Works Council Relations By Christian Pfeifer
  10. The Impact of Pollution on Worker Productivity By Joshua S. Graff Zivin; Matthew J. Neidell
  11. Measuring the Impact of the Environmental Quality Incentives Program (EQIP) on Irrigation Efficiency and Water Conservation By Wallander, Steven; Hand, Michael S.
  12. Spatial Dimensions of US Crop Selection: Recent Responses to Markets and Policy By Motamed, Mesbah; McPhail, Lihong
  13. A decomposition of China's productivity through calibration of an endogenous growth model By Luckstead, Jeff; Choi, Seung Mo; Devadoss, Stephen; Mittelhammer, Ron C.
  14. Effects of Training on Employee Suggestions and Promotions in an Internal Labor Market By Christian Pfeifer; Simon Janssen; Philip Yang; Uschi Backes-Gellner

  1. By: Mugera, Amin
    Abstract: This article integrates fuzzy set theory in Data Envelopment Analysis (DEA) framework to compute technical efficiency scores when input and output data are imprecise. The underlying assumption in convectional DEA is that inputs and outputs data are measured with precision. However, production agriculture takes place in an uncertain environment and, in some situations, input and output data may be imprecise. We present an approach of measuring efficiency when data is known to lie within specified intervals and empirically illustrate this approach using a group of 34 dairy producers in Pennsylvania. Compared to the convectional DEA scores that are point estimates, the computed fuzzy efficiency scores allow the decision maker to trace the performance of a decision-making unit at different possibility levels.
    Keywords: fuzzy set theory, Data Envelopment Analysis, membership function, α-cut level, technical efficiency, Farm Management, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, Risk and Uncertainty, D24, Q12, C02, C44, C61,
    Date: 2011
  2. By: Thomas Bolli (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Mehdi Farsi (CEPE, ETH Zurich, Switzerland)
    Abstract: This paper analyzes the labor productivity of Swiss university departments between 1995 and 2007. Using a parametric input distance function we estimate and decompose the Malmquist productivity indexes in line with Fuentes et al. (2001) and Atkinson et al. (2003). By contrast to those studies, this paper proposes a panel data specification to account for unobserved heterogeneity across production units. The adopted model is a mixed-effects model with department fixed effects as well as random coefficients for time variables. We also use an autoregressive stochastic term to model inefficiency shocks while allowing for gradual improvement of persistent inefficiencies. The results indicate a negative trend in overall productivity measured by Malmquist index, particularly after 2002, with an average productivity decline of about one percent per year. A major part of this productivity decline coincides with the recent developments in Switzerland’s higher education system following the adoption of the Bologna agreement. However, the results do not provide any evidence of statistically significant relationship between productivity and reforms. Our decomposition analysis suggests that the observed productivity decline could be contributed to technical regress but also to a rising inefficiency with a relatively high level of persistence. The results also point to various patterns across different fields. In particular, economics and business departments and law schools show the lowest performance, whereas science departments stand out as an exception with productivity improvement.
    Keywords: Swiss Universities, Parametric Distance Function, Heterogeneity, Malmquist Index, Decomposition, Autocorrelation
    JEL: C23 D24 I23 J24
    Date: 2011–04
  3. By: Toole, Andrew A; King, John L
    Abstract: Prior research identifies a direct positive link between the stock of public scientific knowledge and agricultural productivity; however, an indirect contribution to agricultural productivity is also possible when this stock facilitates private sector invention. This study examines how âconnectednessâ between the stock of public scientific knowledge and private firms influences firm-level research productivity. Bibliographic information identifies the nature and degree to which firms use public agricultural science through citations and collaborations on scientific papers. Fixed effects models show that greater citations and collaborations with university researchers are associated with greater agricultural research productivity.
    Keywords: public science, research productivity, patents, citations, collaboration, R&D, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Q16, O31,
    Date: 2011–04–27
  4. By: Zhang, Tiantian (Cardiff Business School); Matthews, Kent (Cardiff Business School)
    Abstract: This paper examines the convergence properties of cost efficiency for Indonesian banks for the period 1992-2007. It employs the Simar and Wilson's (2007) two stage semi-parametric double bootstrap DEA procedure to estimate cost efficiency. Using panel data estimation, the paper examines β-convergence and σ-convergence, to test the speed at which Indonesian banks are converging, towards the best practice and country average. We find evidence that in general the post-crisis structural reform process improved the average level of efficiency and improved the distribution of efficiency across banks significantly. The Asian financial crisis and the structural reform had the effect of slowing the adjustment speed of bank efficiency.
    Keywords: Banks; Efficiency; Indonesia; Convergence
    JEL: G21 G28
    Date: 2011–04
  5. By: McBride, William; Key, Nigel; Mathews, Kenneth
    Abstract: Antimicrobial drugs are fed to hogs at sub-therapeutic levels to prevent disease and promote growth. However, there is concern that the presence of antimicrobial drugs in hog feed is a factor promoting the development of antimicrobial drug-resistant bacteria. This study describes the extent to which antibiotics are used in hog production and how this changed between 2004 and 2009. This study also uses a sample-selection model to examine the impact that use has on the productivity of U.S. hog operations. Using hog producer data from 2004, the analysis did not find a relationship between productivity and sub-therapeutic antibiotics fed during finishing, but productivity was significantly improved when fed to nursery pigs. These results are being evaluated using similar data from 2009.
    Keywords: antibiotics, hogs, sample selection, Farm Management, Production Economics,
    Date: 2011–07–24
  6. By: Iraj Hashi; Nebojsa Stojcic; Shqiponja Telhaj
    Abstract: This paper aims to explore the factors influencing the ability of firms to compete in globalised markets. The Austrian and evolutionary economics and the endogeneous growth literature highlight the role of innovation activities in enabling firms to compete more effectively - and expand their market share. On the basis of these theories, and using a large panel of firms from several Central and East European Countries (CEECs), this paper attempts to identify the factors and forces which determine the ability of firms to compete in conditions of transition. The competitiveness of firms, measured by their market share, is postulated to depend on indicators of firms' innovation behaviour such as improvements in cost-efficiency, labour productivity and investment in new machinery and equipment as well as characteristics of firms and their environment such as location, experience, technological intensity of their industries and the intensity of competition. To control for the dynamic nature of competitiveness and the potential endogeneity of its determinants, and to distinguish between short and long run effects of firm behaviour, a dynamic panel methodology is employed. The results indicate that the competitiveness of firms in transition economies is enhanced with improvements in their cost efficiency, productivity of labour, investment and their previous business experience while stronger competition has a negative impact on it.
    Keywords: competitiveness, restructuring, transition economies, market share, dynamic panel analysis
    JEL: O31
    Date: 2011–04
  7. By: Andrea, Canidio
    Abstract: Empirical evidence shows that R&D productivity decreases with firm size. I provide an explanation to this fact by developing a model of science production where heterogeneous researchers are endogenously allocated to different firms. The main assumption is that firms invest in research to increase their absorptive capacity: the ability to use and understand knowledge produced outside of the firm. Firms create absorptive capacity by building labs and hiring researchers in a competitive market. Because of externalities, firms underinvest in labs. More interestingly, researchers and labs are substitutes in the revenue function, even though they are complements in the research production function. As a consequence, the greater the investment in research, the lower the productivity of the researcher working for the firm. This generates a novel form of inefficiency: for any given investment, the allocation of researchers to firms is non optimal.
    Keywords: Knowledge, R&D Productivity, Organization of Scientific Research, Externality, Absorptive Capacity, Matching with Investment.
    JEL: D21 O38 O31 H23 L22
    Date: 2010–07
  8. By: Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Thulin, Per (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper focuses on a much cited but seldom measured micro-foundation for agglomerations: inter-firm labor mobility. Labor mobility has been advanced as a vehicle for knowledge flows and labor market efficiency, and is often maintained to be an important source of agglomeration economies. Based on matched employer-employee data, we estimate the influence that spatial employment density has on the probability of inter-firm job-switching, while controlling for ample attributes of each worker and employer. The rate of inter-firm labor mobility varies substantially across regions and we document a systematic and robust positive influence of density on the probability of job switching. The likelihood that such switching is intra-regional is significantly higher if the employees operate in denser regions, verifying that labor mobility (and thus the effects mediated by it) is indeed localized. Higher rates of inter-firm labor mobility appear as a likely mechanism behind the empirically verified productivity advantage of dense regions.
    Keywords: job-switching; inter-firm labor mobility; agglomeration economies; external economies; micro-foundations; density
    JEL: J61 J62 R11 R12
    Date: 2011–04–26
  9. By: Christian Pfeifer (Institute of Economics, Leuphana University Lueneburg, Germany)
    Abstract: I use a question about works council relations from the 2006 wave of the IAB Establishment panel to analyze the heterogeneous effects of works councils on productivity, wages, and profits. The results indicate that the effects differ significantly between works council relationship types in a systematic pattern. The overall findings are in line with productivity-enhancing and rent-sharing functions of works councils.
    Keywords: Codetermination; Firm performance; Industrial relations; Works councils
    JEL: J53 M54
    Date: 2011–04
  10. By: Joshua S. Graff Zivin; Matthew J. Neidell
    Abstract: Environmental protection is typically cast as a tax on the labor market and the economy in general. Since a large body of evidence links pollution with poor health, and health is an important part of human capital, efforts to reduce pollution could plausibly be viewed as an investment in human capital and thus a tool for promoting economic growth. While a handful of studies have documented the impacts of pollution on labor supply, this paper is the first to rigorously assess the less visible but likely more pervasive impacts on worker productivity. In particular, we exploit a novel panel dataset of daily farm worker output as recorded under piece rate contracts merged with data on environmental conditions to relate the plausibly exogenous daily variations in ozone with worker productivity. We find robust evidence that ozone levels well below federal air quality standards have a significant impact on productivity: a 10 ppb decrease in ozone concentrations increases worker productivity by 4.2 percent.
    JEL: I1 J3 Q5
    Date: 2011–04
  11. By: Wallander, Steven; Hand, Michael S.
    Abstract: Since the passage of the 1996 Farm Act, the Environmental Quality Incentives Program (EQIP) has provided over $10 billion in technology adoption subsidies. One of the national conservation priorities in EQIP is water conservation, but it is not known how participation in EQIP by irrigators affects water application rates and decisions to expand or reduce a farmâs irrigated acreage. Using a farm-level panel data set drawn from three national samples of irrigators taken in 1998, 2003, and 2008, this study provides the first national scale econometric estimates of the changes in water application rates and irrigated acreage that result when a farm receives EQIP payments. Due to a five-fold increase in EQIP funding following the 2002 farm bill, the change in EQIP participation between 2008 and earlier years is largely the result of an exogenous policy shock. A difference-in-differences estimator that exploits this change in EQIP funding and also controls for unobserved farm-specific variables, suggests that for the average farm participating in EQIP between 2004 and 2008, the EQIP payments may have reduced water application rates but also may have increased total water use and led to an expansion in irrigated acreage. However, since EQIP participation is voluntary, there may still be a need to correct for bias due to sample selection. A nearest neighbor matching estimator finds no evidence of any statistically significant effect of EQIP participation on technology adoption rates, water use, water application rates or acreages, which suggests that there is a high degree of self-selection into the program.
    Keywords: EQIP, irrigation efficiency, water conservation, difference-in-differences, matching estimator, Environmental Economics and Policy,
    Date: 2011
  12. By: Motamed, Mesbah; McPhail, Lihong
    Abstract: We explicitly measure corn acreage response to the biofuels boom from 2006 to 2010. Specifically, we use newly available micro-scale planting data over time to test whether corn cultivation intensifies in proportion to the proximity of ethanol processors. We control for the endogeneity of plant location to corn acreage by using transportation network data for instruments. Our results show that reducing the distance between a farm and an ethanol plant by one percent increases acreage in corn by 0.64% and reveal a price elasticity of supply of 0.47%. To our knowledge, this is the first study that measures changes in location and intensity of corn planting in response to incentives posed by the recent biofuels boom. The results can serve as a springboard for researchers and policy-makers concerned with crop diversity, environmental sustainability, and greenhouse gas emissions.
    Keywords: corn acreage, ethanol, panel data analysis, instrumental variables, Agricultural and Food Policy, Crop Production/Industries, Land Economics/Use, Q1, Q28, C33,
    Date: 2011
  13. By: Luckstead, Jeff; Choi, Seung Mo; Devadoss, Stephen; Mittelhammer, Ron C.
    Keywords: China, IST, human capital, International Development, o30,
    Date: 2011
  14. By: Christian Pfeifer (Institute of Economics, Leuphana University Lueneburg, Germany); Simon Janssen (University Zurich, Institute for Strategy and Business Economics, Switzerland); Philip Yang (Leibniz University Hannover, Institute of Labor Economics, Germany); Uschi Backes-Gellner (University Zurich, Institute for Strategy and Business Economics, Switzerland)
    Abstract: We evaluate the effects of employer-provided formal training on employee suggestions for productivity improvements and on promotions among male blue-collar workers. More than twenty years of personnel data of four entry cohorts in a German company allow us to address issues such as unobserved heterogeneity and the length of potential training effects. Our main finding is that workers have larger probabilities to make suggestions and to be promoted after they have received formal training. The effect on suggestions is however only short term. Promotion probabilities are largest directly after training but also seem to be affected in the long term.
    Keywords: Human capital; Insider econometrics; Productivity; Promotions; Training
    JEL: J24 M53
    Date: 2011–04

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