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on Efficiency and Productivity |
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Issue of 2011‒06‒25
fifteen papers chosen by |
| By: | Sharma, Chandan |
| Abstract: | Recent researches for developing countries suggest knowledge generating activates is no silver bullet for productivity growth. In this context, this paper examines the impact of R&D activities on firms’ performance for the Indian pharmaceutical industry by utilizing the data of the post reform period (1994-2006). The empirical analysis is performed in two stages. In first stage, we examine the relative productivity performance of R&D vis-à-vis non- R&D. Subsequently, we construct two empirical frameworks, namely, growth accounting and production function. Results of analysis indicate that R&D firms have productivity edge over non- R&D firms. Regression results based on the growth accounting framework suggest that R&D intensity has a positive and significant effect (15%) on TFP. The results also confirm that the performance of foreign firms operating in the industry is more sensitive towards R&D than the local firms. Furthermore, the estimation results of the production function approach indicate that the output elasticity to R&D capital varies from 10% to 13%. Therefore, we support the argument that ‘manna from heaven’ impact is large and significant. |
| Keywords: | Productivity; R&D; Indian Pharmaceutical |
| JEL: | D24 O3 |
| Date: | 2011–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31681&r=eff |
| By: | Michel, Bernhard (Federal Planning Bureau, Belgium); Rycx, Francois (Free University of Brussels) |
| Abstract: | Offshoring is generally believed to be productivity-enhancing and this belief is underpinned by economic theory. This article contributes to the growing literature that tests empirically whether offshoring does indeed help to improve productivity. Estimating the impact of materials and business services offshoring on productivity growth with industry-level data for Belgium over the period 1995-2004, we examine this issue separately for manufacturing and market services. The results show that there is no productivity effect of materials offshoring, while business services offshoring leads to productivity gains in manufacturing. In addition, this is the first article to investigate the possibility of spillovers from offshoring. Productivity gains from offshoring in one industry may feed through to other industries that purchase its output for intermediate use if, due to offshoring, the user value exceeds the price of the output. There is only scarce evidence of positive spillovers from materials offshoring in manufacturing in the data, which suggests that most firms effectively manage to internalise all efficiency gains from offshoring. |
| Keywords: | offshoring, productivity, spillovers, manufacturing and services, gmm |
| JEL: | F0 O0 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5768&r=eff |
| By: | Bernadette Biatour; Michel Dumont; Chantal Kegels |
| Abstract: | In this Working Paper the impact of potential determinants of total factor productivity, i.e. the part of output that cannot be explained by the quantity of production factors, is estimated for Belgium using industry-level data for the period 1988-2007. |
| JEL: | C82 D24 F43 O47 |
| Date: | 2011–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:fpb:wpaper:1107&r=eff |
| By: | Jan Hanousek; Evžen Kočenda (Osteuropa-Institut, Regensburg (Institut for East European Studies)); Michal Mašika |
| Abstract: | In this paper we analyze the evolution of firm financial efficiency in the Czech Repub-lic. Using a large panel of more than 400,000 Czech firm/years we study whether firms fully utilize their resources, how firm financial efficiency evolves over time, and how firm financial efficiency is determined by ownership structure. We employ a panel ver-sion of a stochastic production frontier model for the period 1996–2007 with time-invariant efficiency. We differentiate among various degrees of ownership concentra-tion and their domestic or foreign origin. In a two-stage set-up we estimate the degree of firm inefficiency and then we estimate the effect of ownership structure on the distance from the efficiency frontier. Our results support the hypothesis that concentration and foreign ownership are positively related to financial efficiency. |
| Keywords: | financial efficiency, ownership structure, firms, panel data, stochastic frontier |
| JEL: | C33 D24 G32 L60 L80 M21 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:300&r=eff |
| By: | Bernhard Klaus Michel |
| Abstract: | Offshoring is generally believed to be productivity-enhancing and this belief is underpinned by economic theory. This article contributes to the growing literature that tests empirically whether offshoring does indeed help to improve productivity. Estimating the impact of materials and business services offshoring on productivity growth with industry-level data for Belgium over the period 1995-2004, we investigate this issue separately for manufacturing and market services. The results show that there is no productivity effect of materials offshoring, while business services offshoring leads to productivity gains especially in manufacturing. In addition, we look at the possibility of rent spillovers from offshoring. Productivity gains from offshoring in one industry may feed through to other industries that purchase its output for intermediate use if, due to offshoring, the user value exceeds the price of the output. The lack of evidence of such rent spillovers from either materials or business services offshoring in the data leads us to conclude that firms manage to internalise all efficiency gains from offshoring. |
| JEL: | F14 F43 O33 O47 |
| Date: | 2011–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:fpb:wpaper:1105&r=eff |
| By: | Colin Davis (Institute for International Education, Doshisha University); Ken-ichi Hashimoto (Graduate School of Economics, Kobe University) |
| Abstract: | This paper investigates the relationship between geographic patterns of industrial activity and endogenous growth in a two region model of trade that exhibits no scale effect. The in-house process innovation of manufacturing firms drives productivity growth and is closely associated with firm-level scales of production and relative levels of accessible technical knowledge. Focusing on long-run industry shares and a cross-region productivity gap, we find that dispersed equilibria with positive industry shares for both regions always produce higher growth rates than core-periphery equilibria with all industry locating in one region. Moreover, the highest growth rate arises in a symmetric steady state that features no productivity gap and equal shares of industry leading to the conclusion that the geographic concentration of industry has a negative impact on overall growth. Convergence towards a dispersed equilibrium, however, is contingent on the levels of inter-regional transport costs and knowledge dispersion. Finally, we explore the implications of greater economic integration arising from reduced transport costs and greater knowledge dispersion for patterns of industry and productivity, and for regional welfare levels within a dispersed equilibrium. |
| Keywords: | Industry Concentration, Industry Share, Productivity Gap, Productivity Growth, Scale Effect |
| JEL: | F43 O30 O40 R12 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1106&r=eff |
| By: | Margaret S. McMillan; Dani Rodrik |
| Abstract: | Large gaps in labor productivity between the traditional and modern parts of the economy are a fundamental reality of developing societies. In this paper, we document these gaps, and emphasize that labor flows from low-productivity activities to high-productivity activities are a key driver of development. Our results show that since 1990 structural change has been growth reducing in both Africa and Latin America, with the most striking changes taking place in Latin America. The bulk of the difference between these countries’ productivity performance and that of Asia is accounted for by differences in the pattern of structural change – with labor moving from low- to high-productivity sectors in Asia, but in the opposite direction in Latin America and Africa. In our empirical work, we identify three factors that help determine whether (and the extent to which) structural change contributes to overall productivity growth. In countries with a relatively large share of natural resources in exports, structural change has typically been growth reducing. Even though these “enclave” sectors usually operate at very high productivity, they cannot absorb the surplus labor from agriculture. By contrast, competitive or undervalued exchange rates and labor market flexibility have contributed to growth enhancing structural change. |
| JEL: | O1 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17143&r=eff |
| By: | Mélanie Volral; François Rycx; Benoît Mahy |
| Abstract: | This article puts the relationship between wage dispersion and firm productivity to an updated test, taking advantage of access to detailed Belgian linked employer-employee panel data. Controlling for simultaneity issues, time-invariant workplace characteristics and dynamics in the adjustment process of productivity, empirical results reveal the existence of a positive impact from conditional intra-firm wage dispersion to firm productivity (measured by the average value added per hour worked), which however decreases for higher dispersion levels. Findings thus suggest that the incentive effect of wage dispersion, predicted for instance by the ‘tournament’ model, dominates ‘fairness’ and/or ‘sabotage’ considerations. Further results reveal that the influence of wage dispersion on firm productivity is stronger among firms with a larger proportion of highly skilled workers but does not depend on whether wages are collectively renegotiated at the firm level. |
| Keywords: | Wage Dispersion; Labour Productivity; Personnel Economics; Matched Employer-Employee Panel Data. |
| JEL: | J31 J24 M50 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:2013/89489&r=eff |
| By: | Yao Tang (Department of Economics, Bowdoin College) |
| Abstract: | Although real currency appreciations pose direct difficulties for exporters and import-competing firms as they will face more intense competition, is it possible that such competition spurs firms to improve productivity? To answer this question, the paper first constructs a theoretical model to show how the competitive pressures of currency appreciations induce firms to improve productivity by adopting new technologies. In addition, the model predicts that during appreciations there will be a positive relation between market concentration and improvements in productivity for industries highly exposed to trade, because the marginal benefits of productivity improvement will be bigger for firms with a larger market share. The paper then examines Canadian manufacturing data from 1997 to 2006, and finds evidence consistent with model predictions. I find that growth rates of labor productivity were on average higher during the Canadian dollar appreciation between 2002 and 2006, after controlling for industry characteristics. Within the group of highly traded Canadian industries, the more concentrated ones experienced larger growth in labor productivity. |
| Keywords: | exchange rate appreciation, productivity, technology adoption |
| JEL: | F3 F4 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:bwd:wpaper:2&r=eff |
| By: | John Pawley (UWA Business School, The University of Western Australia); Ernst Juerg Weber (UWA Business School, The University of Western Australia) |
| Abstract: | The vintage model of capital accumulation predicts that technical progress depends on the installation of new capital equipment. In this paper it is found that investment raises labor productivity in the G7 countries and Australia. This finding implies that the decline in investment during the global financial crisis will have a long lasting detrimental effect on labor productivity and hence wages. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:11-10&r=eff |
| By: | Colin Davis (Institute for International Education, Doshisha University); Ken-ichi Hashimoto (Graduate School of Economics, Kobe University) |
| Abstract: | This paper investigates the relationship between geographic patterns of economic activity and productivity growth in a two region model of trade and endogenous growth without scale effects. At the core of the model is the production and in-house innovation activities of manufacturing firms and, in a world of transport costs, imperfect knowledge dispersion and perfect capital mobility, these activities are located independently in the region that provides the lowest associated cost. In contrast to the existing literature, we remove scale effects by shifting the focus from aggregate research and development activity to innovation at the level of individual product lines and find that although industry concentration raises the level of product variety, it reduces the rate of productivity growth so that the pace of economic growth is highest when industry is equally dispersed across regions. We also study the effects of greater economic integration between regions and find that increases in the freeness of trade and the level of knowledge dispersion both have negative effects on productivity growth while raising the level of product variety. These opposing effects for growth and product variety lead to mixed results for the impacts of economic integration on regional welfare. |
| Keywords: | Industry Concentration, Industry Share, Productivity Growth, Scale Effect |
| JEL: | F43 O30 O40 R12 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1107&r=eff |
| By: | Rentocchini, Francesco; Manjarrés-Henrìquez, Liney; D'Este, Pablo; Grimaldi, Rosa |
| Abstract: | This paper investigates whether engagement in consulting activities has a significant impact on the research performance of academic scientists. The study relies on a sample of 2678 individual faculty, from five Spanish universities, who have been recipients of publicly funded grants or have been principal investigators in activities contracted by external agents over the period 1999-2004. By implementing a propensity score matching estimator method, we show that engaging in consulting activities has an overall negative impact on the average number of ISI-publications. However, the effect of consulting on the scientific productivity of academic scientists depends on the scientific fields and the intensity of engagement in consulting activities. Academic consulting is found to have a negative impact in the fields of ?Natural and Exact Sciences? and ?Engineering?, but not in the case of ?Social Sciences and Humanities?. When the intensity of consulting activity is taken into account at the discipline level, engaging in consulting activities has an overall negative impact on scientific productivity only for high levels of involvement in consulting activities, but not for moderate ones. |
| Keywords: | Academic consulting; Economics of science; Technology transfer |
| JEL: | O31 O32 O33 Z19 L31 |
| Date: | 2011–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:ing:wpaper:201103&r=eff |
| By: | Rao, B. Bhaskara; Shankar, Sriram |
| Abstract: | This paper estimates with the Bayesian methods a CES production function for Singapore for 1960-2009. It is found that the elasticity of substitution is 0.6, technical progress is labour augmenting and the steady state growth rate of Singapore is about 1.8%. |
| Keywords: | Bayesian methods; CES production function and Technical progress |
| JEL: | D24 C11 |
| Date: | 2011–06–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31601&r=eff |
| By: | Silvia Fabiani (Banca d'Italia); Roberto Sabbatini (Banca d'Italia) |
| Abstract: | The study analyses wage adjustment by Italian firms on the basis of information collected through a coordinated survey carried out in 17 European countries in two waves (at the beginning of 2008 and in the summer of 2009). The pre-crisis evidence indicates that the degree of wage rigidity is relatively high in Italy: wages remain unchanged on average for about two years, against an average of just over one year in the other countries. Italian firms hardly cut nominal wages, reflecting not only institutional constraints, but also an attempt to avoid a negative impact on their productivity. During the economic recession the firms most severely affected by the fall in demand reduced their costs mainly by adjusting the input of labour (in terms of both employment and hours worked). A higher incidence of skilled and white-collar workers was accompanied by greater recourse to strategies aimed at containing non-labour costs, presumably in order to preserve the human capital accumulated. |
| Keywords: | survey, wage rigidity, economic recession |
| JEL: | D21 E30 J31 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_94_11&r=eff |
| By: | Wagner, Joachim (Leuphana University Lüneburg) |
| Abstract: | This paper documents for the first time the relationship between profitability and three types of international trade activities – exports, imports and two-way trade. It uses unique new representative data for manufacturing enterprises from Germany, one of the leading actors on the world market for goods, that merge information from surveys performed by the Statistical Offices and administrative data collected by the Tax Authorities. Descriptive statistics and regression analysis (with and without controlling for unobserved firm heterogeneity and the role of outliers) point to the absence of any statistically significant and economically large effects of trade activities on profits. This demonstrates that any productivity advantages of trading firms are eaten up by extra costs related to selling and buying on foreign markets. |
| Keywords: | exports, imports, profitability |
| JEL: | F14 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5766&r=eff |