New Economics Papers
on Efficiency and Productivity
Issue of 2011‒07‒27
fifteen papers chosen by

  1. Knock-on effect of non-manufacturing regulation on manufacturing sectors efficiency and productivity By Fioramanti, Marco
  2. Imported intermediary inputs, R&D and Firm's Productivity: Evidence from Indian Manufacturing By Sharma, Chandan
  3. Analyzing the efficiency differences among basic health units in Sargodha District By Abbas, Touqeer; Awan, Masood Sarwar; Aslam, Muhammad Amir; Waqas, Muhammad
  4. Productivity effects of land rental markets in Ethiopia : Evidence from a matched tenant-landlord sample By Deininger, Klaus; Ali, Daniel Ayalew; Alemu, Tekie
  5. The Long-Run Relationship between Outward FDI and Total Factor Productivity: Evidence for Developing Countries By Herzer, Dierk
  6. Spillover and Competition Effects: Evidence from the Sub-Saharan African Banking Sector By Pohl, Birte
  7. "Assessing agglomeration economies in a spatial framework with endogenous regressors" By Michael J. Artis; Ernest Miguélez; Rosina Morenos
  8. Productive inefficiency in patriarchal family farms: evidence from Mali By Goetghebuer, Tatiana
  9. Yield Effects of Tissue Culture Bananas in Kenya: Accounting for Selection Bias and the Role of Complementary Inputs By Kabunga, Nassul S.; Dubois, Thomas; Qaim, Matin
  10. Firm Heterogeneity and Complex Offshoring Strategies: Evidence from Korean Firm-Level Data By Janghee Cho; Hyunbae Chun; Jung Hur
  11. Education spillovers in farm productivity: empirical evidence in rural India By Gille, Véronique
  12. Sectoral convergence in output per worker between Portuguese regions By Martinho, Vítor João Pereira Domingues
  13. Cost-saving or Cost-enhancing Mergers: the Impact of the Distribution of Roles in Oligopoly By Nicolas Le Pape; Kai Zhao
  14. Decomposition of ethnic heterogeneity on growth By Yamamura, Eiji
  15. Impact of the business environment on output and productivity in Africa By Bah, El-hadj M.; Fang, Lei

  1. By: Fioramanti, Marco
    Abstract: Since the mid of nineties European countries are registering an anemic growth of economic activity, in large part due to the dynamic of productivity. In 2010 the European Council adopted a new Agenda, Euro2020, which aim is to boost growth also improving European competitiveness. Regulation is one of the main factors influencing competitiveness. This paper focuses on the determinants of Total Factor Productivity (TFP) growth in 13 manufacturing sectors in a panel of 18 OECD countries from 1975 to 2007. Using the Stochastic Frontier Approach applied to the EU-KLEMS and OECD’s Regulation Impact Indicator database I found that, given the strong negative relationship between regulation and Technical Efficiency, which is one of the drivers of TFP, countries with still tight regulation in services could/should reduced it in order to improve their economic performance without detriment for public finances.
    Keywords: Total Factor Productivity; Technical Efficiency; Competition; Regulation; Stochastic Frontier.
    JEL: O47 C23 L59
    Date: 2011–07–14
  2. By: Sharma, Chandan
    Abstract: This paper examines dynamic as well as static effects of imported intermediary inputs and inhouse R&D on productivity growth using firm-level panel data for Indian technology-intensive manufacturing industries for the period 2000-2009. For this purpose, the present study adopts two empirical frameworks: production function and growth accounting method. Although we do have some comprehensible evidence to conclude that imported inputs have positive and significant impact on the productivity of firms, but the overall findings are rather mixed. Specifically, the results from the production function framework suggest that impact of imported intermediary goods on output is reasonably sizable. Surprisingly, however, the role of R&D activities under this framework is found to be insignificant across industries in various estimation specifications. On the other hand, the analysis based on the growth accounting model some yields positive results, which suggest that TFP of firms are closely linked with import and R&D activities. Firms that engage in these activities have 8% to 12% higher TFP than other firms across the industries. However, labor productivity is found to be insulated from these activities. --
    Keywords: imported intermediary,R&D,Firms' productivity
    JEL: D24 F10 O30
    Date: 2011
  3. By: Abbas, Touqeer; Awan, Masood Sarwar; Aslam, Muhammad Amir; Waqas, Muhammad
    Abstract: Pakistan has adequate infrastructure for health services delivery at primary level. The study aims to calculate the technical efficiency of Basic Health Units (BHUs) in Sargodha by using the Data Envelopment Analysis (DEA) with the choice of inputs and outputs being specific to BHUs operation. DEA model results reveals that the mean technical efficiency under, Constant Returns to Scale (CRS) and Variable Returns to Scale (VRS) was 0.719 and 0.807 while the mean scale efficiency was 0.88. Study exposed that 77 % BHUs were technically inefficient under CRS while 66 % BHUs were technically inefficient under VRS modal. Overall 76% BHUs were inefficient and destructing the infrastructure. Moreover, findings evidently point to adverse inefficiency of BHUs in health services delivery. Study concluded that existing high level of inefficiency in BHUs needs institutional fascination for scaling up BHUs to meet both regional as well international targets such as Millennium Development Goals (MDGs) and recommended such measures that may curb the waste.
    Keywords: Basic Health Units; Technical Efficiency; Data Envelopment Analysis; Pakistan
    JEL: I11 H51 I18 H75
    Date: 2011
  4. By: Deininger, Klaus; Ali, Daniel Ayalew; Alemu, Tekie
    Abstract: As countries increasingly strive to transform their economies from agriculture-based into a diversified one, land rental will become of greater importance. It will thus be critical to complement research on the efficiency of specific land rental arrangements -- such as sharecropping -- with an inquiry into the broader productivity impacts of the land rental market. Plot-level data for a matched landlord-tenant sample in an environment where sharecropping dominates allows this paper to explore both issues. The authors find that pure output sharing leads to significantly lower levels of efficiency that can be attenuated by monitoring while the inefficiency disappears if inputs are shared as well. Rentals transfer land to more productive producers but realization of this productivity advantage is prevented by the inefficiency of contractual arrangements, suggesting changes that would prompt adoption of different contractual arrangements could have significant benefits.
    Keywords: Labor Policies,Municipal Housing and Land,Economic Theory&Research,Land and Real Estate Development,Real Estate Development
    Date: 2011–07–01
  5. By: Herzer, Dierk
    Abstract: This paper examines the long-run relationship between outward foreign direct investment (FDI) and total factor productivity for a sample of 33 developing countries over the period 1980-2005. Using panel cointegration techniques, we find that: (i) outward FDI has, on average, a positive long-run effect on total factor productivity in developing countries, (ii) increased factor productivity is both consequence and a cause of increased outward FDI, and (iii) there are large differences in the long-run effects of outward FDI on total factor productivity across countries. Cross-sectional regressions indicate that these cross-country differences in the productivity effects of outward FDI are significantly negatively related to cross-country differences in labor market regulation, whereas there is no statistically significant association between the productivity effects of outward FDI and the level of human capital, the level of financial development, or the degree of trade openness in the home country. --
    Keywords: outward FDI,total factor productivity,developing countries,panel cointegration
    JEL: F21 O11 F23 C23
    Date: 2011
  6. By: Pohl, Birte
    Abstract: This paper examines the efficiency effects of foreign bank entry on domestic banks in sub-Saharan Africa during the period 1999-2006. Using a recently compiled dataset on foreign bank presence, the competition and spillover effects of North-South, regional and nonregional South-South banks are distinguished. The results show that the competitive pressure on domestic banks' net interest margins emanates only from regional South-South banks. There is evidence of spillover effects from North-South and regional South-South banks on domestic banks. As domestic banks invest in foreign technologies, their overhead costs increase in the short-run. Non-regional South-South banks seem to have little effect on the efficiency of domestic banks. --
    Keywords: Sub-Saharan Africa,efficiency,South-South banks,spillover
    JEL: F21 F23 F36
    Date: 2011
  7. By: Michael J. Artis (Department of Economics, University of Swansea); Ernest Miguélez (Faculty of Economics, University of Barcelona); Rosina Morenos (Faculty of Economics, University of Barcelona)
    Abstract: This paper is concerned with the influence of agglomeration economies on economic outcomes across British regions. The concentration of economic activity in one place can foster economic performance due to the reduction in transportation costs, the ready availability of customers and suppliers, and knowledge spillovers. However, the concentration of several types of intangible assets can boost productivity as well. Thus, using an interesting dataset which proxies regional productivity, we will assess the relative importance of agglomeration and other assets, controlling for endogeneity, spatial autocorrelation and heteroscedasticity at the same time. Our results suggest that agglomeration has a definite positive influence on productivity, although our estimates of its effect are dramatically reduced when spatial dependence and other hitherto omitted variables proxying intangible assets are controlled for.
    Keywords: Agglomeration economies, intangible assets, endogeneity, spatial autocorrelation, spatial HAC estimation. JEL classification:C21, J24, R10, R11, R12.
    Date: 2011–07
  8. By: Goetghebuer, Tatiana
    Abstract: In Mali, there exist various farm-cum-family structures, so that agricultural production occurs on plots controlled by different members of the household. In this paper, we want to lay emphasis on the under-researched differentials between collective and individual plots (attended by male or female farmer) in the context of extended family farms using input and output first hand data collected in the south-eastern part of Mali. First, we find that land yields are significantly larger on (male) private plots than on common plots with similar characteristics planted to the same crop in the same year after all appropriate controls have been included. And, second, we bring strong suggestive evidence that a moral hazard-in-team problem exists on the collective fields (yet only with regard to care-intensive crops) that could explain their relatively poor performance. --
    Keywords: Land productivity,family structure,moral-hazard-in-team problem,collective
    JEL: D13 D57 J12 O12 O13 Q12 Q15 R20
    Date: 2011
  9. By: Kabunga, Nassul S.; Dubois, Thomas; Qaim, Matin
    Abstract: We analyze yield effects of tissue culture (TC) banana technology in the Kenyan small farm sector, using recent survey data and an endogenous switching regression approach. TC banana plantlets, which are free from pests and diseases, have been introduced in East Africa since the late-1990s. While field experiments show significant yield advantages over traditional banana suckers, a rigorous assessment of impacts in farmers' fields is still outstanding. A comparison of mean yield levels between TC adopters and non-adopters in our sample shows no significant difference. However, we find a negative selection bias, indicating that farmers with lower than average yields are more likely to adopt TC. Controlling for this bias results in a positive and significant TC net yield gain of 7%. We also find that TC technology is more knowledgeintensive and more responsive to irrigation than traditional bananas. Simulations show that improving access to irrigation could lift TC productivity gains to above 20%. The analytical approach developed and applied here may also be useful for the evaluation of other knowledgeintensive package technologies and innovations in perennial crops. --
    Keywords: Biotechnology,adoption,productivity,impact,endogenous switching regression,Kenya
    Date: 2011
  10. By: Janghee Cho (Department of Economics, Sogang University, Seoul); Hyunbae Chun (Department of Economics, Sogang University, Seoul); Jung Hur (Department of Economics, Sogang University, Seoul)
    Abstract: Using Korean firm-level data on offshoring activities, we investigate the role of firm heterogeneities in productivity, firm size, and capital and ICT (information and communication technology) intensities in explaining choices of the complex offshoring strategies ? foreign outsourcing through arm¡¯s length transaction and foreign insourcing through foreign direct investment. We find new evidence of complementarity in the two modes of offshoring activities. In particular, our empirical results reveal that firm characteristics such as capital and ICT intensities have distinctive roles in decision of the two foreign sourcing strategies. That is, if a firm requiring a variety of inputs has high labor and ICT intensive technologies at the same time, it may engage in the two types of foreign sourcing strategies that are complementary each other.
    Keywords: Firm Heterogeneity, Productivity, Offshoring, Outsourcing, Insourcing
    JEL: F14 F23 L22 L23
    Date: 2011–06
  11. By: Gille, Véronique
    Abstract: Empirical evidence of education spillovers in developing countries and rural contexts is scarce and focuses on specific channels. This paper provides evidence of such spillovers in rural India, by evaluating the overall impact of education of neighbors on farm productivity. We use cross-sectional data from the India Human Development Survey of 2005. Spatial econometric tools are used to take into account social distance between neighbors. To be sure that our definition of the neighborhood does not drive our results, we test three different definitions of neighbors. Our results show that education spillovers are substantial: one additional year in the mean level of education of neighbors increases households' farm productivity by 3%. These findings are robust to changes in specification and open the way to further research. In particular, the paper does not explore the channels through which this spillover effect happens. This paper confirms the choice of improving education in developing countries: giving a child education will certainly provide him greater revenues but it may also provide his neighbors greater revenues. It also shows the importance for policy makers of taking into account education spillovers and policies' complementarity when facing political trade-offs. This paper is one of the few to underline that education externalities do not only exist in urban contexts and that education spillovers do not only occur between workers of the manufacturing and service sectors. There are also spillovers in sectors considered as more traditional such as agriculture. --
    Keywords: Education externalities,Rural India,Farm productivity
    JEL: D13 O12 Q12
    Date: 2011
  12. By: Martinho, Vítor João Pereira Domingues
    Abstract: The aim of this paper is to present a further contribution to the analysis of absolute convergence ( and ), associated with the neoclassical theory, and conditional, associated with endogenous growth theory, of the sectoral productivity at regional level. Presenting some empirical evidence of absolute convergence of productivity for each of the economic sectors and industries in each of the regions of mainland Portugal (NUTS II and NUTS III) in the period 1986 to 1994 and from 1995 to 1999. The finest spatial unit NUTS III is only considered for each of the economic sectors in the period 1995 to 1999. They are also presented empirical evidence of conditional convergence of productivity, but only for each of the economic sectors of the NUTS II of Portugal, from 1995 to 1999. The structural variables used in the analysis of conditional convergence is the ratio of capital/output, the flow of goods/output and location ratio. The main conclusions should be noted that the signs of convergence are stronger in the first period than in the second and that convergence is conditional, especially in industry and in all sectors.
    Keywords: convergence; output; Portuguese regions
    JEL: R58 O47 C23
    Date: 2011
  13. By: Nicolas Le Pape; Kai Zhao
    Keywords: Horizontal Merger, Efficiency gains, Efficiency losses, Stackelberg oligopoly, Market power
    JEL: D43 L11 L13 L41
    Date: 2010–12–18
  14. By: Yamamura, Eiji
    Abstract: Empirical results from a random-effects regression model show that ethnic heterogeneity has a negative effect on growth. The negative effect is seen largely in the hampering of efficiency improvements, but not capital accumulation.
    Keywords: Ethnic fractionalization; Ethnic polarization; Efficiency improvement; Capital accumulation; Random-effects model.
    JEL: H11 O43
    Date: 2011–06–26
  15. By: Bah, El-hadj M.; Fang, Lei
    Abstract: Africa is the poorest part of the world and it has the worst environment for long term business success by most standards. Empirical works normally find a negative correlation between income per worker and measures for poor business environment. This paper develops a general equilibrium model to assess the quantitative effects of the business environment, including access to finance, regulation, crime, corruption and infrastructure, on output and TFP for 30 Sub-Saharan African countries. We find that the quantitative effects of these areas of the business environment are large. They together can explain about 67% of the variation in income per capita relative to the US. Improving these dimensions of the business environment will be key for the long term development of the continent.
    Keywords: Business environment; Investment Climate; African Development; Productivity
    JEL: O47 L23 O16
    Date: 2011–07–12

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