New Economics Papers
on Efficiency and Productivity
Issue of 2012‒01‒10
fifteen papers chosen by

  1. Innovative and absorptive capacity of international knowledge : an empirical analysis of productivity sources in Latin American countries By Castillo, Leopoldo Laborda; Salem, Daniel Sotelsek; Guasch, Jose Luis
  2. Labour Contracts and Performance of Cameroonian Firms By Fomba Kamga, Benjamin
  3. Efficiency of State Universities and Colleges in the Philippines: a Data Envelopment Analysis By Cuenca, Janet S.
  4. Transport and CO2: Productivity Growth and Carbon Dioxide Emissions in the European Commercial Transport Industry By Krautzberger, Lisann; Wetzel, Heike
  5. Explaining TFP at firm level in Italy. Does location matter? By Aiello, Francesco; Pupo, Valeria; Ricotta, Fernand
  6. To what extent do infrastructure and financial sectors reforms interplay? Evidence from panel data on the power sector in developing countries By Ba, Lika; Gasmi, Farid
  7. Quality of Life, Firm Productivity, and the Value of Amenities across Canadian Cities By David Albouy; Fernando Leibovici; Casey Warman
  8. Dual Farrell measures of efficiency By Juan Muro
  9. An evaluation of the Greek Universities Economics Departments By Stelios Katranidis; Theodore Panagiotidis; Costas Zontanos
  10. A Generalized Exactly Additive Decomposition of Aggregate Labor Productivity Growth By Dumagan, Jesus C.
  11. Management Practices Across Firms and Countries By Nicholas Bloom; Christos Genakos; Raffaella Sadun; John Van Reenen
  12. Trust-Based Working Time and Organizational Performance: Evidence from German Establishment-Level Panel Data By Michael Beckmann; Istvàn Hegedüs
  13. Measuring energy efficiency and its contribution towards meeting CO2 targets: estimates for 29 OECD countries By Joanne Evans; Massimo Filippini; Lester C Hunt
  14. Director Characteristics and Firm Performance By Pascal Gantenbein; Christophe Volonté
  15. Student effort and educatinal attainment: Using the England football team to identify the education production function By Robert Metcalfe; Simon Burgess; Steven Proud

  1. By: Castillo, Leopoldo Laborda; Salem, Daniel Sotelsek; Guasch, Jose Luis
    Abstract: This paper examines two sources of global knowledge spillovers: foreign direct investments and trade. Empirical evidence demonstrates that foreign direct investment and trade can contribute to overall domestic productivity growth only when the technology gap between domestic and foreign firms is not too large and when a sufficient absorptive capacity is available in domestic firms. The paper proposes the terms research and development and labor quality to capture the innovative and absorptive capacity of the country. The spillover effects in productivity are analyzed using a stochastic frontier approach. This productivity (in terms of total factor productivity) is decomposed using a generalized Malmquist output oriented index, in order to evaluate the specific effect in technical change, technical efficiency change, and scale efficiency change. Using country-level data for 16 Latin American countries for 1996-2006, the empirical analysis shows positive productivity spillovers from foreign direct investment and trade only when the country has absorptive capacity in terms of research and development. Foreign direct investment and trade spillovers are found to be positive and significant for scale efficiency change and total productivity factor change.
    Keywords: Economic Theory&Research,Labor Policies,E-Business,Foreign Direct Investment,Emerging Markets
    Date: 2012–01–01
  2. By: Fomba Kamga, Benjamin (University of Yaounde II)
    Abstract: The aim of this study is to evaluate employees' productivity in relation to their contract status. This study uses (a) survey data collected among manufacturing sector firms, having more than 15 employees, in Cameroon between April and May 2006 and (b) information issued by the National Institute of Statistics. Information collected concerned 45 firms spanning the period 2003 to 2005. This study uses the stochastic production frontier, distinguishing employees holding fixed-term contract (FTC) from employees that do not have fixed-term contracts (indefinite-term contract (ITC)). Results are estimated in 2 stages. First, we evaluate the determinants of the utilisation of FTC workers and second, we estimate the level of efficiency and productivity of two types of workers. Empirical results indicate that employees holding FTC are twice more productive than those holding ITC. Likewise, parameters indicating returns to scale are 1.3. This parameter, though not significant, is greater than one indicating constant returns to scale in the firm production function.
    Keywords: labour contract, fixed-term contract, indefinite-term contract, production frontier
    JEL: J41 J82 L25
    Date: 2011–12
  3. By: Cuenca, Janet S.
    Abstract: In view of the long-standing issues and concerns that beset the Philippine system of higher education, the study attempts to evaluate the performance of state universities and colleges (SUCs) in the period 2006-2009 using Data Envelopment Analysis (DEA). In particular, it estimates the efficiency of 78 SUCs based on available input data (i.e., expenditure data) and output data (i.e., number of enrolled students, number of graduates, and total revenue). Also, it examines productivity change in these institutions by applying the Malmquist approach on a four-year panel data set of 78 SUCs. The DEA results indicate that majority of the SUCs have efficiency score less than 1 and thus, they are considered inefficient. In addition, the target input and output levels derived from the DEA suggest potential cost savings for each of the SUCs. Further, productivity of about 62 percent of the SUCs has slightly improved in the period under review. The findings of the study point to a potential research in the future that would take a closer look on each of the SUCs identified as inefficient in this exercise with the end in view of identifying, understanding, and hopefully, addressing the factors that affect their operation and performance.
    Keywords: productivity, efficiency, higher education, Philippines, higher education institutions (HEIs), Revitalized General Education Program (RGEP), gambling, state universities and colleges (SUCs), data envelopment analysis
    Date: 2011
  4. By: Krautzberger, Lisann (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Wetzel, Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: In the last decades transport activities persistently increased in the EU27 and were strongly coupled to growth in GDP. Like most production processes, they are inevitably linked with the generation of environmentally hazardous by-products, such as CO2 emissions. This leads to the question of how to promote a sustainable transport sector that meets both environmental protection targets and economic requirements. In this context, the objective of this paper is to compare the CO2-sensitve productivity development of the European commercial transport industry for the period between 1995 and 2006. We calculate a Malmquist-Luenberger productivity index to investigate the effects of country-specific regulations on productivity and to identify innovative countries. Our results show a high variation in the CO2-sensitive productivity development and a slight productivity decrease on average. Efficiency losses indicate that the majority of the countries were not able to follow the technological improvements induced by some innovative countries.
    Keywords: European transport industry; Carbon dioxide emissions; Productivity growth; Malmquist-Luenberger index
    JEL: L92 Q47 Q53 Q56
    Date: 2012–01–02
  5. By: Aiello, Francesco; Pupo, Valeria; Ricotta, Fernand
    Abstract: This study considers how firms’ internal variables and regional factors affect the total factor productivity of Italian manufacturing firms. Due to of the hierarchical structure of data in estimation, we employ a multilevel model. Results, which refer to 2006, show the importance of firm-specific determinants of TFP, but at the same time confirm the role of regional context in explaining the gap in TFP levels which exist between the South and the North of Italy. In this respect, we show that northern firms are localised in regions with adequate endowment of infrastructure, with efficient public administration and with high R&D intensity and, as a result of these factors, perform better than firms operating in less well endowed regions.
    Keywords: Manufacturing Firms; Total Factor Productivity; Italian Regional Divide; Multilevel Models
    JEL: R11 O14 L60
    Date: 2011–12–30
  6. By: Ba, Lika (Ecole des Hautes Etudes en Sciences Sociales, Paris); Gasmi, Farid (Toulouse School of Economics (Arqade & Idei))
    Abstract: The main goal of this study is to demonstrate the existence of a significant empirical link between infrastructure and financial sectors reforms the effects of which are reflected in infrastructure sectors performance. This paper reports on the findings of an exploration of this issue for the case of the power sector in developing countries. We estimate the impact of the four main components of the power sector reform in these countries, namely, the creation of an independent regulatory agency, the unbundling of generation, transmission, and distribution, the introduction of competition and the implementation of privatization programs in the generation and distribution segments, on some of this sector’s performance outcomes, and attempt to assess the contribution of the domestic financial systems’ reforms to these outcomes. In a dataset on 42 developing countries covering the 1990-2005 period, we find that private participation in generation and distribution has significantly improved power supply as reflected in higher electricity generation per capita and technical and labor efficiency in the distribution segment. The unbundling of generation, transmission, and distribution has contributed to improving productive efficiency through a better use of the labor factor in the distribution segment. We find that the creation of a separate regulatory agency has boosted the generation segment in terms of both capacity and sales and has generated better incentives for a more efficient use of labor input in the distribution segment. We also find that regulatory experience has significantly contributed to improving access to electricity. The results suggest that while the power sector, in particular, its generation segment, has significantly benefited from the introduction of independent regulation, the beneficial effects of (good) regulatory practices have been exacerbated by the modernization of the financial systems. More specifically, improved financial systems have eased access to capital for operators allowing them to upgrade their networks and decrease power losses in distribution. The overall results obtained in this paper strongly recommend that along with reforming the power sector, policy makers in developing countries should implement the financial reforms that would deepen their domestic financial systems thus allowing them to recover the full benefits of these systems’ positive externalities on the performance of the sector.
    Keywords: Developing countries, electricity industry performance, privatization, regulation, unbundling, competition, financial sector development
    JEL: L2 L33 L94 L98 O16 C23
    Date: 2011–11
  7. By: David Albouy (University of Michigan); Fernando Leibovici (New York University); Casey Warman (Queen's University)
    Abstract: This paper presents the first hedonic general-equilibrium estimates of quality-of-life and firm productivity differences across Canadian cities, using data on local wages and housing costs. These estimates account for the unobservability of land rents and geographic differences in federal and provincial tax burdens. Quality of life estimates are generally higher in Canada’s larger cities: Victoria, Vancouver are the nicest overall, particularly for Anglophones, while Montreal and Ottawa are the nicest for Francophones. These estimates are positively correlated with estimates in the popular literature and may be explained by differences in climate. Toronto is Canada’s most productive city; Vancouver, the overall most valued city.
    Keywords: quality of life, firm productivity, cost-of-living, firm productivity, compensating wage differentials
    JEL: H24 H5 H77 J61 R1
    Date: 2012–01
  8. By: Juan Muro (Departamento de Estadística, Estructura y O.E.I. Universidad de Alcalá.)
    Abstract: This paper provides several definitions of efficiency measures in the price space. Economic and scale aspects of inefficiency are considered to give empirical content to the measurement of efficiency when the production technology is described by cost functions models. It shows, in the Hanoch’s symmetric duality approach, how the new definitions preserve the ranking of efficiency, are formally dually symmetric to the ones defined in the input space, and both are established with respect to different descriptions of the same technology. In addition, graphical procedures are utilized to make an insight into the achievement of polar technologies from primal ones and into the relationship between Shephard’s lemma and Roy’s identity.
    Keywords: Efficiency measures, scale measures, duality theory, polar forms
    JEL: D24
    Date: 2011
  9. By: Stelios Katranidis (Department of Economics, University of Macedonia); Theodore Panagiotidis (Department of Economics, University of Macedonia); Costas Zontanos (University of Macedonia)
    Abstract: This study provides a ranking of Economics Departments of Greek Universities. Contrary to the existing literature, we look directly at the citations of the faculty members as a measure of academic performance and avoid the classification of journals. Additionally, the country of the PhD studies was found to be a significant variable that can explain the productivity of Greek economists. PhD holders from US and UK universities are characterised by higher productivity compared to the rest.
    Keywords: Economics Department, ranking, Greece.
    JEL: A11 A20
    Date: 2012–01
  10. By: Dumagan, Jesus C.
    Abstract: Aggregate labor productivity (ALP) growth--i.e., growth of output per unit of labor--may be decomposed into additive contributions due to within-sector productivity growth effect, dynamic structural reallocation effect (Baumol effect), and static structural reallocation effect (Denison effect) of cross-sectional components (e.g., industry or region) of output and labor. This paper implements ALP growth decomposition that is "generalized" to output in constant prices and to output in chained prices (i.e., chained volume measure or CVM) and "exactly additive" since with either output the sum of contributions exactly equals "actual" ALP growth. It compares this "generalized exactly additive" (GEAD) decomposition to the "traditional" (TRAD) ALP growth decomposition devised for output in constant prices. The results show GEAD and TRAD are exactly additive when output is in constant prices but GEAD is exactly additive while TRAD is not when output is in CVM. Also, GEAD components are empirically purer than or analytically superior to those from TRAD. Moreover, considering that contributions to ALP growth can be classified by industry or region each year over many years, GEAD provides a more well-grounded picture over time of industrial or regional transformation than TRAD. Therefore, GEAD should replace TRAD in practice.
    Keywords: labor productivity, Philippines, chained volume measures, Triffin Dilemma, Migrants Workers and Overseas Filipinos Act, output in constant prices, reallocation effects
    Date: 2011
  11. By: Nicholas Bloom; Christos Genakos; Raffaella Sadun; John Van Reenen
    Abstract: For the last decade we have been using double-blind survey techniques and randomized sampling to construct management data on over 10,000 organizations across twenty countries. On average, we find that in manufacturing American, Japanese, and German firms are the best managed. Firms in developing countries, such as Brazil, China and India tend to be poorly managed. American retail firms and hospitals are also well managed by international standards, although American schools are worse managed than those in several other developed countries. We also find substantial variation in management practices across organizations in every country and every sector, mirroring the heterogeneity in the spread of performance in these sectors. One factor linked to this variation is ownership. Government, family, and founder owned firms are usually poorly managed, while multinational, dispersed shareholder and private-equity owned firms are typically well managed. Stronger product market competition and higher worker skills are associated with better management practices. Less regulated labor markets are associated with improvements in incentive management practices such as performance based promotion.
    Keywords: management, organization, and productivity
    JEL: L2 M2 O14 O32 O33
    Date: 2011–12
  12. By: Michael Beckmann; Istvàn Hegedüs (University of Basel)
    Keywords: Trust-based working time, working time flexibility, firm performance
    JEL: J24 J81 M50
    Date: 2011
  13. By: Joanne Evans (Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey); Massimo Filippini (Centre for Energy Policy and Economics (cepe), ETH Zurich and Department of Economics, University of Lugano); Lester C Hunt (Surrey Energy Economics Centre (SEEC) and Research Group on Lifestyles Values and Environment (RESOLVE), University of Surrey)
    Abstract: Using results for 29 OECD countries from the estimation of an extended version of the model advocated by Filippini and Hunt (2011a), actual energy consumption and CO2 emissions are compared to notional energy consumption and CO2 emissions if the countries were energy efficient. This shows the contribution that improvements in energy efficiency can make towards the reduction in CO2 emissions. It is found that in many countries efficiency improvements alone are not likely to be sufficient to bring about reductions in CO2 emissions required to meet ambitious obligations. However, this is not the case across all countries included in the investigation. Moreover, it is shown that some of the world’s largest OECD emitters can make a significant contribution to CO2 reductions from becoming energy efficient. Therefore the negotiations of the new legally binding treaty agreed under the Durban Platform should promote emission reduction targets that incentivise national energy efficiency.
    Keywords: emissions, energy efficiency, Durban Platform.
    JEL: Q41 Q48 Q50 Q54
    Date: 2011–12
  14. By: Pascal Gantenbein; Christophe Volonté (University of Basel)
    Keywords: Corporate governance: Board of directors; Director characteristics, Education and business experience
    JEL: G30 G34 G38
    Date: 2011
  15. By: Robert Metcalfe; Simon Burgess; Steven Proud
    Abstract: We use a sharp, exogenous and repeated change in the value of leisure to identify the impact of student effort on educational achievement. The treatment arises from the partial overlap of the world’s major international football tournaments with the exam period in England. Our data enable a clean difference-in-difference design. Performance is measured using the high-stakes tests that all students take at the end of compulsory schooling. We find a strongly significant effect: the average impact of a fall in effort is 0.12 SDs of student performance, significantly larger for male and disadvantaged students, as high as many educational policies.
    Keywords: Student effort, Educational achievement, Schools
    JEL: I20 J24
    Date: 2011

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