nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2012‒01‒25
nineteen papers chosen by
Angelo Zago
University of Verona

  1. Agricultural productivity and policies in Sub-Saharan Africa: By Yu, Bingxin; Nin-Pratt, Alejandro
  2. Potential climate effects on Japanese rice productivity By Tanaka, Kenta; Managi, Shunsuke; Kondo, Katsunobu; Masuda, Kiyotaka; Yamamoto, Yasutaka
  3. Costly Blackouts? Measuring Productivity and Environmental Effects of Electricity Shortages By Karen Fisher-Vanden; Erin T. Mansur; Qiong (Juliana) Wang
  4. Services reform and manufacturing performance : evidence from India By Arnold, Jens Matthias; Javorcik, Beata; Lipscomb, Molly; Mattoo, Aaditya
  5. Development and Sources of Labor Productivity in Chinese Provinces By Su, Biwei; Heshmati, Almas
  6. Migration and Regional Convergence in the European Union By Peter Huber; Gabriele Tondl
  7. Exporters, Spin-outs and Firm Performance By Lööf, Hans; Nabavi, Pardis
  8. Services liberalization and productivity of manufacturing firms : evidence from Ukraine By Shepotylo, Oleksandr; Vakhitov, Volodymyr
  9. "Productivity and innovation spillovers: Micro evidence from Spain" By Esther Goya; Esther Vayá; Jordi Suriñach
  10. Agricultural Productivity Across Prussia During the Industrial Revolution: A ThŸnen Perspective By Michael Kopsidis; Nikolaus Wolf
  11. Barriers to Internationalisation: Firm-Level Evidence from South Africa By Marianne Matthee; Waldo Krugell
  12. Capital accumulation and growth in Central Europe, 1920-2006 By Bas van Leeuwen; Peter Földvari
  13. Offshoring and Specialisation: Are Industries Moving Abroad? By Ioannis Bournakis; Michela Vecchi; Francesco Venturini
  14. Labour Productivity and human capital in the maritime sector of the North Atlantic, c. 1672-1815 By Jelle van Lottum; Jan Luiten van Zanden
  15. The Impact of Public Credit Programs on Brazilian Firms By João Alberto De Negri; Alessandro Maffioli; Cesar M. Rodriguez; Gonzalo Vázquez
  16. Changing Banking Relationships and Client Firm Performance: Evidence for Japan from the 1990s By Tsuruta, Daisuke
  17. Firms' exporting and importing activities: is there a two-way relationship? By David Aristei; Davide Castellani; Chiara Franco
  18. Creating High Performance Organisations: The Determining Factors By André de Waal
  19. The Cobb-Gouglas function as an approximation of other functions By Frédéric Reynès;

  1. By: Yu, Bingxin; Nin-Pratt, Alejandro
    Abstract: We analyze the evolution of Sub-Saharan Africa's (SSA's) agricultural total factor productivity (TFP) over the past 45 years, looking for evidence of recent changes in growth patterns using an improved nonparametric Malmquist index. Our TFP estimates show a remarkable recovery in the performance of SSA's agriculture between 1984 and 2006 after a long period of poor performance and decline. That recovery is the consequence of improved efficiency in production, resulting from changes in the output structure and an adjustment in the use of inputs. Policy interventions, including fiscal, trade, and sector-specific policies, appear to have played an important role in improving agricultural performance. Despite the improved agricultural performance, economies in SSA face serious challenges to sustain growth. Among these are the small contribution of technological change to TFP growth in the past, the large tax burden imposed by remaining distortions, and the challenge of population growth.
    Keywords: Agriculture, Efficiency, Malmquist index, policy, Technical change, Total factor productivity,
    Date: 2011
  2. By: Tanaka, Kenta; Managi, Shunsuke; Kondo, Katsunobu; Masuda, Kiyotaka; Yamamoto, Yasutaka
    Abstract: Adaptation to climate change has become an important policy question in recent years. Agriculture is the economic activity most sensitive to climate change. We evaluate the dynamic effects of productivity change and individual efforts to adapt to climate change. Adaptation actions in agriculture are evaluated to determine how the climate affects production efficiency. In this paper, we use the bi-directional distance function method to measure Japanese rice production loss due to climate. We find that 1) accumulated precipitation has the greatest effect on rice production efficiency and 2) the climate effect on rice production efficiency decreases over time. Our results empirically support the benefit of an adaptation approach.
    Keywords: Climate change; productivity analysis; agriculture
    JEL: Q54
    Date: 2012–01–01
  3. By: Karen Fisher-Vanden; Erin T. Mansur; Qiong (Juliana) Wang
    Abstract: In many countries, unreliable inputs, particularly those lacking storage, can significantly limit a firm's productivity. In the case of an increasing frequency of blackouts, a firm may change factor shares in a number of ways. It may decide to self generate electricity, to purchase intermediate goods that it used to produce directly, or to improve its technical efficiency. We examine how industrial firms responded to China's severe power shortages in the early 2000s. Fast-growing demand coupled with regulated electricity prices led to blackouts that varied in degree over location and time. Our data consist of annual observations from 1999 to 2004 for approximately 32,000 energy-intensive, enterprises from all industries. We estimate the losses in productivity due to factor-neutral and factor-biased effects of electricity scarcity. Our results suggest that enterprises re-optimize among factors in response to electricity scarcity by shifting from energy (both electric and non-electric sources) into materials---a shift from "make" to "buy." These effects are strongest for firms in textiles, timber, chemicals, and metals. Contrary to the literature, we do not find evidence of an increase in self generation. Finally, we find that these productivity changes, while costly to firms, led to small reductions in carbon emissions.
    JEL: D24 P2 Q4
    Date: 2012–01
  4. By: Arnold, Jens Matthias; Javorcik, Beata; Lipscomb, Molly; Mattoo, Aaditya
    Abstract: The growth of India's manufacturing sector since 1991 has been attributed mostly to trade liberalization and more permissive industrial licensing. This paper demonstrates the significant impact of a neglected factor: India's policy reforms in services. The authors examine the link between those reforms and the productivity of manufacturing firms using panel data for about 4,000 Indian firms from1993 to 2005. They find that banking, telecommunications, insurance and transport reforms all had significant, positive effects on the productivity of manufacturing firms. Services reforms benefited both foreign and locally-owned manufacturing firms, but the effects on foreign firms tended to be stronger. A one-standard-deviation increase in the aggregate index of services liberalization resulted in a productivity increase of 11.7 percent for domestic firms and 13.2 percent for foreign enterprises.
    Keywords: Transport Economics Policy&Planning,Banks&Banking Reform,Emerging Markets,E-Business,Economic Theory&Research
    Date: 2012–01–01
  5. By: Su, Biwei (Korea University); Heshmati, Almas (Korea University)
    Abstract: As China exhibited unprecedented rapid economic growth ever since its reform and openness, the development and sources of labor productivity has gradually come to the forefront. This paper studies the development and the source of labor productivity in 31 Chinese provinces during the period of 2000-2009. The labor productivity is investigated through an examination at both the levels and the growth rate. Particularly, we first look at the production function relationship, to see the contribution of labor and other production factors to the gross domestic product. Then, a number of possible determinants are defined. They are regressed on the level and the growth rate of labor productivity to shed light on their relationships. Controlled for unobserved time-specific and province-specific effects, the fixed effects model with heteroskedasticity robust adjustments have been used for the estimation of three functions. Regional breakdown shows severe disparity in the economy where three municipal cities have the highest labor productivity among other regions. Subsequently, we summarize the different sources and their contributions to labor productivity and provide several policy suggestions.
    Keywords: development, labor productivity, labor productivity growth, provinces, China
    JEL: C23 J24 R23 O15
    Date: 2011–12
  6. By: Peter Huber (WIFO); Gabriele Tondl
    Abstract: We offer an empirical, econometric analysis of the impact of migration on the EU 27's NUTS-2 regions in the period 2000-2007. While our results indicate that migration had no statistical impact on regional unemployment in the EU it had a significant impact on both per-capita GDP and productivity. The coefficients suggest that a 1 percent increase in immigration to immigration regions increased per-capita GDP by about 0.02 percent and productivity by about 0.03 percent. For emigration regions a 1 percent increase in the emigration rate leads to a reduction of 0.03 percent in per-capita GDP and 0.02 percent in productivity. Since immigration regions are also often regions with above-average GDP and productivity while emigration regions in Europe practically all have below-average GDP, migration seems to induce divergence rather than convergence.
    Keywords: Migration, Convergence, Unemployment
    Date: 2012–01–18
  7. By: Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Nabavi, Pardis (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper analyzes the relationship between exporters, spin-outs and firm performance. A large body of research has shown that exporters perform better than non-exporters. But are also firms spawn out from exporters better than other new firms in terms of survival, productivity and growth? Using a panel of about 2,000 ex-employee starts ups, their parent companies and 10 000 other new firms in Sweden observed over a sequence of 5 years, we provide new evidence on spinouts as a channel of transferring knowledge from exporting firms to new ventures.
    Keywords: Exports; new firms; spin-out; spillovers; productivity
    JEL: J24 L26 M13 O31 O32
    Date: 2012–01–13
  8. By: Shepotylo, Oleksandr; Vakhitov, Volodymyr
    Abstract: This paper brings new evidence on the impact of services liberalization on the performance of manufacturing firms. Using a unique database of Ukrainian firms in 2001-2007, the authors utilize an external push for liberalization in the services sector as a source of exogenous variation to identify the impact of services liberalization on total factor productivity (TFP) of manufacturing firms. The results indicate that a standard deviation increase in services liberalization is associated with a 9 percent increase in TFP. Allowing services liberalization to dynamically influence TFP through the investment channel leads to an even larger effect. The effect is robust to different estimation methods and to different sub-samples of the data. In particular, it is more pronounced for domestic and small firms.
    Keywords: Economic Theory&Research,E-Business,Emerging Markets,ICT Policy and Strategies,Public Sector Corruption&Anticorruption Measures
    Date: 2012–01–01
  9. By: Esther Goya (Faculty of Economics, University of Barcelona); Esther Vayá (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona)
    Abstract: This article analyses the impact that innovation expenditure and intrasectoral and intersectoral externalities have on productivity in Spanish firms. While there is an extensive literature analysing the relationship between innovation and productivity, in this particular area there are far fewer studies that examine the importance of sectoral externalities, especially with the focus on Spain. One novelty of the study, which covers the industrial and service sectors, is that we also consider jointly the technology level of the sector in which the firm operates and the firm size. The database used is the Technological Innovation Panel (PITEC), which includes 12,813 firms for the year 2008 and has been little used in this type of study. The estimation method used is Iteratively Reweighted Least Squares method (IRLS), which is very useful for obtaining robust estimations in the presence of outliers. The results confirm that innovation has a positive effect on productivity, especially in high-tech and large firms. The impact of externalities is more heterogeneous because, while intrasectoral externalities have a positive and significant effect, especially in low-tech firms independently of size, intersectoral externalities have a more ambiguous effect, being clearly significant for advanced industries in which size has a positive effect..
    Keywords: Productivity, innovation, sectoral externalities, firm size. JEL classification:D24, O33
    Date: 2011–12
  10. By: Michael Kopsidis (IAMO Halle); Nikolaus Wolf (Humboldt-University Berlin and CEPR)
    Abstract: This paper explores the pattern of agricultural productivity across 19th century Prussia to gain new insights on the causes of the ÒLittle DivergenceÓ between European regions. We argue that access to urban demand was the dominant factor explaining the gradient of agricultural productivity as had been suggested much earlier theoretically by von ThŸnen (1826) and empirically by Engel (1867). This is in line with recent findings on a limited degree of interregional market integration in 19th century Prussia.
    Keywords: Prussia, Agricultural Productivity, Industrialisation, Market Access
    JEL: N53 O43 O47 Q13 R12
    Date: 2012–01
  11. By: Marianne Matthee (School of Economics, North-West University, Potchefstroom, South Africa); Waldo Krugell (School of Economics, North-West University, Potchefstroom, South Africa)
    Abstract: The internal resource barriers that firms experience influence their capability to export. This in turn influences the export performance of the country and the extent to which exports contribute to economic growth. The aim of this paper is to analyse the impact of resource barriers, more specifically firm size, productivity, firm-specific capital and labour market constraints, on South African firms' decision to internationalise. The literature on South African exporting firms presents some interesting glimpses of the exporting behaviour of firms in South Africa. However, these were cross-sectional studies focusing on earlier NES data and the 2003 ICA data. This paper tries to provide another dimension in terms of data, by taking the 2007 ICA data into account and by constructing a unique panel from the World Bank Enterprise Survey data for 2003 and 2007. Using panel data allows for better understanding of South African firms in that it enables one to consider the dynamic nature of firms over time. Also, the earlier South African contributions examined the export behaviour of South African firms, but did not control for unobserved heterogeneity. This paper takes the analysis a step further by estimating a panel data two-step Heckman selection model of the predictors of firms’ export propensities and intensities. From the overall results of the model, it is clear that the unobserved factors that make export more likely tend to be associated with lower levels of exports. The main findings are that firm size, productivity and finance matter for exports. Also, barriers to doing business, such as electricity, customs delays and transportation and the use of imported inputs influence exporting firms’ supply-side capabilities.
    JEL: F14 F23 O55 D21
    Date: 2011–07
  12. By: Bas van Leeuwen; Peter Földvari
    Abstract: Central and Eastern Europe is a region with widely divergent development paths. Up to WWII, these countries experienced comparable growth patterns. Yet, whereas Austria and West Germany remained part of the capitalist West and underwent periods of rapid growth, other countries, under state-socialist regimes, experienced on average far lower growth rates. The lack of data, however, often limits the possibilities of a detailed, quantitative analysis. In this paper, we use a new dataset on physical and human capital in seven Eastern and Central European countries for the period 1920-2006 to calculate the effect on economic growth. We analyse the effect of including the quality of education in human capital. This allows us to perform a growth accounting analysis with the several production factors for Central Europe between 1920 and the present. The difference in growth path across countries is partly explained by differences in efficiency.
    Keywords: Eastern Europe, human capital, physical capital, growth accounting, efficiency, long run growth
    Date: 2011–12
  13. By: Ioannis Bournakis; Michela Vecchi; Francesco Venturini
    Abstract: This paper investigates the impact of off-shoring on specialisation via its effect on national endowments and productivity. We use different definition of off-shoring to properly capture international fragmentation of production, while controlling for countries? stocks of R&D and ICT capital. Using industry data for the US, Japan and Europe we show that while offshoring of materials can benefit a wide range of industries, service and intra-industry offshoring can decrease specialisation in high-tech industry, both within manufacturing and services. This effect can be compensated with increasing R&D investments.
    Date: 2011–12–01
  14. By: Jelle van Lottum; Jan Luiten van Zanden
    Abstract: Pre-modern growth was to a large extent dependent on processes of commercialization and specialization, based on cheap transport. Seminal interpretations of the process of economic growth before the Industrial Revolution have pointed to the strategic importance of the rise of the Atlantic economy and the growth of cities linked to this but have not really explained why Europeans were so efficient in organizing large international networks of shipping and trade. Most studies concerning early modern shipping have focused on changes in shipdesign in explaining long-term performance of European shipping in the pre-1800 period. In this paper we argue that this is only part of the explanation. Human capital – the quality of the labour force employed on ships – mattered as well. We firstly demonstrate that levels of human capital on board European ships were very high, much higher than the average for the countries from which the crew was recruited, and secondly that there were close links between the level of labour productivity in shipping and the quality of the workforce. This suggests strongly that shipping was a ‘high tech’ industry not only employing high quality capital goods, but also, as a complementary input, high quality labour, which was required to operate the increasingly complex ships and their equipment.
    Keywords: Human Capital, Shipping, Early Modern Period
    Date: 2011–12
  15. By: João Alberto De Negri; Alessandro Maffioli; Cesar M. Rodriguez; Gonzalo Vázquez
    Abstract: This paper analyzes the effectiveness of public credit lines in promoting the performances of Brazilian firms. We focus on the impact of the credit lines managed by BNDES and FINEP in fostering growth measured in terms of employment, labor productivity and export. For this purpose, we use a unique panel data set developed by the Instituto de Pesquisa Econômica Aplicada (IPEA), which includes information on both firm-level performances and access to public credit lines. This particular data setting allows us to use quasi-experimental techniques to control for selection bias when estimating the impact of the public credit lines. The core of our estimation strategy is based on a difference-in-differences technique, which we complement with matching methods for robustness check. Our results consistently show that access to public credit lines has a significant and robust positive impact on employment growth and exports, while we do not find evidence of a significant effect on our measure of productivity. Interestingly enough, our findings show that impact on exports is driven by the increase in export volumes among exporting firms, while no significant effect on the probability of becoming an exporter is detected.
    Keywords: Public Credit, Impact Evaluation, SMEs, Difference in Difference, Panel Data,Brazil, BNDES, FINEP
    JEL: C21 C40 H43 O12 O22
    Date: 2011–12
  16. By: Tsuruta, Daisuke
    Abstract: The banking literature concludes that the performance of client firms deteriorates if their distressed main bank reduces the supply of credit. However, these results rely on the assumption that main banks have an information advantage over other banks, such that if a client firm changes its main bank, its access to credit worsens. Using Japanese data from a period including financial shocks, we show that firms change the main banking relationship when their main bank becomes distressed. In addition, the performance of client firms improves after a change in the main bank relationship. This implies that the availability of credit improves for these firms, despite the change in main bank.
    Keywords: Bank--firm relationships; Bank distress; Private information
    JEL: G32 G21 G20
    Date: 2012–01–12
  17. By: David Aristei; Davide Castellani; Chiara Franco
    Abstract: The literature on firm heterogeneity and trade has highlighted that most trading firms tend to engage in both importing and exporting activities. This may be due to some common sunk costs or to a true state dependence. This paper provides some evidence that helps sort this issue out. Using firm level data for a group of 27 Eastern European and Central Asian countries from the World Bank Business Environment and Enterprise Performance Survey (BEEPS) over the period 2002-2008, we estimate a bivariate probit model of exporting and importing. The main finding is that there is a positive correlation between import and export at the level of the firm, but after controlling for size (and other firm level characteristics) importing have a positive effect on exporting, but exporting to not increase the probability of importing. The evidence is thus consistent with the presence of common sunk costs and with a one-way link between importing and exporting. The positive effect of import on export is mainly due to an increase in firm productivity and product innovation.
    Keywords: Exports, Imports, Firm heterogeneity, Eastern European and Central Asian countries
    JEL: F14 F21 F23
    Date: 2011–12–15
  18. By: André de Waal (Associate Professor Strategic Management at the Maastricht School of Management, Academic Director of the Center for Organizational Performance, and guest lecturer at the Free University Amsterdam and Erasmus University Rotterdam.)
    Abstract: The recent economic downturn has caused tremendous upheaval in the business world and it has spurred many companies to engage in self-analysis and organisational improvement activities. As a result, interest in the determinant factors of sustainable high performance is increasing. Managers all over the world are trying out new performance improvement concepts, though unfortunately with varying success. One likely reason for this is the current lack of consensus on the organisational characteristics that lead to high performance. The aim of the research study described in this article was to identify the characteristics that lead to sustainable high performance. The initial phase of the study - a descriptive review of 290 research studies into high performance – resulted in the identification of 189 potential characteristics which could make up a high performance organisation. In the following phase, these were tested in a worldwide survey and narrowed down to 35 characteristics, categorised in five factors, which showed a positive correlation with competitive performance. The factors were applied in a case study at a division of a prominent Dutch bank. The application led to specific characteristics that explained the difference in performance between the high and the low performing regions of the examined bank division. The study results show that identifying the determining factors of sustainable high performance is feasible and that these factors can be used at organisations to determine the differences between high and low performing units. This research theferore offers managers a framework that provides focus to organisational improvement projects.
    Keywords: high performance organisations, organisational characteristics, banking
    JEL: M12 M14
    Date: 2011–08
  19. By: Frédéric Reynès (Observatoire Français des Conjonctures Économiques); (Observatoire Français des Conjonctures Économiques)
    Abstract: By defining the Variable Output Elasticities Cobb-Douglas function, this article shows that a large class of production functions can be approximated by a Cobb-Douglas function with nonconstant output elasticity. Compared to standard flexible functions such as the Translog function, this framework has several advantages. It requires only the use of the first order approximation while respecting the theoretical curvature conditions of the isoquants. This greatly facilitates the deduction of linear input demands function without the need of involving the duality theorem. Moreover, it allows for a generalization of the CES function to the case where the elasticity of substitution between each pair of inputs is not necessarily the same.
    Keywords: flexible production functions, Cobb-Douglas function, CES function.
    JEL: D24 E23
    Date: 2011–10

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