New Economics Papers
on Efficiency and Productivity
Issue of 2012‒02‒08
twelve papers chosen by

  1. Impact of Liberalization and Globalization on Productivity in Indian Banking: A Comparative Analysis of Public Sector, Private, and Foreign Banks By Subhash Ray
  2. Innovation Systems and Technical Efficiency in Developing-Country Agriculture By Mekonnen, Dawit K.; Spielman, David J.; Fonsah, Greg
  3. Economic Efficiency of U.S. Organic Versus Conventional Dairy Farms: Evidence from 2005 and 2010 By Nehring, Richard; Gillespie, Jeffrey; Hallahan, Charlie; Sauer, Johannes
  4. Maintaining the Regular Ultra Passum Law in data envelopment analysis By Olesen, Ole B.; Ruggiero, John
  5. Stochastic Frontier Analysis of Biological Agents (Microbial Inoculants) Input Usage in Apple Production By Chavez, Holcer; Nadolnyak, Denis; Kloepper, Joseph
  6. Causative factors for changes in total factor productivity of Japanese agriculture under the era of climatic uncertainty By Kunimitsu, Yoji
  7. Efficiency Analysis of Rural Hospitals: Parametric and Semi-parametric Approaches By Nedelea, I. Cristian; Fannin, J. Matthew
  8. Water use efficiency and maximizing profitability of grain sorghum production in the Texas Panhandle By Ahamadou, Aly; Dembele, Mamadou; Almas, Lal K.; Brooks, Kathleen R.
  9. Effects of Trade Openness on Economic Growth: The Case of African Countries By Yeboah, Osei; Naanwaab, Cephas; Saleem, Shaik; Akuffo, Akua
  10. Manufacturing firms in Africa: Some stylized facts about wages and productivity By Clarke, George
  11. Trade Liberalization, Mergers and Acquisitions, and Intra-Industry Reallocations By Peter Arendorf Bache; Anders Laugesen
  12. The Economics of Organic Versus Conventional Cow-calf Production By Gillespie, Jeffrey; Nehring, Richard

  1. By: Subhash Ray (University of Connecticut)
    Abstract: Although dominated by public sector banks, India already had a significant presence of private domestic banks and foreign banks. What the banking reforms have done is to create a more level playing field where banks of different ownership types compete within a new set of broad (and far more relaxed) regulations. Data on the performance of the three different categories of banks over the past two decades offer an opportunity to assess to what extent the regulatory changes have improved the productive efficiency of the banking sector in India. Apart from analyzing the standard descriptive measures of performance, this paper uses the nonparametric approach of Data Envelopment Analysis to measure total factor productivity growth and its components to assess the impact of liberalization on different ownership categories of banks in India. The broad conclusion is that it is possible to promote financial soundness by introducing proper prudential norms and to improve operational efficiency without wholesale privatization by allowing competition between public, private and foreign banks. This can be a valuable lesson for other developing countries. JEL Classification: G21, C61 Key words: Banking Reforms, Data Envelopment Analysis, Efficiency Analysis
    Date: 2011–11
  2. By: Mekonnen, Dawit K.; Spielman, David J.; Fonsah, Greg
    Abstract: The paper uses a stochastic frontier analysis of production functions to estimate the level of technical efficiency in agriculture for a panel of 29 developing countries in Africa and Asia between 1994 and 2000. In addition, the paper examines how different components of an agricultural innovation system interact to determine the estimated technical inefficiencies. Results show that the mean level of technical efficiency among the sampled countries was about 86 percent, with some modest increases during the period in question. These results suggest that there is room for significant increases of production through reallocations of existing resources. Despite significant variation among countries, these results also indicate quite a number of least developed countries have high mean efficiency scores, implying a need to focus on investment that pushes the production frontier outward in these countries. Several measures of agricultural R&D achievement and intensity, along with educational enrollment, are found to enhance agricultural efficiency. On the other hand, countries with higher levels of official development assistance, foreign direct investment, and a greater share of land under irrigation are found to be performing poorly in their agricultural efficiency score.
    Keywords: agricultural innovation systems, technical efficiency, developing country agriculture, Agricultural and Food Policy, Crop Production/Industries, Food Security and Poverty, International Development, Production Economics, Productivity Analysis,
    Date: 2012–02
  3. By: Nehring, Richard; Gillespie, Jeffrey; Hallahan, Charlie; Sauer, Johannes
    Abstract: We estimate an input distance function for U.S. dairy farming to examine the competitiveness of organic and non-organic dairy production by system and size. Across organic/non-organic systems and size classes, size is the major determinant of competitiveness based on various measures of productivity and returns to scale.
    Keywords: Organic, Non-organic, Input Distance Function, Livestock Production/Industries, Production Economics,
    Date: 2012–02
  4. By: Olesen, Ole B. (Department of Business and Economics); Ruggiero, John (School of Business Administration)
    Abstract: The variable returns to scale data envelopment analysis (DEA) model is developed with a maintained hypothesis of convexity in input-output space. This hypothesis is not consistent with standard microeconomic production theory that posits an S-shape for the production frontier, i.e. for production technologies that obey the Regular Ultra Passum Law. Consequently, measures of technical efficiency assuming convexity are biased downward. In this paper, we provide a more general DEA model that allows the S-shape.
    Keywords: Data envelopment analysis; homothetic production; S-shaped production function; non-convex production set
    JEL: C00 C40 C60
    Date: 2012–01–04
  5. By: Chavez, Holcer; Nadolnyak, Denis; Kloepper, Joseph
    Abstract: In this paper, we analyze the impact of the Microbial Inoculants (MI) Technology on apple yields and pesticide application using 2007 farm data. The results show that pesticide usage is not reduced by MI applications. However, there is a significant positive effect on the yields. Apple production efficiency is 37%.
    Keywords: Microbial Inoculants, apple production, frontier analysis, damage control, Farm Management, Production Economics, Research and Development/Tech Change/Emerging Technologies, Risk and Uncertainty,
    Date: 2012
  6. By: Kunimitsu, Yoji
    Abstract: This study analyzed causative factors on TFP growth in Japanese agriculture. The regression analysis with consideration of correlation between factors demonstrated that without further deregulation for introducing new comers, enlarging farm management area and asset management for keeping public capital, agricultural TFP cannot be improved in the future.
    Keywords: fertility of farmland, human factor, scale economies, public capital stock, knowledge capital stock, technological progress, Total Factor Productivity, Agricultural and Food Policy, Production Economics, Productivity Analysis, Public Economics,
    Date: 2012–01–17
  7. By: Nedelea, I. Cristian; Fannin, J. Matthew
    Abstract: This paper examined cost efficiency differences between rural hospitals participating in the Critical Access Hospital (CAH) Program and a group of non-converting, prospectively paid rural hospitals using both a two-stage semi-parametric approach as well as stochastic frontier analysis (SFA). CAHs receive Medicare cost-based reimbursement, in contrast with the rest of the hospitals reimbursed under Medicare prospective payment system (PPS). However, cost-based reimbursement has been associated with inefficiency in hospital operations and, consequently, concerns have been raised about the efficiency of CAHs. Results showed a positive and significant effect of CAH status on cost inefficiency under both model specifications suggesting that CAHs were less cost efficient than non-converting rural hospitals.
    Keywords: rural hospitals, efficiency, SFA, two-stage approach, Community/Rural/Urban Development, Health Economics and Policy, Production Economics, Productivity Analysis, Public Economics, Research Methods/ Statistical Methods, I18,
    Date: 2012
  8. By: Ahamadou, Aly; Dembele, Mamadou; Almas, Lal K.; Brooks, Kathleen R.
    Abstract: The reduction in the availability of irrigation water and the increase in pumping costs resulting from the decline in the Ogallala Aquifer make good management decisions more critical for the survival of the farm firm and the success of the agricultural sector in the Texas Panhandle. Response functions for irrigation and percentage potential evapotranspiration (PET) in the production of grain sorghum are estimated. The response functions are transferred into value product functions and combined with an irrigation energy cost function to determine the profit maximizing irrigation strategy. Three management decision variables; total water available, the level of irrigation and the water to meet crop ET requirements are evaluated. Grain sorghum yield, natural precipitation, irrigation, soil moisture content, potential evapotranspiration, and percent potential evapotranspiration (PET) data, collected over the period from 1998 through 2007 by commercial producers participating in the AgriPartners program are used to estimate the response functions. Results indicate that the optimum level of irrigation increases as the price of sorghum increases and decreases as the price of natural gas increases.
    Keywords: Grain sorghum, ET, maximizing profit, irrigation efficiency, input use optimization, water conservation, Ogallala Aquifer, Texas Panhandle., Farm Management, Production Economics, Productivity Analysis, Resource /Energy Economics and Policy, Q12, Q15, Q25, Q32, and Q34,
    Date: 2012–02
  9. By: Yeboah, Osei; Naanwaab, Cephas; Saleem, Shaik; Akuffo, Akua
    Abstract: The relationship between trade and productivity has not been established theoretically. Some researchers have indeed found some, if not complete, support for the view that increasing openness has a positive impact on productivity. This study used a Cobb-Douglas production function as in Miller and Upadhyay (2000) to estimate the impact of FDI, exchange rate, capital-labor ratio and trade openness on GDP for 38 African countries from 1980 to 2008. Data were transformed to natural logs and estimated using alternative panel models; which included one- or-two-way fixed or random effects models. The results found trade openness having a positive relationship with GDP; which is comparable to findings of Ahmed et al.; (2008).
    Keywords: Trade Openness, Productivity, Africa, Cobb Douglas Production Function., International Development, International Relations/Trade, Productivity Analysis,
    Date: 2012
  10. By: Clarke, George
    Abstract: Why have so few countries in Sub-Saharan Africa been successful in export-oriented manufacturing? This paper uses firm-level data from the World Bank’s Enterprise Surveys to discuss this. The paper shows that although firms in most African countries are relatively unproductive, they are more productive on average than firms in other countries at similar levels of development. Further, even though many Africans earn subsistence wages working for informal firms, formal firms have higher labor costs than firms in other low-income countries. The paper discusses several possible reasons for this including the effect of the poor institutional environment on profits and the effect of limited competition on productivity measurement.
    Keywords: Africa; Zambia; Productivity; Manufacturing; Wages; East Asia
    JEL: O25 O14 O12
    Date: 2012–01–21
  11. By: Peter Arendorf Bache (Department of Economics and Business, Aarhus University, Denmark); Anders Laugesen (Department of Economics and Business, Aarhus University, Denmark)
    Abstract: This paper presents a Melitz-type model of international trade in final goods and Grossman-Hart-Antràs input sourcing by heterogeneous firms. We show how firms self-select into different organizational forms in a continuum of industries with different characteristics. Next, we show how a liberalization of trade leads to short run increases in the number of firm mergers and acquisitions and potentially new gains from trade. Finally, we show how the relative prevalence of integrating firms is increasing in some industries while constant in all others.
    Keywords: international trade, firm heterogeneity, make-or-buy decision, export behavior, productivity gains, M&As
    JEL: D23 F12 F14 F15 L2
    Date: 2012–01–26
  12. By: Gillespie, Jeffrey; Nehring, Richard
    Abstract: Costs, returns, and profitability of cow-calf farms that are organic or transitioning to organic are compared with those of cow-calf farms that are non-organic. A method of matching samples is used for the comparison. Results suggest higher cost of organic production due to higher unpaid labor, taxes and insurance, and overhead costs.
    Keywords: Matching Samples, Profit, Costs, Farm Management, Production Economics,
    Date: 2012–02

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