New Economics Papers
on Efficiency and Productivity
Issue of 2012‒02‒20
nineteen 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 and absorptive capacity: What is the role of technological frontier? By Gombau, Verònica; Segarra Blasco, Agustí
  3. Robust investment climate effects on alternative firm-level productivity measures By Alvaro Escribano; J. Luis Guasch
  4. Plant-level Productivity and Imputation of Missing Data in U.S. Census Manufacturing Data By T. Kirk White; Jerome P. Reiter; Amil Petrin
  5. Multifactor Productivity Growth Cycles at the Industry Level By P, Barnes
  6. Productivity growth and ownership change in China: 1998-2007 By Liu, Jing; Cao, Shutao
  7. R&D Productivity and Firm Size in Semiconductors and Pharmaceuticals: Evidence from Citation Yields By Burak Dindaroglu
  8. Service Off-shoring and Productivity Growth in the European Economies By Cecilia Jona-Lasinio
  9. Raising the Barcode Scanner: Technology and Productivity in the Retail Sector By Emek Basker
  10. Productivity growth in Latin American manufacturing: what role for international trade intensities? By Faundez, Sebastian; Mulder, Nanno; Carpentier, Nicole
  11. The Sahel's Silent Maize Revolution: Analyzing Maize Productivity in Mali at the Farm-level By Jeremy D. Foltz; Ursula T. Aldana; Paul Laris
  12. Assessing the Efficiency of Mother-to-Child HIV Prevention in Low- and Middle-Income Countries using Data Envelopment Analysis By Sérgio P. Santos; Carla A.E. Amado; Mauro F. Santos
  13. Ranking accounting, banking and finance journals: A note By Halkos, George; Tzeremes, Nickolaos
  14. The effects of real exchange rate volatility on productivity growth By Diallo, Ibrahima Amadou
  15. Ranking the ‘Diamond Core’ economic journals: A note By Halkos, George; Tzeremes, Nickolaos
  16. Bank market concentration and efficiency in the European Union: a panel granger causality approach By Cândida Ferreira
  17. Ranking agricultural, environmental and natural resource economics journals: A note By Halkos, George; Tzeremes, Nickolaos
  18. Regional development and creativity By Emanuela Marrocu; Raffaele Paci
  19. The economic performance of Portuguese and Spanish regions: A network dynamic approach By João Carlos Lopes; Tanya Araujo

  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: Gombau, Verònica; Segarra Blasco, Agustí
    Abstract: This paper explores how absorptive capacity affects the innovative performance and productivity dynamics of Spanish firms. A firm’s efficiency levels are measured using two variables: the labour productivity and the Total Factor Productivity (TFP). The theoretical framework is based on the seminal contributions of Cohen and Levinthal (1989, 1990) regarding absorptive capacity; and the applied framework is based on the four-stage structural model proposed by Crépon, Duguet and Mairesse (1998) for setting the determinants of R&D, the effects of R&D activities on innovation outputs, and the impacts of innovation on firm productivity. The present study uses a twostage structural model. In the first stage, a probit estimation is used to investigate how the sources of R&D, the absorptive capacity and a vector of the firm’s individual features influence the firm’s likelihood of developing innovations in products or processes. In the second phase, a quantile regression is used to analyze the effect of R&D sources, absorptive capacity and firm characteristics on productivity. This method shows the elasticity of each exogenous variable on productivity according to the firms’ levels of efficiency, and thus allows us to distinguish between firms that are close to the technological frontier and those that are further away from it. We used extensive firm-level panel data from 5,575 firms for the 2004-2009 period. The results show that the internal absorptive capacity has a strong impact on the productivity of firms, whereas the role of external absorptive capacity differs according to nature of the each industry and according the distance of firms from the technological frontier. Key words: R&D sources, innovation strategies, absorptive capacity, technological distance, quantile regression.
    Keywords: Empreses -- Innovacions tecnològiques, Productivitat industrial, 65 - Gestió i organització. Administració i direcció d'empreses. Publicitat. Relacions públiques. Mitjans de comunicació de masses,
    Date: 2011
  3. By: Alvaro Escribano; J. Luis Guasch
    Abstract: Developing countries are increasingly concerned about improving country competitiveness and productivity, as they face the increasing pressures of globalization and attempt to improve economic growth and reduce poverty. Among such countries, Investment Climate surveys (ICs) at the firm level, have become the standard way for the World Bank to identify key obstacles to country competitiveness, in order to prioritize policy reforms for enhancing competitiveness. Given the surveys objectives and the nature and limitations of the data collected, this paper discusses the advantages and disadvantages of using different total factor productivity (TFP) measures. The main objective is to develop a methodology to generate robust investment climate impacts (elasticities) on TFP under alternative measures. The paper applies it to the data collected for ICs in four developing countries: Costa Rica, Guatemala, Honduras and Nicaragua. Observations on logarithms of the production function variables are pooled across three countries (Guatemala, Honduras and Nicaragua). Endogeneity of the production function inputs and of the investment climate variables is addressed by using observable firm level information, a variant of the control function approach, considering IC variables as proxy and also by aggregating certain investment climate variables by industry and region. It is shown that by using this methodology it is possible to get robust IC “elasticities” on TFP for more than ten different TFP measures. The robust IC elasticity estimates for the five countries show how relevant the investment climate variables are to explain the average productivity of each country. IC variables in several categories (red tape, corruption and crime, infrastructure and, quality and innovation) account for over 30 percent of average productivity. The policy implications are clear: investment climate matters and the relative impact of the various investment climate variables helps indentifying where reform efforts should be directed in each country. It is argued that this robust methodology can be used as a benchmark to assess cross-country productivity effects in other IC surveys. This is important since similar firm-level IC surveys on several sectors (manufacturing, services, etc.) are now available at the World Bank for more than 65 developing countries.
    Keywords: Total factor productivity measures, Investment climate, Observable fixed effects, Robust investment climate elasticities, Input-output elasticities
    JEL: C23 C18 L25 L11 F14 C51
    Date: 2012–01
  4. By: T. Kirk White; Jerome P. Reiter; Amil Petrin
    Abstract: Within-industry differences in measured plant-level productivity are large. A large literature has been devoted to explaining these differences. In the U.S. Census Bureau's manufacturing data, the Bureau imputes for missing values using methods known to result in underestimation of variability and potential bias in multivariate inferences. We present an alternative strategy for handling the missing data based on multiple imputation via sequences of classification and regression trees. We use our imputations and the Bureau's imputations to estimate within-industry productivity dispersions. The results suggest that there may be more within-industry productivity dispersion than previous research has indicated.
    JEL: C80 L11 L60
    Date: 2012–02
  5. By: P, Barnes (Productivity Commission)
    Abstract: This staff working paper (by Paula Barnes) examines multifactor productivity growth cycles at the industry level in Australia. There is considerable variation in industry-specific cycles across industries and the market sector. Moreover, the cycles chosen to examine industry MFP growth can have a considerable effect on the interpretation of industry productivity performance over time.<p> Growth in productivity is a key determinant of long-term economic growth and hence income growth. As Australia’s prospective productivity performance will affect its future prosperity, recent significant declines in productivity growth understandably have been of concern.<p> Closer analysis of industry productivity is key to understanding aggregate productivity performance and to providing policy-relevant insights into how to influence it. The industry-specific cycles presented in this paper, and the methodology for identifying them, are tools that can assist in understanding industry productivity performance. This initial set of cycles, while not intended to be definitive, provides the basis for more refined examinations of productivity in individual industries. The methodology outlined provides a generic approach to the identification of industry cycles, but the results also flag the scope for further refinement of the cycles where more detailed industry-specific information is available.<p> The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.
    Keywords: productivity; long-term economic growth; industry level; multifactor productivity; income growth; productivity performance; industry-cycles; MFP
    JEL: D24 E32 O49
    Date: 2011–07
  6. By: Liu, Jing; Cao, Shutao
    Abstract: This paper studies the industry productivity dynamics in China’s manufacturing sector from 1998 to 2007, and in particular, explores to what extent the privatization of state-owned enterprises (SOEs) contributes to the aggregate productivity growth. Our results show that, though non-SOEs on average are more productive than SOEs, the average productivity growth among SOEs is greater than the privately-owned firms. Industry concentration, taxation, and credit market all account for this difference in growth between SOEs and non-SOEs. In addition, industry productivity growth is mainly attributed to the growth of non-SOEs, entry of non-SOE firms, and the exit of SOEs. However, non-SOE firms that are transformed directly from SOEs make a small but negative contribution to industry productivity growth.
    Keywords: Productivity Growth, Industry Dynamics, Ownership Change, Reallocation
    JEL: E6 D24 O4
    Date: 2011–04–15
  7. By: Burak Dindaroglu (Department of Economics, Izmir University of Economics)
    Abstract: Using firm level panel data from the U.S., I explore the relationship between firm size and R&D productivity for two important and R&D-intensive industries: Semiconductors and Pharmaceuticals. I employ two measures of a firm's R&D performance: the number of citations received per patented innovation, and the number of citations received per dollar of R&D expenditures. The former is a measure of the average quality of a firm's patents, and the latter is a measure of total R&D output obtained per dollar of investments. I find that the average quality of patents (citations received per patent) falls with firm size in Pharmaceuticals, but there is no relationship between patent quality and firm size in Semiconductors. Citations received per R&D dollar decrease with size in both industries, which is due to the well-documented negative relationship between patents per R&D and firm size.
    Keywords: R&D Productivity, Firm size, Patents, Citations, Semiconductors, Pharmaceuticals, Panel data
    JEL: L1 L2
    Date: 2011–11
  8. By: Cecilia Jona-Lasinio (Italian National Institute of Statistics)
    Abstract: We study the relation between service off-shoring and productivity growth in the manufacturing sector of a set of European economies in 1995-2005. We document that those countries resorting more to service off-shoring in 1995 experienced faster productivity growth in ICT/R&D intensive industries over the next decade. Our results show also that the productivity gap between more and less ICT/R&D intensive industries was relatively higher in those countries experimenting higher increases in service off-shoring intensity over the period. In both cases, ICT intensity is more relevant than R&D to explain the mechanism through which service off-shoring affects productivity growth. These findings are consistent with the enhancing productivity effects of the complementary relation between service off-shoring and ICT
    Keywords: service off-shoring, productivity growth, ICT
    JEL: O4 O3 F23
    Date: 2012
  9. By: Emek Basker
    Abstract: Barcodes and barcode scanners transformed the grocery industry in the 1970s. I use store-level data from the 1972, 1977, and 1982 Census of Retail Trade, matched to data on store scanner installations, to estimate scanners' effect on labor productivity. I find that early scanners increased a store's labor productivity, on average, by approximately 4.5 percent in the first few years. The effect was larger in stores carrying more packaged products, consistent with the presence of network externalities. Short-run gains were small relative to fixed costs, suggesting that the impediment to widespread adoption of the new technology was profitability, not coordination problems.
    JEL: D22 L81 O33
    Date: 2012–02
  10. By: Faundez, Sebastian; Mulder, Nanno; Carpentier, Nicole
    Abstract: This paper analyzes the relationship between the intensity of international trade flows and labor productivity for 28 industries in the five main economies in the region (Argentina, Brazil, Chile, Colombia and Mexico)using the Arellano-Bond generalized method of moments (GMM)estimator. The results show that international trade flows contributed through various channels to labor productivity growth in the period 1990 to 2008. These channels, which have been developed in the theoretical literature, are export intensity (share of production exported), import penetration (share of domestic demand covered by imports), the diversification of the export basket and intra-industry trade. The estimation also includes several control variables, of which several turn out significant. In addition to estimates for the total manufacturing sector, we also show results for three different groups of manufacturing industries characterized by different factor endowments: natural resource intensive,labor and capital intensive ones.
    Keywords: productivity; international trade; manufacturing; Latin America; labour
    JEL: F16 O54 J24 D24
    Date: 2011–11
  11. By: Jeremy D. Foltz; Ursula T. Aldana; Paul Laris
    Abstract: Since independence a quiet revolution has taken place in maize production in the Sahel with Mali increasing production more than ten-fold and yields going up ~2% a year. This research work uses farm level panel data from southern Mali's maize growing regions to demonstrate this success in agricultural production and technological change. We analyze the determinants of production to unpack increases in input use from technological change. The estimations show that farmer adoption of increased fertilizer use has driven much of the productivity growth rather than the adoption of improvements in seeds and management. Additionally, we find strong evidence of observed and unobserved heterogeneity, which affects both the choice of fertilizer amounts and the marginal returns to fertilizer use. The results demonstrate the key changes behind this silent maize revolution and point to the importance of taking into account farmer heterogeneity in estimating productivity and returns to fertilizer.
    JEL: O13 O33 Q12 Q16
    Date: 2012–02
  12. By: Sérgio P. Santos (Faculty of Economics, University of Algarve and CEFAGE-UE); Carla A.E. Amado (Faculty of Economics, University of Algarve and CEFAGE-UE); Mauro F. Santos (CASEE, University of Algarve)
    Abstract: AIDS is one of the most significant health care problems worldwide. Due to the difficulty and costs involved in treating HIV, preventing infection is of paramount importance in controlling the AIDS epidemic. The main purpose of this paper is to explore the potential of using Data Envelopment Analysis (DEA) to establish international comparisons on the efficiency implementation of HIV prevention programmes. To this effect we use data from 52 low- and middle-income countries regarding the prevention of mother-to-child transmission of HIV. Our results indicate that there is a remarkable variation in efficiency of prevention services across nations, suggesting that a better use of resources could lead to more and improved services, and ultimately, prevent the infection of thousands of children. These results also demonstrate the potential strategic role of DEA for the efficient and effective planning of scarce resources to fight the epidemic.
    Keywords: HIV Prevention; DEA; Mother-to-Child HIV Transmission.
    JEL: C14 I12
    Date: 2012
  13. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper by applying Data Envelopment Analysis (DEA) ranks Economics journals in the field of Accounting, Banking and Finance. By using one composite input and one composite output the paper ranks 57 journals. In addition for the first time three different quality ranking reports have been incorporated to the DEA modelling problem in order to classify the journals into four categories (‘A’ to ‘D’). The results reveal that the journals with the highest rankings in the field are Journal of Finance, Journal of Financial Economics, Accounting Review, Journal of Accounting and Economics, Journal of Accounting Research and Journal of Financial and Quantitative Analysis.
    Keywords: Rankings; Economics Journals; Accounting Journals; Banking Journals; Finance Journals; Data Envelopment Analysis
    JEL: C14 C02 A10 G00 A11
    Date: 2012–01
  14. By: Diallo, Ibrahima Amadou
    Abstract: This paper employs panel data instrumental variable regression and threshold effect estimation methods to study the link between real effective exchange rate volatility and total factor productivity growth on a sample of 74 countries on six non overlapping sub-periods spanning in total from 1975 to 2004. The results illustrate that real effective exchange rate volatility affects negatively total factor productivity growth. But this effect is not very high. This outcome is corroborated by estimations using an alternative measurement of real effective exchange rate volatility and on a subsample of developed countries. But for developing countries the negative effect of real effective exchange rate volatility is very large. We also found that real effective exchange rate volatility acts on total factor productivity according to the level of financial development. For very low and very high levels of financial development, real exchange rate volatility has no effect on productivity growth but for moderately financially developed countries, real exchange rate volatility reacts negatively on productivity.
    Keywords: real effective exchange rate; volatility; total factor productivity growth; panel data instrumental variable regression; threshold effect estimation; stochastic frontier analysis
    JEL: O47 F3 F41
    Date: 2012–01–24
  15. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: By estimating the production frontier with the application of Data Envelopment Analysis (DEA) we rank the ‘Diamond Core’ economic journals as has been presented by Diamond (1989). By using one composite input and one composite output the paper ranks 27 core economics journals. For the first time a study attempts to rank the 27 journals by using data from SCOPUS database for the time period of 1996-2010. In addition for the first time three different quality ranking reports are incorporated in the DEA modelling problem in order to classify the journals into four categories (‘A’ to ‘D’). The results reveal that from the 27 ‘core’ economics journals the five journals with the highest rankings are Journal of Political Economy, Quarterly Journal of Economics, Journal of Economic Literature, Review of Economic Studies and American Economic Review. In addition it appears that the journals’ impact factor derived from SSCI database reflects their ranking position.
    Keywords: Rankings; Economics Journals; Diamond’s core Journals; Data Envelopment Analysis
    JEL: C14 C02 A10 A11
    Date: 2012–02
  16. By: Cândida Ferreira
    Abstract: The relationships between bank market concentration and bank efficiency are of particular relevance in the European Union (EU), but they remain controversial. Using a panel Granger causality approach, this paper contributes to the literature, testing not only the causality running from bank market concentration to bank efficiency, but also the reverse causality running from efficiency to concentration. The results obtained confirm the relative complexity of these causality relationships, although they generally point to a negative causation running both from concentration to efficiency and from efficiency to concentration. These findings are in line with the Structure Conduct Performance (SCP) paradigm and the suggestions that the increase of the banks’ market power will contribute to inefficiency, since these banks will face less competition to obtain more output results with less input costs. Our results suggest that within this panel of all 27 EU countries over a relatively long time period, from 1996 to the onset of the 2008 financial crisis, the more cost-efficient commercial and savings banks operated in less concentrated markets.
    Keywords: Concentration, Efficiency, Granger causality, European banks.
    JEL: G21 F36 D24 L11
    Date: 2012–01
  17. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper by applying Data Envelopment Analysis (DEA) ranks for the first time Economics journals in the field of Agricultural, Environmental and Natural Resource. Specifically, by using one composite input and one composite output the paper ranks 32 journals. In addition for the first time three different quality ranking reports have been incorporated to the DEA modelling problem in order to classify the journals into four categories (‘A’ to ‘D’). The results reveal that the journals with the highest rankings in the field are Journal of Environmental Economics and Management, Land Economics, American Journal of Agricultural Economics, Journal of Agricultural Economics, Energy Journal, Resource and Energy Economics, Environment and Planning A, Ecological Economics and European Review of Agricultural Economics.
    Keywords: Journals Rankings; Agricultural Economics; Environmental Economics; Natural Resource Economics; Data Envelopment Analysis
    JEL: Q00 C14 C02 A10 A11
    Date: 2012–01
  18. By: Emanuela Marrocu; Raffaele Paci
    Abstract: The aim of this paper is to assess the role played by creativity and other components of human capital on the process of economic growth for 257 regions in the 27 member countries of the European Union. We first decompose the regional human capital endowment to distinguish between the educational component (the share of individuals with a university degree) and the creativity component, which considers the actual occupations of individuals in specific jobs like science, engineering, education, arts and entertainment. We define three non overlapping categories of human capital (creative graduates, bohemians and non creative graduates) which are simultaneously included in a spatial model as determinants of regional growth measured by labour productivity. After extending the analysis to control for other relevant factors which may affect regional development, such as physical, technological and social capital, cultural diversity, industrial and geographical characteristics, we provide robust evidence on the growth enhancing effects of graduates, in particular for those of the creative category.
    Keywords: human capital; creativity; regional growth
    JEL: R11 J24 O40 C21
    Date: 2012
  19. By: João Carlos Lopes; Tanya Araujo
    Abstract: This paper contributes to further understanding the economic performance of Portuguese and Spanish regions, using a stochastic network approach. The empirical analysis is made at the territorial level of NUT 3 regions and covers the period 1995-2008. The performance of regions is based on GDP per capita at Purchasing Power Standards. The network analysis is based on a metric space built from the correlation coefficients between the log-difference of annual growth rates. The metric space and the corresponding topological coefficients are compared with the independent performance of randomly generated data. The metric space is graphically represented along the 3 dominant eigenvalues and the strongest connections are selected and represented in a network of Iberian regions. The main purpose of this research is to find the most relevant geographical and demographic determinants of regional development, namely a “border effect”, an “interiority (without border) effect”, a “coastal effect”, a “metropolitan effect” and an “ultra periphery effect”.
    Date: 2012–01

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