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on Efficiency and Productivity |
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Issue of 2012‒03‒21
fifteen papers chosen by |
| By: | Luis Aguiar; Philippe Gagnepain |
| Abstract: | The goal of this paper is to assess the impact on the performance of firms that participate in Research Joint Ventures (RJVs) funded by the Fifth European Framework Programme for Research and Technological Development (EU-FP5). A special emphasis is made on the User-friendly Information Society (IST) programme, one of the most important thematic programmes of the EU-FP5. We use the funding available to the firms as an instrumental variable to account for self-selection and estimate the Local Average Treatment Effect (LATE) of participation by considering labor productivity and profit margin as performance measures. Our results show a large and positive impact of participation on the labor productivity of the firms, whereas the effect on profit margin is weaker. When taking into account the size of the RJV, we find that the positive impact on labor productivity comes mainly from participation in large projects and that participation in smaller RJVs has a negative effect on the profit margin |
| Keywords: | Research joint venture, R&D policy, Productivity, EU framework programme |
| JEL: | L24 L25 O31 O32 O38 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:we1207&r=eff |
| By: | Lise Tole (Department of Economics, University of Strathclyde); Gary Koop (Department of Economics, University of Strathclyde) |
| Abstract: | This paper uses data on the worldÂ's copper mining industry to measure the impact on efficiency of the adoption of the ISO 14001 environmental standard. Anecdotal and case study literature suggests that fiÂ…rms are motivated to adopt this standard so as to achieve greater efficiency through changes in operating procedures and processes. Using plant level panel data from 1992-2007 on most of the worldÂ's industrial copper mines, the study uses stochastic frontier methods to investigate the effects of ISO adoption. The variety of models used in this study Â…find that adoption either tends to improve efficiency or has no impact on efficiency, but no evidence is found that ISO adoption decreases efficiency. |
| Keywords: | ISO 14001 environmental standard; Â…firm performance; stochastic frontier cost function; copper mining industry |
| JEL: | C23 L72 Q52 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1136&r=eff |
| By: | Lise Tole (Department of Economics, University of Strathclyde); Gary Koop (Department of Economics, University of Strathclyde) |
| Abstract: | This paper uses data on the worldÂ's copper mining industry to measure the impact on efficiency of the adoption of the ISO 14001 environmental standard. Anecdotal and case study literature suggests that fiÂ…rms are motivated to adopt this standard so as to achieve greater efficiency through changes in operating procedures and processes. Using plant level panel data from 1992-2007 on most of the worldÂ's industrial copper mines, the study uses stochastic frontier methods to investigate the e¤ects of ISO adoption. The variety of models used in this study fiÂ…nd that adoption either tends to improve efficiency or has no impact on efficiency, but no evidence is found that ISO adoption decreases efficiency. |
| Keywords: | ISO 14001 environmental standard; Â…firm performance; stochastic frontier cost function; copper mining industry |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:11-36&r=eff |
| By: | Pfeifer, Christian (Leuphana University Lüneburg); Wagner, Joachim (Leuphana University Lüneburg) |
| Abstract: | This empirical paper documents the relationship between composition of a firm's workforce (with a special focus on age and gender) and its performance (productivity and profitability) for a large representative sample of enterprises from manufacturing industries in Germany. We use unique newly available data that for the first time combine information from the statistics of employees covered by social security that is aggregated at the enterprise level and information from enterprise level surveys performed by the Statistical Offices. Our micro-econometric analysis confirms previous findings of concave age-productivity profiles, which are consistent with human capital theory, and adds a new finding of a rather negative effect of age on firms' profitability, which is consistent with deferred compensation considerations. Moreover, our analysis reveals for the first time that the ceteris paribus lower level of productivity in firms with a higher share of female employees does not go hand in hand with a lower level of profitability in these firms. If anything, profitability is (slightly) higher in firms with a larger share of female employees. This finding might indicate that lower productivity of women is (over)compensated by lower wage costs for women, which might be driven by general labor market discrimination against women. |
| Keywords: | ageing, firm performance, gender, productivity, profitability, Germany |
| JEL: | D22 D24 J21 J24 L25 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6381&r=eff |
| By: | Wasantha Athukorala (QUT); Clevo Wilson (QUT) |
| Abstract: | Extraction of groundwater for onion and other cash crop production has been increasing rapidly during the last two decades in the dry zone areas of Sri Lanka. As a result of overuse, the quantity of available groundwater is gradually declining, while water quality is deteriorating. The deteriorating water quality has a negative impact on agricultural production, especially for crops (such as onions) that are sensitive to increases in salinity levels. This issue is examined with respect to onion production in Sri Lanka. A stochastic frontier production function (SFPF) is used, in which technical efficiency and the determinants of inefficiencies are estimated simultaneously. The results show that farmers are overusing groundwater in their onion cultivation which has resulted in decreasing yields. Factors contributing to inefficiency in production are also identified. The results have important policy implications. |
| Keywords: | Agriculture, groundwater recharge, salinization, Sri Lanka |
| Date: | 2012–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:279&r=eff |
| By: | Samba MBAYE |
| Abstract: | The literature on the effect of real exchange rate undervaluation on growth points toward two main transmission channels: the "capital accumulation channel" and the "total factor productivity (TFP) growth channel". This paper carries out an empirical investigation on the TFP growth channel. We provide answers to the three following questions. Does undervaluation of the currency boost the overall productivity level in the economy? If so, does this "undervaluation-induced" productivity improvement significantly enhance growth? And what is the magnitude of the TFP growth channel relative to the capital accumulation channel? Based on a panel of 72 countries over 1970-2008, and separating explicitly the effect of undervaluation from that of overvaluation, our estimations suggest that: (i) the TFP growth channel is empirically verified, (ii) this channel seems to convey the most important part of the growth enhancing effect of undervaluation. These results are robust to the use of both an enhanced-PPP undervaluation measure and a behavioral equilibrium exchange rate based undervaluation index. |
| Keywords: | real exchange rate misalignment, growth, total factor productivity. |
| JEL: | O47 F31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1338&r=eff |
| By: | Hsu, Chih-Chiang; Lin, Chang-Ching; Yin, Shou-Yung |
| Abstract: | This paper develops panel stochastic frontier models with unobserved common correlated effects. The common correlated effects provide a way of modeling cross-sectional dependence and represent heterogeneous impacts on individuals resulting from unobserved common shocks. Traditional panel stochastic frontier models do not distinguish between common correlated effects and technical inefficiency. In this paper, we propose a modified maximum likelihood estimator (MLE) that does not require estimating unobserved common correlated effects. We show that the proposed method can control the common correlated effects and obtain consistent estimates of parameters and technical efficiency for the panel stochastic frontier model. Our Monte Carlo simulations show that the modified MLE has satisfactory finite sample properties under a significant degree of cross-sectional dependence for relatively small T. The proposed method is also illustrated in applications based on a cross country comparison of the efficiency of banking industries. |
| Keywords: | fixed effects; common correlated effects; factor structure; cross-sectional dependence; stochastic frontier |
| JEL: | C23 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37313&r=eff |
| By: | Laura Di Giorgio (Department of Economics, University of Lugano); Massimo Filippini (Department of Economics, University of Lugano; ETH, Zurich, Switzerland); Giuliano Masiero (Department of Economics and Technology Management, University of Bergamo, Italy; Department of Econonomics, University of Lugano, Switzerland) |
| Abstract: | In Switzerland, nursing home services are mainly provided by regulated public and private nonprofit organizations. Some of them are created by local governments as foundations. This provides a unique setting to analyze the impact of the institutional form on the performance of nursing homes. We propose a model where the institutional form is represented as a legal constraint which affects managers in the decison-making process. Considering a sample of 44 Swiss Italian nursing homes over a 7-years period (1999-2005), we then disentangle persistent inefficiency due to differences in the institutional form from unobserved heterogeneity. The applied estimation strategy provides more accurate estimates of the impact of the institutional form on nursing homes efficiency, as compared to previous studies. Our results suggest that governmental nursing homes are more costly than private and public foundations. These results are consistent across different model specifications. |
| Keywords: | constant inefficiency, unobserved heterogeneity, nursing homes, nonprofit, institutional form |
| JEL: | C23 I18 L20 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wpaper:1203&r=eff |
| By: | Joshua Drucker |
| Abstract: | The spatial extent of localized agglomeration economies constitutes one of the central current questions in regional science. It is crucial for understanding firm location decisions and for assessing the influence of proximity in shaping spatial patterns of economic activity, yet clear-cut answers are difficult to come by. Theoretical work often fails to define or specify the spatial dimension of agglomeration phenomena. Existing empirical evidence is far from consistent. Most sources of data on economic performance do not supply micro-level information containing usable geographic locations. This paper provides evidence of the distances across which distinct sources of agglomeration economies generate benefits for plants belonging to three manufacturing industries in the United States. Confidential data from the Longitudinal Research Database of the United States Census Bureau are used to estimate cross-sectional production function systems at the establishment level for three contrasting industries in three different years. Along with relevant establishment, industry, and regional characteristics, the production functions include variables that indicate the local availability of potential labor and supply pools and knowledge spillovers. Information on individual plant locations at the county scale permits spatial differentiation of the agglomeration variables within geographic regions. Multiple distance decay profiles are investigated in order to explore how modifying the operationalization of proximity affects indicated patterns of agglomeration externalities and interfirm interactions. The results imply that industry characteristics are at least as important as the type of externality mechanism in determining the spatial pattern of agglomeration benefits. The research methods borrow from earlier work by the author that examines the relationships between regional industrial structure and manufacturing production. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:12-01&r=eff |
| By: | Ellen R. McGrattan; Edward C. Prescott |
| Abstract: | Prior to the mid-1980s, labor productivity growth was a useful barometer of the U.S. economy’s performance: it was low during economic recessions and high during expansions. Since then, labor productivity has become significantly less procyclical. In the recent recession of 2008–2009, labor productivity actually rose as GDP plummeted. These facts have motivated the development of new business cycle theories because the conventional view is that they are inconsistent with existing business cycle theory. In this paper, we analyze recent events with existing theory and find that the labor productivity puzzle is much less of a puzzle than previously thought. In light of these findings, we argue that policy agendas arising from new untested theories should be disregarded. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmwp:694&r=eff |
| By: | Sébastien Massoni (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne); Jean-Christophe Vergnaud (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne) |
| Abstract: | The Action Lecture program is an innovative teaching method run in some nursery and primary schools in Paris and designed to improve pupils' literacy. We report the results of an evaluation of this program. We describe the experimental protocol that was built to estimate the program's impact on several types of indicators. Data were processed following a Differences-in-Differences (DID) method. Then we use the estimation of the impact on academic achievement to conduct a cost-effectiveness analysis and take a reduction of the class size program as a benchmark. The results are positive for the Action Lecture program. |
| Keywords: | Costs; Educational economics; Efficiency; Resource allocation |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-00676515&r=eff |
| By: | Foellmi, Reto; Oechslin, Manuel |
| Abstract: | We explore the productivity impact of international trade in a monopolistically competitive economy with endogenous mark-ups due to credit market frictions. We show that reducing trade barriers in such an environment (i) may - but not necessarily must – have a negative impact on productivity and output; (ii) is bound to increase the polarization of the income distribution. The reason is that the pro-competitive effects of trade reduce mark-ups and hence the borrowing capacity of less affluent entrepreneurs. As a result, smaller firms may no longer be able to make the investments required to operate the high-productivity technology. Our findings are consistent with evidence from developing countries which (i) does not suggest a clear-cut impact of trade on economic performance; (ii) hints at an inequality-increasing effect of globalization. |
| Keywords: | International trade, credit market frictions, productivity, inequality |
| JEL: | O11 F13 O16 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2012:03&r=eff |
| By: | Roberto Antonietti |
| Abstract: | In this paper I assess the existence, and the magnitude, of technological externalities in the form of creativity spillovers that affect individual firms’ innovative intensity. Relying on a large sample of Italian manufacturing firms, I first estimate a knowledge production function; from this, I extract the residuals, which represent the unexplained part of the actual observed share of innovative sales, namely ‘innovativeness’. Then, I regress such a measure of firm innovativeness on a set of occupation-based, as well as density-based, indicators of creativity at the NUTS3 level, while controlling for firm localization, size and industry. I also control for endogeneity and non-linearity by estimating a two-stage least squares model and a generalized additive model respectively. My estimates show that: (i) there is a positive and highly statistically significant effect of creativity on innovativeness; (ii) the effect of creativity on actual innovative sales is weak, whereas I find a strong positive effect played by internal R&D labour; (iii) occupation-based measures of creativity outperform education-based measures of human capital; (iv) when controlling for the education content of jobs, firms’ innovativeness is affected more by the local availability of non-graduated creative workers than of graduated ones; (v) rather, a higher local availability of graduated creative workers affects the invention intensity of a city; (vi) the relationship between firm innovativeness and the local density of creative people is U-shaped, so that proximity-based knowledge externalities emerge only after a certain density threshold is reached, this occurring typically in larger urban areas, typically hosting design and service-based creative industries. |
| Keywords: | creativity; innovativeness; innovative sales; knowledge production function; proportions |
| JEL: | L60 O31 R10 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpol:1117&r=eff |
| By: | Nils Gutacker (Centre for Health Economics, University of York, UK); Chris Bojke (Centre for Health Economics, University of York, UK); Silvio Daidone (Centre for Health Economics, University of York, UK); Nancy Devlin (Office for Health Economics, London, UK); David Parkin (NHS South East Cost, Horley, UK); Andrew Street (Centre for Health Economics, University of York, UK) |
| Abstract: | Accounting for variation in the quality of care is a major challenge for the assessment of hospital cost performance. Because data on patients’ health improvement are generally not available, existing studies have resorted to inherently incomplete outcome measures such as mortality or re-admission rates. This opens up the possibility that providers of high quality care are falsely deemed inefficient and vice versa. This study makes use of a novel dataset of routinely collected patient-reported outcomes measures (PROMs) to i) assess the degree to which cost variation is associated with variation in patients’ health gain and ii) explore how far judgement about hospital cost performance changes when health outcomes are accounted for. We use multilevel modelling to address the clustering of patients in providers and isolate unexplained cost variation. Our results provide some evidence of a U-shaped relationship between risk-adjusted costs and outcomes for hip replacement surgery. For the other three investigated procedures, the estimated relationship is sensitive to the choice of PROM instrument. We do not observe substantial changes in estimates of cost performance when outcomes are explicitly accounted for. |
| Keywords: | hospital costs, efficiency, patient outcomes, PROMs, cost-quality relationship |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:chy:respap:68cherp&r=eff |
| By: | Daouia, Abdelaati; Gijbels, Irene |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ner:toulou:http://neeo.univ-tlse1.fr/3071/&r=eff |