New Economics Papers
on Efficiency and Productivity
Issue of 2012‒07‒08
twenty-one papers chosen by

  1. Accounting for Greenhouse Gases Emissions in OECD Agricultural Productivity By Kabata, Tshepelayi
  2. Absorptive Capacity and Efficiency: A Comparative Stochastic Frontier Approach Using Sectoral Data By Letizia Montinari; Michael Rochlitz
  3. Technological progress and efficiency change In Hungarian Agriculture By Fekete-Farkas, Maria; Szucs, Istvan; Varga, Tibor
  4. Natural Resource Conservation and Technical Efficiency from Small-scale Farmers in Central Chile By Jara-Rojas, Roberto; Bravo-Ureta, Boris; Moreira, Victor; Diaz, José
  5. Determinants of technical efficiency in beef cattle production in Kenya By Otieno, David Jakinda; Hubbard, Lionel J.; Ruto, Eric
  6. Export Activity and Productivity: New Evidence from the Egyptian Manufacturing Industry By Youssouf KIENDREBEOGO
  7. Animal Breeding and Productivity Growth of Dairy Farms By Atsbeha, Daniel Muluwork; Kristofersson, Dadi; Rickertsen, Kyrre
  8. Cost Economies in Hog Production: Feed prices matter By Duvaleix-Treguer, Sabine; Gaigne, Carl
  9. Doubts on input quality: The effect of inaccurate fertilizer content on the estimation of production functions and technical efficiency By Khor, Ling Yee; Zeller, Manfred
  10. Maximum likelihood estimation of a stochastic frontier model with residual covariance By Simwaka, Kisu
  11. Impact of Access to Credit on Farm Productivity of Fruit and Vegetable Growers in Chile By Reyes, Alvaro; Lensink, Robert; Kuyvenhoven, Arie; Moll, Henk
  12. University Technology Transfer: How (in-)efficient are French universities? By Claudia Curi; Cinzia Daraio; Patrick Llerena
  13. Exports, R&D and Productivity: A test of the Bustos-model with German enterprise data By Joachim Wagner
  14. Productivity in the euro area- Any evidence of convergence? By David Sondermann
  15. An Analysis of Productivity Performance in Spain Before and During the Crisis: Exploring the Role of Institutions By Juan S. Mora Sanguinetti; Andrés Fuentes
  16. How land fragmentation affects off-farm labor supply in China: Evidence from household panel data By Jia, Lili; Petrick, Martin
  18. Market concentration and productivity in the United States corn sector: 2002-2009 By Nolan, Elizabeth; Santos, Paulo; Shi, Guanming
  19. Is Japanese agriculture improving its eco-efficiency? –An application of the System of Environmental and Economic Accounting (SEEA)– By Hayashi, Takashi; Yamamoto, Mitasu
  20. System of Rice Intensification (SRI) method of rice cultivation in West Bengal (India): An Economic analysis By Haldar, Surajit; Honnaiah, T.B.; Govindaraj, G.
  21. The structural determinants of the u.s. competitiveness in the last decades: "a trade-revealing" By Massimo Del Gatto; Filippo di Mauro; Joseph Gruber; Benjamin Mandel

  1. By: Kabata, Tshepelayi
    Keywords: Production Economics, Productivity Analysis,
    Date: 2012–08
  2. By: Letizia Montinari (IMT Lucca Institute for Advanced Studies); Michael Rochlitz (IMT Lucca Institute for Advanced Studies)
    Abstract: In this paper, we investigate differences in and determinants of technical efficiency across three groups of OECD, Asian and Latin American countries. As technical efficiency determines the capacity with which countries absorb technology produced abroad, these differences are important to understand differences in growth and productivity across countries, especially for developing countries which depend to a large extend on foreign technology. Using a stochastic frontier framework and data for 22 manufacturing sectors for 1996-2005, we find notable differences in technical efficiency between the three country groups we examine. We then investigate the effect of human capital and domestic R&D, proxied by the stock of patents, on technical efficiency. We find that while human capital has always a strongly positive effect on efficiency, an increase in the stock of patents has positive effects on efficiency in high-tech sectors, but negative effects in low-tech sectors.
    Keywords: absorptive capacity, efficiency, stochastic frontier analysis
    JEL: C33 O14 O33
    Date: 2012–06
  3. By: Fekete-Farkas, Maria; Szucs, Istvan; Varga, Tibor
    Abstract: Hungary became the member of European Union in 2004. The authors want to show that, though, many sectors of Hungarian agriculture have been operating at low level of technology and efficiency; there was a big expectation about the fast catching up with accession to European Union. This paper investigates the effect of EU membership on the productivity performance of Hungarian agriculture based on the years 2005 and 2009 using Data Envelopment Analyses and Malmquist index. The analysis showed that there were considerable reserves of efficiency in the presented two main branches (wheat and pig fattening) of the Hungarian agriculture, and the reserves slightly decreased in wheat production, but they increased in the pig sector by EU accession. The implication for agricultural reform of future productivity growth has also been assessed.
    Keywords: total factor productivity, agriculture, EU membership, Agricultural and Food Policy, Crop Production/Industries, Farm Management, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, D24, Q16,
    Date: 2012–08–20
  4. By: Jara-Rojas, Roberto; Bravo-Ureta, Boris; Moreira, Victor; Diaz, José
    Abstract: This study estimates a stochastic production frontier to measure technical efficiency (TE) using farm-level survey data for a random sample of small-scale farmers in Central Chile. Socioeconomic and productive information was collected in season 2005/06 through a survey of 319 farmers in the Province of Linares. An important issue in the paper is the effect of adoption of soil and water conservation practices on productivity. The results reveal a positive relationship between the adoption of soil and water conservation and farm-level TE. The results also indicate that improvements in TE, when associated with conservation practices, not only lead to higher output and thus improvements in net returns, but also contribute to environmental sustainability. Moreover, the analysis reveals a positive relationship between TE and human capital variables such as education and agricultural extension.
    Keywords: soil and water conservation, stochastic frontiers, technical efficiency, sustainability., Production Economics, Productivity Analysis, D24, Q2, Q12, Q16,
    Date: 2012
  5. By: Otieno, David Jakinda; Hubbard, Lionel J.; Ruto, Eric
    Abstract: The stochastic metafrontier method is applied to estimate technical efficiency levels in beef cattle production in Kenya. Subsequently, a Tobit model is used to assess factors that might influence efficiency. Results show that the average efficiency level is 0.69, suggesting that there is considerable scope to improve beef production in Kenya. Considering the importance of the livestock enterprise to rural livelihoods and its potential role in poverty reduction, there is need for appropriate development strategies for enhanced efficiency. In particular, livestock development policies should focus on provision of technology-related services. For instance, promoting use of controlled cattle crossbreeding methods would enhance productivity gains. Effective institutional support is also necessary in order to improve efficiency, including improved access to market contracts, better farm management skills and off-farm income opportunities. Key words: Beef production; technical efficiency determinants; Kenya. JEL classifications: D24; O32; Q18.
    Keywords: Beef production, technical efficiency determinants, Kenya, Agricultural and Food Policy, Livestock Production/Industries, Production Economics, Productivity Analysis, D24, O32, Q18,
    Date: 2012
  6. By: Youssouf KIENDREBEOGO (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: This study addresses on the relationship between export participation and firm-level productivity. Using comprehensive data for Egypt, we find that total factor productivity and labor productivity are significantly higher in exporters than in non-exporters. When we differentiate between pre-entry and post-entry differences in productivity performance and after controlling for potential endogeneity problem, we find that this exporter premia is driven by the learning-by-exporting hypothesis. We find no evidence that more productive firms self-select into export markets. Exporting makes firms more productive but more productive firms do not necessarily self-select into exporting.
    Keywords: Productivity Performance;Exports
    Date: 2012–06–21
  7. By: Atsbeha, Daniel Muluwork; Kristofersson, Dadi; Rickertsen, Kyrre
    Abstract: Breeding can result in more output per unit of inputs as well as improved quality of outputs. A genetic-based technical change component is introduced into the Malmquist index, and productivity growth due to genetic and nongenetic factors is estimated for Icelandic dairy farms with quality adjusted output. Only about 4 percent of the productivity growth has been genetic-based. More than a third of this growth can be attributed to better milk quality. Adoption of new nongenetic-based technologies explains most of the productivity growth.
    Keywords: breeding, dairy production, Malmquist decomposition, technical change, Livestock Production/Industries, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, D24, O33, Q12, Q16,
    Date: 2012–06–25
  8. By: Duvaleix-Treguer, Sabine; Gaigne, Carl
    Abstract: In this paper, we assess the impact of farm size on the production cost and evaluate the marginal costs and margins by taking into account that input prices may change with the scale of production. By using French data at the hog farm level, we estimate a system of equations including feed price equation, input demand functions, a output supply function based on a technology approximated by a combined generalized Leontief‐Quadratic form. Our results suggest the marginal costs are over‐estimated whether the endogeneity of feed prices is not controlled for. We show also that cost economies associated with output size are related to lower feed prices and not to a better use of labor. More specifically, cost economies for large farms (enjoying highest levels of profits) arise from feed prices and not by technological scale economies. In contrast,farms with no hired labor exhibit technological scale economies and reach higher pricecost margins than the larger farms.
    Keywords: Marginal cost, Farm size, Scale economies, Input prices, Price‐cost margins, Livestock Production/Industries, Production Economics, Productivity Analysis, Q12, D24,
    Date: 2012–06
  9. By: Khor, Ling Yee; Zeller, Manfred
    Abstract: Household survey responses regarding levels of input use are sometimes affected by bias of which even the households themselves are not aware. Some examples include poor quality seed with a mixture of the fertile and infertile types, and pesticide content that has been substituted with less effective chemicals. We analyze in our paper the effect of low quality fertilizer, which contains less nitrogen than is advertised on the packaging. We show that this could lead to bias in the estimation of marginal effect and technical efficiency. Using panel data from the Hebei province of China, we calculate the magnitude of the bias across different levels of fertilizer quality. We find that the bias could be between -2% and -7% for marginal effect of fertilizer at mean input levels, and between 1% and 4% for technical efficiency.
    Keywords: Low quality fertilizer, Estimation bias, Production function, Agricultural and Food Policy, Production Economics, Productivity Analysis, Q12, Q18,
    Date: 2012
  10. By: Simwaka, Kisu
    Abstract: In theoretical literature on productivity, the disturbance terms of the stochastic frontier model are assumed to be independent random variables. In this paper, we consider a stochastic production frontier model with residuals that are both spatially and time-wise correlated. We introduce generalizations of the Maximum Likelihood Estimation procedure suggested in Cliff and Ord (1973) and Kapoor (2003). We assume the usual error component specification, but allow for possible correlation between individual specific errors components. The model combines specifications usually considered in the spatial literature with those in the error components literature. Our specifications are such that the model’s disturbances are potentially spatially correlated due to geographical or economic activity. For instance, for agricultural farmers, spatial correlations can represent productivity shock spillovers, based on geographical proximity and weather. These spillovers effect estimation of efficiency.
    Keywords: spatial stochastic production frontier models; correlated errors
    JEL: C23 C24 C21
    Date: 2012–06–27
  11. By: Reyes, Alvaro; Lensink, Robert; Kuyvenhoven, Arie; Moll, Henk
    Abstract: The objective of this paper is to analyze the factors that determine productivity of fruit and vegetable growers in central Chile, focusing especially on the effect of short-term credit on farm productivity for market-oriented farmers. We explicitly test for possible selection bias using a panel data set from a survey conducted in 2006 and 2008 with 177 farmers. Our results indicate that short-term credit does not have an impact on farm productivity, while other factors as education and the type of activity do. These results suggest that other providers of credit, such as informal credit institutions, may relax short-term credit constraints in rural financial markets in Chile.
    Keywords: Productivity, credit constraint, medium-scale farmers, Chile, Agricultural and Food Policy, Financial Economics, Productivity Analysis,
    Date: 2012–08
  12. By: Claudia Curi; Cinzia Daraio; Patrick Llerena
    Abstract: This paper assesses the efficiency of the technology transfer operated by the French university system and its main determinants. The analysis is based on a detailed and original database of 51 TTOs, categorized by type of university, over the period 2003-2007. Overall, we find low-level of efficiency and both intra-category and inter-categories efficiency variation. The analysis of determinants shows that French TTOs efficiency depends extensively on the nature of the category (with universities specialised in science and engineering resulting the most efficient ones), on institutional and environmental characteristics. We found that both the seniority of TTO and size of the university have a positive effect. In terms of environmental variables, the intensity of R&D activity (both private and public) has a positive impact; however, in terms of growth rate, only the Private R&D activity seems to be the main driver. Lastly, having a medical school related to a hospital is a source of inefficiency.
    Keywords: Technology Transfer Offices (TTOs), French University System, Technical Efficiency, DEA, Bootstrap.
    JEL: C34 C44 D24
    Date: 2012
  13. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This paper presents the first empirical test with German firm level data of a hypothesis derived by Bustos (AER 2011) in a model that explains the decision of heterogeneous firms to export and to engage in R&D. Using a non-parametric test for first order stochastic dominance it is shown that, in line with this hypothesis, the productivity distribution of firms with exports and R&D dominates that of exporters without R&D, which in turn dominates that of firms that neither export nor engage in R&D. These results are in line with findings for Argentina. The model, therefore, seems to be useful to guide empirical work on the relation between exports, R&D and productivity.
    Keywords: Exports, R&D, productivity, Germany
    JEL: F14
    Date: 2012–06
  14. By: David Sondermann (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.)
    Abstract: Sizable prevailing real economic disparities among countries in a currency union potentially involve costs for those countries for which the aggregate policy stance is not appropriate. This paper contributes to the literature by testing for productivity convergence among euro area countries. While no convergence can be found on the aggregate level, selected service sectors and manufacturing sub-industries indicate evidence of convergence. In a search for factors in uencing productivity, investments in research and development as well as a high skill level of employees are shown to be benecial whereas regulations constitute a burden. Consequently, euro area countries should engage in structural reforms where necessary to provide a more competitive environment, eventually facilitating economic convergence. JEL Classification: C33, O47, J24, L60, L80.
    Keywords: Productivity, Convergence, Panel Unit Root Test, Manufacturing and Service Sector
    Date: 2012–04
  15. By: Juan S. Mora Sanguinetti; Andrés Fuentes
    Abstract: The Spanish economy experienced significantly weaker labour productivity growth than other OECD economies and failed to catch up with the most advanced economies in the period 1996-2007. In recent years labour productivity growth has accelerated, but this recovery is likely to be due to cyclical and temporary factors. The aim of this paper is to identify what factors weigh on weak trend productivity growth. The relatively weak performance largely reflects the low growth of total factor productivity within a wide range of sectors, with very limited impact of composition effects, while the capital stock and educational attainment of the workforce have grown relatively strongly. The paper investigates the role of some institutions in deterring innovation, competition and the growth of successful firms. It argues that Spain needs to have a more flexible labour market and collective bargaining system to improve productivity performance. Productivity performance would also benefit from a more flexible business environment in such a way that both entry and exit of firms in the economy are less costly, including a reform of bankruptcy legislation, steps to make civil judicial procedures more efficient and a greater reduction of barriers to entry into the retail trade sector.<P>Analyse de la performance de la productivité en Espagne avant et durant la crise : Le rôle des institutions<BR>L’économie espagnole a enregistré une croissance nettement plus faible de la productivité du travail que les autres économies de l’OCDE et elle n’a pas réussi à rattraper les économies les plus avancées sur la période 1996-2007. Ces dernières années, la croissance de la productivité du travail s’est accélérée, mais ce redressement est vraisemblablement dû à des facteurs conjoncturels et temporaires. L’objet de cette étude est d’identifier les facteurs qui pèsent sur la croissance de la productivité. La faiblesse relative de la performance reflète en grande partie la médiocre progression de la productivité totale des facteurs dans un large éventail de secteurs, avec un impact très limité des effets de composition, alors que le stock de capital et le niveau de formation de la main-d’oeuvre ont assez fortement progressé. Cette étude examine dans quelle mesure certains dispositifs institutionnels ont joué contre l’innovation, la concurrence et le développement d’entreprises prospères. L’Espagne, est-il observé, doit pouvoir s’appuyer sur un marché du travail et un système de négociations collectives plus flexibles pour améliorer sa performance en termes de productivité. La performance sur le plan de la productivité bénéficierait aussi de davantage de flexibilité dans l’environnement des entreprises, de façon qu’aussi bien les entrées que les sorties d’entreprises de l’économie soient moins coûteuses, ce qui suppose une réforme de la législation sur les faillites, des mesures pour rendre les procédures judiciaires au civil plus efficientes et un abaissement plus marqué des barrières à l’entrée dans le secteur du commerce de détail.
    JEL: J24 K0 O4
    Date: 2012–06–21
  16. By: Jia, Lili; Petrick, Martin
    Abstract: This study provides a deeper theoretical understanding of the linkages between land fragmentation and off-farm labor supply and investigates this relationship empirically in a more direct and robust way than in the existing literature. Drawing upon a rural household panel dataset collected in Zhejiang, Hubei and Yunnan provinces from 1995-2002, we estimate the effects in two steps. First, we estimate the effect of land fragmentation on labor productivity. Second, we estimate the effect of land fragmentation on off-farm labor supply. The production function results show that land fragmentation indeed leads to lower agricultural labor productivity, implying land consolidation will make on-farm work more attractive and thus decrease off-farm labor supply. However, the effect of land consolidation on off-farm labor supply cannot be observed in the presence of imperfect labor market and this conclusion is supported by a direct estimation of the effect of land fragmentation on off-farm labor supply.
    Keywords: Land fragmentation, off-farm, labor supply, China, Labor and Human Capital, Land Economics/Use, Q15 Q24 J22 R23,
    Date: 2012
  17. By: Alexander Knobel (Gaidar Institute for Economic Policy)
    Abstract: This paper estimates the influence of the service sector’s liberalization on service flows in transition economies and on productivity of the Russian industry that uses these services as intermediate consumption. Empirical analysis of the international statistics shows that service trade between CIS countries and OECD countries is strongly underestimated and could grow 2.5–3 times larger due to liberalization. Modeling of the international service trade shows that services imports into Russia are strongly limited by existing trade barriers. For Russia, according to the estimates, the most liberalized service sector is communication services, and the least liberalized sector is information technology. This paper demonstrates that services are actively used by Russian industry as intermediate consumption. On the basis of the inter-industry empirical analysis, one can conclude that service sector liberalization may have a positive impact on the productivity of various sectors of the Russian manufacturing industry.
    Keywords: : import volumes, services, trade liberalization, gravity model, panel data, labor productivity
    JEL: C23 F12 F14 O14
    Date: 2012
  18. By: Nolan, Elizabeth; Santos, Paulo; Shi, Guanming
    Abstract: There is a large literature which investigates the relationship between market concentration and innovation. It is difficult to find a suitable measure for innovative output. We use a rich dataset based on university trials of corn hybrids to estimate, using fixed effects, a production function. We predict the fixed effects, by year and Crop Reporting District (CRD), for each hybrid to identify the amount of yield that is directly related to the genetics of the hybrids. We combine this dataset with one which provides information for market concentration, and find, using two stage least squares, that there is a positive relationship between market concentration and innovation.
    Keywords: corn hybrids, innovation, instrumental variables, market concentration., Industrial Organization, Production Economics, Productivity Analysis,
    Date: 2012
  19. By: Hayashi, Takashi; Yamamoto, Mitasu
    Abstract: The world is facing serious resource shortage and environmental problems. Eco-efficiency is more attention for sustainable development not only in manufacturing sector but also agricultural sector. This study investigates whether Japanese agriculture improves its eco-efficiency. To conduct the analysis, we, first, develop a System of Environmental and Economic Accounting (SEEA) for agriculture and forestry, and then estimate the eco-efficiencies and Factor values (FVs) of the agricultural sector, using a case study in Japan. Eco/energy-efficiencies and FVs are estimated based on greenhouse gas emission, acidification, eutrophication, air pollution, and energy and water use in every five year from 1985 to 2005. The results shows that although the absolute amounts of environmental impact and resource use have declined, eco/resource-efficiencies have worsened and FVs are less than 1 throughout the estimation period. Further governmental support for farmers is required to achieve improved eco-efficiency.
    Keywords: Eco-efficiency, Factor value, System of Environmental and Economic Accounting (SEEA), Agriculture, Japan, Environmental Economics and Policy,
    Date: 2012
  20. By: Haldar, Surajit; Honnaiah, T.B.; Govindaraj, G.
    Abstract: The economic analysis of System of Rice Intensification (SRI) vis-à-vis conventional method of rice cultivation was assessed in Bardhaman district of West Bengal during 2009-10. The cost-returns analysis of SRI method revealed that the cost of raising nursery for one ha main field transplantation was comparatively lower (Rs 954 and Rs 995) than conventional method (Rs 3654 and Rs 4503) in kharif and rabi season, respectively. However, cost of cultivation in SRI method was comparatively higher in kharif (Rs 44833), but less in rabi season (Rs 43862) as compared to conventional method (Rs 40627 and Rs 44853 in kharif and rabi) of rice cultivation. The total return per rupee of total cost was higher in SRI method (1.58 and 1.92) than in conventional method (1.25 and 1.37) in both the seasons. SRI farmers were found to be technically more efficient than conventional rice farmers. The probability of adoption increases as the literacy level increases and farmers located far away from canal. Difficulties in management practices like water management, intercultural operations along with lack of skilled labour and water scarcity especially in rabi season were the major factors constraining the adoption of SRI method.
    Keywords: system of rice intensification, efficiency, logit analysis, Agricultural and Food Policy, Crop Production/Industries, Farm Management, Production Economics,
    Date: 2012
  21. By: Massimo Del Gatto (G.d’Annunzio University and CRENoS); Filippo di Mauro (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Joseph Gruber (Federal Reserve Board.); Benjamin Mandel (Federal Reserve Board.)
    Abstract: We analyze the decline in the U.S. share of world merchandise exports against the backdrop of a model-based measure of competitiveness. We preliminarily use constant market share analysis and gravity estimations to show that the majority of the decline in export shares can be associated with a declining share of world income, suggesting that the dismal performance of the U.S. market share is not a sucient statistic for competitiveness. We then derive a computable measure of country-sector specic real marginal costs (i.e. competitiveness) which, insofar it is inferred from actual trade ows, is referred to as 'revealed'. Brought to the data, this measure reveals that most U.S. manufacturing industries are losing momentum relative to their main competitors, as we nd U.S. revealed marginal costs to grow by more than 38% on average. At the sectoral level, the "Machinery" industry is the most critical. JEL Classification: F12, F17, F19.
    Keywords: Productivity, competitiveness, export shares, marginal costs, rm heterogeneity, rm selection, gravity equation, trade costs.
    Date: 2012–06

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