New Economics Papers
on Efficiency and Productivity
Issue of 2012‒08‒23
twenty-six papers chosen by

  1. The Evolution of Manufacturing Efficiency: Evidence from Indian States By Nitin Gupta
  2. Improving efficiency through consolidation of jurisdictions? Evidence from the cantons of Switzerland By Philippe K. Widmer; George Elias; Peter Zweifel
  3. Aggregation of Scale Efficiency By Valentin Zelenyuk
  4. Higher productivity in Exporters: self-selection, learning by exporting or both? Evidence from Vietnamese manufacturing SMEs By Vu , Van Huong
  5. Policy, Technology, and Efficiency of Brazilian Agriculture By Rada, Nicholas E.; Valdes, Constanza
  6. Environmental Efficiency Among Corn Ethanol Plants By Sesmero, Juan P.; Perrin, Richard K.; Fulginiti, Lilyan E.
  7. Agglomeration, Accessibility, and Productivity: Evidence for Urbanized Areas in the US By Daniel Graham; Patricia Melo; David Levinson
  8. Production Externalities in the Wood Furniture Industry in Central Java By Roos K. Andadari; Henri L.F. de Groot; Piet Rietveld
  9. Energy efficiency measurement in agriculture with imprecise energy content information By Blancard, Stephane; Martin, Elsa
  10. Allocative Efficiency Analysis using DEA in Stata By Choonjoo Lee
  11. Green innovations and organizational change: Making better use of environmental technology By Hottenrott, Hanna; Rexhäuser, Sascha; Veugelers, Reinhilde
  12. Offshoring, Domestic Outsourcing, and Productivity: Evidence for a Number of European Countries By Tillmann Schwörer
  13. Labour relations quality and productivity : An empirical analysis on French firms By Gilbert Cette; Nicolas L. Dromel; Rémy Lecat; Anne-Charlotte Paret
  14. A homothetic reference technology in Data Envelopment Analysis By Olesen, Ole B.
  15. Direction of Causality in Innovation-Exporting Linkage: Evidence on Korean Manufacturing By Chin Hee HAHN; Chang-Gyun PARK
  16. Globalization, Innovation and Productivity in Manufacturing Firms: A Study of Four Sectors of China By Jacques MAIRESSE; Pierre MOHNEN; Yanyun ZHAO; Feng ZHEN
  17. Japan out of the Lost Decade: Divine Wind or Firms’ Effort? By Mika Saito; Ichiro Tokutsu; Kazuo Ogawa
  18. Multilevel Approaches and the Firm-Agglomeration Ambiguity in Economic Growth Studies By Frank G. van Oort; Martijn J. Burger; Joris Knoben; Otto Raspe
  19. Wage structure and firm performance By N. CECI-RENAUD; V. COTTET
  20. The Impact of a Culturally Diverse Workforce on Firms' Market Size: An Empirical Investigation on Germany By Stephan Brunow; Peter Nijkamp
  21. Product-Marketing Innovation, Skills, and Firm Productivity By Junge, Martin; Severgnini, Battista; Sørensen, Anders
  22. The Value of Bosses By Edward P. Lazear; Kathryn L. Shaw; Christopher T. Stanton
  23. Market Size, Division of Labor, and Firm Productivity By Chaney, Thomas; Ossa, Ralph
  24. Sluggish Productivity Growth in Denmark: The Usual Suspects? By Muge Adalet McGowan; Stéphanie Jamet
  25. Incentives in the Public Sector: Evidence from a Government Agency By Burgess, Simon; Propper, Carol; Ratto, Marisa; Tominey, Emma
  26. Comparative Advantage, Scale Economy and Regional Specialization:An Empirical Analysis Based on China’s Industries By Lu, Zheng; Deng, Xiang

  1. By: Nitin Gupta
    Abstract: The paper investigates the patterns of variations in Indian industrial performance at both industry and state levels. Applying stochastic frontier analysis to an unbalanced panel of 15 Indian states, 22 industries at the 2-digit level, and an 11-year period spanning 1992-2002; the paper estimates, for each industry group, the relative ranking of states based on their technical efficiency scores, and how these rankings have changed over time. The results represent novel contributions to the growing debate on Indian industrial productivity, albeit from a different perspective. Three primary sets of conclusions arise. First, there is considerable variation across industries in terms of their aggregate efficiency performance. However, overall industrial performance appears to be driven more by input growth, with technical efficiency having a marginal effect at best. Second, results also show considerable regional variation in efficiency patterns, with southern and western states outperforming northern and eastern states in terms of their overall manufacturing efficiencies. Punjab is surprisingly the worstperforming state in the country in terms of this yardstick. Finally, detailed analysis at the state-industry level allows creation of state profiles, which summarise the relative strengths and performances of different industries across those states.
    Keywords: Manufacturing, technological change, technical efficiency, India
    JEL: L6 D24 O33
    Date: 2012
  2. By: Philippe K. Widmer; George Elias; Peter Zweifel
    Abstract: The purpose of this paper is to analyze the optimal scale of local jurisdictions (cantons) in Switzerland applying Data Envelopment Analysis (DEA) to the years 2000 to 2004. Aggregate output performance indicators for four local government activities (administration, education, health, and transportation) are used to measure technical and scale efficiency and to derive DEA scores. Results show that these public services fail to exhibit economies of scale, undermining quests for centralization of public good provision while suggesting the possibility of Tiebout competition.
    Keywords: DEA, efficiency measurement, economies of scale, public good provision, Switzerland
    JEL: C14 C67 H11 H72 H83
    Date: 2012–07
  3. By: Valentin Zelenyuk (CEPA - School of Economics, The University of Queensland)
    Abstract: In this article we extend the aggregation theory in efficiency and productivity analysis by deriving solutions to the problem of aggregation of individual scale efficiency measures, primal and dual, into aggregate primal and dual scale efficiency measures of a group. The new aggregation result is coherent with aggregation framework and solutions for the other related efficiency measures that already exist in the literature.
    Date: 2012
  4. By: Vu , Van Huong
    Abstract: This study examines whether high productivity is either the cause or a consequence of a business’s decision to export. Using a balanced panel dataset from 2005-2009 for Vietnamese manufacturing private SMEs, our empirical results find strongly statistical evidence for the self-selection of more productive firms into the export market. The alternative hypothesis, learning by exporting, was shown to be invalid through employing fixed effect panel data estimation, and fixed effect Instrumental Variable regression. By going beyond the previous literature, this study also reveals that export participation has a statistically insignificant impact on technical efficiency, technical progress, and scale change. Last but not least, improvement in innovative capacity and network with foreign customers is also important determinants in boosting the export participation of private enterprises.
    Keywords: Productivity; self-selection; learning by exporting or both
    JEL: F0
    Date: 2012–08–17
  5. By: Rada, Nicholas E.; Valdes, Constanza
    Abstract: The Brazilian agricultural sector has been transformed from a traditional system of production with low use of modern technologies to a world agricultural leader. That transformation occurred as the country moved away from import-substitution policies—which nurtured domestic industrial development at the expense of agriculture—toward market-oriented policy reforms. These reforms included openness to foreign trade and foreign investment and the use of new technologies, which led to a new growth pattern. To evaluate that transformation, the authors use agricultural censuses spanning 1985-2006 to characterize Brazilian total factor productivity growth, decomposing that growth into technical and effi ciency changes. This report presents the fi ndings of a study that focuses on the effect of Brazil’s science and technology investments and other public policies on farm production. The fi ndings indicate that agricultural research benefi ts have been most rapidly adopted by the most effi cient farms, widening the productivity gap between these farms and average farms. That gap, however, has been narrowed through other public policies, such as rural credit and infrastructure investments, that favor average producers.
    Keywords: Brazilian agriculture, total factor productivity (TFP) growth, technical change, technical effi ciency, Embrapa, agricultural research, distance function, stochastic frontier, Agricultural and Food Policy, International Development, Production Economics, Productivity Analysis,
    Date: 2012–07
  6. By: Sesmero, Juan P.; Perrin, Richard K.; Fulginiti, Lilyan E.
    Abstract: This study evaluates the environmental efficiency of seven recently constructed ethanol plants in the North Central region of the U.S., using nonparametric data envelopment analysis (DEA). Environmental efficiency is measured and decomposed into its technical and allocative sources. Results show that, on average, plants in our sample may be able to reduce GHG emissions by a maximum of 6% or by 3,116 tons per quarter. The economic (shadow) cost of reducing greenhouse gas emissions reveals that, at current activity levels, plants may have room for simultaneous improvement of environmental efficiency and economic profitability.
    Keywords: ethanol carbon footprint, environmental efficiency, shadow cost, data envelopment analysis, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy,
    Date: 2012
  7. By: Daniel Graham; Patricia Melo; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper undertakes an empirical analysis with the aim of improving the current understanding of the relationship between labor productivity and urban agglomeration economies across a sample of urbanized areas in the US. Agglomeration economies are represented with driving time measures of employment accessibility to establish a direct account for the link between transport and agglomeration economies. The paper investigates the presence of nonlinearities in the relationship between labor productivity and agglomeration economies, and examines the spatial decay pattern of the effects arising from this relationship. The findings indicate that there is considerable nonlinearity in the relation between productivity and transport induced agglomeration effects, implying that the estimation of country-level aggregate elasticities is likely to misrepresent the actual magnitude of any productivity gains from urban agglomeration. The results also suggest that the magnitude of the productivity-agglomeration effects decays very rapidly with time and is very strong within 20 minutes driving time. This suggests that knowledge spillover externalities are likely to be a very important Marshallian source of agglomeration economies.
    Keywords: agglomeration economies, network accessibility, labor productivity
    JEL: J31 R12 R40
    Date: 2012
  8. By: Roos K. Andadari (Satya Wacana Christian University); Henri L.F. de Groot (VU University Amsterdam); Piet Rietveld (VU University Amsterdam)
    Abstract: This paper exploits micro firm level data to examine the impact of spatial clustering and links to foreign buyer networks on firm performance in the wood furniture industry in Central Java, Indonesia. The analysis is based on an annual manufacturing survey. We identify the impact of specialization of the cluster, diversification, and links to foreign buyer networks. For this purpose, a production function framework is developed. The results lend support to the view that clustering of large and medium scale specialized firms improves firm performance, while clustering of small scale specialized firms and clustering of diverse firms are not conducive to firm performance. We also find a clear positive association between involvement in exporting activities and firm performance.
    Keywords: Productivity; Externalities; Wood Furniture Industry; Indonesia
    JEL: D20 R11 R32
    Date: 2012–07–18
  9. By: Blancard, Stephane; Martin, Elsa
    Abstract: Energy efficiency measurement is crucial when planning energy reduction policies. However, decision makers understandably will be reluctant to act in the absence of solid data and results supporting a policy position. The main objective of this paper is to propose an alternative method to measure farm energy efficiency. This method is based on the Data Envelopment Analysis (DEA) approach in a cost framework introduced by Farrell (1957) and developed by Färe et al. (1985). We decompose the energy efficiency measurement into two components, namely technical and allocative efficiencies. Here, input prices are replaced by their energy content. The energy efficiency model is used to explore the optimal input-mix that produces the current outputs at minimum energy-consumption. We show that this decomposition can help policy makers considerably to design accurate energy policies. The presence of uncertainty on data, and more particularly on energy content of inputs, leads us to recommend exploiting the methodologies proposed for calculating the bounds of efficiency measurement in order to produce more robust results. We expect to alert policy-makers in the fact that efficiency is not a fixed value and should be considered with caution. A 2007 database of French farms specialized in crops is used for empirical illustration.
    Keywords: Crop-farming, Data Envelopment Analysis, energy efficiency, uncertainty, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, D24, O13, Q15, Q4,
    Date: 2012
  10. By: Choonjoo Lee (Korea National Defense University)
    Abstract: In this presentation, the author presents a procedure and an illustrative application of a user-written Allocation Model(AE) in Stata. AE measures allocative efficiency and economic efficiency as well as technical efficiency when price and cost information of production are available. This model is an extension of basic DEA models which are also written by the author.
    Date: 2012–08–01
  11. By: Hottenrott, Hanna; Rexhäuser, Sascha; Veugelers, Reinhilde
    Abstract: The literature on within-firm organizational change and productivity suggests that firms can make more efficient use of certain technologies if complementary forms of organization are adopted. This issue may be of even greater importance for the case of greenhouse gas (GHG) abatement technologies imposed by public authority as to reduce social costs of climate change while they are not necessarily expected to increase private returns. Previous research, however, has largely neglected this aspect. Using German firm-level data, we find that organizational change increases the returns to he use of CO2 reducing technologies and that joint adoption leads to higher productivity. Without having introduced complementary organizational innovations, the adoption of CO2 reducing technologies is associated with lower productivity. --
    Keywords: firm behavior,technical change,innovation,environmental innovation,organizational change,productivity
    JEL: D23 O33 O32 Q55 L23 D24
    Date: 2012
  12. By: Tillmann Schwörer
    Abstract: The economic effects of offshoring have been subject to extensive empirical analysis in the past, but many studies have not accurately distinguished between offshoring, domestic outsourcing, and the substitution of domestic by foreign suppliers. In this study I provide stylized facts on offshoring in Europe between 1995 and 2008 taking into account this distinction. I show that service inputs have been offshored and domestically outsourced, whereas material inputs have been either offshored or moved from domestic to foreign suppliers. The strong overall decline in the share of internal production evokes the question whether this has led to productivity gains within firms. I address this question by combining industry-level data on offshoring and domestic outsourcing with a firm panel. I find that offshoring of non-core activities has led to productivity gains whereas offshoring of core activities and domestic outsourcing have had no such effects. The estimated productivity gains are in particular driven by offshoring to low-wage countries and by the gains of multinational firms
    Keywords: offshoring, domestic outsourcing, productivity
    JEL: F23 D24 L24 L60
    Date: 2012–07
  13. By: Gilbert Cette (Centre de recherche de la Banque de France - Banque de France); Nicolas L. Dromel (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne); Rémy Lecat (Centre de recherche de la Banque de France - Banque de France); Anne-Charlotte Paret (Centre de recherche de la Banque de France - Banque de France, ENSAE - École Nationale de la Statistique et de l'Administration Économique - ENSAE ParisTech)
    Abstract: This analysis characterizes empirically how good labour relations can alleviate the negative impact on productivity of regulatory constraints or workforce opposition. Our evidence of good labour relations lies in the existence of binding collective agreements, at the firm or at the industry level. The estimations are based on a unique dataset collected by the Banque de France about the obstacles French firms may face in increasing their utilisation of production factors. Data are an unbalanced sample of 7,441 observations, corresponding to 1,545 companies, over the period 1991-2008. Our main results may be summarised as follows : i) 'workforce or union opposition' interacted with 'regulatory constraints' has a negative significant impact on total factor productivity (TFP). Regulatory constraints would become really binding when workers or unions use them as a tool to oppose management's decisions ; ii) 'regulatory constraints' interacted with 'branch or firm agreement' has a positive significant impact on TFP. These agreements, which can only be obtained if labour relations are supportive, would be used by firms to offset the negative impact of regulatory constraints. These results confirm that labour relations quality, at the branch or the firm levels, is an important factor of productive performance.
    Keywords: Labour relation; collective bargaining; trade unions; productivity
    Date: 2012–07
  14. By: Olesen, Ole B. (Department of Business and Economics)
    Abstract: The assumption of a homothetic production function is often maintained in production economics. In this paper we explore the possibility of maintaining homotheticity within a nonparametric DEA framework. The main contribution of this paper is to use the approach suggested by Hanoch and Rothschild in 1972 to define a homothetic reference technology. We focus on the largest subset of data points that is consistent with such a homothetic production function. We use the HR-approach to define a piecewise linear homothetic convex reference technology. We propose this reference technology with the purpose of adding structure to the flexible non-parametric BCC DEA estimator. Motivation for why such additional structure sometimes is warranted is provided. An estimation procedure derived from the BCC-model and from a maintained assumption of homotheticity is proposed. The performance of the estimator is analyzed using simulation.
    Keywords: Data Envelopment Analysis (DEA); DEA based estimation of a homothetic production function; linear programming; convex hull estimation; isoquant estimation; polyhedral sets in intersection and sum form
    JEL: C00 C40 C60
    Date: 2012–08–14
  15. By: Chin Hee HAHN (Chin Hee HAHN Kyungwon University); Chang-Gyun PARK (Chang-Gyun PARK Chung-Ang University)
    Abstract: This paper examines various possible bi-directional causal relationships among exporting, innovation, and productivity utilizing plant-level data on Korean manufacturing. Based on both propensity score matching technique and three-variable panel VAR estimation, we find a significantly positive effect of exporting on new product introduction. The effect for the other direction of causality is estimated to be positive but not significant. Panel VAR estimation results suggest that plant productivity has a significantly positive effect on both exporting and new product introduction.
    Date: 2012–06–01
  16. By: Jacques MAIRESSE (Jacques MAIRESSE INSEE-CREST (France), UNU-MERIT (Netherlands), and NBER (USA)); Pierre MOHNEN (Pierre MOHNEN UNU-MERIT (Netherlands), and Maastricht University); Yanyun ZHAO (Yanyun ZHAO Renmin University of China); Feng ZHEN (Feng ZHEN Bank of China, and Chinese Academy of Social Science)
    Abstract: This paper investigates relationships between innovation input, innovation output and labor productivity in China for four major manufacturing sectors; textiles, wearing apparel, transport equipment and electronic equipment. It uses a large sample of firm level micro data and a structural model in the estimation. The data from 2005 to 2006 is estimated, and results of all the sectors show positive effects from innovation input to output, and then to firm performance. Globalization has various impacts on innovation, through exports. It has a positive effect on both the decision to carry out R&D, and intensity of R&D input in sectors with competitive advantage, such as textiles and transport equipment, but not in sectors with high levels of overseas capital control, such as electronic equipment and wearing apparel. Ownership reveals the same story in different sectors, namely that foreign firms tend to do less in innovation input and output, but they do have higher level of productivity. Moreover, market share, subsidy, firm size and other characters of firms are involved in the estimation, which explains significant difference in engaging in innovation and production. Thus, in all the sectors, market share improves R&D input, continuous R&D input and exports improve new products output. Subsidy sustains R&D input, but not innovation output.
    Date: 2012–06–01
  17. By: Mika Saito; Ichiro Tokutsu; Kazuo Ogawa
    Abstract: A surge of exports in the 2000s helped Japan exit the severe decade-long stagnation known as the lost decade. Using panel data of Japanese exporting firms, we examine the sources of the export surge during this period. One view argues that the so-called "divine wind" or exogenous external demand boosted Japanese exports. The other view emphasizes the role of supply factors such as productivity gains, materialized after long-fought restructuring efforts during the lost decade. Estimating the firm-level export function allows us to assess the relative importance of these demand and supply factors. Evidence shows that firms' efforts were more important than the divine wind.
    Keywords: Economic models , Export growth , Export performance , Manufacturing , Productivity , Statistical annexes ,
    Date: 2012–07–02
  18. By: Frank G. van Oort (Utrecht University); Martijn J. Burger (Erasmus University Rotterdam); Joris Knoben (Tilburg University); Otto Raspe (Netherlands Environmental Assessment Agency)
    Abstract: See also the publication in <A href="">'Journal of Economic Surveys'</A>, 26(3), 468-91.<p> Empirical studies in spatial economics have shown that agglomeration economies may be a source of the uneven distribution of economic activities and economic growth across cities and regions. Both localization and urbanization economies are hypothesized to foster agglomeration and growth, but recent meta-analyses of this burgeoning body of empirical research show that the results are ambiguous. Recent overviews show that this ambiguity is fuelled by measurement issues and heterogeneity in terms of scale of time and space, aggregation, growth definitions, and the functional form of the models applied. Alternatively, in this paper, we argue that ambiguity may be due to a lack of research on firm-level performance in agglomerations. This research is necessary because the theories that underlie agglomeration economies are microeconomic in nature. Hierarchical or multilevel modeling, which allows micro levels and macro levels to be modeled simultaneously, is becoming an increasingly common practice in the social sciences. As illustrated by detailed Dutch data on firm-level productivity, employment growth and firm survival, we argue that these approaches are also suitable for reducing the ambiguity surrounding the agglomeration-firm performance relationship and for addressing spatial, sectoral and cross-level heterogeneity.
    Keywords: agglomeration economies; micro-macro link; multilevel analysis; productivity
    JEL: C21 O18 R1
    Date: 2012–02–16
  19. By: N. CECI-RENAUD (Insee); V. COTTET (Insee)
    Abstract: This study describes the human resources management along several dimensions, based on administrative data (DADS and tax data): wage schedule both in terms of level but also dispersion, stability of the workforce, proportion of different qualifications and age, share of subsidized jobs ... A typology of these companies is available from these dimensions. Then we compare these wage structures with the performance. We observe that the most productive firms are also those who pay the highest wages, even after taking into account their specific characteristics (size, sector) and those of their employees. The link between wage dispersion and the productivity is more difficult to characterize: the estimate parameters are very sensitive to the empirical specification.
    Keywords: wage dispersion, wage structure, productivity
    JEL: L25 M52 J31 J33
    Date: 2012
  20. By: Stephan Brunow (Institute for Employment Research, Nuremberg, Germany); Peter Nijkamp (VU University Amsterdam)
    Abstract: There is evidence from the literature that firms enjoy higher productivity levels when the workforce employed is culturally more diverse. It is an open question whether this gain is utilized to shift the supply curve and set lower prices, in order to achieve a higher demand and possibly higher revenues. This knowledge gap is not addressed in the existing literature, and forms the departure of our research. We introduce a reduced-form model, inspired by the study of Melitz and Ottaviano (2008) on heterogeneous firms, and add labour productivity by using the approach of Ottaviano and Peri (2005) on cultural diversity. In our empirical study, we employ German data, while the field of research is conducted for single plants, and industry-specific effects are taken into account. Our analysis shows significant positive effects of the cultural diversity of the high-skilled workforce on the market size of single establishments. We conclude that emerging productivity gains are not just paid as dividend or factor rewards but are also used to set lower prices in order to achieve higher demand.
    Keywords: cultural diversity; firm heterogeneity; market size
    JEL: J15 L11 L25
    Date: 2012–08–09
  21. By: Junge, Martin; Severgnini, Battista (Department of Economics, Copenhagen Business School); Sørensen, Anders (Department of Economics, Copenhagen Business School)
    Abstract: The role of product and marketing innovation for productivity growth is addressed using survey and register data for the Danish economy. It is argued that marketing and product innovation are complementary inputs and that innovation activities are skill-intensive. It is found that product and marketing innovation in skill-intensive firms results in significantly faster productivity growth than in unskilled-intensive firms that introduce this combination of innovation activities. More precisely, an increase in the share of educated workers of one percentage point, increases productivity growth by around 0.1 percentage point in firms with product and marketing innovation. In addition, it is found that firms that engage in product innovation but not in marketing innovation or the other way around do not demonstrate a growth effect from their innovation activities. It is also found that product and marketing innovation has an independent role in productivity growth that cannot be attributed to organisational changes, even though the majority of innovative firms engage in this latter innovation type. JEL codes: J24, O31, M31
    Keywords: Product innovation; marketing innovation; organizational innovation; productivity growth; educational composition
    JEL: J24 M31 O31
    Date: 2012–07–04
  22. By: Edward P. Lazear; Kathryn L. Shaw; Christopher T. Stanton
    Abstract: Do supervisors enhance productivity? Arguably, the most important relationship in the firm is between worker and supervisor. The supervisor may hire, fire, assign work, instruct, motivate and reward workers. Models of incentives and productivity build at least some subset of these functions in explicitly, but because of lack of data, little work exists that demonstrates the importance of bosses and the channels through which their productivity enhancing effects operate. As more data become available, it is possible to examine the effects of people and practices on productivity. Using a company-based data set on the productivity of technology-based services workers, supervisor effects are estimated and found to be large. Three findings stand out. First, the choice of boss matters. There is substantial variation in boss quality as measured by the effect on worker productivity. Replacing a boss who is in the lower 10% of boss quality with one who is in the upper 10% of boss quality increases a team’s total output by about the same amount as would adding one worker to a nine member team. Using a normalization, this implies that the average boss is about 1.75 times as productive as the average worker. Second, boss’s primary activity is teaching skills that persist. Third, efficient assignment allocates the better bosses to the better workers because good bosses increase the productivity of high quality workers by more than that of low quality workers.
    JEL: J01 J24 J3
    Date: 2012–08
  23. By: Chaney, Thomas; Ossa, Ralph
    Abstract: We generalize Krugmanís (1979) ënew tradeímodel by allowing for an explicit production chain in which a range of tasks is performed sequentially by a number of specialized teams. We demonstrate that an increase in market size induces a deeper division of labor among these teams which leads to an increase in Örm productivity. The paper can be thought of as a formalization of Smithís (1776) famous theorem that the division of labor is limited by the extent of the market. It also sheds light on how market size di§erences can limit the scope for international technology transfers.
    Keywords: Division of labor; Firm productivity; Market size; Technology transfer
    JEL: F10 F12 L22 L25
    Date: 2012–07
  24. By: Muge Adalet McGowan; Stéphanie Jamet
    Abstract: Despite sound policies and institutions, Danish productivity has grown modestly over the past decade, both historically and in relation to other countries, contributing to weak economic growth and an erosion in competitiveness. An examination of the four potential drivers of this puzzle, namely competition, education, labour market flexibility and the size of the public sector, shows that there is room for improvement in all areas, calling for action on each of these fronts. This Working Paper relates to the 2012 OECD Economic Survey of Denmark (<P>Croissance de la productivité anémique du Danemark : les suspects habituels ?<BR>Malgré des politiques et institutions saines, la productivité danoise a connu une croissance modeste au cours de la dernière décennie, à la fois historiquement et par rapport à d'autres pays. Celle-ci a contribué à une croissance économique faible et une érosion de la compétitivité. L'analyse de quatre facteurs potentiels de ce puzzle, à savoir la concurrence, l'éducation, la flexibilité du marché du travail et la taille du secteur public, montre que des améliorations sont possibles dans tous ces domaines, appelant à des actions sur chacun de ces fronts. Ce Document de travail se rapporte à l’Étude économique de l’OCDE du Danemark, 2012 (
    Keywords: growth, employment protection legislation, productivity, competition, education, employment, Denmark, government size, législation sur la protection de l'emploi, productivité, croissance, éducation, concurrence, Danemark, taille du gouvernement
    JEL: D24 H11 I25 J63 J80 O3 O4 O52
    Date: 2012–07–02
  25. By: Burgess, Simon (University of Bristol); Propper, Carol (University of Bristol); Ratto, Marisa (Université Paris-Dauphine); Tominey, Emma (University of York)
    Abstract: This paper addresses a lack of evidence on the impact of performance pay in the public sector by evaluating a pilot scheme of incentives in a major government agency. The incentive scheme was based on teams and covered quantity and quality targets, measured with varying degrees of precision. We use data from the agency's performance management system and personnel records plus matched labour market data. We focus on three main issues: whether performance pay matters for public service worker productivity, what the team basis of the scheme implies, and the impact of the differential measurement precision. We show that the use of performance pay had no impact at the mean, but that there was significant heterogeneity of response. This heterogeneity was patterned as one would expect from a free rider versus peer monitoring perspective. We found that the incentive scheme had a substantial positive effect in small teams, and a negative response in large teams. We found little impact of the scheme on quality measures, which we interpret as due to the differential measurement technology. We show that the scheme in small teams had non-trivial effects on output, and our estimates suggest that the use of incentive pay is much more cost effective than a general pay rise.
    Keywords: incentives, public sector, teams, performance, personnel economics
    JEL: J33 J45 D23
    Date: 2012–07
  26. By: Lu, Zheng; Deng, Xiang
    Abstract: Current empirical studies on regional specialization mainly focused on measurement of China’s overall regional specialization level, while determinants of industrial geographical distribution, namely the regional specialization pattern, are just paid few attentions. This paper analyzed the regional specialization pattern empirically by employing statistical data of China two-digit industries from 1987 to 2007 through estimating a model which takes comparative advantage and scale economy as driven factors of industrial geographical concentration. Conclusions show that the overall regional specialization of Chinese industries increased between 1987 and 2007, however, it decreased obviously in 1990s. And, scale economy rather than comparative advantage arising from production cost is a long-run factor of China’s industrial geographical distribution.
    Keywords: Comparative Advantage Scale Economy Regional Specialization China
    JEL: R30 R12
    Date: 2012–05–20

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