New Economics Papers
on Efficiency and Productivity
Issue of 2012‒09‒22
seventeen papers chosen by

  1. Trends in Total Factor Productivity in Indian Agriculture: State-level Evidence using non-parametric Sequential Malmquist Index By Shilpa Chaudhary
  2. Are reforms productive? Explaining productivity and efficiency in the Indian manufacturing By Marie-Ange VEGANZONES-VAROUDAKIS; Arup MITRA; Chandan SHARMA
  3. Regional innovation performance in Europe By Marta Foddi; Stefano Usai
  4. Management Efficiency in Football: An Empirical Analysis of two Extreme Cases By M. Jara; Dimitri Paolini; J.D. Tena
  5. Green Economies Impact with Methane Reduction in livestock production systems on Latin America By Zuniga Gonzalez, Carlos Alberto; Blanco Roa, Noel Ernesto; Berrios, Roberto; Martinez Avendaño, Jario Terencio
  6. Cultural diversity and plant‐level productivity By Michaela Trax; Stephan Brunow; Jens Suedekum
  7. Energy efficiency measurement in agriculture with imprecise energy content information By Stéphane Blancard; Elsa Martin
  8. The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing By Michael Greenstone; John A. List; Chad Syverson
  9. Changes in the Operational Efficiency of National Oil Companies By Peter R Hartley; Kenneth B. Medlock III
  10. An "extended" knowledge production function approach to the genesis of innovation in the European regions By Sylvie Charlot; Riccardo Crescenzi; Antonio Musolesi
  11. Stochastic frontier analysis using Stata By Federico Belotti; Silvio Daidone; Giuseppe Ilardi; Vincenzo Atella
  12. The Linkage between Outcome Differences in Cotton Production and Rural Roads Improvements - A Matching Approach By Christian K.M. Kingombe
  13. Green Economic on the forest system impact with emphasis on the Central America and the Caribbean livestock production By Zuniga Gonzalez, Carlos Alberto; Toruno, Pedro Jose
  14. Is EU Support to Malawi Agriculture Effective? By Wouter Zant
  15. Water resources institutions and Technical efficiency by smallholder farmers: A case study from Cuatro Lagunas, Peru By Cavero, D.
  16. Do managerial skills matter? An analysis of the impact of managerial features on performance for the Italian football By J.D. Tena; Claudio Detotto; Dimitri Paolini
  17. The impact of armed conflict on economic performance. Evidence from Rwanda By Serneels , Pieter; Verpoorten , Marijke

  1. By: Shilpa Chaudhary (Department of Economics, Delhi School of Economics, Delhi, India)
    Abstract: Recognizing the critical role of agricultural sector in the overall growth as well as development performance, this study estimates total factor productivity (TFP) in Indian agriculture at state-level. Using Index of Agricultural Production as the measure of output, changes in TFP are estimated using non-parametric Sequential Malmquist TFP index. The TFP change is decomposed into efficiency change and technical change. It is found that productivity improvements are marked in very few states, and so is technical change. The improvements in efficiency are observed to be low for most of the states and efficiency decline is observed in several states implying huge gains in production possible even with existing technology. In order to achieve higher productivity, it is essential to increase efficiency levels as well as achieve a more even spread of new technology.
    Date: 2012–09
  2. By: Marie-Ange VEGANZONES-VAROUDAKIS (Centre d'Etudes et de Recherches sur le Développement International); Arup MITRA; Chandan SHARMA
    Abstract: India's economic liberalization in the 1990s provides scope for research on the effect of policy reforms on economic performance. This paper addresses the question of some of these policy changes and their impact on firms' productivity and efficiency. We test specifically the role of export, import (total, intermediary and capital goods), R&D, technology transfer and infrastructure endowment over the period 1994-2008. Result of the analysis suggests that infrastructure is a crucial determinant of manufacturing performance in India. This is true for a wide range of variables such as transport, energy and information & communication technology (ICT). This result is important in the Indian context of infrastructure bottlenecks. Empirical results also suggest that knowledge transfers through exports are more important than through imports. Other findings indicate that R&D is not a productivity-enhancing activity in India and that firms rely more on purchase of foreign technology. This outcome does not come as a surprise because Indian firms are known for low in-house research and innovation-oriented activities.
    JEL: F43 O3 O53 D24 H54 L60
    Date: 2012
  3. By: Marta Foddi; Stefano Usai
    Abstract: Europe 2020 strategy and the initiative “Innovation Union” call for a particular attention at the territorial dimension of innovation and knowledge creation. The heterogeneity across regions in their capacity to create knowledge and innovation, but also in their abilities to exploit ideas and technologies available across the European territory, motivates in-depth analyses of the territorial dimension of the knowledge economy. This paper investigates the nature of knowledge production and diffusion among regions in 29 EU countries and tries to assess its effectiveness. The analysis follows a two-step analytical route. Firstly, as a preliminary analysis, we estimate a knowledge production function (Griliches, 1979 and many others) with the usual parametric methods, in order to find out which are the main determinants of knowledge production at the regional level in Europe. Secondly, based on these findings, we apply DEA to assess the degree of efficiency of European regions in their use of internal and external inputs for the production of new knowledge and ideas. This allows to provide a ranking of the innovative performance of EU regions for two points in time, the beginning of the current century and the second part of this decade. Such rankings will be evaluated thanks to the Malmquist productivity index in order to assess the relative importance of its main components. According to the Data Envelopment Analysis, we found further evidence of a dualistic (centre vs periphery) pattern in the regional innovation activities, with the highest efficient territories located in the most central or economically strategic areas of the continent. On the contrary, the application of the Malmquist productivity index shows that productivity dynamics has been extremely differentiated across regions in terms of both magnitude and intrinsic features. We, again, observe important differences between the core and periphery of Europe and most specifically between the countries which are rich and industrialized and form the so called “Old Europe” and those which are relatively poor and have entered the European Union quite recently.
    Keywords: innovation; human capital; spatial spillovers; European regions; DEA
    JEL: C13 C61 O33 R11
    Date: 2012
  4. By: M. Jara; Dimitri Paolini; J.D. Tena
    Abstract: Analysis of managerial efficiency in sport economics typically focuses on evaluating coach decisions instead of assessing the organization as a whole. This paper studies the relative importance of variables related to power and managerial decisions by estimating stochastic production frontiers models for the Chilean and Italian football. We find the presence of technical inefficiencies in both cases. However, managerial decisions play a more significant role in the Italian league. This difference can be explained by a less open and balanced competition in the Chilean case, that could be due to financial constraints faced by small clubs in that country.
    Keywords: stochastic production frontier; managerial efficiency; sport economics
    JEL: J44 L83 M50
    Date: 2012
  5. By: Zuniga Gonzalez, Carlos Alberto; Blanco Roa, Noel Ernesto; Berrios, Roberto; Martinez Avendaño, Jario Terencio
    Keywords: Green Economic, Bio Economic, Bio Technology, Malmquist Indexest, Methane Emission Productivity., Environmental Economics and Policy, Livestock Production/Industries, Productivity Analysis, O13, O47, Q51,
    Date: 2012–09–11
  6. By: Michaela Trax (Mercator School of Management, University of Duisburg-Essen); Stephan Brunow (Institute of Employment Research (IAB)); Jens Suedekum (Mercator School of Management, University of Duisburg-Essen)
    Abstract: Using comprehensive data for German establishments (1999-2008), we estimate plant-level production functions to analyze if “cultural diversity” affects total factor productivity. We distinguish diversity in the establishment’s workforce and in the aggregate regional labor force where the plant is located. We find that a larger share of foreign workers –either in the establishment or in the region –does not affect productivity. However, there are strong spillovers associated with the degree of cultural heterogeneity. The aggregate level is, quantitatively, at least as important as the workforce composition inside the establishment. Diversity thus seems to induce externalities beyond the boundaries of a single firm; it improves local business environments.
    Keywords: Cultural Diversity, Plant-level Productivity and knowlege Spillovers.
    JEL: R23 J21 J31
    Date: 2012–09
  7. By: Stéphane Blancard; Elsa Martin
    Abstract: Energy efficiency measurement is crucial when planning energy reduction policies. However, decision makers understandably are 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 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: Data Envelopment Analysis, energy efficiency, uncertainty
    JEL: D24 O13 Q15 Q4
    Date: 2012–09–06
  8. By: Michael Greenstone; John A. List; Chad Syverson
    Abstract: The economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago. Using detailed production data from nearly 1.2 million plant observations drawn from the 1972-1993 Annual Survey of Manufactures, we estimate the effects of air quality regulations on manufacturing plants’ total factor productivity (TFP) levels. We find that among surviving polluting plants, stricter air quality regulations are associated with a roughly 2.6 percent decline in TFP. The regulations governing ozone have particularly large negative effects on productivity, though effects are also evident among particulates and sulfur dioxide emitters. Carbon monoxide regulations, on the other hand, appear to increase measured TFP, especially among refineries. The application of corrections for the confounding of price increases and output declines and sample selection on survival produce a 4.8 percent estimated decline in TFP for polluting plants in regulated areas. This corresponds to an annual economic cost from the regulation of manufacturing plants of roughly $21 billion, about 8.8 percent of manufacturing sector profits in this period.
    JEL: D2 K3 L5 L6 Q5
    Date: 2012–09
  9. By: Peter R Hartley (Business School, University of Western Australia and Rice University); Kenneth B. Medlock III (Rice University)
    Abstract: Using data on 61 oil companies from 2001-09, we examine the evolution of revenue efficiency of National Oil Companies (NOCs) and shareholder-owned oil companies (SOCs). We find that NOCs generally are less efficient than SOCs, but their efficiency increased faster over the last decade. We also find evidence that partial privatizations increase operational efficiency, and (weaker) evidence that mergers and acquisitions during the decade tended to increase the efficiency of the merging firms. Finally, we find evidence that much of the inefficiency of NOCs is consistent with the hypothesis that government ownership leads to different firm objectives.
    Date: 2012
  10. By: Sylvie Charlot; Riccardo Crescenzi; Antonio Musolesi
    Abstract: The paper looks at the genesis of innovation in the EU regions in order to shed light on the link between innovative inputs (R&D and Human Capital) and the genesis of economically valuable knowledge. The "traditional" regional Knowledge Production Function (KPF) is innovatively developed in three complementary directions. First, the KPF is "augmented" in order to control for all possible "unobservable" and "immeasurable" time varying factors that influence the genesis of innovation (i.e. localised institutional and relational factors, regional innovation policies). Second, a semi-parametric approach that relaxes any arbitrary assumption on the "shape" of the KPF is adopted. Finally, the assumption of homogeneity in the impact of R&D and Human Capital is relaxed by explicitly accounting for the differences between "core" and "peripheral" regions. The econometric results confirm the importance of accounting for time varying unobserved heterogeneity through the adoption of a "random growth" specification: R&D efforts exert a significant influence on innovation only after controlling for regional specific time varying unobserved factors. In addition the semi-parametric approach uncovers significant threshold effects for both R&D expenditure and Human Capital and highlights a strong complementary between these two factors. However, "core" regions benefit from a persistent advantage in terms of the "productivity" of their innovation inputs. This has important implications for the EU innovation policies at the regional level.
    Keywords: Innovation, Regions, Knowledge production function, Europe, Semi-parametric models
    JEL: O32 R11 C14 C23
    Date: 2012–09–06
  11. By: Federico Belotti (Faculty of Economics, University of Rome "Tor Vergata"); Silvio Daidone (University of York); Giuseppe Ilardi (Bank of Italy, Economic and Financial Statistics Department); Vincenzo Atella (Faculty of Economics, University of Rome "Tor Vergata")
    Abstract: This paper describes sfcross and sfpanel, two new Stata commands for the estimation of cross-sectional and panel data stochastic frontier models. sfcross extends the official frontier capabilities by including additional models (Greene 2003; Wang 2002) and command functionality, such as the possibility to manage complex survey data characteristics. Similarly, sfpanel allows to estimate a much wider range of time-varying inefficiency models compared to the official xtfrontier command including, among the others, the Cornwell et al. (1990) and Lee and Schmidt (1993) models, the exible model of Kumbhakar (1990), the inefficiency effects model of Battese and Coelli (1995) and the "true" fixed and random-effects models developed by Greene (2005a). A brief overview of the stochastic frontier literature and a description of the two commands and their options are given, and illustrations using simulated and real data are provided.
    Keywords: stochastic frontier analysis, cross-sectional, panel data
    JEL: C87
    Date: 2012–09–13
  12. By: Christian K.M. Kingombe (Graduate Institute of International Studies)
    Abstract: This paper tests the linkage between a binary treatment (rural road improvement project) and a continuous outcome (cotton productivity) in Zambia’s agro-based Eastern Province as measured by repeated cross-sections of farm-level data from the Zambian post-harvest survey (PHS). We use this PHS dataset, which covers the period from 1996/1997 to 2001/2002 across two phases, the pre-treatment phase (1996/1998) and the treatment phase when the Eastern Province Feeder Road Project (EPFRP) was being implemented (1998/2002). The identification strategy relies on the implementing of matching estimators for all three treatment parameters: Average Treatment Effect (ATE); Treatment on the Treated (TT) and Treatment on the Untreated (TUT), which is crucial in terms of policy relevance (Arcand, 2012). Matching ensures a sub-set of non-project areas that best represents the counterfactual and is done at the same geographic level of aggregation (van de Walle, 2009). Since treatment participation is not by random asignment we use the propensity score as a method to reduce the bias in the estimation of these treatment effects with observational PHS data sets in order to reduce the dimensionality of the matching problem. We find the ATT estimation results are not the same when implementing various matching using ‘the logarithm of (cotton) yield’ compared to using ‘cotton productivity’ as variable. In the latter case the following matching methods all have negative difference between treated and controls: 1-to-1 propensity score matching; k-nearest neighbours matching; radius matching; and 'spline-smoothing'. However, the Kernel matching has positive difference between treated and controls for the ‘productivity’ variable: Finally, some of the local linear regression and the Mahalanobis matching specifications yields positive difference between treated and controls for the ‘logyield’ variable, but not for the ‘productivity’ variable and not for all specifications either. Through our robustness checks of the Matching Assumpion and Sensitivity of Estimates we find that the matching doesn’t reduce the starting unbalancing. The comparison of the simulated ATT and the baseline ATT tells us that the latter is robust. We conclude that the application of various non-parametric matching methods didn’t enable us to identify a robust linkage, most likely due to the PHS data source and the evaluation design. Future rigorous rural roads impact evaluation requires panel (with pre-intervention) data for project and appropriate non-project areas, which allows for an evaluation design that combines a double difference (DID) with controls for initial conditions either through propensity score matching, regression controls or an IV (van de Walle, 2009). Regression discontinuity designs would offer an alternative method for impact evaluation (ADB, 2011; see Arcand, 2012).
    Keywords: cAverage Treatment Effects; Average Treatment on the Treated; Matching Methods; Poor rural area development project; Impact evaluation of cotton productivity; Africa; Zambia (Eastern Province).
    JEL: C2 C83 D2 O12 O13 Q12 R3
    Date: 2012–08–07
  13. By: Zuniga Gonzalez, Carlos Alberto; Toruno, Pedro Jose
    Keywords: Malmquist Indexes, Biomass, Carbon Storage, Carbon losses., Environmental Economics and Policy, Livestock Production/Industries, Productivity Analysis, O13, O47, Q51, O:33, Q:57,
    Date: 2012–09–11
  14. By: Wouter Zant (VU University Amsterdam)
    Abstract: We measure the impact of the Farmers Income Diversification Program (FIDP), an EU funded program implemented in Malawi from late 2005 onwards, aiming at increasing agricultural productivity, diversification, value addition, commercialization and trade of subsistence farmers. The geographical spread of the implementation of FIDP is exploited to identify its impact. Computations are based on annual data by Extension Planning Area, 198 in total, fully covering Malawi, for the period 2003-04 to 2009-10. The estimations support a statistically significant impact of FIDP on agricultural productivity, with increases reaching 20% to 24% relative to base period levels, with a lag of at least one year after the start of the program and increasing over the years. Evidence on diversification of crop income is less strong but still suggests increases ranging from 5% to 10%. Results are robust for instrumental variables, synthetic controls, clustering of standard errors and inclusion of additional covariates.
    Keywords: agricultural policy; impact evaluation; subsistence farming; Malawi; Africa
    JEL: F35 O13 O55 Q11 Q13
    Date: 2012–09–07
  15. By: Cavero, D. (Rimisp)
    Abstract: This document is the result of the Rural Territorial Dynamics Program, implemented by Rimisp in several Latin American countries in collaboration with numerous partners. The program has been supported by the International Development Research Center (IDRC, Canada). We authorize the non-for-profit partial or full reproduction and dissemination of this document, subject to the source being properly acknowledged.
    Keywords: Water resources institutions, smallholder farmers, Cuatro Lagunas, Peru
    JEL: D44 D82 L86 C72
    Date: 2012
  16. By: J.D. Tena; Claudio Detotto; Dimitri Paolini
    Abstract: This paper studies the impact of a set of managerial features on performance in the top division of the Italian football league during seasons 2000/01-2009/10. Our set of coach characteristics includes indicators of skill, experience, innate features as well as empathy with the team. We find that some managerial features matter even when we control by club power and past results. Indeed, performance is positively correlated with the fact that the manager has experience abroad or has been a previous player of the team but negatively correlated with lack of previous managerial experience. Other features affect only some particular aspects of performance. In particular, Italian managers play a more defensive game in home matches while old managers are more defensive in away games. Also, changing a coach within the season has a negative impact on the defensive skill of the team in away matches.
    Keywords: OR in sports; bi-ordered probit model; coach dismissals; endogeneity
    JEL: C35 L83 C25 M11
    Date: 2012
  17. By: Serneels , Pieter (University of East Anglia); Verpoorten , Marijke (University of Antwerp)
    Abstract: Important gaps remain in the understanding of the economic consequences of civil war. Focusing on the conflict in Rwanda in the early 90s, and using micro data to carry out econometric analysis, this paper finds that households and localities that experienced more intense conflict are lagging behind in terms of consumption six years after the conflict, a finding that is robust to taking into account the endogeneity of violence. Significantly different returns to land and labour are observed between zones that experienced low and high intensity conflict which is consistent with on-going recovery. Distinguishing between civil war and genocide, the findings also provide evidence that these returns, and by implication the process of recovery, depend on the form of violence.
    Keywords: civil war; economic growth; Rwanda; human capital
    Date: 2012–09–05

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