nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2012‒10‒13
thirty-two papers chosen by
Angelo Zago
University of Verona

  1. The Dynamics of Productivity in the Swiss and German University Sector: A Non-Parametric Analysis that Accounts for Heterogeneous Production By Maria Olivares; Andrea Schenker-Wicki
  2. Productivity linkages between services and manufacturing: Firm-level evidence from developing countries By Shepherd, Ben
  3. Analysis of the sources of economic growth and TFP level in V4 countries and in Finland By Martin Lábaj; Róbert Kúšik
  4. The Costs of Corruption in the Italian Solid Waste Industry By Graziano Abrate; Fabrizio Erbetta; Giovanni Fraquelli; Davide Vannoni
  5. Economic efficiency of the Mexican metropolitan regions between 1998 and 2008 By Alejandra Trejo
  6. Additive decomposition in two-stage DEA: An alternative approach By Despotis, Dimitrs; Koronakos, Gregory; Sotiros, Dimitris
  7. Identification of Factors Behind Performance of Pharmaceutical Industries in India By Chiranjib Neogi; Atsuko Kamiike; Takahiro Sato
  8. A universal solution for units-invariance in data envelopment analysis By Xu, Jin; Zervopoulos, Panagiotis; Qian, Zhenhua; Cheng, Gang
  10. Export mode, Trade Costs, and Productivity Sorting By Ronald B Davies; Tine Jeppesen
  11. Land fragmentation, market integration and farm efficiency: empirical evidence from Kosovo By Sauer, Johannes; Davidova, Sophia; Gorton, Matthew
  12. The measurement of energy performance By Blancard, Stephane; Martin, Elsa
  13. A preference allocation-DFM model in Data Envelopment Analysis -An application to Energy-Environment-Economic efficiency in Japan- By Soushi Suzuki; Peter Nijkamp; Piet Rietveld
  15. Bridging Firm’s Innovation, Productivity and Export: An Analysis using Swedish CIS data By Viroj Jienwatcharamongkhol; Mohammad Hossein Tavassoli
  16. Productivity and potential output before, during, and after the Great Recession By John Fernald
  17. Estimating technical efficiency under technological heterogeneity in Hungarian crop sector By Barath, Lajos; Ferto, Imre
  18. Size and Density Economies in Refuse Collection By Graziano Abrate; Fabrizio Erbetta; Giovanni Fraquelli; Davide Vannoni
  19. Agglomeration, Productivity, and Firms¡® Exports: Evidence from Chinese Firm-level Data By Churen Sun; Zhihao Yu; Tao Zhang
  20. Are Firms in Business Groups More Productive? An empirical analysis based on German micro-level data with a special emphasis on the roles of regional and sectoral diversity By Andreas Koch; Elena Biewen
  21. Technological Progress and Growth in Selected Pacific Countries By Benedetto Molinari; Jesús Rodríguez López; Jose Luis Torres
  22. A quarterly, utilization-adjusted series on total factor productivity By John Fernald
  23. Building performance evaluation and certification in the UK: a critical review of SAP? By Kelly, S.; Pollitt, M.; Crawford-Brown, D.
  24. Regional development and creativity By Emanuela Marrocu; Raffaele Paci
  25. Estimating the Elasticity of Demand and the Production Response for Nitrogen Fertiliser on Irish Farms By Breen, James P.; Clancy, Daragh; Donnellan, Trevor; Hanrahan, Kevin F.
  26. Does working with spouses make teams more productive? A field experiment in India using NREGA By Alistair Munro; Arjan Verschoor; Amaresh Dubey
  27. Behavioural Change through Agri-Environmental Policies ? – A Distance Function based Matching Approach By Sauer, Johannes; Walsh, John; Zilberman, David
  28. What makes Chinese firms productive? Learning from indigenous and foreign sources of knowledge By Boeing, Philipp; Mueller, Elisabeth; Sandner, Philipp
  29. Quasi-experimental Methods in Empirical Regional Science and Policy Analysis – Is there a Scope for Application? By Timo Mitze; Alfredo R. Paloyo; Björn Alecke
  30. Constant and variable returns to scale DEA models for socially responsible investment funds By Antonella Basso; Stefania Funari
  31. Sectoral productivity convergence between European regions: does space matter? By Nicola Pontarollo; Elisa Montresor; Francesco Pecci
  32. Agglomeration and network effects on regional knowledge production activities in Europe By Slavomir Hidas; Martyna Wolska; Manfred M Fischer; Thomas Scherngell

  1. By: Maria Olivares (Disney Research Zurich); Andrea Schenker-Wicki (Department of Business Administration (IBW), University of Zurich)
    Abstract: Based on a disaggregate cross-country analysis, we investigate the performance of 10 public Swiss universities and 77 public German universities from 2001-2007. During this period the universities in both countries have faced two major reforms aimed at improving efficiency and productivity in the European higher education sector. We assess the change in productivity and its sources, that is technological change, technical efficiency change and scale effects, obtained by computing the non-parametric Malmquist productivity index by benchmarking the non-science disciplines and the science disciplines of both countries separately against a common frontier. Given the lack of statistical inference of non-parametric productivity analyses, we employ bootstrapping techniques and estimate confidence intervals, allowing us to verify the statistical significance of our results. The results indicate that improvements in technical efficiency were by far the most important driver for productivity growth, followed by gains realised through exploiting economies of scale; thereby technological change partly reduced the increases in productivity. Our findings, however, suggest reform-related differences between the Swiss and the German public university sector. Further, the results point to structural differences across the scientific disciplines, as we found divergent patterns for the development in productivity and its sources in the non-sciences and the sciences.
    Keywords: Higher Education, Cross-Country Analysis, Total Factor Productivity, Nonparametric Malmquist Productivity Index
    JEL: I23 I28 D24
    Date: 2012–08
  2. By: Shepherd, Ben
    Abstract: This paper uses firm-level data from 119 developing countries to show that services sector productivity is positively associated with manufacturing productivity. Moreover, the link between productivity in services and manufacturing is particularly strong for manufacturing firms that are more intensive in their use of services inputs. At the mean level of services input use in the dataset, a 10% improvement in services productivity is associated with a 0.6% improvement in manufacturing productivity.
    Keywords: Services; Manufacturing; Productivity linkages; Firm-level data; Developing countries
    JEL: L80 L60 O14
    Date: 2012–10–05
  3. By: Martin Lábaj (University of Economics in Bratislava, Faculty of National Economy, Department of Economic Policy); Róbert Kúšik
    Abstract: We identify the sources of long-term economic growth in V4 countries and in Finland in this paper. We show the differences in productivity levels and their development over time, with following decomposition of productivity gap to technological backwardness and inefficiency. We deal with an analysis of particular V4 economies with comparison to Finland. We have revealed relatively high differences in the sources of economic growth as well as in productivity levels. We have showed that the importance of lagging behind in efficiency is high, comparing to traditional focus on technological backwardness.
    Keywords: Economic growth, Total factor productivity, Sources of economic growth, Technological backwardness, Efficiency
    JEL: E20 O11
    Date: 2012–08–12
  4. By: Graziano Abrate (Department of Business Management and Environment, University of Eastern Piedmont); Fabrizio Erbetta (Department of Business Management and Environment, University of Eastern Piedmont); Giovanni Fraquelli (Department of Business Management and Environment, University of Eastern Piedmont); Davide Vannoni (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)
    Abstract: The paper investigates the link between corruption and efficiency by using a rich micro-level dataset concerning solid waste collection activities in 529 Italian municipalities observed over the years 2004-2006. In order to test the impact of corruption on cost efficiency we estimate a stochastic latent class frontier approach, which accounts for technological heterogeneity across units. The results of our estimates show that corruption significantly increases inefficiency, a finding which is robust to the inclusion of alternative local corruption indicators and of other control variables such as geographical, demographic and political factors. Finally, we find that the impact of corruption tends to be greater in the southern regions of the country and for those municipalities which are less involved in recycling activities.
    Keywords: corruption, cost inefficiency, latent class stochastic frontier, solid waste
    JEL: C33 D24 D73 Q53
    Date: 2012–04
  5. By: Alejandra Trejo
    Abstract: Nowadays metropolitan spaces are key territorial references for analysis and action. They are of critical economic, social and political importance. Three decades ago the Mexican urban structure was characterized by the existence of a principal city, Mexico City, where the national government, the largest concentration of population, industry, services and infrastructure seats. However the urban system has become more complex. The restructuring has taken the form of the emergence of several cities with qualities of metropolitan areas. These metropolitan agglomerations concentrate more than 70% of the productive capacity and therefore the largest part of the economic growth is expected to originate in the metropolises. This creates challenges for these regions, such as the need of jobs and capital accumulation but it also offer the best opportunity to expand economically and improve the quality of life for the population. Yet, productivity, profits and efficiency are distributed heterogeneously among metropolitan areas. The most mobile factors of production, capital and technological knowledge, are dominated by a few urban centers, thus other cities are left with obsolete physical capital and the less qualified laborers. Presently, the country faces the challenge to extend the urban development benefits to all cities and inhabitants. The need of competitive and efficient metropolis is relevant to this aim. A profound knowledge and diagnosis about the specificities and differences among metropolis is called for. However there has been a relatively scarce recording of productivity and efficiency in cities and metropolitan areas in Mexico. This paper attempts to add evidence on the issue of disparities in efficiency levels among the metropolitan economies in the period 1998-2008 by examining the differences and evolution of technical efficiency. I analyze the technical efficiency of the 56 metropolitan regions in Mexico by means of data envelopment analysis using economic censuses data for 1998, 2003 and 2008. In the paper I will resent information to characterize, delimit and classify functionally the metropolitan zones in order to guide further analysis as well as competitiveness projects and programs that support their performance and participation in the global and local scenes. Key words: Technical efficiency, productivity, competitiveness, Metropolitan regions, Mexico
    Date: 2012–10
  6. By: Despotis, Dimitrs; Koronakos, Gregory; Sotiros, Dimitris
    Abstract: Typically, a two-stage production process assumes that the first stage transforms external inputs to a number of intermediate measures, which then are used as inputs to the second stage that produces the final outputs. The three fundamental approaches to efficiency assessment in the context of DEA (two-stage DEA) are the simple (or independent), the multiplicative and the additive. The simple approach does not assume any relationship between the two stages and estimates the overall efficiency and the individual efficiencies for the two stages independently with typical DEA models. The other two approaches assume a series relationship between the two stages and differ in the way they conceptualize the decomposition of the overall efficiency to the efficiencies of the individual stages. This paper presents an alternative approach to additive efficiency decomposition in two-stage DEA. We show that when using the intermediate measures as pivot, it is possible to aggregate the efficiency assessment models of the two individual stages in a single linear program. We test our models with data sets taken from previous studies and we compare the results with those reported in the literature.
    Keywords: Data envelopment analysis (DEA); Efficiency; Decomposition; Two-stage DEA
    JEL: C6
    Date: 2012–07–13
  7. By: Chiranjib Neogi (Economic Research Unit, Indian Statistical Institute, India); Atsuko Kamiike (Economic Research Unit, Indian Statistical Institute, India); Takahiro Sato (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: The changes in various policies related to trade and entry of multinational companies in Indian pharmaceutical industries have started during early seventies. However, the pace of growth of this industry have shown a remarkable upswing only after 1991 and it shows a major jump after 2005. The introduction of pharmaceutical product patents brings new business opportunities to the Indian pharmaceutical industry. On the other hand the increase in competitive pressure has possibly induced the exit of small and inefficient firms and plants from the markets. In this backdrop it is necessary to assess the performances of pharmaceutical industries during the recent years and to find out the factors responsible behind the variation of industries efficiency and productivity. In this paper Stochastic Frontier Analysis (SFA) have been used to estimate the efficiencies of firms using the unit level panel data (2000 to 2005) of Indian pharmaceutical industries. Also, Total Factor Productivities (TFP) have been estimated using the same data. Finally, some analysis have been made to find out the forces of variation of efficiencies and productivities of these industrial units. It has been observed that the firms with low efficiencies and low TFP cannot survive and either they merged with other firms or they are compelled to discontinue their operation. Managerial skill and wage rates have significant positive effect on performance of these firms and some of the newly identified areas with special facilities are found conducive for the better performance of pharmaceutical industries.
    Date: 2012–09
  8. By: Xu, Jin; Zervopoulos, Panagiotis; Qian, Zhenhua; Cheng, Gang
    Abstract: The directional distance function model is a generalization of the radial model in data envelopment analysis (DEA). The directional distance function model is appropriate for dealing with cases where undesirable outputs exist. However, it is not a units-invariant measure of efficiency, which limits its accuracy. In this paper, we develop a data normalization method for DEA, which is a universal solution for the problem of units-invariance in DEA. The efficiency scores remain unchanged when the original data are replaced with the normalized data in the existing units-invariant DEA models, including the radial and slack-based measure models, i.e., the data normalization method is compatible with the radial and slack-based measure models. Based on normalized data, a units-invariant efficiency measure for the directional distance function model is defined.
    Keywords: Data Envelopment Analysis; Data normalization; Units-invariance; Directional distance function
    JEL: C02 C61 C67 D24
    Date: 2012–09–29
  9. By: Wagner, Christina; Huttel, Silke; Odening, Martin
    Keywords: Efficiency, shadow cost approach, uncertainty, dairy sector, Agribusiness, Farm Management, Livestock Production/Industries, Risk and Uncertainty,
    Date: 2012
  10. By: Ronald B Davies (University College Dublin); Tine Jeppesen (University College Dublin)
    Abstract: In this paper we directly test the proposed productivity hierarchy of direct, indirect and non-exporters using firm-level data from 105 developing and transition countries. Using both regression analysis and propensity score matching, we find strong evidence to suggest that direct exporters are on average more productive than both indirect and non-exporters. However, only the results obtained using regression analysis support a similar ranking between indirect and non-exporters. Furthermore, we test the underlying relationship between source-specific fixed trade costs and the average productivity differences between the three firm-types. We find a significant and positive relation between such costs and the average productivity premium of direct exporters only. While other studies have shown that exports by trade intermediaries increase with destination-specific fixed costs, our results suggest that this is also true for source-specific costs, as an increase in the average productivity of direct exporters indicate that a larger share of less productive direct exporters choose to make use of a trade intermediary as export costs rise.
    Keywords: Heterogeneous firms, Export mode, Exporting Costs
    JEL: F1
    Date: 2012–10–04
  11. By: Sauer, Johannes; Davidova, Sophia; Gorton, Matthew
    Abstract: This paper investigates the effect of land fragmentation on farm efficiency in Kosovo utilising agricultural household survey data. To recognise heterogeneity among agricultural production systems in Kosovo, we estimate the technology separately for different groups or “classes” of farms, identified using latent class modelling. This approach separates the data into multiple technological “classes” according to estimated probabilities of class membership based on multiple specified characteristics, relating in this case to land fragmentation and market integration. The latent class frontier method is linked to the estimation of a multi-output multi-input production function, namely a directional output distance function, and to the estimation of Morishima elasticities of substitution, based on shadow price changes indicating allocative efficiency changes. The analytical results confirm that the usual approach of using one homogenous function to estimate fragmentation effects is misleading and can lead to inappropriate policy recommendations. Three distinct classes of farm households are identified, which show different levels of efficiency and the proxies for land fragmentation and market integration show different signs over these classes.
    Keywords: land fragmentation, market integration, farm households, Kosovo, Farm Management, O13, Q12,
    Date: 2012–04
  12. By: Blancard, Stephane; Martin, Elsa
    Abstract: ADEME (the French national environmental and energy agency) develops tools in order to measure farm energy performance. The actual measurement is based on the total amount of energy consumed by farmers. The main objective of this paper is to propose an alternative method that can be used in order to improve this measurement. The alternative method that we propose is based on Data Envelopment Analysis (DEA) models. Following the procedure adopted in a cost framework by Farrell (1957) and developed by Färe et al. (1985), we propose to decompose an overall energy performance measurement into two components, namely technical and allocative performances. In order to do this, we replace prices by energy content of inputs. We show that this decomposition can considerably help policy makers 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 methodology proposed by Camanho and Dyson (2005) in order to produce more robust results. Thus, this methodology allows deriving both upper and lower bounds for the performance measurements. A year 2007 database of French farms specialized in crops is used for empirical illustration.
    Keywords: Crop-farming, Data Envelopment Analysis, energy performance, uncertainty, Crop Production/Industries, Risk and Uncertainty, D24, O13, Q15, Q4,
    Date: 2012–04
  13. By: Soushi Suzuki; Peter Nijkamp; Piet Rietveld
    Abstract: Japan is faced with a ÂgFukushimaÂf problem, meaning a nuclear accident leading to electrical power shortage. This problem relates to a non-balanced ÂgEnergy-Environment-EconomicÂh policy which does not, but should incorporate Âgelectrical power savingÂh, Âglow carbon emissionÂh, and Âgeconomic growthÂh. Although it is difficult at this stage, it is necessary to make an effort to achieve more balanced and more efficient ÂgEnergy-Environment-EconomicÂh policy in Japan, even if Japan decides to withdraw from the COP (Conference of Parties of United Nations Conventions) 17. A standard tool to judge the efficiency of actors (decision making units) is Data Envelopment Analysis (DEA). The existence of many possible efficiency improvement solutions has in recent years prompted a -rich variety of literature on the methodological integration of the MOLP (Multiple Objective Linear Programming) and the DEA models. In the past years, much progress has been made to extend this approach in several directions. An example is the Distance Friction Minimization (DFM) method. The DFM model is based on a generalized distance friction function and serves to improve the performance of a Decision Making Unit (DMU) by identifying the most appropriate movement towards the efficiency frontier surface. Standard DEA models use a uniform proportional input reduction (or a uniform proportional output increase) in the improvement projections, but the DFM approach aims to enhance efficiency strategies by introducing a weighted projection function. This approach may address both input reduction and output increase as a strategy of a DMU. An advantage of this model is that there is no need to incorporate the value judgment of a decision maker. Nevertheless, in order to achieve efficiency improvement in JapanÂfs ÂgEnergy-Environment-EconomicÂh policy at a regional level, it might be necessary to incorporate a value judgment of a policy maker on political priorities. In our study, we present a newly developed Preference Allocation model in DFM, which is suitable to incorporate a decision makerÂfs value judgment for the allocation of an input reduction and an output augmentation in an efficiency improvement projection. The above-mentioned Preference Allocation model is illustrated on the basis of an application to the efficiency analysis of ÂgEnergy-Environment-EconomicÂh for each prefecture in Japan. Keywords: Data Envelopment Analysis (DEA), Distance Friction Minimization (DFM), Preference Allocation (PA), Energy-Environment-Economic efficiency JEL code: C00, Q48, R58
    Date: 2012–10
  14. By: João Pedro Jardim; Maria Baltazar; Jorge Silva
    Abstract: Airport benchmarking depends on airport operational performance and efficiency indicators, which are important issues for business, operational management, regulatory agencies, airlines and passengers. There are several sets of single and complex indicators to evaluate airports performance and efficiency as well as several techniques to benchmark such infrastructures. The general aim of this work is the development of airport performance and efficiency predictive models using robust but flexible methodologies and incorporating simultaneously traditional indicators (number of movements and passengers, tons of cargo, number of runways and slots, area of terminals both of passenger and cargo) as well as new (emergent) constraints as ramp incidents and volcano ashes. Specifically this work: firstly shows the performance and efficiency evolution of a set of airports under several constraints based on two multidimensional tools, Multicriteria Decision Analysis (MCDA, by the use of Macbeth - Measuring Attractiveness by a Categorical Based Evaluation Technique) and Data Envelopment Analysis (DEA); and secondly compares the obtained results either with Macbeth or with DEA. Whilst DEA is a linear programming based technique for measuring the relative performance of organizational units in the presence of multiple inputs and outputs, MCDA/Macbeth uses performance and efficiency indicators to support benchmark results, being useful to evaluate not only the real importance of the selected indicators but also its correct weight. This work is divided as follows: first, a state of the art review concerning airport operational performance and efficiency indicators, and DEA and MCDA tools and techniques; second, the impacts on airports operational performance and efficiency of emergent operational factors (ramp incidents) and sudden meteorological/natural phenomenon (volcano ashes); third, a study on the feasibility of the incorporation of such inputs in airport performance and efficiency predictive models; fourth, the presentation of some case studies concerning a set of selected airports; fifth, some insights and challenges about future research still under development. We believe that new models are needed to benchmark airports simultaneously based on scientific techniques robust but flexible to accommodate new (emerging) constraints and useful for those responsible for airport management in different processes of decision making.
    Date: 2012–10
  15. By: Viroj Jienwatcharamongkhol; Mohammad Hossein Tavassoli
    Abstract: This paper analyses the effect of innovation on the well-established productivity-export association in the literature. Here, we argue that actively innovative firms have a higher productivity, which make them more likely to become exporters. Moreover, exporting firms learn from their trading experiences and accumulate the necessary knowledge in order to innovate further, which may facilitate future productivity. We use the micro-data from two waves of Swedish Community Innovation Survey (CIS) to provide empirical evidences to test our argument concerning this interrelation between innovation, productivity, and export. The main finding is that firms which become innovative are more likely to also become an exporter, especially when they do not have prior export experiences. JEL Classification: D22, D24, F14, O39 Keywords: innovation, productivity, export, Swedish CIS, micro-data
    Date: 2012–10
  16. By: John Fernald
    Abstract: This paper makes four points about the recent dynamics of productivity and potential output. First, after accelerating in the mid-1990s, labor and total-factor productivity growth slowed after the early to mid 2000s. This slowdown preceded the Great Recession. Second, in contrast to some informal commentary, productivity performance during the Great Recession and early in the subsequent recovery was roughly in line with previous experience during deep recessions. In particular, the evidence suggests substantial labor and capital hoarding. During the recovery, measures of factor utilization fairly quickly rebounded, and TFP and labor productivity returned to their anemic mid-2000s trends. Third, a plausible benchmark for the slower pace of underlying technology along with demographic assumptions from the Congressional Budget Office imply steady-state GDP growth of just over 2 percent per year—lower than most estimates. Finally, during the recession and recovery, potential output grew even more slowly— reflecting especially the effect of weak investment on growth in capital input. Half or more of the shortfall of actual output relative to pre-recession estimates of the potential trend reflects a reduction in potential.
    Keywords: Productivity ; Business cycles ; Economic growth
    Date: 2012
  17. By: Barath, Lajos; Ferto, Imre
    Abstract: Technological heterogeneity is an important issue in studies of agricultural production. We assume that this is much more serious in transition countries, since the agricultural sector in these countries is characterized by the presence of even more different technologies and structures. Previous studies address the issue of production heterogeneity in developed countries; however, there is a clear lack in the literature concerning the effect of different technologies in transition countries. There are two common approaches to estimate different technologies: the most common one is to split the sample into groups based on some a priori information; an alternative method is the latent class models. In the present paper both approaches are used to identify different technologies and to estimate technical efficiency. It seems to be that the LCM model identified better technological differences and separated better the effect of heterogeneity and technical efficiency.
    Keywords: Technical efficiency, Heterogeneity, Latent class model, Hungarian agriculture, Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies, Q12,
    Date: 2012–04
  18. By: Graziano Abrate (Department of Business Management and Environment, University of Eastern Piedmont); Fabrizio Erbetta (Department of Business Management and Environment, University of Eastern Piedmont); Giovanni Fraquelli (Department of Business Management and Environment, University of Eastern Piedmont); Davide Vannoni (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)
    Abstract: The focus of the paper is to analyze the costs of solid waste collection by applying a well-behaved multiproduct cost function model to a sample of more than 500 Italian municipalities. Beyond shedding light on the presence and on the extent of size (or scale) economies, our aim is to investigate in depth the issue of economies of density, which is still an underexplored topic in the literature. Our cost function specification, by being able to estimate several measures of density economies (such as output density economies, vertical density economies and horizontal density economies), allows to capture the impact of different urbanization models on the costs of refuse collection and disposal. The results of the estimates highlight the presence of output density economies as well as horizontal density economies. Conversely, there is significant and robust evidence of the existence of vertical density diseconomies, which suggests that congestion problems in densely populated councils are severely affecting garbage collection costs. Finally, there is evidence of diseconomies of size, which suggests that aggregating the refusal collection operations of several municipalities would not bring savings in the average costs.
    Keywords: Solid waste, density economies, cost functions.
    JEL: D24 H42 L32 L99
    Date: 2012–07
  19. By: Churen Sun; Zhihao Yu; Tao Zhang
    Abstract: The paper proposes a model to investigate the influences of agglomeration on heterogeneous firms' exporting behaviors. In the model, firms are heterogeneous in productivity. Selection effect and agglomeration economies caused by agglomeration increase firms' productivity and decreases industrial entry costs, and factor prices are increased because of agglomeration. The former factors increase while the latter reduces firms' exporting possibilities and sales. The theoretical result shows that the compositive effect is that the influences of productivity on the latter increase with agglomeration level. Empirical results based on data from Chinese Industrial Enterprises between 1998 and 2007 verify the theoretical results. Moreover, the is a critical agglomeration level for each firm (which varies across firms' productivity), so that the influence of agglomeration on a firm' export increases with agglomeration if it's less than this level while decreases if it's larger than it. The paper also estimates the influences of local market effect, urban economies and competition effect on firms' exports and find that they affect firms' exporting behaviors in very complicated modes.
    Date: 2012–10
  20. By: Andreas Koch; Elena Biewen
    Abstract: The present paper analyses whether and how the affiliation of a firm to a business group affects its productivity. Based on novel data consisting of official firm data from the German Business Register including ownership information from Bureau van Dijk’s MARKUS database and from the Cost Structure Panel we assess differences in productivity (1) between independent firms and firms affiliated to groups and (2) affiliated firms controlled by German owners and affiliated firms controlled by foreign owners. Controlling for a series of determinants like, for example, the internal diversity of firms and groups, region, sector and size of firms, it is shown that group members have a productivity premium between 6 and 28% depending on the considered subsample. Furthermore, affiliates under foreign control are more productive than firms controlled by domestic owners.
    Date: 2012–10
  21. By: Benedetto Molinari (Department of Economics, Universidad Pablo de Olavide); Jesús Rodríguez López (Department of Economics, Universidad Pablo de Olavide); Jose Luis Torres (Universidad de Málaga)
    Abstract: This paper assess the sources of technological progress that determined GDP and labor productivity growth across a group of leading Pacific economies - Australia, Japan, South Korea, and the U.S. - during the period 1980-2006. We consider three alternative sources of technological progress: disembodied and factor-embodied technical change to capital and labor. The contribution to growth of each of these sources is evaluated using both traditional and equilibrium growth accounting procedures. We find that capital accumulation is the main determinant of GDP growth in Australia, Japan and the U.S., whereas the main contribution in South Korea is given by Total Factor Productivity (disembodied technology). In all the considered economies, about half of the contribution to growth of capital-embodied technical change comes from Information and Communication Technologies.
    Keywords: Output Growth, Labor Productivity Growth, Investment-Specific Technical Change, Neutral Technology, Human Capital Accumulation
    JEL: O3 O4
    Date: 2012–09
  22. By: John Fernald
    Abstract: This paper describes a real-time, quarterly growth-accounting database for the U.S. business sector. The data on inputs, including capital, are used to produce a quarterly series on total factor productivity (TFP). In addition, the dataset implements an adjustment for variations in factor utilization—labor effort and the workweek of capital. The utilization adjustment follows Basu, Fernald, and Kimball (BFK, 2006). Using relative prices and input/output information, the series are also decomposed into separate TFP and utilization-adjusted TFP series for equipment investment (including consumer durables) and “consumption” (defined as business output less equipment and consumer durables).
    Keywords: Productivity ; Business cycles ; Economic growth
    Date: 2012
  23. By: Kelly, S.; Pollitt, M.; Crawford-Brown, D.
    Abstract: Improving the efficiency and performance of the UK residential sector is now necessary for meeting future energy and climate change targets. Building Performance Evaluation and Certification (BPEC) tools are vital for estimating and recommending cost effective improvements to building energy efficiency and lowering overall emissions. In the UK, building performance is estimated using the Standard Assessment Procedure (SAP) for new dwellings and Reduced SAP (RdSAP) for existing dwellings. Using a systems based approach we show there are many opportunities for improving the effectiveness of BPEC tools. In particular, if the building stock is going to meet future energy and climate change targets the system driving building energy efficiency will need to become more efficient. In order to achieve this goal, building performance standards across Europe are compared highlighting the most effective strategies where they are found. It is shown that the large variance between estimated and actual energy performance from dwellings in the UK may be preventing the adoption of bottom-up energy efficiency measures. We show that despite popular belief, SAP and RdSAP do not estimate building energy efficiency but instead attempt to estimate the cost-effective performance of a building and thus create perverse incentives that may lead to additional CO2 emissions. In this regard, the SAP standard confounds cost-effectiveness, energy efficiency and environmental performance giving an inadequate estimate of all three policy objectives. Important contributions for improving measurement, analysis, synthesis and certification of building performance characteristics are offered.
    Keywords: Dwellings; Building Stock; Buildings; SAP; Energy Performance Certificates; Efficiency, Energy Demand.
    Date: 2012–10–04
  24. By: Emanuela Marrocu; Raffaele Paci
    Abstract: The aim of this paper is to assess the role played by creativity and other components of human capital on the process of economic growth for 257 regions in the 27 member countries of the European Union. We first decompose the regional human capital endowment to distinguish between the educational component (the share of individuals with a university degree) and the creativity component, which considers the actual occupations of individuals in specific jobs like science, engineering, education, arts and entertainment. We define three non overlapping categories of human capital (creative graduates, bohemians and non creative graduates) which are simultaneously included in a spatial model as determinants of regional growth measured by labour productivity. After extending the analysis to control for other relevant factors which may affect regional development, such as physical, technological and social capital, cultural diversity, industrial and geographical characteristics, we provide robust evidence on the growth enhancing effects of graduates, in particular for those of the creative category. Keywords: human capital, creativity, regional growth JEL code: C21, J24, O40, R11
    Date: 2012–10
  25. By: Breen, James P.; Clancy, Daragh; Donnellan, Trevor; Hanrahan, Kevin F.
    Abstract: The application of artificial fertiliser continues to be a vital component of the production system on the bulk of Irish farms, accounting for approximately nine percent of total costs on dairy and cattle farms (Hennessy et al. 2011). However, the average application of artificial nitrogen fertiliser per hectare of grassland has been in decline recently. This reduction in use is likely due to a number of factors including better on-farm grassland management, as well as better management and utilisation of organic manures, the introduction of the Rural Environmental Protection Scheme, the Nitrates Directive, and more recently higher fertiliser prices. Changes in the level of artificial nitrogen usage are likely to have significant implications for agricultural productivity and the environment, both in terms of nitrate emissions and greenhouse gas emissions. Therefore, a better understanding of the factors affecting fertiliser demand, as well as the relationship between fertiliser use and agricultural production levels is required. In this study an unbalanced panel dataset was constructed using data for the period 2000 to 2010 from the Irish National Farm Survey (NFS) and used to estimate two fixed effects models. The first model estimated the elasticity of demand for artificial nitrogen fertiliser applied on grassland. A second fixed effects model was developed to estimate the relationship between stocking rate and the level of artificial nitrogen applied on grassland.
    Keywords: Fixed Effects Model, Fertiliser, Elasticity of Demand, Agribusiness, Q12,
    Date: 2012–04
  26. By: Alistair Munro (National Graduate Institute for Policy Studies); Arjan Verschoor (School of International Development, University of East Anglia); Amaresh Dubey (Centre for the Study of Regional Development, Jawaharlal Nehru University)
    Abstract: An important question in labour economics is whether the presence in a work environment of friends or relations lowers or raises productivity. We examine the question using evidence from a simple field experiment in Uttar Pradesh, India with married wives and husbands. Teams of four are engaged to dig soil under the NREGA programme. In one treatment husbands and wives work together; in the other treatment they work in separate teams. We find that working with spouses is associated with significantly higher productivity.
    Date: 2012–09
  27. By: Sauer, Johannes; Walsh, John; Zilberman, David
    Abstract: This empirical study investigates the effects of different agri-environmental schemes on individual producer behaviour. We consider the effects on production intensity, performance and structure for a sample of UK cereal farms for the period 2000 to 2009 and use the policy examples of the Environmental Stewardship Scheme (ESS) and the Nitrate Vulnerable Zones (NVZ). The econometric methodology is based on a directional distance function framework as well as the application of propensity score analysis by the use of matching estimators. We find that both schemes are effectively influencing production behaviour at individual farm level. However, agri-environmental schemes show only very minor effects on the technical and allocative efficiency of farms, hence, we can conclude that farms enrolled in agri-environmental schemes are efficiently adjusting their production decisions given the constraints by the respective scheme. Farms affected by these schemes indeed tend to become less specialised and more diversified with respect to their production structure. A voluntary type agrienvironmental scheme seems to signficantly influence producer behaviour at a far higher scale than a non-voluntary agri-environmental scheme. The methodological novelty of this research lies in the use of a sound production theory based multi-output multi-input approach to disentangle measures for production performance and structure which are then used as indicators for the robust treatment effects’ analyses.
    Keywords: Agri-Environmental Policy, PES, Distance Function, Propensity Score Matching, Environmental Economics and Policy, Q15, Q18, Q57, C23,
    Date: 2012–04
  28. By: Boeing, Philipp; Mueller, Elisabeth; Sandner, Philipp
    Abstract: This study investigates how in-house R&D as well as access to national and foreign knowledge sources influences the productivity of Chinese firms. For our main analysis we use data for 1,140 patenting firms listed at mainland China stock exchanges over the time-period 2001-2010. In-house R&D based on indigenous knowledge does indeed improve productivity as does engaging in joint research projects with national partners. In order to benefit from international knowledge, Chinese firms are dependent on an organizational integration of the knowledge source. Joint ventures with foreign partners, acquisitions of foreign firms, and employing foreign researchers inside China contribute to firm productivity, whereas international joint research projects are not sufficient. Our results indicate that at the current stage of China's economic development the absorptive capacity of most firms is sufficient to benefit from foreign sources of knowledge only if an enduring, deep relationship supports the absorption of the knowledge. --
    Keywords: indigenous innovation,China,knowledge sources,productivity,absorptive capacity,patents
    JEL: O32 O33
    Date: 2012
  29. By: Timo Mitze; Alfredo R. Paloyo; Björn Alecke
    Abstract: Applied econometrics has recently emphasized the identification of causal parameters for policy analysis. This revolution has yet to fully propagate to the field of regional science. We examine the scope for application of the matching approach – part of the modern applied econometrics toolkit – in regional science and highlight special features of regional data that make such an application difficult. In particular, our analysis of the effect of regional subsidies on labor-productivity growth in Germany indicates that such policies are effective, but only up to a certain maximum treatment intensity. Although the matching approach is very appealing due to its methodological rigor and didactical clarity, we faced difficulties in balancing the set of covariates for our regional data given that the regions differ strongly with respect to the underlying structural characteristics. Thus, results have to be interpreted with some caution. The matching approach nevertheless can be of great value for regional policy analysis and should be the subject of future research efforts in the field of empirical regional science.
    Keywords: Generalized propensity score; nearest neighbor matching; labor productivity growth; regional policy
    JEL: C21 R11 R58
    Date: 2012–09
  30. By: Antonella Basso (Department of Economics, University Of Venice Cà Foscari); Stefania Funari (Department of Management, University of Venice Cà Foscari)
    Abstract: In order to evaluate the performance of socially responsible investment (SRI) funds, we propose some models which use data envelopment analysis and can be computed in all phases of the business cycle. These models focus on the most crucial elements of an investment in mutual funds. In the literature both constant and variable returns to scale DEA models have been used to evaluate the performance of mutual funds. An empirical investigation carried out on European SRI equity funds indicates that for the funds analyzed the returns to scale are constant. Another aspect taken into account by the empirical investigation is the measurement of the degree of social responsibility of SRI equity funds in the various European countries. In addition, we have analyzed the performance of the funds considered with the different DEA models proposed, which differ in the way the ethical objective is taken into account. Moreover, the paper focuses on another crucial issue regarding socially responsible investing: the comparison of the performances between SRI and non SRI funds; the empirical study suggests that the ethical objective can be pursued without having to renounce financial rewards.
    Keywords: Data envelopment analysis, Finance, Mutual fund performance evaluation, Socially responsible investing
    JEL: C65 G1 G23
    Date: 2012
  31. By: Nicola Pontarollo; Elisa Montresor; Francesco Pecci
    Abstract: The aim of our analysis is the evaluation of the total and sectoral convergence of labour productivity between 182 regions of EU12 in the period 1991-2006. The selected sectors are agriculture, manufactory, market and non-market services. We adopt a β- and σ-convergence approach along with a methodology based on Getis’ spatial filters that allows decomposing variables into their spatial and a-spatial components ensuring their spatial independence. This last point is fundamental to avoid i) omitted variables and/or problems of bias and/or inconsistency of coefficients in growth regressions, ii) bias in the computation of variance. The cited econometric approach also permits to identify spatial regimes of regions with high and low productivity, respectively ‘core’ and ‘periphery’. Our results show significant σ-convergence in aggregate labour productivity, market and non-market services in the first years and a slightly divergence in the second period. Sigma-divergence is present only in manufactory sector when spatial factors are not considered, while in agriculture a strong convergence is perceivable. The analysis highlights that if we do not take into account spatial effects, σ-convergence is overestimated. In the second part of the paper, we evaluate β-convergence for total labour productivity and for each sector. We considered five cases: the whole sample (EU12) without dummies, with country dummies and with spatial regime dummies, the ‘core’ and the ‘periphery’; finally we take into account singularly each spatial regime. The same estimation performed with and without spatially filtered variables leads to different results. While β-convergence process takes place in all cases and with all techniques, countries dummies are statistically significant only when spatial effects are not considered. In case of spatially filtered variables, the dummies, whose aim is to take into account the specificity of an agglomeration of regions, lose their significance, both theoretical and statistical, because the spatial factors embedded in each variable, and strictly connected with the country or convergence club to which they belong, are removed. The interesting point, however, is the lack of significance of dummies for spatial regimes. This finding, common both to filtered and unfiltered variables and to all sectors, is a little surprising because the identified spatial regimes are interpretable (and often interpreted) like convergence clubs. In conclusion, this paper shows that economic structure has to be considered together with spatial structure. These two factors affect themselves reciprocally and, for a full and reliable explanation of regional economic dynamics both must be formally included in the analysis. JEL classification: C14, O52, R11, R15 Key words: Spatial econometrics, convergence, sectoral labour productivity
    Date: 2012–10
  32. By: Slavomir Hidas; Martyna Wolska; Manfred M Fischer; Thomas Scherngell
    Abstract: The focus of this study is on regional knowledge production activities in Europe, with special emphasis on the interplay between agglomeration and network effects. As increasingly considered in economic geography and regional science in the recent past, regional knowledge production activities, on the one hand, still remain geographically bounded; on the other hand, knowledge production activities have become increasingly interwoven and internationalized, emphasizing the crucial importance of region-external knowledge sources for a region’s knowledge production capacity. The objective of the study is to estimate to what extent agglomeration and network effects influence knowledge production activities at the level of European regions. We use an extended regional knowledge production function framework as basis for the study, and derive a spatial Durbin model (SDM) relationship that can be used for empirical testing. The European coverage is achieved using 241 NUTS-2 regions covering the EU-25 member states. The dependent variable, knowledge production activity, is measured in terms of patent counts at the regional level in the time period 1998-2008, using patents applied at the European Patent Office (EPO). The independent variables include an agglomeration index, measured in terms of population density, and the regional participation intensity in the European network of R&D cooperation, measured in terms of the number of participations of a region in R&D joint ventures funded by the European Commission under the heading of the EU Framework programs (FPs). By this we are able to estimate the distinct effects of network participation and agglomeration on regional knowledge production. In our modeling framework, we further control for total regional R&D expenditures as widely used in regional knowledge production function frameworks and its empirical applications. In estimating the effects, we implement a panel version of the standard SDM that controls for spatial autocorrelation as well as individual heterogeneity across regions. The specification incorporates a spatial lag of the dependent variable as well as spatial lags of the independent variables. This allows for the estimation of spatial spillovers of agglomeration and network effects from neighboring regions by calculating scalar summary measures of impacts. The estimation results are expected to provide sketches of policy implications in a European and regional policy context. JEL Classification: R11, O31, C21 Keywords: Regional knowledge production, Agglomerations effects, R&D networks, European Framework Programs, knowledge production function, panel spatial Durbin model
    Date: 2012–10

This nep-eff issue is ©2012 by Angelo Zago. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.