New Economics Papers
on Efficiency and Productivity
Issue of 2012‒10‒27
fourteen papers chosen by

  1. A proxy approach to dealing with the infeasibility problem in super-efficiency data envelopment analysis By Cheng, Gang; Zervopoulos, Panagiotis
  2. Product Mix Changes and Performance in Chilean Plants By Roberto Alvarez; Claudio Bravo-Ortega; Lucas Navarro
  3. Export Mode, Trade Costs, and Productivity Sorting By Ronald B. Davies; Tine Jeppesen
  4. Why is Measured Productivity so Low in Agriculture? By Todd Schoellman; Berthold Herrendorf
  5. Rethinking the import-productivity nexus for Italian manufacturing By Giuliano CONTI; Alessia LO TURCO; Daniela MAGGIONI
  6. A generalized directional distance function in data envelopment analysis and its application to a cross-country measurement of health efficiency By Cheng, Gang; Zervopoulos, Panagiotis
  7. UK Innovation Index: productivity and growth in UK industries By Haskel, J; Goodridge, P; Wallis, G
  8. The Effects of Effciency and TFP Growth on Nitrogen and Sulphur Emissions in Europe: A Multistage Spatial Analysis By Anthony J. Glass; Karligash Kenjegalieva; Robin Sickles
  9. Demand or productivity: What determines firm growth? By Andrea Pozzi; Fabiano Schivardi
  10. Comparing Parametric and Nonparametric Regression Methods for Panel Data: the Optimal Size of Polish Crop Farms By Tomasz Gerard Czekaj; Arne Henningsen
  11. Spatial spillovers from FDI agglomeration : evidence from the Yangtze River Delta in China By Tanaka, Kiyoyasu; Hashiguchi, Yoshihiro
  12. Partial Credit Guarantees and Firm Performance: Evidence from the Colombian National Guarantee Fund By Irani Arráiz; Marcela Melendez; Rodolfo Stucchi
  13. Developing High Performance: Performance Management in the Australian Public Service By Deborah Ann Blackman; Fiona Buick; Michael O'Donnell; Janine L. O'Flynn; Damian West
  14. Spatial Disparities in Hospital Performance By Gobillon, Laurent; Milcent, Carine

  1. By: Cheng, Gang; Zervopoulos, Panagiotis
    Abstract: Super-efficiency data envelopment analysis (SE-DEA) models are expressions of the traditional DEA models featuring the exclusion of the unit under evaluation from the reference set. The SE-DEA models have been applied in various cases such as sensitivity and stability analysis, measurement of productivity changes,outliers’ identification,and classification and ranking of decision making units (DMUs). A major deficiency in the SE-DEA models is their infeasibility in determining super-efficiency scores for some efficient DMUs when variable, non-increasing and non-decreasing returns to scale (VRS, NIRS, NDRS) prevail. The scope of this study is the development of an oriented proxy approach for SE-DEA models in order to tackle the infeasibility problem. The proxy introduced to the SE-DEA models replaces the original infeasible DMU in the sample and guarantees a feasible optimal solution. The proxy approach yields the same scores as the traditional SE-DEA models to the feasible DMUs.
    Keywords: Data envelopment analysis (DEA); Super-efficiency (SE); Infeasibility; Orientation
    JEL: C02 C61 C67
    Date: 2012–06
  2. By: Roberto Alvarez; Claudio Bravo-Ortega; Lucas Navarro
    Abstract: A recent theoretical literature has given relevance to the study of the relationship between product mix changes and firm productivity. In this paper, taking advantage of a rich dataset for manufacturing plants in Chile during the period 1996-2000, we use matching techniques and a difference in difference approach to estimate the causal impact of product mix changes on productivity and other plant-specific outcomes. Our results suggest a positive and increasing impact of product mix changes on total factor productivity and labor productivity after two years the product mix changes are introduced. We also find positive effects on employment and sales. Nevertheless, this positive effect is mainly driven by firms that add and drop products at the same time. Our results are in line with recent theoretical developments on the study of productivity determinants on multiproduct firms and illustrate how products creation and destruction are a source of within-firm productivity growth.
    Date: 2012–10
  3. By: Ronald B. Davies (University College Dublin; Institute for International Integration Studies, Trinity College Dublin; CES-Ifo); 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: 2012–09
  4. By: Todd Schoellman (Arizona State University); Berthold Herrendorf (Arizona State University)
    Abstract: It is well known that poor countries are much less productive in agriculture than in the rest of the economy, and that it is hard to account for these productivity gaps. In this paper, we study US states during 1980–2009. We find that there are large productivity gaps between agriculture and non–agriculture. These productivity gaps are not at all accounted for by gaps in real wages per efficiency unit, which are similar in the two sectors. Instead, they are accounted for by two key factors: human capital is much higher in non–agriculture; and value added is seriously mis–measured in agriculture.
    Date: 2012
  5. By: Giuliano CONTI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Alessia LO TURCO (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Daniela MAGGIONI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)
    Abstract: We provide evidence on the firm-level productivity effects of imports of intermediates. Exploiting a large panel of Italian manufacturing firms we are able to separately test the role of offshoring to high and low income countries. Contrary to our expectations, no significant impact is found out for purchases from developed countries, while firmefficiency seems to be positively affected by imported inputs from developing countries. Anyway, we prove that this result may be driven by the omission of another important firm internationalisation strategy, the export activity. Due to the strict linkage existing between export and import activity at firm level, we investigate whether the significant role of offshoring still stay after controlling for the firms' sales in foreign markets. Positive effects of offshoring disappear, while we confirm the existence of learning-by-exporting, already displayed in literature for Italy.
    Keywords: Exports, Imports, Productivity
    JEL: D22 F10 F14
    Date: 2012–09
  6. By: Cheng, Gang; Zervopoulos, Panagiotis
    Abstract: Economic activity produces not only desirable outputs but also undesirable outputs that are usually called negative externalities in economic theory. Negative externalities are usually omitted from efficiency assessments (i.e., applications of Data Envelopment Analysis) which fail to express the true production process. In the present paper we develop a generalized directional distance function method for handling asymmetrically both desirable and undesirable outputs in the assessment process. Unlike the existing directional distance function-based approaches, the proposed method is units-invariant even in case assumptions for the direction vectors are relaxed. The new method is applied to data from national health systems of 160 countries. Desirable and undesirable outputs are incorporated to obtain a clear view of the efficiency status of the national health systems.
    Keywords: Data envelopment analysis; Directional distance function; Undesirable outputs; Units-invariant; Health systems
    JEL: C02 C61 D24
    Date: 2012–06
  7. By: Haskel, J; Goodridge, P; Wallis, G
    Date: 2012–07
  8. By: Anthony J. Glass (School of Business and Economics, Loughborough University, UK); Karligash Kenjegalieva (School of Business and Economics, Loughborough University, UK); Robin Sickles (Department of Economics, Rice University, Houston, United States)
    Abstract: It is common in firm level environmental efficiency studies for pollution to form part of the production technology. We omit nitrogen and sulphur emissions from the spatial analysis of production in European countries (1995 - 2008) because we find they are not significant inputs. Efficiency and TFP growth from the production analysis are then used in second stage spatial models of nitrogen and sulphur emissions in European countries. We find that to cut European sulphur emissions by a certain percentage requires a decrease in a composite measure of a country’s efficiency and TFP growth which is more than double the decrease needed to reduce European nitrogen emissions by the same percentage.
    Keywords: TFP Growth; Atmospheric Pollution; Spatial Econometrics; Economic Efficiency
    JEL: C23 D24 Q53
    Date: 2012–10
  9. By: Andrea Pozzi (EIEF); Fabiano Schivardi (University of Cagliari, CEPR and EIEF)
    Abstract: We disentangle the contribution of unobserved heterogeneity in idiosyncratic demand and productivity to firm growth. We use a model of monopolistic competition with Cobb-Douglas production and a dataset of Italian manufacturing firms containing unique information on firm-level prices to reach three main conclusions. First, demand shocks are at least as important as productivity shocks for firm growth. Second, firms respond to shocks less than a frictionless model would predict, suggesting the existence of adjustment frictions. Finally, the degree of under-response is much larger for TFP shocks. This implies the existence of frictions with differential effects according to the nature of the shock, unlike the typical frictions studied by the literature on factor misallocation. We consider hurdles to firm reorganization as one such friction and show that they hamper firms’ responses to TFP shocks but not to demand shocks.
    Date: 2012
  10. By: Tomasz Gerard Czekaj (Institute of Food and Resource Economics, University of Copenhagen); Arne Henningsen (Institute of Food and Resource Economics, University of Copenhagen)
    Abstract: We investigate and compare the suitability of parametric and non-parametric stochastic regression methods for analysing production technologies and the optimal firm size. Our theoretical analysis shows that the most commonly used functional forms in empirical production analysis, Cobb-Douglas and Translog, are unsuitable for analysing the optimal firm size. We show that the Translog functional form implies an implausible linear relationship between the (logarithmic) firm size and the elasticity of scale, where the slope is artificially related to the substitutability between the inputs. The practical applicability of the parametric and non-parametric regression methods is scrutinised and compared by an empirical example: we analyse the production technology and investigate the optimal size of Polish crop farms based on a firm-level balanced panel data set. A nonparametric specification test rejects both the Cobb-Douglas and the Translog functional form, while a recently developed nonparametric kernel regression method with a fully nonparametric panel data specification delivers plausible results. On average, the nonparametric regression results are similar to results that are obtained from the parametric estimates, although many individual results differ considerably. Moreover, the results from the parametric estimations even lead to incorrect conclusions regarding the technology and the optimal firm size.
    Keywords: production technology, nonparametric econometrics, panel data, Translog, firm size, Polish crop farms
    JEL: C14 C23 D24 Q12
    Date: 2012–10
  11. By: Tanaka, Kiyoyasu; Hashiguchi, Yoshihiro
    Abstract: Foreign firms have clustered together in the Yangtze River Delta, and their impact on domestic firms is an important policy issue. This paper studies the spatial effect of FDI agglomeration on the regional productivity of domestic firms, using Chinese firm-level data. To identify local FDI spillovers, we estimate the causal impact of foreign firms on domestic firms in the same county and similar industries. We then estimate a spatial-autoregressive model to examine spatial spillovers from FDI clusters to other domestic firms in distant counties. Our results show that FDI agglomeration generates positive spillovers for domestic firms, which are stronger in nearby areas than in distant areas.
    Keywords: China, Foreign investments, International business enterprises, Productivity, FDI, Multinational firms, Spillovers
    JEL: C21 F21 F23 R12 R58
    Date: 2012–06
  12. By: Irani Arráiz (Multilateral Investment Fund, Inter-American Development Bank, Washington, USA); Marcela Melendez; Rodolfo Stucchi (Inter-American Development Bank, Washington, USA)
    Abstract: This paper studies the effect of government-backed partial credit guarantees on firms’ performance. These guarantees are automatically granted to firms without enough collateral in order to lift their credit constraints. We put together a panel, covering the period 1997-2007, that combines data from DANE's Annual Manufacturing Survey; DIAN's export and import information; and firm-level records from the National Guarantee Fund (NGF), the government agency in charge of implementing this policy. Using propensity score matching and difference-in-differences, we found that firms that gain access to credit backed by the NGF are able to grow in terms of both output and employment. However, we did not find any effect on productivity, wages, or investment. These results suggest that firms use the new funds as working capital to grow their businesses rather than for investment in new durable goods that increase their capital stock.
    Keywords: Partial credit guarantee, access to credit, firm growth, job creation, productivity
    JEL: H43 L25 O12 O54
    Date: 2012–10
  13. By: Deborah Ann Blackman; Fiona Buick; Michael O'Donnell; Janine L. O'Flynn; Damian West
    Abstract: This paper provides a new conceptualisation of high performance government for the public sector. Despite the concerted focus on performance management in both the public and private sectors, the performance puzzle remains. In part, we argue, this is because of a failure to recognise the complex interactions across the micro, meso, and macro levels of performance management that characterise such systems in the public sector. We consider the current attention on system-wide 'high performance government', review the existing literature on high performance organisations, and high performance individuals and groups, and then posit a further, and to date missing, level of analysis - high performance governance. The report is part of a multi-year collaborative research project between the Australian National University, the University of Canberra, the University of New South Wales and the Australian Public Service Commission as part of the Ahead of the Game blueprint for reform in the Australian public service.
    Keywords: Public Sector, performance management, high performance organization, high performance government, reform
    Date: 2012–06
  14. By: Gobillon, Laurent (INED, France); Milcent, Carine (Paris School of Economics)
    Abstract: Using a French exhaustive dataset, this paper studies the determinants of regional disparities in mortality for patients admitted to hospitals for a heart attack. These disparities are large, with an 80% difference in the propensity to die within 15 days between extreme regions. They may reflect spatial differences in patient characteristics, treatments, hospital characteristics, and local healthcare market structure. To distinguish between these factors, we estimate a flexible duration model. The estimated model is aggregated at the regional level and a spatial variance analysis is conducted. We find that spatial differences in the use of innovative treatments play a major role whereas the local composition of hospitals by ownership does not have any noticeable effect. Moreover, the higher the local concentration of patients in a few large hospitals rather than many small ones, the lower the mortality. Regional unobserved effects account for around 20% of spatial disparities.
    Keywords: spatial health disparities, economic geography, stratified duration model
    JEL: I11 C41
    Date: 2012–10

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