New Economics Papers
on Efficiency and Productivity
Issue of 2012‒11‒24
fourteen papers chosen by

  1. Dynamic Productivity Growth in the Spanish Meat Industry By Kapelko, Magdalena; Oude Lansink, Alfons G.J.M.; Stefanou, Spiro E.
  2. Efficient Innovation in Dairy Production - Empirical Findings for Germany By Sauer, Johannes; Latacz-Lohmann, Uwe
  3. Technological change in the Czech food processing industry: What did we experience in the last decade? By Cechura, Lukas
  4. Structural Change and Technical Change in Polish Agriculture: An Adjustment Cost Approach with Technical and Allocative Efficiency By Rungsuriyawiboon, Supawat; Hockmann, Heinrich
  5. Cost Efficiency and Farm Self-selection in Precision Farming: The Case of Czech Wheat Production By Curtiss, Jarmila; Jelinek, Ladislav
  6. Assessing dynamic efficiency of the Spanish construction sector pre- and post-financial crisis By Kapelko, Magdalena; Oude Lansink, Alfons G.J.M.; Stefanou, Spiro E.
  7. Factors affecting productivity of research-based pharmaceutical companies following mergers and acquisitions By Tjandrawinata, Raymond R.; Simanjuntak, Destrina Grace
  8. Mitigation and Heterogeneity in Management Practices on New Zealand Dairy Farms By Anastasiadis, Simon; Kerr, Suzi
  9. Dynamic Externalities and Manufacturing Productivity: An empirical comparison among China's top three municipalities By ZHAO Ting; ZHAO Wei
  10. Estimating Dairy Farms’ Demand for Water By Kravchenko, Alexey
  11. Obesity, Weight Loss, and Employment Prospects – Evidence from a Randomized Trial By Arndt Reichert
  12. Agricultural productivity and Environmental Sustainability Are we going to throw the baby out with the bathwater? By Bell, Brian A.
  13. Impact of Adoption of Sustainable Production Systems on Farm Profitability By Robinson, Ian
  14. The cost structure of the clean development mechanism By Rahman, Shaikh M.; Larson, Donald F.; Dinar, Ariel

  1. By: Kapelko, Magdalena; Oude Lansink, Alfons G.J.M.; Stefanou, Spiro E.
    Abstract: This paper develops a dynamic Luenberger productivity growth indicator and decomposes it to identify the contributions of technical change, technical efficiency change and scale change. The Luenberger productivity growth indicator is estimated using Data Envelopment Analysis. The empirical application focuses on panel data of Spanish meat processing firms over the period 2000-2010. The dynamic Luenberger indicator shows productivity decrease of on average -0.003 in the period under investigation, with technical regress being the main driver of change, despite technical and scale efficiency growth.
    Keywords: directional distance function, dynamics, Luenberger TFP, meat processing, Agribusiness, Agricultural and Food Policy,
    Date: 2012–09–18
  2. By: Sauer, Johannes; Latacz-Lohmann, Uwe
    Abstract: This empirical study aims to shed light on the dynamic linkages between innovation and efficiency at individual farm level. We use a comprehensive dataset for dairy farms in Germany for the period 1995 to 2010. Based on a directional distance function framework we estimate the changes in efficiency, technical change and productivity over the period considered. In a second step we then investigate possible factors for technically efficient milk production at farm level before we finally try to identify those farms that are capable of translating investments in innovative technologies into actual efficiency gains over time applying a multinomial logit approach. Our empirical findings reveal that investments in innovative dairy technologies are only reflected in higher profitability if sufficient Know-How for the efficient use of these innovations is available.
    Keywords: Innovation, Efficiency, Dairy Farming, Microeconometrics, Innovation, Effizienz, Milchproduktion, Mikroökonometrie, Livestock Production/Industries, Q12, D24, C23,
    Date: 2012
  3. By: Cechura, Lukas
    Abstract: The paper examines the contribution of technological change to changes in technical efficiency and TFP (Total Factor Productivity). The results show that the technological change did not contribute significantly to the development of efficiency in all analyzed sector. However, the distribution of technical change suggests that the gap between the best and worst food processing companies increased within the analyzed period. On the other hand, the technological change was an important factor determining the TFP increase in all sectors.
    Keywords: Technological change, Technical efficiency, TFP, Czech food processing industry, Agribusiness, Agricultural and Food Policy,
    Date: 2012–09–18
  4. By: Rungsuriyawiboon, Supawat; Hockmann, Heinrich
    Abstract: This paper aims to understand the state of adjustment process and dynamic structure in Polish agriculture. A dynamic cost frontier model using the shadow cost approach is formulated to decompose cost efficiency into allocative and technical efficiencies. The dynamic cost efficiency model is developed into a more general context with a multiple quasi-fixed factor case. The model is implemented empirically using a panel data set of 1,143 Polish farms over the period 2004 to 2007. Due to the regional disparities and a wide variety of farm specialization, farms are categorized into two regions and five types of farm production specialization. The estimation results confirm our observation that adjustment is rather sluggish implying that adjustment cost are considerably high. It takes up to 30 years until Polish farmers reach their optimal level of capital and land input. Allocative and technical efficiency differ widely across regions. Moreover, efficiency is rather stable over time and among farm specialisations. However, their results indicate that the regions characterized by the larger farms perform slightly better.
    Keywords: Polish agriculture, dynamic efficiency, adjustment cost, shadow cost approach, Agribusiness, Agricultural and Food Policy, D21, D61, Q12,
    Date: 2012–09–18
  5. By: Curtiss, Jarmila; Jelinek, Ladislav
    Abstract: This paper examines allocative and cost efficiency implications of adopting variable-rate fertiliser application using survey data from Czech wheat farms. Data Envelopment Analysis delivered higher efficiency scores for precision farming (PF) adopters. Correcting for selection bias using a one-step endogenous switching regression reveals that farms displaying a lower cost efficiency score are less likely to adopt PF technology. Nonadopters switching to PF technology would likely be affected by a significant decrease in cost efficiency given their production conditions and/or managerial and technical skills. In line with this, results indicate that human capital and farm size increase the likelihood of PF adoption. Cost (allocative efficiency) implications of PF-related changes in input structure only, on the other hand, are not found to have an impact on the choice of technology. A positive allocative efficiency effect of PF technology is brought about mainly by a farm's ability to better extrapolate the soil's productive potential, which is insufficiently reflected in the land rental prices. The allocative as well as cost efficiency implications of PF technology are further related to technology-specific responses to various farm characteristics and technological practices. PF technology makes farms' efficiency more responsive to production conditions, farm specialisation, legal form and other technological practices. The overall efficiency effect the PF practices is, therefore, conditioned on farm characteristics.
    Keywords: Precision farming, cost efficiency, technical efficiency, allocative efficiency, Czech agriculture, endogenous switching regression, Agribusiness, Agricultural and Food Policy,
    Date: 2012–09–18
  6. By: Kapelko, Magdalena; Oude Lansink, Alfons G.J.M.; Stefanou, Spiro E.
    Abstract: This paper estimates dynamic efficiency in the Spanish construction industry before and during the current financial crisis over the period 2001-2009. Static efficiency measures are biased in a context of a significant economic crisis with large investments and disinvestments as they do not account for costs in the adjustment of quasi-fixed factors. The results show that overall dynamic cost inefficiency is very high with technical inefficiency being the largest component, followed by allocative and scale inefficiency. Moreover, overall dynamic cost inefficiency is significantly larger before the beginning of the financial crisis than during the financial crisis. Results also show that larger firms are on average less technically and scale inefficient than smaller firms, but have more problems in choosing the mix of inputs that minimizes their long-term costs. Firms that went bankrupt, on average have a higher overall dynamic cost inefficiency and scale inefficiency than firms that did not go bankrupt.
    Keywords: dynamic efficiency, construction sector, Agribusiness, Agricultural and Food Policy,
    Date: 2012–09–18
  7. By: Tjandrawinata, Raymond R.; Simanjuntak, Destrina Grace
    Abstract: This paper analyzes the impact of mergers and acquisitions (M&A) activities in research-based pharmaceutical companies, specifically the impact of R&D expenditure, profitability, and sales revenue on firms’ productivity, R&D intensity, in pharmaceutical industries following M&A activities. The model was estimated using annual data, gathered from seven large research-based pharmaceutical companies pre and post-M&A, during the period 2003 until 2010. The regression analysis method uses a fixed effect method with generalized least square (GLS) analysis. The result further shows that following M&A activities, firms’ one-year lagged R&D expenditure (t-1) and lagged profitability (t-1) to be positive in increasing significantly the firms’ amount of R&D intensity in research-based pharmaceutical industries, while, surprisingly firms’ one-year lagged sales revenue (t-1) have a negative impact in increasing significantly the firms’ amount of R&D intensity in research-based pharmaceutical industries.
    Keywords: Mergers and Acquisitions (M&A); R&D Expenditure; Profitability; Sales Revenue; R&D Intensity
    JEL: D21 D24
    Date: 2012–11
  8. By: Anastasiadis, Simon; Kerr, Suzi
    Abstract: We consider two approaches to quantify New Zealand farmers’ ability to mitigate their farm’s environmental impact: The construction of marginal abatement cost curves and improvements in farm management practices. Marginal abatement cost curves can be constructed by combining information on the effectiveness of mitigation with cost data. However, we find that the available data is not sufficient to support this approach. We consider improvements in management practices using a distribution of farm production efficiency with regard to nitrogen and greenhouse gas (kg production per unit of emissions). Where differences in production efficiency are due to factors that can be managed by farmers, targeting less efficient farmers to encourage the adoption of management practices similar to those of the more efficient farmers is a potential mitigation strategy.
    Keywords: Cost curves, greenhouse gas, heterogeneity, leaching, mitigation, nitrogen, production efficiency, Agribusiness, Environmental Economics and Policy, Farm Management, Land Economics/Use, Production Economics, Q53, Q57,
    Date: 2012–08
  9. By: ZHAO Ting; ZHAO Wei
    Abstract: By reviewing and improving previous empirical works on this topic, the present paper investigates the dynamic externalities of agglomeration in China. Taking China's top three municipalities (i.e., Beijing, Shanghai, and Tianjin) as sample regions, it assesses empirically and compares how three types of dynamic externalities—namely MAR (Marshall-Arrow-Romer), Jacobs, and Porter externalities—affect manufacturing productivity. The main findings of this paper are threefold. First, all three types of dynamic externalities measured in labor productivity can be found in the three sample regions, but large differences in the degrees and directions of the effects exist among them. Second, the degree and sign of the effects of each type of externality vary with changes in time lags. Third, the positive effects of these externalities seem to be substitutable for one another. Specifically, if MAR externalities contribute more to productivity growth in one city, Jacobs or Porter externalities do so to a lesser degree and vice versa.
    Date: 2012–11
  10. By: Kravchenko, Alexey
    Abstract: Resource Management's Act current “first come first served” method of distributing water rights is fast becoming inadequate to handle this increasingly over-allocated factor of production. Water markets or tariffs are one way to achieve allocative efficiency. To establish such markets or tariffs, it is imperative to estimate users’ responses to having, for the first time, to pay for this currently largely unpriced input. This study seeks to provide a viable “starting point” estimate of the response curve to water price tariffs of dairy farmers – NZ’s largest fresh water consumers – using the MPI dairy monitoring dataset. This paper suggests that under the assumptions of inelastic input substitutability, the farms’ supply curves can provide an approximation of the farms’ responses to at-site (irrigation cost inclusive) changes of water costs.
    Keywords: water demand, dairy farms, irrigation, non-market valuation, Agribusiness, Agricultural and Food Policy, Crop Production/Industries, Demand and Price Analysis, Environmental Economics and Policy, Farm Management, Land Economics/Use, Production Economics,
    Date: 2012–08
  11. By: Arndt Reichert
    Abstract: This study presents credible estimates for the causal effect of a variation in obesity on employment. By exploring random assignment of a weight loss intervention based on monetary rewards, I provide convincing evidence that weight loss positively affects the employment prospects of obese women but not of obese men. Consistent with this, significant effects of weight loss on proxy variables for labor productivity are found only for obese women.
    Keywords: Obesity; weight loss intervention; IV estimation; sample selection; labor productivity; employment
    JEL: I10 I18 J24 J21
    Date: 2012–11
  12. By: Bell, Brian A.
    Abstract: Among the green lobby and the general public there is urgency for agriculture to clean up its act on environmental issues. Increased intensification of land use and in particular dairying has led to environmental spill-overs that the public is no longer willing to tolerate. Agriculture is in danger of losing its public license to operate. Polices to ensure degraded waterways are put on a path to improvement are currently being formulated. These have the potential to rob New Zealand of its international competitive advantage in agricultural production if not implemented wisely. This paper uses two case studies to illustrate the costs and the timeframes inherent in environmental improvement for pastoral agriculture and makes recommendation on policies to ensure New Zealand has good environmental outcomes and retains its international competitive advantage.
    Keywords: Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Environmental Economics and Policy, Farm Management, Land Economics/Use,
    Date: 2012–08
  13. By: Robinson, Ian
    Keywords: Environmental Economics and Policy, Farm Management,
    Date: 2012–10–18
  14. By: Rahman, Shaikh M.; Larson, Donald F.; Dinar, Ariel
    Abstract: This paper examines the cost of producing emission reduction credits under the Clean Development Mechanism. Using project-specific data, cost functions are estimated using alternative functional forms. The results show that, in general, the distribution of projects in the pipeline does not correspond exclusively to the cost of generating anticipated credits. Rather, investment choices appear to be influenced by location and project type considerations in a way that is consistent with variable transaction costs and investor preferences among hosts and classes of projects. This implies that comparative advantage based on the marginal cost of abatement is only one of several factors driving Clean Development Mechanism investments. This is significant since much of the conceptual and applied numerical literature concerning greenhouse gas mitigation policies relies on presumptions about relative abatement costs. The authors also find that Clean Development Mechanism projects generally exhibit constant or increasing returns to scale. In contrast, they find variations among classes of projects concerning economies of time.
    Keywords: Climate Change Economics,Climate Change Mitigation and Green House Gases,Energy Production and Transportation,Transport Economics Policy&Planning,Energy and Environment
    Date: 2012–11–01

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