New Economics Papers
on Efficiency and Productivity
Issue of 2012‒12‒06
fourteen papers chosen by

  1. Enterprise Agglomeration, Output Prices, and Physical Productivity: Firm-Level Evidence from Ethiopia By Siba, Eyerusalem; Soderbom, Mans; Bigsten, Arne; Gebreeyesus, Mulu
  2. Unbundling technology adoption and tfp at the firm level. Do intangibles matter? By M. Battisti; F. Belloc; Massimo Del Gatto
  3. Economic growth and environmental efficiency: Evidence from U.S. regions By Halkos, George; Tzeremes, Nickolaos
  5. A Dynamic Analysis of Regulation and Productivity in Retail Trade By Maican, Florin; Orth, Matilda
  6. Skew productivity distributions and agglomeration: Evidence from plant-level data By Toshihiro Okubo; Eiichi Tomiura
  7. Missallocation and Financial Frictions: Some Direct Evidence From the Dispersion in Borrowing Costs By Simon Gilchrist; Jae W. Sim; Egon Zakrajšek
  8. The influence of eco-innovation supply chain practices on business eco-efficiency By Azevedo, Susana; Cudney, Elizabeth A.; Grilo, António; Carvalho, Helena; Cruz-Machado, V.
  9. Performance measurement in an input-output framework. By Raa, T. ten
  10. Performance of the life insurance industry under pressure: efficiency, competition and consolidation By Jacob Bikker
  11. Technology Spillover and Determinants of Foreign Direct Investment: An Analysis of Indian Manufacturing Industries By smruti, Smruti Ranjan Behera
  12. Firm Dynamics: The Death of New Canadian Firms: A Survival Analysis of the 2002 Cohort of Entrants to the Business Sector By Macdonald, Ryan
  13. The “Revealed” Competitiveness of U.S. Exports By Massimo Del Gatto; F. di Mauro; J. Gruber; B. Mandel
  14. Economies of Scale and Merger Efficiencies: Empirical Evidence from the Chilean Pension Funds Market By Claudio A Agostini

  1. By: Siba, Eyerusalem; Soderbom, Mans; Bigsten, Arne; Gebreeyesus, Mulu
    Abstract: We use census panel data on Ethiopian manufacturing firms to analyze the connections between enterprise agglomeration, firm-level output prices and physical productivity. We find a negative and statistically significant relationship between the agglomerat
    Keywords: agglomeration, productivity, output prices, firm-level data, Ethiopia, Africa, manufacturing
    Date: 2012
  2. By: M. Battisti; F. Belloc; Massimo Del Gatto
    Abstract: We use a panel of European firms to investigate the relationship between intangible assets and productivity. We disentangle between tfp and technology adoption, while available studies so far have considered only a notion of productivity conflating the two effects. To this aim, we estimate production function parameters allowing, within each sector, for the existence of multiple technologies. We find that intangible assets both push the firm towards better technologies (technology adoption effects) and allow for a more efficient exploitation of a given technology (tfp effects).
    Keywords: TFP; intangible assets; firm heterogeneity; firm selection; technology adoption; mixture models
    JEL: C29 O32 D24 F12
    Date: 2012
  3. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper proposes a conditional directional distance function model in order to examine the link between regional environmental efficiency and GDP per capita levels. As an illustrative example we apply our model to USA regional data revealing an inverted ‘U’ shape relationship between regional environmental efficiency and per capita income. The results derived from a non-parametric regression indicate a turning point at 49,000 dollars.
    Keywords: Regional environmental efficiency; Directional distance function; Conditional measures; U.S. regions
    JEL: Q50 C14 Q56 R11
    Date: 2012–11
  4. By: Nuno Araújo (Centro de Apoio Tecnológico à Indústria Metalomecânica); Leonardo Costa (Faculdade de Economia e Gestão - Universidade Católica Portuguesa, Porto)
    Abstract: We view innovation as a productive process, with outputs and inputs. We aim at compare the productivity of innovation across the twenty seven Member States of the European Union (EU-27), having a particular focus on Portugal. The data on inputs and outputs of innovation were collected from the Innovation Union Scoreboard 2010 report and covers the EU-27 Member States, from 2006 to 2010. The Total Factor Productivity index (TFP index) was used as the technique for data analysis. The choice of this technique was mainly determined by its flexibility and by data constraints. Two types of TFP indexes were computed: i) TFPt (time), which compares the productivity of innovation in each Member State with its productivity in a base year; ii) TFPs (space), which compares the productivity of innovation in each Member State with the productivity of the EU-27 average. Results show larger TFPs differences across Member States than TFPt differences. Concerning TFPt, there is a reduction of productivity of most of the Member States during the time length, which can be explained by the recent world financial crisis. This was the case of Portugal, where average TFPt in the time length is slightly below 1. The seven Member States that did not lose any productivity are mostly from Eastern Europe, Member Sates which have entered the European Union and accede to its structural funds more recently. Concerning TFPs, Portugal presents average TFPs well above 1. The Portuguese average TFPs value is close to the one of Germany and higher than the one of Sweden. The Innovation Union Scoreboard 2010 report classifies Portugal as Moderate innovator and Germany and Sweden as innovation leaders. We conclude that productivity of innovation in Portugal is similar to the one of Germany and higher than the one of Sweden. Differences between Portugal and those Member States, such as the ones reported in the Innovation Union Scoreboard 2010, can be explained by the fact of Portugal having fewer resources allocated to innovation and thus fewer outputs from innovation than Germany or Sweden have.
    Keywords: TFP index, productivity, innovation
    Date: 2012–11
  5. By: Maican, Florin (Research Institute of Industrial Economics (IFN)); Orth, Matilda (Research Institute of Industrial Economics (IFN))
    Abstract: Liberalization is widely recognized to drive productivity growth. Retail trade is often thought to substantially contribute to the frequently debated productivity gap between Europe and the U.S. In Europe, entry regulations empower local authorities to decide on the entry of new stores. We use a dynamic structural model and data on all retail stores in Sweden during the period 1996–2002 to quantify the effect of entry regulations on productivity in retail. The results show that the approval of an additional application by local authorities increases median productivity by approximately 2 percent in most subsectors. A stricter regulation in terms of one fewer approved application in each local market corresponds to an annual economic cost for the retail trade sector of nearly 10 percent of total annual capital investments. Our findings suggest that a restrictive entry regulation limits the role of entry and exit in local market dynamics and productivity growth.
    Keywords: Retail Trade; Regulation; Imperfect Competition; Dynamic Structural Model; Productivity Decomposition
    JEL: L11 L81 L88 O30
    Date: 2012–11–14
  6. By: Toshihiro Okubo (Faculty of Economics, Keio University); Eiichi Tomiura (Department of Economics, Yokohama National University)
    Abstract: This paper empirically examines how the shapes of plant productivity distributions vary across regions based on Japan's manufacturing census. We focus on the skewness to examine the asymmetry by estimating the gamma distribution at the plant level. By linking the estimated shape parameters with economic geography variables, we find that the productivity distribution tends to be significantly left-skewed, especially in cores, regions with diversified industrial compositions, regions with weak market potential, and in agglomerated industries. These findings suggest that agglomeration economies are likely to accommodate heterogeneous plants with wide ranges of productivities.
    Date: 2012–11
  7. By: Simon Gilchrist; Jae W. Sim; Egon Zakrajšek
    Abstract: Financial frictions distort the allocation of resources among productive units—all else equal, firms whose financing choices are affected by such frictions face higher borrowing costs than firms with ready access to capital markets. As a result, input choices may differ systematically across firms in ways that are unrelated to their productive efficiency. We propose an accounting framework that allows us to assess empirically the magnitude of the loss in aggregate resources due to such misallocation. To a second-order approximation, the framework requires only information on the dispersion in borrowing costs across firms, which we measure—for a subset of U.S. manufacturing firms—directly from the interest rate spreads on their outstanding publicly-traded debt. Given the observed dispersion in borrowing costs, our approximation method implies a relatively modest loss in efficiency due to resource misallocation—on the order of 1 to 2 percent of measured total factor productivity (TFP). In our framework, the correlation between firm size and borrowing costs has no bearing on TFP losses under the assumption that financial distortions and firm-level efficiency are jointly log-normally distributed. To take into account the effect of covariation between firm size and borrowing costs, we consider a more general framework, which dispenses with the assumption of log-normality and which implies somewhat higher estimates of the resource losses—about 3.5 percent of measured TFP. Counterfactual experiments indicate that dispersion in borrowing costs must be an order of magnitude higher than that observed in the U.S. financial data, in order for misallocation—arising from financial distortions—to account for a significant fraction of measured TFP differentials across countries.
    JEL: D92 O16 O40
    Date: 2012–11
  8. By: Azevedo, Susana; Cudney, Elizabeth A.; Grilo, António; Carvalho, Helena; Cruz-Machado, V.
    Abstract: This paper aims to study the influence of eco-innovation practices on eco-efficiency of business, which embraces environmental and economic performance. Four hypotheses are drawn up based on the existing literature in green supply chain and considering the business innovation. A survey questionnaire was used to collect data on a sample of USA and Portuguese innovative organizations. Multivariate statistics and Partial Least Squares (PLS) path modelling techniques were used to test the proposed hypothesis. The statistical analysis allows to conclude that there are differences between the eco-innovation practices deployed by organizations belonging to different sectors and with different sizes. Also, it was found that the level of implementation of the different eco-innovation practices by organizations influence the eco-efficiency of businesses.
    Keywords: Eco-innovation; eco-efficiency; economic performance; environmental performance
    JEL: C14 C12 C42 M21
    Date: 2012–11–17
  9. By: Raa, T. ten (Tilburg University)
    Date: 2012
  10. By: Jacob Bikker
    Abstract: A well-performing life insurance industry benefits consumers, producers and insurance firm stockholders alike. Unfavourable market conditions stress the need for life insurers to perform well in order to remain solvent. Using a unique supervisory data set, this paper investigates competition and efficiency in the Dutch life insurance market by estimating unused scale economies and measuring efficiency-market share dynamics during 1995-2010. Large unused scale economies exist for small and medium-sized life insurers, indicating that further consolidation would reduce costs. Over time average scale economies decrease but substantial differences between small and large insurers remain. A direct measure of competition confirms that competitive pressures are at a lower level than in other markets. We do not observe any impact of increased competition from banks, the so-called investment policy crisis or the credit crisis, apart from lower returns in 2008. Investigation of product submarkets reveals that competition is higher on the collective policy market, while the opposite is true for the unit-linked market, where the role of intermediary agents is largest.
    Keywords: Life insurance; competition; efficiency; Performance-Conduct-Structure model; Boone indicator; concentration; economies of scale
    JEL: G22 L1
    Date: 2012–11
  11. By: smruti, Smruti Ranjan Behera
    Abstract: This paper examines the spillover effect of foreign direct investment (FDI) and determinant of FDI across Indian manufacturing industries. The result, based on two-equation model that allows for the two-way link between labor productivity of locally owned industries and foreign presence provide evidence that foreign presence brings new channels of knowledge and technology spillover to domestic industrial firms. We find that intermediate factors like R&D intensity and technology import intensity can impact positively the productivity of domestic firms. Furthermore, we find that bigger market size and highly productive domestic sectors are likely to attract more foreign capital into Indian industries.
    Keywords: Foreign Direct Investment; Technology Spillover; Manufacturing; Panel Cointegration; Unit Root Tests
    JEL: F30 O32 C33 L60
    Date: 2012–08–01
  12. By: Macdonald, Ryan
    Abstract: This paper examines the survival characteristics of firms, using microdata from the Longitudinal Employment Analysis Program (LEAP) of Statistics Canada. Entry rates and survival functions for the 2002 cohort are analyzed. The business sector is disaggregated along industry and size dimensions.
    Keywords: Business performance and ownership, Entry, exit, mergers and growth
    Date: 2012–11–07
  13. By: Massimo Del Gatto; F. di Mauro; J. Gruber; B. Mandel
    Abstract: We investigate the factors behind the recent decline in the U.S. share of world merchandise exports in an attempt to determine how big a role the changing productivity of U.S. firms has played. We do so against the backdrop of a measure of cost competitiveness which, insofar it is inferred from actual trade ows, we refer to as revealed marginal costs (RMC). Although, in line with our purpose, we derive such measure as an implication of a trade model with (intra-industry) firm heterogeneity, computation does not require firm level data but only aggregate bilateral trade ows, domestic trade included. Brought to the data for the manufacturing sector, such measure reveals that, notwithstanding significant heterogeneity across industries, most U.S. sectors are indeed losing momentum relative to their main competitors, as we find U.S. s RMC to grow by an average 14%, relative to the other G20 countries. The RMC structure identifies in market size, trade freeness and imports its "revealing-observable" components - while market size is found to be the main responsible of such decline on average, cost competitiveness seems to have benefited from a good combination of increasing trade freeness and decreasing imports, relative to the other G20 countries. The best performing countries in terms of RMC (China and India among others) characterize, however, for an increase in trade freeness higher than in the U.S. At the sectoral level, the "Machinery" industry is the most critical, followed by the "Chemicals" and "Equipment" industries.
    Keywords: Productivity; competitiveness; export shares; marginal costs; firm heterogeneity; firm selection; gravity equation; trade costs
    JEL: F12 R13
    Date: 2012
  14. By: Claudio A Agostini (Escuela de Gobierno, Universidad Adolfo Ibáñez)
    Date: 2012–10

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