New Economics Papers
on Efficiency and Productivity
Issue of 2013‒02‒08
sixteen papers chosen by

  1. Unbundling Technology Adoption and tfp at the Firm Level. Do Intangibles Matter? By Michele Battisti; Filippo Belloc; Massimo Del Gatto
  2. Dynamics of productivity and cost of labor in Italian Manufacturing firms By G. Bottazzi; M. Grazzi
  3. Industry-level Output Price Indexes for R&D: An Input-cost Approach with R&D Productivity Adjustment By Carol Robbins; Olympia Belay; Matthew Donahoe; Jennifer Lee
  4. Internationalization choices: an ordered probit analysis at industry-level By Filomena Pietrovito; Alberto Franco Pozzolo; Luca Salvatici
  5. Climatic Conditions and Productivity : An Impact Evaluation in Pre-industrial England By Stéphane Auray; Aurélien Eyquem; Frédéric Jouneau-Sion
  6. State-Owned Enterprises, Exporting and Productivity in China: A Stochastic Dominance Approach By Robert Elliott; Ying Zhou
  7. Renewable energy consumption and economic efficiency: Evidence from European countries By Halkos, George; Tzeremes, Nickolaos
  8. Firm size and judicial efficiency: evidence from the neighbour's court By Silvia Giacomelli; Carlo Menon
  9. Regional Variations in Productivity Premium of Exporters: Evidence from plant-level data By OKUBO Toshihiro; TOMIURA Eiichi
  10. Long and short-term effects of the financial crisis on labour productivity, capital and output By Oulton, Nicholas; Sebastia-Barriel, Maria
  11. Employment Policies, Hiring Practices and Firm Performance By Sylvie Blasco; Barbara Pertold-Gebicka
  12. Modelling Tails of Aggregated Economic Processes in a Stochastic Growth Model By Stéphane Auray; Aurélien Eyquem; Fréderic Jouneau-Sion
  13. Teacher evaluations and pupil achievement: Evidence from classroom observations By Marc van der Steeg; Sander Gerritsen
  14. Economic Efficiency, Environmental Effectiveness and Political Feasibility of Energy Efficiency Rebates: The Case of the Spanish Energy Efficiency “Renove†Plan By Ibon Galarraga; Luis M. Abadie; Alberto Ansuategi
  15. Banks’ Capital Buffer, Risk and Performance in the Canadian Banking System: Impact of Business Cycles and Regulatory Changes By Guidara, Alaa; Lai, Van Son; Soumaré, Issouf; Tchana Tchana, Fulbert
  16. Environmental Kuznets Curve and Ecological Footprint: A Time Series Analysis By Marie-Sophie Hervieux; Olivier Darné

  1. By: Michele Battisti (University of Palermo, CeLEG LUISS Guido Carli and RCEA); Filippo Belloc (“G. d'Annunzio” University); Massimo Del Gatto (“G. d'Annunzio” University and CRENoS)
    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, Heterogeneity, Firm Selection, Technology Adoption, Mixture Models
    JEL: C29 D24 F12 O32
    Date: 2012–12
  2. By: G. Bottazzi; M. Grazzi
    Abstract: This paper studies the impact of size on labor cost and productivity for Italian manufacturing firms. The distributions of both labor cost and productivity display a wide support, even when disaggregated by sector of industrial activity. Further, both labor cost and productivity, when considered alone, are growing with the size of the firm. We investigate this relationship on a new set of data and we are able to show that once accounted for productivity differences among firms, size still retains a positive effect on cost of labor in most of the sectors considered.
    JEL: D21 J31 L11 L60
    Date: 2013–02
  3. By: Carol Robbins; Olympia Belay; Matthew Donahoe; Jennifer Lee (Bureau of Economic Analysis)
    Date: 2012–12
  4. By: Filomena Pietrovito (Universit… del Molise); Alberto Franco Pozzolo (University of Molise, Centro Studi Luca d'Agliano); Luca Salvatici (Universit… di Roma Tre, Dipartimento di Economia)
    Abstract: Trade theory traces back different patterns of internationalization to heterogeneity between firms, measured both through differences in productivity levels and size. In this paper we analyze the link between heterogeneity within sectors and internationalization choices, namely trade and foreign direct investments (FDI) for a large sample of countries and industries between 1994 and 2004. The focus of our paper is on the role played by average productivity level and the distribution of firms by size in explaining differences across sectors and countries in the extensive margin of internationalization (i.e., the number of foreign nations where firms from a given sector and country have expanded abroad). By performing an ordered probit analysis, and controlling for other factors affecting the patterns of internationalization, we confirm that industries with higher productivity levels and with a distribution of firms shifted toward large firms are more prone to internationalize in foreign markets through both trade and FDI. Moreover, the relative impact of average productivity and firm size on FDI is larger than that on trade. These results are robust to different measures of productivity and the distribution of firms.
    Keywords: distribution of firms, exports, foreign direct investments, mergers and acquisitions, ordered probit, productivity
    JEL: D24 F10 F14 F20 F23
    Date: 2013–01
  5. By: Stéphane Auray (ENSAI); Aurélien Eyquem (Université de Lyon); Frédéric Jouneau-Sion (Université de Lille)
    Abstract: In this paper, we bridge economic data and climatic time series to assess the vulnerability of a pre-industrial economy to changes in climatic conditions. We propose an economic model to extract a measure of total productivity from English data (real wages and land rents) in the pre-industrial period. This measure of total productivity is then related to temperatures and precipitations. We find that lower (respectively higher) than average precipitations (respectively temperatures) enhance productivity. Further, temperatures have non-linear effects on productivity: large temperature variations lower productivity. Quantitatively, a permanent two degree rise in temperatures lowers the level of productivity by more than 22%, and production by more than 26%. This historical impact evaluation may serve as an informative benchmark for currently under-developed economies in front of the upcoming climatic change
    Keywords: Climatic conditions TFP shocks, land rent
    JEL: C22 N13 O41 Q54
    Date: 2012–10
  6. By: Robert Elliott; Ying Zhou
    Abstract: A popular explanation for China's rapid economic growth in recent years has been the dramatic increase in the number of private domestic and foreign-owned firms and a decline in the state-owned sector. However, recent evidence suggest that China's state-owned enterprise (SOEs) are in fact stronger than ever. In this paper we examine over 78,000 manufacturing firms between 2002 and 2006 to investigate the relationship between ownership structure and the degree of firm-level exposure to export markets and firm-level productivity. Using a conditional stochastic dominance approach we reveal that although our results largely adhere to prior expectations, the performance of state-owned enterprises differs markedly between those that export and those that supply the domestic market only. It appears that China's internationally focused SOEs have become formidable global competitors.
    Keywords: Productivity, China, firm-level, State-owned enterprise, heterogeneity, stochastic dominance
    JEL: L2 L3 P3 D2
    Date: 2013–01
  7. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper examines the relationship between renewable energy consumption and economic efficiency. For this reason conditional Data Envelopment Analysis (DEA) estimators alongside with nonparametric regressions are applied in a sample of 25 European countries for the year 2010. Our results reveal that renewable energy consumption has a positive effect on countries’ economic efficiency for lower consumption levels while for higher levels the analysis reveals mixed effects, which are also subject to regional disparities. Finally, it appears that the effect of renewable energy consumption on countries’ economic efficiency depends also on countries’ specific regional characteristics as well as on the environmental policies adopted.
    Keywords: Renewable energy consumption; economic efficiency; data envelopment analysis; nonparametric regression
    JEL: C14 Q40 Q01 Q20 C60 O44
    Date: 2013–02–02
  8. By: Silvia Giacomelli (Bank of Italy); Carlo Menon (OECD and Bank of Italy)
    Abstract: We investigate the causal relationship between judicial efficiency and firm size across Italian municipalities exploiting spatial discontinuities in court jurisdictions for identification. The estimated coefficients suggest that the reduction of the length of civil proceedings could exert, all other things being equal, a significant and positive effect on the average size of Italian firms. Results are robust to a number of different specifications, based on two different databases.
    Keywords: judicial efficiency, firm size, spatial discontinuity, Italy
    JEL: K4 L11 O18
    Date: 2013–01
  9. By: OKUBO Toshihiro; TOMIURA Eiichi
    Abstract: Exporters are more productive than non-exporters. Although this is a stylized fact, little is known on regional variations within a country. Based on plant-level longitudinal data covering all manufacturing industries in all regions of Japan, this paper finds that the productivity premium of exporters tends to be significantly smaller in regions proximate to the core and in regions with higher market potential. We have also confirmed that our principal findings are consistent with plant-level entry/exit dynamics. The export decision is not completely determined by the firm's own productivity; it is also affected by local market size and export costs.
    Date: 2013–01
  10. By: Oulton, Nicholas (Bank of England); Sebastia-Barriel, Maria (Bank of England)
    Abstract: The behaviour of labour productivity in the United Kingdom since the onset of the recession in early 2008 constitutes a puzzle. Over four years after the recession began labour productivity is still below its previous peak level. This paper considers the hypothesis that economic capacity can be permanently damaged by financial crises. A model which allows a financial crisis to have both a short-run effect on the growth rate of labour productivity and a long-run effect on its level is estimated on a panel of 61 countries over 1955-2010. The main finding is that a banking crisis as defined by Reinhart and Rogoff on average reduces the short-run growth rate of labour productivity by between 0.6% and 0.7% per year and the long-run level by between 0.84% and 1.1% (depending on the method of estimation), for each year that the crisis lasts. A banking crisis also reduces the long-run level of capital per worker by an average of about 1%. The corresponding effect on GDP per capita is about double the effect on GDP per worker since there is a long-run, negative effect on the employment ratio.
    Keywords: productivity; financial; banking crisis; recession
    JEL: E23 E32 J24 O47
    Date: 2013–01–24
  11. By: Sylvie Blasco (CREST); Barbara Pertold-Gebicka (Aarhus Université)
    Abstract: In this paper we investigate how active labour market policy programmes affect firms' hiring strategies and, eventually, firms' performance. We focus on counseling and monitoring which may reduce search costs for employers, but which may have ambiguous effect on the employer- employee matching quality and thus on firms' performance. Using a large scale experiment which was conducted in Denmark in 2005-2006 and induced a greater provision of activation, we find that small firms hiring in the districts where the social experiment was conducted changed their hiring practices in favor of unemployed workers and experienced greater turnover than the other firms. Treated firms also experienced no change or a marginal reduction in value added and total factor productivity during the first years after the experiment. These results are consistent with the idea that monitoring creates compulsion effects which counteract the possible improvement in the matching process expected from job search assistance.
    Keywords: active labour market programmes, counseling and monitoring,hiring decisions,firms performance
    JEL: C21 J63 J68
    Date: 2012–11
  12. By: Stéphane Auray (ENSAI); Aurélien Eyquem (Université de Lyon); Fréderic Jouneau-Sion (Université de Lille)
    Abstract: We present an annual sequence of wages in England starting in 1245. We show that a standard AK-type growth model with capital externality and stochastic productivity shocks is unable to explain important features of the data. We then consider random returns to scale. Moderate episodes of increasing returns to scale and growth are shown to be compatible with stationarity. Further, random returns to scale generate heteroskedasticity, a feature common to macroeconomic time series. Third, stationary distributions display fat tails if returns to scale are episodically increasing. We provide several inference results to support randomness of returns to scale.
    Keywords: Economic growth, Unified growth theory, Heteroskedasticity, Fat tails
    JEL: C22 C46 N13 O41 O47
    Date: 2012–10
  13. By: Marc van der Steeg; Sander Gerritsen
    Abstract: This paper investigates the relationship between teacher evaluations, conducted by trained evaluators, and pupil performance in primary education in a large city in the Netherlands. Teacher evaluations are based on a detailed rubric containing 75 classroom practices considered to be crucial for effective teaching. We obtain a set of estimates that suggests that the score on this rubric significantly predicts pupil performance gains. Estimated test score gains are in the order of 0.4 standard deviations in math and grammar if a pupil is assigned to a teacher from the top quartile instead of the bottom quartile of the distribution of the evaluation rubric. These are relatively large differences in pupil outcomes, suggesting that evaluations based on the rubric measure teacher practices that matter for pupil performance. This suggests that the rubric seems to have potential for teacher evaluations and teacher effort.
    JEL: I2
    Date: 2013–01
  14. By: Ibon Galarraga; Luis M. Abadie; Alberto Ansuategi
    Abstract: Energy labels are used to promote the purchase of efficient appliances. Many countries in Europe use subsidies (namely energy efficiency rebates) to support these purchases as it is the case of Spain. A figure ranging from 50 to 105€ subsidy has been granted in the past for the acquisition of the most efficient appliances. This paper first analyses the impact of a 80€ subsidy on the dishwasher market and compares the results with a 40 € tax for non-labelled ones. The results take into account the effects that the policies generate in the market segment that is a close substitute, that is, cross effects. The paper shows that the subsidy is expensive for the Government, generates some welfare losses and it also generates a rebound effect as a consequence of the increase in the total number of appliances sold. The 40 € tax does not cost money to the Government, it generates a lower welfare loss and reduces the energy bill. However, the analysis is extended to go beyond the two extreme scenarios: subsidies without taxes and taxes without subsidies. Different combinations of both instruments are suggested and they are assessed based on their performance regarding economic efficiency, environmental effectiveness and political feasibility.
    Keywords: Energy efficiency rebates, deadweight losses, rebound effect
    Date: 2013–02
  15. By: Guidara, Alaa; Lai, Van Son; Soumaré, Issouf; Tchana Tchana, Fulbert
    Abstract: Using quarterly financial statements and stock market data from 1982 to 2010 for the six largest Canadian chartered banks, this paper documents positive co-movement between Canadian banks’ capital buffer and business cycles. The adoption of Basel Accords and the balance sheet leverage cap imposed by Canadian banking regulations did not change this cyclical behaviour of Canadian bank capital. We find Canadian banks to be well-capitalized and that they hold a larger capital buffer in expansion than in recession, which may explain how they weathered the recent subprime financial crisis so well. This evidence that Canadian banks ride the business and regulatory periods underscores the appropriateness of a both micro- and a macro-prudential “through-the-cycle” approach to capital adequacy as advocated in the proposed Basel III framework to strengthen the resilience of the banking sector.
    Keywords: Capital Buffer; Risk; Performance; Basel Accords; Regulation; Business Cycles; Canadian Banks
    JEL: G28 G21
    Date: 2013–01–31
  16. By: Marie-Sophie Hervieux (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Olivier Darné (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272)
    Abstract: In this paper we examine the Environmental Kuznets Curve (EKC) hypothesis using the Ecological Footprint (EF), a more comprehensive indicator of environmental degradation, through a time-series analysis for 15 countries covering the 1961-2007 period. We rst test the EKC hypothesis from traditional linear, quadratic and cubic functions, with standard and logarithmic speci cations. The EKC hypothesis is only supported for Chile and Uruguay with the quadratic functional form. We also nd that most of the countries exhibit a positive linear relationship between the EF and GDP. Finally, we study the long-term relationship between the EF and GDP. The results show evidence of long-term relationship between income and EF for some countries (Brazil, Chile, China, and Uruguay). More particularly, Spain displays a cubic relationship, in an N-shaped function form.
    Keywords: Environmental Kuznets Curve ; Ecological Footprint
    Date: 2013–01–28

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