New Economics Papers
on Efficiency and Productivity
Issue of 2013‒04‒06
thirty-two papers chosen by

  1. Intermediate inputs and economic productivity By Simon Baptist; Cameron Hepburn
  2. Duality of Shephard’s weakly disposable technology under a directional output distance function By Hervé Leleu
  3. Exploring the determinants of the productivity of microfinance institutions in India By Twaha, Koire; Rashid, Abdul
  4. Does Modernization Improve Performance: Evidence from Indian Police By Kumar, Surender; Kumar, Sudesh
  5. Agglomeration and firm-level productivity : a Bayesian spatial approach By Hashiguchi, Yoshihiro; Tanaka, Kiyoyasu
  6. Service deregulation, competition and the performance of French and Italian firms By Francesco Daveri; Rèmy Lecat; Maria Laura Parisi
  7. Productivity As If Space Mattered: An Application to Factor Markets Across China By Cheng, Wenya; Morrow, John; Tacharoen, Kitjawat
  8. Immigration and Labor Productivity: New Empirical Evidence for Spain By Nicodemo, Catia
  9. Do Technology Shocks Lower Hours Worked? Evidence from the Japan Industrial Productivity Database By KWON Hyeog Ug; Jun-Hyung KO
  10. Inspiration and Perspiration Factors in Economic Growth: The Former Soviet Union Area versus China (ca. 1920-2010) By Dmitry Didenko; Péter Földvári; Bas van Leeuwen
  11. Factors behind international relocation and changes in production geography in the European automobile components industry By Lampón, Jesús F.; Lago-Peñas, Santiago
  12. The Impact of Energy Performance on Single-Family Home Sales Prices in Sweden By Högberg, Lovisa
  13. Factor Intensity, Product Switching, and Productivity: Evidence from Chinese Exporters By Yue Ma; Heiwai Tang; Yifan Zhang
  14. Global Supply Chains at Work in Central and Eastern European Countries:Impact of FDI on export restructuring and productivity growth By Jože Damijan; Črt Kostevc; Matija Rojec
  15. Could informality be the solution? An instrumental variable approach on the informality of M/SE in Egypt By Nesma Magdi
  16. The impact of human capital accounting on the efficiency of English professional football clubs By Goshunova, Anna
  17. Factor decomposition of income inequality change : Japan's regional income disparity from 1955 to 1998 By Higashikata, Takayuki
  18. Technological interdependence between south american countries : a spatial panel data growth model By Carolina Guevara; Corinne Autant-Bernard
  19. Adoption of energy-efficiency measures in SMEs - An empirical analysis based on energy audit data By Tobias Fleitera; Joachim Schleich; Ployplearn Ravivanpong
  20. Can Public Transportation Increase Economic Efficiency? By Drennan, Matthew; Brecher, Charles
  21. Performance of Newly Listed Firms: Evidence from Japanese firm and venture capital data By MIYAKAWA Daisuke; TAKIZAWA Miho
  22. Production Hierarchies in Sweden By Tåg, Joacim
  23. Which Bad is Worst? An Application of Leif Johansen’s Capacity Model By Färe, Rolf; Grosskopf, Shawna; Lundgren, Tommy; Marklund, Per-Olov; Zhou, Wenchao
  24. Energy Intensity Development of the German Iron and Steel Industry between 1991 and 2007 By Marlene Arens; Ernst Worrell; Joachim Schleich
  25. An Integrated Corporate Governance Framework and Financial Performance in South African Listed Corporations By Ntim, Collins G.
  26. Knowledge versus technique in SO2-saving technological change: A comparative test using quantile regression with implications for greenhouse gas compliance By David Grover
  27. The Price of Distance: Producer Heterogeneity, Pricing to Market, and Geographic Barriers By Kano, Kazuko; Kano, Takashi; Takechi, Kazutaka
  28. The cyclicality of job-to-job transitions and its implications for aggregate productivity By Toshihiko Mukoyama
  29. Using Volume Measurement for Measuring Health Care in the SNA By Mieko Fujisawa
  30. Director Shareownership and Corporate Performance in South Africa By Ntim, Collins G
  31. Role of Inter-firm Transactions on Industrial Agglomeration: Evidence from Japanese firm-level data By NAKAJIMA Kentaro; SAITO Yukiko; UESUGI Iichiro
  32. The Performance of Plants Inserted in Global Supply Chains: A Look at Vertically-Linked Affiliates By Blyde, Juan; Santamaria, Julieth

  1. By: Simon Baptist; Cameron Hepburn
    Abstract: Many models of economic growth exclude materials, energy and other intermediate inputs from the production function. Growing environmental pressures and resource prices suggest that this may be increasingly inappropriate. This paper explores the relationship between intermediate input intensity, productivity and national accounts using a panel data set of manufacturing subsectors in the United States over 47 years. The first contribution is to identify sectoral production functions that incorporate intermediate inputs, while allowing for heterogeneity in both technology and productivity. The second contribution is that the paper finds a negative correlation between intermediate input intensity and total factor productivity (TFP) — sectors that are less intensive in their use of intermediate inputs have higher rates of productivity.This finding is replicated at the firm level. We propose tentative hypotheses to explain this association, but testing and further disaggregation of intermediate inputs is left for further work. Further work could also explore more directlythe relationship between material inputs and economic growth — given the high further work on material efficiency. Depending upon the nature of the mechanismlinking a reduction in intermediate input intensity to an increase in TFP, the implications could be significant. A third contribution is to suggest that an empirical bias in productivity, as measured in national accounts, may arise due to the exclusion of intermediate inputs. Current conventions of measuring productivity in national accounts may overstate the productivity of resource-intensive sectors relative to other sectors.
    Date: 2012–10
  2. By: Hervé Leleu (CNRS-LEM and IESEG School of Management)
    Keywords: DEA,Efficiency, Environmental studies,Resource management
    JEL: D2 D24
    Date: 2013–03
  3. By: Twaha, Koire; Rashid, Abdul
    Abstract: This paper attempts to investigate the determinants of productivity in microfinance institutions (MFIs) in India using the Empirical Bayesian technique. To do this, we utilize an unbalanced panel data set covering the period 2005-2011 with 292 observations from 64 institutions.Based on theoretical grounds, three broad factors are specified: institutional characteristics, outreach, and efficiency. We find convincing evidence that institutional characteristics and outreach have both positive and negative effects on the productivity of MFIs, depending of the proxy used in the analysis. However,the efficiency of MFIs affects the productivity negatively. Specifically, we find that the age of the institution positively influences the productivity by 6.1581 points, while number of offices and number of personnel negatively affect it by 26.41% and 8.77%, respectively. Of the outreach variables, numbers of active borrowers positively influence productivity by 0.04%, whereas, average loan size appears to have an inverse relationship with productivity. We further find that cost per loan – a proxy for efficiency, has a negative and statistically significant impact of 1.9604 points on the productivity of MFIs. Overall, our investigation suggests that there is a need to build client confidence, pursue innovative credit delivery techniques in reaching out to the poor and achieving high levels of productivity.
    Keywords: productivity, microfinance institutions, efficient, outreach,and Empirical Bayesian Estimation Technique
    JEL: G2 G21
    Date: 2012–12–15
  4. By: Kumar, Surender; Kumar, Sudesh
    Abstract: This paper aims to measure the role of police modernization scheme in its performance in crime repression. We use output distance function as an analytical tool and estimate it using stochastic frontier analysis (SFA) framework in a ‘single stage’. We find that the police modernization scheme is helping the state police departments in enhancing their performance, i.e., the police departments which have more modern communication equipments and which are spending more money on the training of their police personnel are doing better. The police density is found to be one of the major determinants of its efficiency along with the factors that create more social cohesion. The total factor productivity (TFP) is governed by the catch-up effect which is worsening over time though the technological progress has been observed in most of the states.
    Keywords: Police, Performance Measurement, Modernization, Stochastic Frontier Analysis, India
    JEL: H59 H76 K14
    Date: 2013
  5. By: Hashiguchi, Yoshihiro; Tanaka, Kiyoyasu
    Abstract: This paper estimates the impact of industrial agglomeration on firm-level productivity in Chinese manufacturing sectors. To account for spatial autocorrelation across regions, we formulate a hierarchical spatial model at the firm level and develop a Bayesian estimation algorithm. A Bayesian instrumental-variables approach is used to address endogeneity bias of agglomeration. Robust to these potential biases, we find that agglomeration of the same industry (i.e. localization) has a productivity-boosting effect, but agglomeration of urban population (i.e. urbanization) has no such effects. Additionally, the localization effects increase with educational levels of employees and the share of intermediate inputs in gross output. These results may suggest that agglomeration externalities occur through knowledge spillovers and input sharing among firms producing similar manufactures.
    Keywords: China, Industrial policy, Manufacturing industries, Productivity, Local economy, Agglomeration economies, Spatial autocorrelation, Bayes, Chinese firm-level data, GIS
    JEL: C21 C51 R10 R15
    Date: 2013–03
  6. By: Francesco Daveri; Rèmy Lecat; Maria Laura Parisi
    Abstract: We use firm-level data for France and Italy to explore the impact of service regulation reform implemented in the two countries on the mark-up and eventually on the performance of firms between the second half of the 1990s and 2007. We find that the relation between entry barriers and productivity is negative and is crucially intermediated through the firm’s mark up. If both countries adopted OECD’s best practices in terms of entry barriers, their TFP level would increase by 3% for Italy and 3.5% for France.
    Keywords: Regulation, services, performance, TFP
    JEL: D24 K20 L51 O40 O57
    Date: 2013–03
  7. By: Cheng, Wenya; Morrow, John; Tacharoen, Kitjawat
    Abstract: Although firms are dispersed across space and may face radically different production conditions, this dimension of firm heterogeneity is often overlooked. Differences between factor markets, especially for labor, are stark. To pursue this line of inquiry, we model firm hiring across local labor markets. We then use the model to estimate and quantify the role of distinct regional labor markets in firm input use, productivity and location by combining firm and population census data. Considering modern China as a country with substantial regional variation, we find labor costs vary by 30-80%, leading to 3-17% differences in TFP once nonlabor inputs are considered. Favorably endowed regions attract more value added per capita, providing new insights into within-country comparative advantage and specialization.
    Keywords: General Equilibrium, Factor Endowments, Structural Estimation, Productivity.
    JEL: D5 F1 J3 O1
    Date: 2013–03
  8. By: Nicodemo, Catia (University of Oxford)
    Abstract: The purpose of this paper of this paper is to explore the immigration and productivity in Spain. We estimate the effect of immigration on labor productivity from 2004 until 2008 for Spain. Using firms (SABI) and individuals data (Social Security Records) we calculate the effect by sector and municipality for the two big Spanish provinces that have received most immigrants in the last decade: Barcelona and Madrid. After controlling for endogeneity of immigration, the results demonstrate that immigration have a negative effect on productivity. Education and occupation are both variables with a positive effect on productivity, while permanent, public or full time contracts do not have any effect. Type of immigration, Europeans 15 (more skill) versus no European, is not relevant in explain the negative productivity. This fact is due that firms are very heterogenous across them and use their employees under their real production potential.
    Keywords: immigration, labor productivity, Spain, MCVL, SABI
    JEL: F22 J61 R11
    Date: 2013–03
  9. By: KWON Hyeog Ug; Jun-Hyung KO
    Abstract: We examine the response of productivity and hours worked to technology and non-technology shocks using the Japan Industrial Productivity (JIP) Database. We find that, at the aggregate level, (1) hours worked increase in response to positive technology shocks both in the manufacturing and the nonmanufacturing sectors, which is consistent with the conventional real-business-cycle model; and (2) productivity decreases in response to positive non-technology shocks. At the two- and three-digit industry levels, we find that the correlation between productivity and hours worked in response to technology shocks still tends to be positive in the manufacturing sector while negative in the nonmanufacturing sector. Further, decomposing non-technology shocks into permanent changes in the relative size of industries and industry-specific shocks shows that the negative productivity response to non-technology shocks originates from industry-specific factors.
    Date: 2013–03
  10. By: Dmitry Didenko; Péter Földvári; Bas van Leeuwen
    Abstract: In this paper we extend our previous studies (Didenko et al., 2012; Földvári et al., 2012; Van Leeuwen et al., 2011) on the role of conventional factors of production (fixed, or physical, and human forms of capital) and their productivity depending on their interrelations and economic development policies. Methodologically based on Solow (1956, 1957) and Mankiw, Romer, and Weil (1992) we apply our theoretical models on the factors of economic growth to compare China with the republics of the former Soviet Union and, to this end, create a new database for both regions. Following Krugman (1994), we decompose economic growth in perspiration (i.e. production factors) and inspiration (i.e. TFP, which consists in turn of technical efficiency of the production factors and a general production frontier) factors and find that in the socialist central-planning period economic growth was largely driven by physical and, to lesser extent, human capital accumulation. Moreover, at these times conventional TFP change was strongly negative (1930s for the FSU, 1950s for China). This means that focusing mainly on physical capital increases the factors of production (hence increasing growth via perspiration) but reduces the technical efficiency of the factors of production strongly (hence lowers the growth via TFP, i.e. inspiration). After the economic transitions were launched (end 1970s in China and end 1980s in the FSU) the inspiration/perspiration pattern changed. China managed to keep technical inefficiency relatively moderate, largely by massively increasing its human capital (which made it easier to make use of physical capital). At the same time, they managed to increase their productivity frontier. In the FSU, however, the change in the human to physical capital ratio was primarily caused not by an increase of human-, but rather by a decrease of physical capital. This means that, even though technical efficiency relatively increased, the general productivity frontier remained stable or declined. This changed in the late 1990s and the start of the 21th century when the FSU started to recover somewhat, only to reach the 1990 level.
    Keywords: factors of production, human capital, productivity, technology, economic development, socialism, USSR, China
    Date: 2013–03
  11. By: Lampón, Jesús F.; Lago-Peñas, Santiago
    Abstract: This article analyses business strategies in the automobile sector to determine the key factors behind production relocation processes in automobile components suppliers. These factors help explain changes in production geography in the sector not only in terms of location advantages but also from a perspective of corporate strategies and decision-making mechanisms within firms. The results obtained from an empirical study in Spain during the period 2001-2008 show how the components sector has used relocation to meet the requirements for efficiency imposed by automobile manufacturers. The search for lower labour costs, production concentration and specialisation in order to obtain economies of scale and improved productivity are found to be the main factors determining relocation in the sector. These processes are facilitated by the operational flexibility of the multinational firms that dominate the sector which allows them to transfer resources internationally. Lean supply, technological requirements for production processes and the integration of production plants in the institutional environment are the main barriers to such processes of mobility, and may also determine the geographical destination of migrated production.
    Keywords: Production relocation, automobile components sector, geography, Spain, Europe
    JEL: F22 L6 L62
    Date: 2013–03–29
  12. By: Högberg, Lovisa (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: The EU Energy Performance Certificates provide new information and measure energy performance more exactly than many earlier (proxy) variables. This is one of the first studies to test the effect of this information, and the first one using Swedish data. The purpose of the paper is to test whether energy performance affects single-family house sales prices, and whether such impact is heterogeneous over house size, age and distance from city center. The paper also examines whether recommendations for supposedly cost-effective energy efficiency measures, by intervention category (construction, installation or operation/control technical measures), are perceived as untapped potential affecting sales prices. Energy performance measurement and dummy variables for three categories of improvement recommendations were included as explanatory variables in a hedonic regression analysis using transaction data and Energy Performance Certificates data for 1073 observations. The results indicate that better energy performance has a positive impact on sales price. Energy efficiency recommendations seem to have an impact on sales price; home buyers seem to require a larger “discount” for more complex types of measures. The results may imply that energy efficiency in buildings will become more important in the future, which may strengthen house owners’/sellers’ incentives to improve energy efficiency.
    Keywords: Energy efficiency; energy performance; property value; hedonic model; Swedish housing market
    JEL: D80 Q40 R15
    Date: 2013–03–27
  13. By: Yue Ma (Lingnan University and Hong Kong Institute for Monetary Research); Heiwai Tang (Tufts University and Hong Kong Institute for Monetary Research); Yifan Zhang (Lingnan University)
    Abstract: Using Chinese manufacturing firm data over the period of 1998-2007, we find that firms become less capital-intensive after exporting, compared to similar non-exporting firms. To rationalize this finding that contrasts with existing evidence for most countries, we develop a variant of the multi-product model of Bernard, Redding, and Schott (2010) to consider products with varying capital intensity. In the model, firms in a labor-abundant country specialize in their core competency by allocating more resources to produce labor-intensive products after exporting. Consistent with the model predictions, we find evidence that the ex-ante more productive firms experience a smaller decline in capital intensity after exporting, but firms that experience a sharper decline in capital intensity after exporting have a larger increase in measured total factor productivity. Using transaction-level data, we confirm that Chinese exporters add new products that are less capital-intensive than their existing product portfolios and drop those that are more capital-intensive over time.
    Keywords: Exporters, Productivity, Factor Intensity, Multi-product Firms
    JEL: F11 L16 O53
    Date: 2012–10
  14. By: Jože Damijan; Črt Kostevc; Matija Rojec
    Abstract: This paper empirically accounts for the importance of the 'global supply chains' concept for export restructuring and productivity growth in Central and Eastern European Countries (CEECs) in the period 1995-2007. Using industry-level data and accounting for technology intensity, we show that FDI has significantly contributed to export restructuring in the CEECs. The effects of FDI are, however, heterogenous across countries. While more advanced core CEECs succeeded in boosting exports in higher-end technology industries, non-core CEECs stuck with export specialization in lower-end technology industries. This suggests that where FDI flows have been directed is of key importance. Our results show that export restructuring and economic specialization brought about by FDI during the last two decades in the CEECs might matter a lot for their potential for long-run productivity growth. Industries of higher-end technology intensity have experienced substantially higher productivity growth and so have countries more successful in attracting FDI to these industries.
    Date: 2013
  15. By: Nesma Magdi (UP1 UFR02 - Université Paris 1, Panthéon-Sorbonne - UFR d'Économie - Université Paris I - Panthéon-Sorbonne)
    Abstract: The expansion of the informal sector constitutes one of the major issues in Egypt. Yet, micro and small enterprises (M/SEs) proved their important role on the social and economic level, but most of them are running on an informal basis. That's why this paper tries to estimate the impact of informality on the performance of M/SEs. Relying on an instrumental variable approach, the results showed that the higher is the probability of operating in the formal sector, the higher is the productivity of the firm. This effect is subject to the realization of a specific channel, which accounts for the characteristics of the firm, the entrepreneur and all the constraints faced by the firm. These findings highlight the importance of formalization policies to reduce the expansion of the informal sector.
    Keywords: Égypte, productivité, économie souterraine, micro-entreprises
    Date: 2012–06
  16. By: Goshunova, Anna
    Abstract: In this paper we tried to investigate the positive influence of capitalization of players acquisition costs as intangible assets on efficiency of professional football clubs. Econometric approach was used to establish econometric models for three indicators of efficiency – total income, total cash flow and rank of club in the national championship. In all models intangible assets (professional players) have reliable positive effect on efficiency of English football clubs.
    Keywords: football clubs, human capital accounting, transfer fees, efficiency
    JEL: C1 M4 M41
    Date: 2013–02–17
  17. By: Higashikata, Takayuki
    Abstract: We propose a method for the decomposition of inequality changes based on panel data regression. The method is an efficient way to quantify the contributions of variables to changes of the Theil T index while satisfying the property of uniform addition. We illustrate the method using prefectural data from Japan for the period 1955 to 1998. Japan experienced a diminishing of regional income disparity during the years of high economic growth from 1955 to 1973. After estimating production functions using panel data for prefectures in Japan, we apply the new decomposition approach to identify each production factor’s contributions to the changes of per capita income inequality among prefectures. The decomposition results show that total factor productivity (residual) growth, population change (migration), and public capital stock growth contributed to the diminishing of per capita income disparity.
    Keywords: Japan, Income distribution, Income inequality, Factor decomposition, Regional disparity
    JEL: C63 O15 R12
    Date: 2013–03
  18. By: Carolina Guevara (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon); Corinne Autant-Bernard (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon)
    Abstract: This study examines how the dissemination of research and development (R&D) and technology affected economic performance in different South American countries from 1990 to 2010. The objective is to understand the relationship between countries in the process of international technology diffusion, i.e. measuring externalities and identifying the mechanisms through which technology is transferred. To answer these questions, we consider the Schumpeterian growth model proposed by Ertur and Koch (2011). This framework accounts for the interdependences between countries (resulting from R&D externalities) from both a theoretical and an empirical point of view. With this spatial panel model, we assess the extent to which one country's productivity affects the productivity of other countries in the region and test the effectiveness of R&D in terms of direct and indirect impact on the economy. Different specifications of the spatial weight matrix are considered in order to investigate the different mechanisms of technological diffusion. The originality of this study lies firstly through the use of R&D measures that allow different sources of funding to be distinguished. In particular, we can thus assess the role of R&D expenditure from national sources in comparison with R&D expenditure from foreign sources which, in the context of developing countries, is a key issue. In addition, we provide an assessment of the role of absorptive capacity in terms of research expenditure or investment in human capital on the productivity levels of countries in the region. The results suggest that of the various factors determining South America's economic performance, public sector funded R&D investments and, to a lesser extent, private sector funded R&D, have a positive impact on these countries' productivity. In contrast, however, foreign investment in research does not produce the expected benefits. We also observe that there are significant international spillovers from R&D activities. The ability to disseminate technologies and to take advantage of these international spillovers, however, differs from one country to another. Our estimates indicate that Brazil has positioned itself as the main actor in the region in terms of technological diffusion, while Bolivia is the country most likely to benefit from these spillover effects.
    Keywords: Total Factor Productivity ; Technology diffusion ; spatial panel model
    Date: 2013–03–22
  19. By: Tobias Fleitera (ISI - a Fraunhofer Institute for Systems and Innovation Research - a Fraunhofer Institute for Systems and Innovation Research); Joachim Schleich (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM), ISI - Fraunhofer Institute for Systems and Innovation Research - Fraunhofer Institute for Systems and Innovation Research); Ployplearn Ravivanpong (ISI - Fraunhofer Institute for Systems and Innovation Research - Fraunhofer Institute for Systems and Innovation Research)
    Abstract: This paper empirically investigates the factors driving the adoption of energy-efficiency measures by small and medium-sized enterprises (SMEs). Our analyses are based on cross-sectional data from SMEs which participated in a German energy audit program between 2008 and 2010. In general, our findings appear robust to alternative model specifications and are consistent with the theoretical and still scarce empirical literature on barriers to energy efficiency in SMEs. More specifically, high investment costs, which are captured by subjective and objective proxies, appear to impede the adoption of energy-efficient measures, even if these measures are deemed profitable. Similarly, we find that lack of capital slows the adoption of energy-efficient measures, primarily for larger investments. Hence, investment subsidies or soft loans (for larger invest-ments) may help accelerating the diffusion of energy-efficiency measures in SMEs. Other barriers were not found to be statistically significant. Finally, our findings provide evidence that the quality of energy audits affects the adoption of energy-efficiency measures. Hence, effective regulation should involve quality standards for energy au-dits, templates for audit reports or mandatory monitoring of energy audits.
    Keywords: Energy efficiency in SMEs; adoption of energy-efficiency measures; barriers to energy efficiency;
    Date: 2012
  20. By: Drennan, Matthew; Brecher, Charles
    Keywords: Engineering, Natural Resources and Conservation, Social Sciences, public investments, public transportation, economic efficiency
    Date: 2012–04–01
  21. By: MIYAKAWA Daisuke; TAKIZAWA Miho
    Abstract: This paper investigates the effect of Initial Public Offerings (IPOs) on firm performance. To single out the economic effects on firm performance brought about by issuing IPOs, we employ propensity-score matching difference-in-differences estimation. Using a unique firm-level panel dataset that allows us to identify newly listed firms and those keeping unlisted status, we find that the former showed better performance than their never-listed counterparts prior to their IPO while the difference in performance partly diminished after the IPO. This implies that firms' distorted behavior originating from, for example, empire building motives prevents newly listed firms from performing. This result is mainly driven by the sample firms going public during a "hot market". Using the information on venture capital (VC) investment, we also find that the participation of VC in investments exacerbates such negative impacts of IPOs on firm performance. The adverse impact on firm performance is more sizable among IPO firms which are invested in by VC syndicates consisting of a smaller number of less heterogeneous VC, or not including foreign VC. These results suggest that the timing of going public and the composition of VC syndicates are related to the post-IPO performance of newly listed firms.
    Date: 2013–03
  22. By: Tåg, Joacim (Research Institute of Industrial Economics (IFN))
    Abstract: I study the internal organization of firms using occupation data on workers in Swedish manufacturing firms. Firms with more layers are larger in size, in value added, and they pay higher wages. Firms are hierarchal in that lower layers have more workers and lower mean wage than higher layers. Adding layers is associated with increases in mean firm size/value added and decreases in mean firm wages (at pre-existing layers). The reverse holds for removing layers. This result also holds for layer by layer mean size and wages for a majority of pre-existing layers.
    Keywords: Hierarchies; Organizations; Occupations; Wages; Productivity
    JEL: D22 D24 J31
    Date: 2013–03–19
  23. By: Färe, Rolf (Dept. of Economics, Oregon State University); Grosskopf, Shawna (Dept. of Applied Economics, Oregon State University); Lundgren, Tommy (CERE, Centre for Environmental and Resource Economics); Marklund, Per-Olov (CERUM); Zhou, Wenchao (CERUM)
    Abstract: The production of desirable (good) outputs is frequently accompanied by unintended production of undesirable (bad) outputs. If two or more of these undesirable outputs are produced as byproducts, one may ask: ‘Which bad is worst?’ By worst we mean which bad inhibits the production of desirable outputs the most if it is regulated. We develop a model based on Leif Johansen’s capacity framework by estimating the capacity limiting effect of the bads. Our model resembles what is referred to as the von Liebig Law of the Minimum, familiar from the agricultural economics literature. To illustrate our model we apply our approach to a firm level data set from the Swedish paper and pulp industry.
    Keywords: von Liebig Law of the Minimum; DEA; emissions; regulation
    JEL: D24 Q01 Q50
    Date: 2013–03–20
  24. By: Marlene Arens (ISI - Fraunhofer Institute for Systems and Innovation Research - Fraunhofer Institute for Systems and Innovation Research); Ernst Worrell (Copernicus Institute of Sustainable Development - Utrecht University); Joachim Schleich (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM), Fraunhofer Institute for Systems and Innovation Research - Fraunhofer Institute for Systems and Innovation Research)
    Abstract: The iron and steel sector is the largest industrial CO2 emitter and energy consumer in the world. Energy efficiency is key to reduce energy consumption and GHG emissions. To understand future developments of energy use in the steel sector, it is worthwhile to analyze energy efficiency developments over the past two decades. This paper analyses the development of the specific energy consumption (SEC) (measured as primary energy use per unit of product) in the German steel sector between 1991 and 2007. We found that the total SEC declined by 0.4%/year. Of this 75%, or 0.3%/year, is due to a structural change towards more electric arc furnaces (EAF). Energy efficiency improvement accounts for about 25% of the observed change in SEC, or 0.1%/year. Energy efficiency improvements are found, especially in rolling (1.4%/year). The net SEC of blast furnaces decreased due to increased top gas recovery by 0.2%/year per tonne iron. Improvements in other processes were very limited or non-existent. In basic oxygen furnaces (BOF) net SEC increased due to a 60% decrease in BOF gas recovery between 1993 and 2007. In EAF and sinter plants the SEC remained constant or, respectively, even increased by 9% between 1991 and 2007 per tonne sinter.
    Keywords: Energy efficiency; Steel industry, Energy intensity;
    Date: 2012
  25. By: Ntim, Collins G.
    Abstract: This paper investigates the relationship between an integrated corporate governance (CG) index and financial performance using a sample of 169 South African (SA) listed corporations between 2002 and 2007. We find a statistically significant and positive association between a broad set of good CG practices and financial performance. In a series of sensitivity analyses, we find that our results are robust to endogeneity, different financial performance proxies, alternative CG weighting scheme and firm-level fixed-effects. We further distinctively examine the link between complying with SA context specific stakeholder CG provisions and financial performance. In line with political cost and resource dependence theories, our results reveal a statistically significant and positive nexus between compliance with stakeholder CG provisions and financial performance.
    Keywords: corporate governance, corporate financial performance, affirmative action and stakeholder provisions, King II and South Africa, endogeneity
    JEL: G32 G34 G38
    Date: 2013–04
  26. By: David Grover
    Abstract: Greenhouse gas emission limits are a major source of technical and policy uncertainty for electric power industry professionals. This paper tries to reduce some of this uncertainty by investigating the main forces that were responsible for the productivity gains made by the electric power sector with respect to SO2 emissions under the US SO2 cap and trade program. The SO2 cap and trade experience has important parallels with the GHG pollution problem, in both policy design and technical response. Linear and quantile regression are used to compare the effect of new technical knowledge (R&D) on SO2 productivity, against the effect of pre-existing techniques that did not involve very much new knowledge creation. Compliance techniques that involved little new technical knowledge and which were incremental and pragmatic played the most important role in SO2-saving technological change. Implications of this finding for electric power plants’ technical response to GHG pollution limits are elaborated.
    Date: 2012–11
  27. By: Kano, Kazuko; Kano, Takashi; Takechi, Kazutaka
    Abstract: This study investigates the effect of distance on price differentials across regions. To identify the distance effect, we need to incorporate producer heterogeneity and pricing-to-market behavior. Because geographic barriers alter the threshold levels of productivity to set a positive price across markets, the effect of distance on price differentials can be underestimated if heterogeneity and pricing to market are not accounted for. By incorporating these factors, empirical analysis using micro-level data reveals that the distance effect is significantly large, suggesting that the price of geographic barriers is still high for regional transportation.
    Keywords: Law of one price, Transportation costs, Geographic barriers, Producer heterogeneity, Pricing to market
    JEL: F11 F14 F41
    Date: 2013–03
  28. By: Toshihiko Mukoyama
    Abstract: This paper analyzes the job-to-job transitions of workers in the United States. I propose a new method of correcting the time-aggregation bias. The bias-corrected series from 1996 to 2011 reveals a procyclical pattern of job-to-job transition and a large decline since the beginning of the 2000s. I construct a model of on-the-job search and explore the implications of this phenomenon. The calibrated model shows that the decline in the reallocation of workers through job-to-job transitions has had a substantial effct on total factor productivity (TFP). From 2009 to 2011, the model accounts for about 0.5%-0.7% annual decline in TFP.
    Date: 2013
  29. By: Mieko Fujisawa
    Abstract: How health care systems should be organized and associated financial challenges be addressed is the subject of considerable debate in developed countries, including Japan. An important aspect in this context is the measurement of health care output, which would also be useful in the measurement of productivity. Measuring health care output accurately not only makes it possible to examine the role and significance of public health insurance and measure its qualitative effects, but would also improve the measurement of gross domestic product(GDP). An important approach in this context is the volume approach to measuring health care output. Against this background, the aim of this study is to examine if and how measures of health care output could be used in the Japanese System of National Accounts (JSNA) and to present materials for implementing the measurement of health care output. The results indicate that when estimating output employing a cost-weighted output index (CWOI) using the number of patients, there are no large changes which can be observed, because the annual changes in the number of patients are also small. On the other hand, when employing a quality-adjusted cost-weighted output index (QACWOI) using the survival rate of cancer patients, some interesting results are obtained. Specifically, it is found that the rate of increase in the QACWOI was larger than that in the CWOI. Moreover, the rate of increase in the QACWOI was smaller than that in health care expenditure. To measure health care output overall, it would be necessary to decide on a measurement criterion for each type of medical treatment or surgery. On the other hand, if it were possible to change the estimation approach used for the JSNA to employ medical treatment units, it would be possible to partly reflect the results obtained here. This study shows one potential avenue for using the volume measurement approach for measuring quality-adjusted health care output.
    Keywords: national accounts, measurement of health care output, volume measurement, CWOI, QACWOI
    Date: 2013–03
  30. By: Ntim, Collins G
    Abstract: This paper investigates the relationship between director shareownership and corporate performance in South Africa using a sample of 169 listed firms from 2002 to 2007. Our results suggest a statistically significant and positive association between director shareownership and corporate performance. By contrast, we find no evidence of a non-linear effect of director shareownership on corporate performance. Our findings are robust across a raft of econometric models that control for different types of endogeneity problems and corporate performance proxies. Overall, our results provide support for agency theory, which suggests that director shareownership can reduce agency problems by aligning more closely the interests of shareholders and corporate executives, and thereby improving corporate performance.
    Keywords: corporate governance, corporate performance, director shareownership, South Africa, endogeneity
    JEL: G32 G34 G38
    Date: 2012–12–29
  31. By: NAKAJIMA Kentaro; SAITO Yukiko; UESUGI Iichiro
    Abstract: This paper investigates the role of inter-firm transaction structure on industrial agglomeration by using Japanese firm-level transaction relationship data. First, we measure the industrial agglomeration for each industry. Next, we measure the intensity of transactions and inequalities of transaction partners as the measures of the micro structure of transaction networks in each industry. Then, we regress the index of agglomeration by the indexes of transaction structure. We find that the intensity of intra-industry transactions statistically enforces the agglomeration. Further, the inequality of transaction partners has a negative effect on the agglomeration. This suggests that the industries that attract a few hub-firms have a large number of intra-industry transaction partners that are not agglomerated.
    Date: 2013–03
  32. By: Blyde, Juan; Santamaria, Julieth
    Abstract: An increasing number of case studies provide evidence that the interaction between global actors and firms in developing countries, particularly within the context of global supply chains, translate into critical knowledge acquisition. Examining vertically-integrated affiliates located in Chile we provide systematic evidence showing that foreign affiliates inserted in global supply chains tend to have larger capabilities in terms of size, skills and productivity, are more export oriented, and produce goods of higher quality, as measured by unit values, than other exporters in the country. We show that the superiority of these establishments increase with the age of the multinational indicating that time is required to accumulate the necessary skills. We also show that the edge of foreign affiliates in terms of the export outcomes decreases but does not disappear completely after these differences in plant capabilities are controlled for, a result that suggests that additional factors, most likely of intangible nature, might be behind the improved export performance and higher quality of goods of these establishments
    Keywords: global supply chains, learning, knowledge transfer, vertical FDI
    JEL: F10 F23 L25
    Date: 2013–03–31

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.