New Economics Papers
on Efficiency and Productivity
Issue of 2013‒04‒27
fifteen papers chosen by

  1. Productivity grwoth and efficiency changes in the Mongolian mobile communications industry By Byambaakhuu, Badamasuren; Kwon, Youngsun; Rho, Jaejeung
  2. The Impact of Ownership Unbundling on Cost Efficiency: Empirical Evidence from the New Zealand Electricity Distribution Sector By Filippini, Massimo; Wetzel, Heike
  3. Does land fragmentation affect farm performance? A case study from Brittany, France By Laure Latruffe; Laurent Piet
  4. Productivity and Economic Growth in the Canadian Provinces, 1997 to 2010 By Gu, Wulong<br /> Lee, Beatrix
  5. The heterogeneous effects of workforce diversity on productivity, wages and profits By Andrea Garnero; François Rycx
  6. Quantifying Productivity Gains from Foreign Investment By Christian Fons-Rosen; Sebnem Kalemli-Ozcan; Bent E. Sorensen; Carolina Villegas-Sanchez; Vadym Volosovych
  7. Work incentive and productivity in Spain By Pisa, M. Isabel; Sánchez, Rosario
  8. Innovation and productivity: An update By Mohnen, Pierre; Hall, Bronwyn H.
  9. Linking ICT related Innovation Adoption and Productivity: results from micro-aggregated data versus firm-level data. By Van Leeuwen, George; Polder, Michael
  10. Does freer trade really lead to productivity growth?: Evidence from Africa By Bresnahan, Lauren; Coxhead, Ian; Foltz, Jeremey; Mogues, Tewodaj
  11. Which Firms are Left in the Periphery? - Spatial Sorting of Heterogeneous Firms with Scale Economies in Transportation By Forslid, Rikard; Okubo, Toshihiro
  12. Is there an optimal pension fund size? A scale-economy analysis of administrative and investment costs By Jacob A. Bikker
  13. On the Origins of the Worldwide Surge in Patenting: An Industry Perspective on the R&D-patent Relationship By Jérôme Danguy; Gaétan de Rassenfosse; Bruno Van Pottelsberghe
  14. Do Large Departments Make Academics More Productive? Agglomeration and Peer Effects in Research By Clément Bosquet; Pierre-Philippe Combes
  15. Weighting life domains with Data Envelopment Analysis By Jorge Guardiola; Andrés J. Picazo-Tadeo

  1. By: Byambaakhuu, Badamasuren; Kwon, Youngsun; Rho, Jaejeung
    Abstract: In the mid 1990s Mongolia has introduced competition in the telecommunications market by deregulating it and opening up its mobile communications market to foreign direct investments. Since this policy reform, mobile service penetration has grown fast, recently exceeding 100 % penetration rate and mobile communications service has become the biggest among telecommunications services in Mongolia. Latest periods of the industry have been witnessing strong competition among the mobile service providers and challenge for reaching customers in remote areas of the country. On the other hand, the mobile service providers are uncertain for efficiency of their investments and benefits from competition. Policy and regulatory departments are unaware productivity growth of the sector which is crucial for the next policy and regulatory decisions. Considering such situation, this study estimates productivity growth and efficiency changes in the mobile communications industry of Mongolia over the period of 2007-2011 using firm level data and employing a Malmquist total factor productivity index method. By determining the changes in total factor productivity (TFP) growth and its components, technical change and technical efficiency change, we find that the productivity increased about 44.7 percent during the study period or nearly 9 percent annually. Our research identifies that a scale change component played as a most significant source of the TFP growth in the market. In addition, our study reveals a fluctuation pattern of the productivity growth caused by catch-up effect and technology-change components during the study period. The results of the study indicates effectiveness of a competition policy for the mobile telecommunications market with shared telecommunications network for gaining the productivity growth which may provide some lessons for similar economies as Mongolia. --
    Keywords: Mongolian mobile communications,Total factor productivity,Malmquist TFP index.
    Date: 2012
  2. By: Filippini, Massimo (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Wetzel, Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: Several countries around the world have introduced reforms to the electric power sector. One important element of these reforms is the introduction of an unbundling process, i.e., the separation of the competitive activities of supply and production from the monopole activity of transmission and distribution of electricity. There are several forms of unbundling: functional, legal and ownership. New Zealand, for instance, adopted an ownership unbundling in 1998. As discussed in the literature, ownership unbundling produces benefits and costs. One of the benefits may be an improvement in the level of the productive efficiency of the companies due to the use of the inputs in just one activity and a greater level of transparency for the regulator. This paper analyzes the cost efficiency of 28 electricity distribution companies in New Zealand for the period between 1996 and 2011. Using a stochastic frontier panel data model, a total cost function and a variable cost function are estimated in order to evaluate the impact of ownership unbundling on the level of cost efficiency. The results indicate that ownership separation of electricity generation and retail operations from the distribution network has a positive effect on the cost efficiency of distribution companies in New Zealand. The estimated effect of ownership separation suggests a positive average one-off shift of 23 percent in the level of cost efficiency in the shortrun and 15 percent in the long-run.
    Keywords: Electricity distribution; Ownership separation; Cost efficiency; Total cost function; Variable cost function; Stochastic frontier analysis
    JEL: D24 L51 L94
    Date: 2013–02–10
  3. By: Laure Latruffe; Laurent Piet
    Abstract: Agricultural land fragmentation is widespread around the world and may affect farmers’ decisions and therefore have an impact on the performance of farms, in either a negative or a positive way. We investigated this impact for the western region of Brittany, France, in 2007. To do so, we regressed a set of performance indicators on a set of fragmentation descriptors. The performance indicators (production costs, yields, revenue, profitability, technical and scale efficiency) were calculated at the farm level using Farm Accountancy Data Network (FADN) data, while the fragmentation descriptors were calculated at the municipality level using data from the cartographic field pattern registry (RPG). The various fragmentation descriptors enabled not only the traditional number and average size of plots, but also their scattering in the geographical space, to be taken into account. Our analysis highlights the fact that the measures of land fragmentation usually used in the literature do not reveal the whole set of significant relationships with farm performance and that, in particular, measures accounting for distance should be taken into consideration more systematically.
    Keywords: agricultural land fragmentation, farm performance, cartographic field pattern registry, France
    JEL: Q12 Q15 D24
    Date: 2013
  4. By: Gu, Wulong<br /> Lee, Beatrix
    Abstract: This paper provides a provincial perspective on the slowdown in productivity and economic growth in the total business sector in Canada between 2000 and 2010 compared to the late 1990s. It uses the most recent provincial multifactor productivity database.
    Keywords: Business performance and ownership, Manufacturing, Economic accounts, Productivity accounts
    Date: 2013–04–17
  5. By: Andrea Garnero; François Rycx
    Abstract: We estimate the impact of workforce diversity on productivity, wages and productivity-wage gaps (i.e. profits) using detailed Belgian linked employer-employee panel data. Findings, robust to a large set of covariates, specifications and econometric issues, show that educational (age) diversity is beneficial (harmful) for firm productivity and wages. The consequences of gender diversity are found to depend on the technological/knowledge environment of firms. While gender diversity generates significant gains in high-tech/knowledge intensive sectors, the opposite result is obtained in more traditional industries. Overall, findings do not point to sizeable productivity-wage gaps except for age diversity.
    Keywords: Labour diversity; productivity; wages; linked panel data;; GMM
    JEL: D24 J24 J31 M12
    Date: 2013–04–17
  6. By: Christian Fons-Rosen (Universitat Pompeu Fabra and Barcelona Graduate School of Economics); Sebnem Kalemli-Ozcan (University of Maryland, CEPR, and NBER); Bent E. Sorensen (University of Houston and CEPR); Carolina Villegas-Sanchez (ESADE - Universitat Ramon Llull); Vadym Volosovych (Erasmus University Rotterdam and ERIM Research Institute of Management)
    Abstract: We quantify the causal effect of foreign investment on total factor productivity (TFP) using a new global firm-level database. Our identification strategy relies on exploiting the difference in the amount of foreign investment by financial and industrial investors and simultaneously controlling for unobservable firm and country-sector-year factors. Using our well identified firm level estimates for the direct effect of foreign ownership on acquired firms and for the spillover effects on domestic firms, we calculate the aggregate impact of foreign investment on country-level productivity growth and find it to be very small.
    Keywords: Multinationals; FDI; Knowledge Spillovers; Selection; Productivity
    JEL: E32 F15 F36 O16
    Date: 2013–04–11
  7. By: Pisa, M. Isabel; Sánchez, Rosario
    Abstract: Work incentives are closely related to production performance. This paper presents evidence that the value added of a firm increases when relative labor costs rise, or the level of unemployment increases. Both circumstances imply evidence in favor of the efficiency wage model. This theory is consistent with the views of many managers and personal administrators, who tend to ascribe primary importance to wage setting as an incentive to increase effort. We use a micro panel data set of Spanish manufacturing firms, during the period 2004–2009, to simultaneously estimate a stochastic frontier of a firm’s value added and the inefficiency determinants. The data source is published in the Spanish Industrial Survey on Business Strategies (Encuesta sobre Estrategias Empresariales, ESEE), collected by the Fundación SEPI.
    Keywords: efficiency, value added, labor economic, industrial relations.
    JEL: D2 J23 J24 L60
    Date: 2013–04–22
  8. By: Mohnen, Pierre (UNU-MERIT, and SBE, Maastricht University); Hall, Bronwyn H. (University of California at Berkeley, NBER, UNU-MERIT, and SBE, Maastricht University.)
    Abstract: This paper reviews the existing evidence regarding the effects of technological and non-technological innovations on the productivity of firms and the existence of possible complementarities between these different forms of innovation.
    Keywords: innovation, productivity
    JEL: O30 O31 O33 O40
    Date: 2013
  9. By: Van Leeuwen, George; Polder, Michael
    Abstract: E-business systems are increasingly considered as important examples of ICT related innovations embodied in software applications, the adoption of which is essential for capturing the potential fruits of several ICT externalities. For analysing the importance of this type of embodied technological progress several routes are open. One route is to look at the data that can be used. In this paper we apply the same modelling strategy to two different types of data: 1) cross-country-industry micro-aggregated data obtained after applying Distributed Micro data Analysis (DMD) and 2) firm-level data, in this case for the Netherlands. Today, the econometric analysis based on firm-level data is often more advanced and more complicated from an econometric point of view than the analysis on aggregated data. We show that DMD can be extended to enable the estimation of more complicated models that feature recent directions in micro-econometric analysis on firm-level data. Our application concerns the innovative use of E-business systems by firms. Using a rich set of cross-country-industry data constructed and tailored by DMD for this purpose, we analyse the adoption of three E-business systems (Eterprise Resourc Planning, Customer Relationship Management, Supply Chain Management). We investigate the complementarities in joint adoption and the productivity effects of adopting systems simultaneously or in isolation. The same exercise is repeated on firm-level data for the Netherlands. Our example illustrates that international benchmarking with more elaborate models on cross-country-industry panel data is feasible after using DMD to tailor the underlying firm-level data for specific research questions. This is an important result in the light of the restrictions on pooling cross-country micro data due to confidentiality rules. We find that the results are more diverging for the estimation of complementarities at the adoption stage than for the productivity effects of (joint) adoption. This result implies that measurement error and unobservable heterogeneity plays a greater role when explaining adoption pattern at the firm-level than at the aggregate level.
    Keywords: DMD, ICT, innovation, innovation complementarities, productivity
    JEL: D2 D24 D8 L2 L21
    Date: 2013–03–31
  10. By: Bresnahan, Lauren; Coxhead, Ian; Foltz, Jeremey; Mogues, Tewodaj
    Abstract: We use firm-level data from the World Bank’s Regional Program on Enterprise Development, covering Ghana, Kenya, Nigeria, and Tanzania for 1991–2003. Econometric results confirm well-known relationships, such as a positive association between export intensity and TFP, which implies that more productive firms are more likely to select in to exporting.
    Keywords: trade; firm productivity; Manufacturing industries; exports; trade liberalization;,
    Date: 2013
  11. By: Forslid, Rikard (Dept. of Economics, Stockholm University); Okubo, Toshihiro (Kobe University)
    Abstract: This paper introduces scale economies or density economies in transportation in a trade and geography model with heterogeneous firms. This relatively small change to the standard model produces a new pattern of spatial sorting among …firms. Contrary to the existing literature, our model produces the result that firms of intermediate productivity relocate to the large core region, whereas high and low productivity firms remain in the periphery. Trade liberalisation leads to a gradual relocation to the core, with the most productive firms remaining in the periphery.
    Keywords: heterogeneous …firms; transportation costs; scale economies
    JEL: F12 F15
    Date: 2013–04–17
  12. By: Jacob A. Bikker
    Abstract: This paper investigates scale economies and the optimal scale of pension funds, estimating different cost functions with varying assumptions about the shape of the underlying average cost function: Ushaped versus monotonically declining. Using unique data for Dutch pension funds over 1992-2009, we find that unused scale economies for both administrative and investment activities are indeed large and concave, that is, huge for small pension funds and decreasing with pension fund size. For administrative activities, we observe a clear optimal scale of around 40 thousand participants during 1992-2000 (pointing to a U shaped average cost function), which increases sharply in subsequent years to size above the largest pension fund, pointing to monotonically decreasing average costs. As regards investment costs we observe an optimal scale for total assets of around euro 690 million and larger, without a clear shift over time and without diseconomies of scale for larger funds. The results are very sensitive to the correct functional form of the cost model. Consolidation among especially smaller and medium-sized pension funds would increase cost efficiency.
    Keywords: Pension funds; unit-costs function, administrative costs, investment costs, economies of scale, pension plan design, governance, defined benefits, defined contribution, outsourcing, reinsurance
    JEL: G23
    Date: 2013–04
  13. By: Jérôme Danguy; Gaétan de Rassenfosse; Bruno Van Pottelsberghe
    Abstract: This paper decomposes the R&D-patent relationship at the industry level to shed light on thesources of the worldwide surge in patent applications. The empirical analysis is based on aunique dataset that includes 5 patent indicators computed for 18 industries in 19 countriescovering the period from 1987 to 2005. The analysis shows that variations in patentapplications reflect not only variations in research productivity but also variations in theappropriability and filing strategies adopted by firms. The results also suggest that the patentexplosion observed in several patent offices can be attributed to the greater globalization ofintellectual property rights rather than to a surge in research productivity.
    Keywords: appropriability; complexity; patent explosion; propensity to patent; research productivity; strategic patenting
    JEL: O30 O34 O38
    Date: 2013–04
  14. By: Clément Bosquet (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM), SERC - Spatial Economic Research Center - London School of Economics and Political Science); Pierre-Philippe Combes (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM), CEPR - Center for Economic Policy Research)
    Abstract: We study the effect of a large set of department characteristics on individual publication records. We control for many individual time-varying characteristics, individual fixed-effects and reverse causality. Department characteristics have an explanatory power that can be as high as that of individual characteristics. The departments that generate most externalities are those where academics are homogeneous in terms of publication performance and have diverse research fields, and, to a lesser extent, large departments, with more women, older academics, star academics and foreign co-authors. Department specialisation in a field also favours publication in that field. More students per academic does not penalise publication. At the individual level, women and older academics publish less, while the average publication quality increases with average number of authors per paper, individual field diversity, number of published papers and foreign co-authors.
    Keywords: research productivity determinants; economic geography; networks; economics of science; selection and endogeneity
    Date: 2013–04
  15. By: Jorge Guardiola (University of Granada); Andrés J. Picazo-Tadeo (University of Valencia)
    Abstract: The specialised literature has frequently addressed the relationship between life domains and people’s satisfaction with life. Some researchers have posed questions regarding the importance of domains, therefore interpreting them as weights and creating domain satisfaction indices. This paper employs Data Envelopment Analysis (DEA) and Multi-Criteria-Decision-Making (MCDM) techniques to obtain a series of computer-based weightings for life domains from a sample of 178 people living in a rural community in Yucatan (Mexico). The main feature of these weightings is that they might differ from one individual or domain to another. Consequently, several weighting schemes are used to compute different DEA-based life satisfaction indices and also a constant equally-weighted index. Based on the goodness-of-fit criteria commonly employed in this literature, our main result is that computer DEA-based indicators do not improve the relationship with selfreported life satisfaction in comparison to the equally-weighted index of life satisfaction.
    Keywords: Data Envelopment Analysis; domains of life satisfaction; life satisfaction indicators; Multi-Criteria-Decision-Making; weightings
    Date: 2013–04

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