New Economics Papers
on Efficiency and Productivity
Issue of 2013‒05‒22
nine papers chosen by

  1. Comparative efficiency of producer cooperatives and conventional firms in a sample of quasi-twin companies By MG. Brandano; C. Detotto; M. Vannini
  2. Geography, Productivity and Trade: Does Selection Explain Why Some Locations Are More Productive than Others? By Antonio Accetturo; Valter Di Giacinto; Giacinto Micucci; Marcello Pagnini
  3. Is there an optimal pension fund size? A scale-economy analysis of administrative and investment costs By Jacob Bikker
  4. 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 de la Potterie
  5. Survival, Productivity and Growth of New Ventures across Locations By Lööf, Hans; Nabavi, Pardis
  7. Municipal expenditures efficiency with emphasis on the competitiveness and type of company: Case study on waste management expenditures in the South Moravian Region By Jana Soukopová; Ivan Malý
  8. Dynamics of Investment and Firm Performance: Comparative Evidence from Manufacturing Industries By Marco Grazzi; Nadia Jacoby; Tania Treibich
  9. Measuring spatial effects in presence of institutional constraints: the case of Italian Local Health Authority expenditure By Vincenzo Atella; Federico Belotti; Domenico Depalo; Andrea Piano Mortari

  1. By: MG. Brandano; C. Detotto; M. Vannini
    Abstract: We investigate the comparative technical efficiency of producer cooperatives (PCs) and conventional firms (CFs) by looking at the performance of a mixed sample of Sardinian wine producing companies over the period 2004-2009. Thanks to the similarity of the habitats in which the firms operate, the peculiarities of the production environment, and the careful measurement of some key inputs through suitable aggregation of accounting data, the observed units are “twins” in all non- organizational respects, providing one natural setting for comparative work. The analysis is carried out in two steps - in the first, technical efficiency indicators for each firm in each year are calculated using Data Envelopment Analysis (DEA) with reference to a common production frontier. Subsequently, the measured efficiency scores become the dependent variables of a pooled truncated maximum likelihood regression in which we control for external covariates and firm type. To assess the procedure’s appropriateness, we test whether the separability condition that the support of the output variables does not depend on the set of external variables is satisfied. Moreover, a double bootstrap algorithm is run to compute valid standard errors and confidence intervals of the coefficients estimates. According to our findings cooperatives are less technically efficient than their capitalist counterparts and displays decreasing returns to scale. Both results are particularly worrying in light of the main challenges (liberalization of EU planting rights and climate changes) facing the wine industry in the near future.
    Keywords: data envelopment analysis, comparative firm efficiency, double bootstrap
    JEL: Q13 P13 L25 C24 R11
    Date: 2012
  2. By: Antonio Accetturo (Bank of Italy, Italy); Valter Di Giacinto (Bank of Italy, Italy); Giacinto Micucci (Bank of Italy, Italy); Marcello Pagnini (Bank of Italy, Italy)
    Abstract: Two main hypotheses are usually put forward to explain the productivity advantages of larger cities: agglomeration economies and firm selection. Combes et al. (2012) propose an empirical approach to disentangle these two effects and fail to find any impact of selection on local productivity differences. We theoretically show that selection effects do emerge when asymmetric trade and entry costs and different spatial scale at which agglomeration and selection may work are properly taken into account. The empirical findings confirm that agglomeration effects play a major role. However, they also show a substantial increase in the importance of the selection effect when asymmetric trade costs and a different spatial scale are taken into account.
    Keywords: agglomeration economies, firm selection, market size, entry costs, openness to trade
    JEL: C52 R12 D24
    Date: 2013–05
  3. By: Jacob 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 € 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
  4. By: Jérôme Danguy (Solvay Brussels School of Economics and Management, iCite and ECARES, Université libre de Bruxelles); Gaétan de Rassenfosse (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne; Intellectual Property Research Institute of Australia, The University of Melbourne); Bruno van Pottelsberghe de la Potterie (Solvay Brussels School of Economics and Management, iCite and ECARES, Université libre de Bruxelles)
    Abstract: This paper decomposes the R&D-patent relationship at the industry level to shed light on the sources of the worldwide surge in patent applications. The empirical analysis is based on a unique dataset that includes 5 patent indicators computed for 18 industries in 19 countries covering the period from 1987 to 2005. The analysis shows that variations in patent applications reflect not only variations in research productivity but also variations in the appropriability and filing strategies adopted by firms. The results also suggest that the patent explosion observed in several patent offices can be attributed to the greater globalization of intellectual 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
  5. By: Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Nabavi, Pardis (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: We assess the impact of the location of genuinely new ventures and spinoffs on these firms’ survival, productivity and growth. The study distinguishes between four different categories of locations: metro cities, metro regions, urban areas, and rural areas. Using a unique database covering more than 23,000 new entrants between 2000 and 2004 in Sweden and observing them for 5 years, several conclusions may be drawn from our study. First, there is a substantial difference in ex-post entry performance between the manufacturing and service sectors. Second, the proposed superiority of start-ups by ex-employees depends on the performance measures and the sector. Third, knowledge and technology intensity of the industry matter for the viability of the new firms.
    Keywords: Location; New ventures; Survival; Productivity; Growth
    JEL: L25 L26 M13 O47 R11
    Date: 2013–05–08
  6. By: Gale Boyd; Mark Curtis
    Abstract: In this paper we merge a well-cited survey of firm management practices into confidential U.S. Census microdata to examine whether generic, i.e. non-energy specific, firm management practices, ”spillover” to enhance energy efficiency in the United States. We find the relationship in U.S. plants to be more nuanced than past research on UK plants has suggested. Most management techniques have beneficial spillovers to energy efficiency, but an emphasis on generic targets, conditional on other management practices, results in spillovers that increase energy intensity. Our specification controls for industry specific effects at a detailed 6-digit NAICS level and shows that this result is stronger for firms in energy intensive industries. We interpret the empirical result that generic management practices do not necessarily spillover to improved energy performance as evidence of an “energy management gap.”
    Date: 2013–04
  7. By: Jana Soukopová; Ivan Malý (Department of Public Economics, Masaryk University)
    Abstract: This paper, based on the analysis of current municipal expenditures on waste management, compares expenditure per capita and examines the impacts of competitive environment and type of waste management company (character of ownership) on the expenditure efficiency. Expenditures are compared by the number of competing companies in neighbouring municipalities by the districts and municipality size groups. First part of the paper briefly describes current situation around environmental protection municipal expenditure in Czech Republic and explains reason why the area of current municipal waste management expenditure has been chosen for the efficiency evaluation. Second part is dedicated to the idea of the efficiency evaluation methodology which is based on Cost-efficiency Analysis (CEA) and assessing the impact of a competitiveness and type of company to the efficiency. Evaluation and comparison is performed on the all 673 South Moravian municipalities for each of the years in the five-year period ended 2011.
    Keywords: competitiveness; efficiency; current municipal expenditure; the South Moravian Region
    JEL: H59
    Date: 2012–12
  8. By: Marco Grazzi; Nadia Jacoby; Tania Treibich
    Abstract: Although the relation between investment and economic growth has been well established in the macroeconomic literature, the existence of a similar link at firm level has been challenged by empirical work. This paper investigates the channels linking investment and firm performance in the French and Italian manufacturing industries by proposing a novel methodology to identify investment spikes, which corrects for size dependence. While maintaining the desired properties of a spike measure, our chosen proxy accounts for the expected relation between investment and firm performance. Ex-ante, more efficient and fast growing firms demonstrate a higher probability to invest; in turn, following an investment spike, the group of investing firms shows further performance gains. We show also that expansionary investment episodes, proxied by the opening of new plants, have a negative effect on profitability but are associated with higher sales and higher levels of employment.
    Keywords: Firm heterogeneity, investment spike, industrial dynamics, corporate performance, capital accumulation, technical change
    JEL: C14 D22 D24 D92 E22 L11 L23 L60
    Date: 2013–04
  9. By: Vincenzo Atella (University of Rome "Tor Vergata"); Federico Belotti (University of Rome "Tor Vergata"); Domenico Depalo (Bank of Italy); Andrea Piano Mortari (University of Rome "Tor Vergata")
    Abstract: Over the last decades spatial econometrics models have represented a common tool for measuring spillover effects across different geographical entities (counties, provinces, regions or nations). Unfortunately, no one has considered that when these entities share common borders but obey to different institutional settings, ignoring this feature may induce misleading conclusions. In fact, under these circumstances, and if institutions do play a role, we expect to find spatial effects mainly \within" entities belonging to the same institutional setting, while the "between" effect across different institutional settings should be attenuated or totally absent, even if the entities share a common border. In this case, relying only on geographical proximity will then produce biased estimates, due to the composition of two distinct effects. To avoid these problems, we derive a methodology that partitions the standard contiguity matrix into within and between contiguity matrices, allowing to separately estimate these spatial correlation coefficients and to easily test for the existence of institutional constraints. In our empirical analysis we apply this methodology to Italian Local Health Authority expenditures, using spatial panel techniques. Results show a strong and significant spatial coefficient only for the within effect, thus confirming the importance and validity of our approach.
    Keywords: spatial, health expenditures, institutional setting, panel data
    JEL: H72 H51 C31
    Date: 2013–05–08

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