nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2013‒06‒30
nine papers chosen by
Angelo Zago
University of Verona

  1. Product market regulation and innovation efficiency By Chiara Franco; Fabio Pieri; Francesco Venturini
  2. Do outliers and unobserved heterogeneity explain the exporter productivity premium? Evidence from France, Germany and the United Kingdom By Temouri, Yama; Wagner, Joachim
  3. Factors behind international relocation and changes in production geography in the European automobile components industry By Jesús F. Lampón; Santiago Lago-Peñas
  4. The Impact of Structural and Macroeconomic Factors on Regional Growth By Sabine D’Costa; Enrique Garcilazo; Joaquim Oliveira Martins
  5. Do Mixed Reimbursement Schemes Affect Hospital Productivity? An Analysis of the Case of Denmark. By Hansen, Xenia Brun; Bech, Mickael; Jacobsen, Mads Leth; Lauridsen, Jørgen T
  7. Reexamining the Conditional Effect of Foreign Direct Investment By Bruno, Randolph Luca; Campos, Nauro F
  8. Resource Windfalls, Optimal Public Investment and Redistribution: The Role of Total Factor Productivity and Administrative Capacity By AREZKI Rabah; DUPUY Arnaud; GELB Alan
  9. Using Performance Measures to Promote Evidence-Based Care: A Bayesian Approach. By Timothy F. Christian; Thomas W. Croghan; Myles Maxfield

  1. By: Chiara Franco (Department of International Economics, Institutions and Development, Catholic University of the Sacred Heart of Milan); Fabio Pieri (Departamento de Estructura Economica (Economia Aplicada II), Universitat de Valencia); Francesco Venturini (Department of Economics, Finance and Statistics, University of Perugia)
    Abstract: We study the role of upstream product market regulation (PMR) on innovation efficiency. By estimating a knowledge production function for a large sample of OECD industries through a stochastic frontier analysis, we find that service regulation remarkably reduces R&D efficiency in the manufacturing sector. These results are robust to controlling for the institutional setting of the technology, the labour and the financial market, as well as to various forms of heterogeneity such as, for instance, non-linearities in the effect of PMR. The marginal impact of upstream regulation is higher in less regulated economies indicating that large improvements in R&D efficiency cannot be achieved at the earlier stages of deregulation. We quantify total gains in R&D efficiency and patenting that could be obtained by late reforming countries by liberalizing the product market.
    Keywords: R&D, knowledge production, eciency, product market regulation
    JEL: L5 L6 O3 O5
    Date: 2013–05
  2. By: Temouri, Yama (Aston University); Wagner, Joachim (Leuphana University)
    Abstract: A stylized fact from the literature on the Micro-econometrics of International Trade and a central implication of the heterogeneous firm models from the New New Trade Theory is that exporters are more productive than non-exporters. It is argued that this exporter productivity premium is due to extra costs of exporting that can be covered only by more productive firms. However, in recent papers that control for extreme observations and unobserved firm heterogeneity by applying a highly robust fixed-effects estimator, no such exporter productivity premium is found for firms from manufacturing and services industries in Germany. This paper uses enterprise level panel data for France, Germany and the United Kingdom from 2003 to 2008 to systematically investigate the role of outliers and unobserved firm heterogeneity for estimates of the exporter productivity premium. We report that outliers do have an influence on the estimated exporter productivity premium. We argue that the vanishing exporter premium in robust fixed effects estimations that is reported for all three countries is caused by characteristics of firms that start or stop to export over the period under investigation, and that are not representative for the bulk of firms that either export or not.
    Keywords: Export; productivity premium; outlier; unobserved heterogeneity; robust estimation
    JEL: F14
    Date: 2013–06–18
  3. By: Jesús F. Lampón (University of Vigo & REDE); Santiago Lago-Peñas (University of Vigo & REDE & IEB)
    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: F2 F23 L2 L23
    Date: 2013
  4. By: Sabine D’Costa; Enrique Garcilazo; Joaquim Oliveira Martins
    Abstract: This papers aims to understand the impact of nation-wide structural policies such as product market regulation in six upstream sectors and employment protection legislation and that of macroeconomic factors on the productivity growth of OECD regions. In particular we explore how this effect varies with the productivity gap of regions with their country’s frontier region. We use a policy-augmented growth model that allows us to simultaneously estimate the effects of macroeconomic and structural policies on regional productivity growth controlling for region-specific determinants of growth. We estimate our model with an unbalanced panel dataset consisting of 217 regions from 22 OECD countries covering the period 1995 to 2007. We find a strong statistical negative effect of product market regulation on regional productivity growth in five of the six upstream sectors considered and the effects are differentiated with respect to the productivity gap. Our estimates also reveal that dispersion of policies hurts regional productivity growth suggesting that policy complementarity can boost productivity growth. The effects of employment protection legislation are negative overall and are especially detrimental to productivity growth in lagging regions. The three macroeconomic factors we consider also influence regional performance: inflation has a negative effect on regional growth and government debt has a positive effect on average. When differentiating the effects by the distance to the frontier, trade-openness is more beneficial to lagging regions and the negative effects of inflation are less negative in lagging regions. These results reveal a strong link between nation-wide policies and the productivity of regions, which carries important policy implications, mainly that these effects should be taken into account in the policy design.
    Keywords: regional productivity growth, regional impact of structural policies, spatial impact of national policies
    JEL: E66 R12
    Date: 2013–06–13
  5. By: Hansen, Xenia Brun (COHERE, Department of Business and Economics); Bech, Mickael (COHERE, Department of Business and Economics); Jacobsen, Mads Leth (Department of Political Sciences, Universitry of Århus); Lauridsen, Jørgen T (COHERE, Department of Business and Economics)
    Abstract: The majority of public hospitals in Scandinavia are reimbursed through a mixture of two prospective reimbursement schemes, block grants (a fixed amount independent of the number of patients treated) and activity-based financing (ABF). This article contributes theoretically to the existing literature with a deeper understanding of such mixed reimbursement systems as well as empirically by identifying key design factors that determines the incentives embedded in such a mixed model. Furthermore, we describe how incentives vary in different designs of the mixed reimbursement scheme and assess whether different incentives affects the performance of hospitals regarding activity and productivity differently. Information on Danish reimbursement schemes has been collected from documents provided by the regional governments and through interviews with regional administrations. The data cover the period from 2007-2010. A theoretical framework identified the key factors in an ABF/block grant model to be the proportion of the national Diagnosis-Related Group (DRG) tariff above and below a predefined production target (i.e. the baseline); baseline calculations; the presence of kinks/ceilings; and productivity requirements. A comparative case study across the five regions in Denmark demonstrated presence of inter-regional variation in the design of reimbursement schemes. This variation creates different incentives regarding activity and productivity. Using gender-age standardized rates across year and region we show that there have not been any significant changes in the number of hospital discharges for any of the regions from 2007 to 2010 within any of the treatment groups.
    Keywords: Mixed reimbursement system; prospective payment system; activity-based financing; incentives; activity; productivity
    JEL: H51 H72 I18
    Date: 2013–04–01
  6. By: Molander, Anders (Oslo and Akershus University College of applied Sciences); Torsvik, Gaute (Department of Economics, University of Bergen)
    Abstract: So-called activation policies aiming at bringing jobless people into work have been a central component of welfare reforms across OECD countries during the last decades. Such policies combine restrictive and enabling programs, but their characteristic feature is that also enabling programs are mandatory, and non-compliers are sanctioned. There are four main arguments that can be used to defend mandatory activation of benefit recipients. We label them efficiency, sustainability, paternalism, and justice. Each argument is analyzed in turn and according to a strict scheme. First we clarify which standards it invokes. Thereafter we evaluate each argument according to its own standards Finally we introduce competing normative concerns that have to be taken into account. In the conclusion we discuss possible constellations of arguments that make up the normative space for activation policies.
    Keywords: work-welfare; social transfers; labour productivity; screening
    JEL: I38 J24
    Date: 2013–06–12
  7. By: Bruno, Randolph Luca (University College London); Campos, Nauro F (Brunel University)
    Abstract: The prevailing consensus is that foreign direct investment (FDI) effects are conditional. At the macro level, they depend upon minimum levels of human capital or financial development, while at the micro level, they depend on type of linkage (forwards, backwards, or horizontal). This paper presents new evidence showing that these effects are substantially less "conditional". We use a meta-analysis on two data sets covering 549 micro and 553 macro estimates of the effects of FDI on performance. We find these effects tend to be larger in macro than in micro studies, and greater in low- than in high-income countries.
    Keywords: foreign direct investment, economic growth, firm performance, meta-regression-analysis
    JEL: C83 F23 O12
    Date: 2013–06
  8. By: AREZKI Rabah; DUPUY Arnaud; GELB Alan
    Abstract: This paper studies the optimal public investment decisions in countries experiencing a resource windfall. To do so, we use an augmented version of the Permanent Income framework with public investment faced with adjustment costs capturing the associated administrative capacity as well as government direct transfers. A key assumption is that those adjustment costs rise with the size of the resource windfall. The main results from the analytical model are threefold. First, a larger resource windfall commands a lower level of public capital but a higher level of redistribution through transfers. Second, weaker administrative capacity lowers the increase in optimal public capital following a resource windfall. Third, higher total factor productivity in the non-resource sector reduces the degree of des-investment in public capital commanded by weaker administrative capacity. We further extend our basic model to allow for ?investing in investing? ? that is public investment in administrative capacity ? by endogenizing the adjustment cost in public investment. Results from the numerical simulations suggest, among other things, that a higher initial stock of public administrative ?know how? leads to a higher level of optimal public investment following a resource windfall. Implications for policy are discussed.
    Keywords: Resource Windfall; Public Investment; Total Factor Productivity; Administrative capacity
    JEL: E60 F34 H21
    Date: 2013–06
  9. By: Timothy F. Christian; Thomas W. Croghan; Myles Maxfield
    Keywords: Performance Measures, Evidence-Based Care, Bayesian Approach, Health Care Effectiveness
    JEL: I
    Date: 2013–06–30

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