New Economics Papers
on Efficiency and Productivity
Issue of 2013‒07‒05
fifteen papers chosen by

  1. Embodied-Technical Change of Farm Tractors in U.S. Agricultural Productivity Analysis: What Does Hedonic Price Tell Us? By Wang, Sun Ling; Schimmelpfennig, David; Ball, Eldon
  2. Off-Farm Work and Economic Performance on Corn Farms By Nehring, Richard; Mishra, Ashok; Fernandez-Cornejo, Jorge; Hallahan, Charlie; Erickson, Kenneth; Harris, Michael
  3. Evaluating the Importance of Multiple Imputations of Missing Data on Stochastic Frontier Analysis Efficiency Measures By Shaik, Saleem; Tokovenko, Oleksiy
  4. Econometric analysis of productivity with measurement error: Empirical application to the US Railroad industry By Coublucq, Daniel
  5. Does Services Liberalization Affect Manufacturing Firms' Export Performance? Evidence from India By Maria Bas
  6. Productivity, Price Recovery, Capacity Constraints and their Financial Consequences By E. Grifell-Tatje; C. A. K. Lovell
  7. Measuring Firm Performance using Nonparametric Quantile-type Distances By Daouia, Abdelaati; Simar, Léopold; Wilson, Paul
  8. Food Environment and Weight Outcomes: A Stochastic Frontier Approach By Li, Xun; Lopez, Rigoberto A.
  9. The impact of consulting services on small and medium enterprises: evidence from a randomized trial in Mexico By Bruhn, Miriam; Karlan, Dean; Schoar, Antoinette
  10. Bad management: a constraint on economic development? By Renata Lemos; Daniela Scur
  11. What Affects the Main Engine of Growth in the European Economy? Industrial Interconnectedness and Differences in Performance of Business Services Across the EU25 By Maciej Sobolewski; Grzegorz Poniatowski
  12. A Spatial Dynamic Panel Analysis of the Environmental Kuznets Curve in European Countries By Hermann Pythagore Pierre Donfouet; P. Wilner Jeanty; Eric Malin
  13. A gamma-moment approach to monotonic boundaries estimation By Daouia, Abdelaati; Girard, Stéphane; Guillou, Armelle
  14. State Grain Rail Statistical Summary By Prater, Marvin; O'Neil Jr., Daniel; Adam, Sparger
  15. On beta and sigma convergence of Czech regions By Mazurek, Jiří

  1. By: Wang, Sun Ling; Schimmelpfennig, David; Ball, Eldon
    Abstract: This study employs new data and a hedonic function to estimate the quality-adjusted price and quantity for farm tractors over the 1950-2011 period. The estimated hedonic prices for tractors are lower than the BLS’ tractor price index in most time period. The lower prices will result in a higher estimate of tractor stock and service flow, which reflects an increase in embodied technical change of farm tractors. After replacing the BLS deflator of tractor investment with these hedonic estimates, average annual TFP growth dropped by 0.13 percentage points over the 1991-2011 period compared with the current USDA’s productivity estimate. The changes can be attributed to properly accounting for embodied technical change in farm tractors over this period.
    Keywords: Hedonic price, farm tractor, total factor productivity (TFP), Agribusiness, Demand and Price Analysis, Production Economics, O3, O4, Q1,
    Date: 2013
  2. By: Nehring, Richard; Mishra, Ashok; Fernandez-Cornejo, Jorge; Hallahan, Charlie; Erickson, Kenneth; Harris, Michael
    Abstract: This paper examines the effect of off-farm work on the economic performance of corn farms. It estimates returns to scale and technical efficiency following an input distance function approach and compares the relative performance of corn farm operator households with and without off-farm work. We use farm-level data from the USDA’s ARMS survey for 2002-2011. The impact of off-farm work on scale and technical efficiency is examined at the household level. We find that off-farm income boosts scale efficiency on corn farms. We also find that operator hours worked off farm negatively affects technical efficiency, while we find no impact on technical efficiency for spouse hours worked off farm. Finally, we find that corn farms relying on off farm income have comparable returns on farm assets across all size classes, but significantly higher household returns (with off-farm income and assets accounted for) across all size classes.
    Keywords: Consumer/Household Economics, Farm Management, Labor and Human Capital,
    Date: 2013–06
  3. By: Shaik, Saleem; Tokovenko, Oleksiy
    Abstract: The robustness of the multiple imputation of missing data on parame- ter coefficients and efficiency measures is evaluated using stochastic frontier analysis in the panel Bayesian context. Second, the implications of multi- ple imputations on stochastic frontier analysis technical efficiency measures under alternative distributional assumptions−half-normal, truncation and exponential is evaluated. Empirical estimates indicate difference in the between-variance and within-variance of parameter coefficients estimated from stochastic frontier analysis and generalized linear models. Within stochastic frontier analysis, the between-variance and within-variance of technical efficiency are different across the three alternative distributional assumptions. Finally, results from this study indicate that even though the between- and within variance of multiple imputed data is close to zero, between- and within-variance of production function parameters, as well as, the technical efficiency measures are different.
    Keywords: Agricultural and Food Policy, Research Methods/ Statistical Methods,
    Date: 2013
  4. By: Coublucq, Daniel
    Abstract: This paper analyzes the productivity in the US rail industry for the period 1980 - 2006. I propose a value-added production framework to circumvent the problem of measurement error in one input. I find evidence showing that aggregate productivity gains can be attributed to returns to scale and the reshuffling of resources to more efficient firms. However, productivity slows down for the period 1995 - 2000 after important concentrations. I also look at the correlations between firm-level productivity and the operating environment. My results show that failing to control for the omitted price variable bias leads to an overestimation of productivity gains. --
    Keywords: industry dynamics,measurement error,productivity,selection,simultaneity,railroad industry
    JEL: C24 L11 L50 L92 L98
    Date: 2013
  5. By: Maria Bas
    Abstract: This paper investigates the relationship between the reform of energy, telecommunications and transport services in India in the mid-1990s and manufacturing firms’ export performance. The empirical analysis relies on exogenous indicators of regulation of Indian services sectors and detailed firm-level data from India in the 1994-2004 period. I find that the reform of upstream services sector has increased the probability of exporting and export sales shares of firms producing in downstream manufacturing industries. The results suggest that the effect of services liberalization on manufacturing firms’ export performance is stronger for initially more productive firms. These empirical findings are robust to alternative econometric specifications that control for other reforms, industry, firm characteristics and that deal with potential reverse causality concerns.
    Keywords: Services liberalization;manufacturing firms’ export performance;firm heterogeneity;firm level data
    JEL: O10 O12 F1 L8
    Date: 2013–06
  6. By: E. Grifell-Tatje; C. A. K. Lovell (CEPA - School of Economics, The University of Queensland)
    Abstract: Mining and fishing are both extractive industries, although one resource is renewable and the other is not. Miners and fishers pursue financial objectives, although their objectives may differ. In both industries financial performance is influenced by productivity and prices. Finally, in both industries capacity constraints influence financial performance, perhaps but not necessarily through their impact on productivity, and both industries encounter external as well as internal capacity constraints. In this study we develop an analytical framework that links all four phenomena. We use return on assets to measure financial performance, and our analytical framework is provided by the duPont triangle. We measure productivity change in two ways, with a theoretical technology-based index and with empirical price-based indexes. We measure price change with empirical quantity-based indexes. We measure internal capacity utilization by relating a pair of output quantity vectors representing actual output and full capacity output, and we develop physical and economic measures of internal capacity utilization. We also show how external capacity constraints can restrict the ability to reach full capacity output. The analytical framework has productivity change, price change and change in capacity utilization influencing change in return on assets.
    Date: 2013–06
  7. By: Daouia, Abdelaati (TSE,UCL); Simar, Léopold (UCL); Wilson, Paul (University of Clemson)
    Abstract: hen faced with multiple inputs X " Rp+ and outputs Y " Rq+, traditional quantile regression of Y conditional on X = x for measuring economic efficiency in the output (input) direction is thwarted by the absence of a natural ordering of Euclidean space for dimensions q (p) greater than one. Daouia and Simar (2007) used nonstandard conditional quantiles to address this problem, conditioning on Y # y (X $ x) in the output (input) orientation, but the resulting quantiles depend on the a priori chosen direction. This paper uses a dimensionless transformation of the (p + q)-dimensional production process to develop an alternative formulation of distance from a realization of (X, Y ) to the efficient support boundary, motivating a new, unconditional quantile frontier lying inside the joint support of (X, Y ), but near the full, efficient frontier. The interpretation is analogous to univariate quantiles and corrects some of the disappointing properties of the conditional quantile-based approach. By contrast with the latter, our approach determines a unique partial-quantile frontier independent of the chosen orientation (input, output, hyperbolic or directional distance). We prove that both the resulting efficiency score and its estimator share desirable monotonicity properties. Simple arguments from extreme-value theory are used to derive the asymptotic distributional properties of the corresponding empirical efficiency scores (both full and partial). The usefulness of the quantile-type estimator is shown from an infinitesimal and global robustness theory viewpoints via a comparison with the previous conditional quantile-based approach. A diagnostic tool is developed to find the appropriate quantile-order; in the literature to date, this trimming order has been fixed a priori. The methodology is used to analyze the performance of U.S. credit unions, where outliers are likely to affect traditional approaches.
    Date: 2013–03
  8. By: Li, Xun; Lopez, Rigoberto A.
    Abstract: Food environment includes the presence of supermarkets, restaurants, warehouse clubs and supercenters, and other food outlets. This paper evaluates weight outcomes from a food environment using a stochastic production frontier and an equation for the determinants of efficiency, where the explanatory variables of the efficiency term include food environment indicators. Using individual consumer data and food environment data from New England counties, empirical results indicate that fruit and vegetables markets and full-service restaurants are negatively associated with weight outcomes, while warehouse clubs and supercenters are positively related. Supermarkets and other grocery stores, convenience stores and limited-service eating places are not significantly linked to weight gain. Farrell’s efficiency indexes are used to rank states and counties and several policy implications are suggested.
    Keywords: food environment, obesity, stochastic frontier, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, I12,
    Date: 2013
  9. By: Bruhn, Miriam; Karlan, Dean; Schoar, Antoinette
    Abstract: Using a randomized evaluation with 432 Mexican small and medium enterprises, this paper shows that access to management consulting led to better firm performance: one-year results show positive effects on return-on-assets and total factor productivity. Owners also had large increases in"entrepreneurial spirit"(an entrepreneurs'managerial confidence index). Using Mexican social security data, the analysis finds a large increase in the number of employees and total wage bill several years after the program. The paper documents large heterogeneity in the specific managerial practices that improved as a result of the consulting, but there is no singular mechanism as a panacea for all firms.
    Keywords: Access to Finance,E-Business,Microfinance,Economic Theory&Research,Business in Development
    Date: 2013–06–01
  10. By: Renata Lemos; Daniela Scur
    Abstract: Are poor management practices holding back middle-income countries? The authors look at evidence for private firms and public organisations in India - in manufacturing, retail, healthcare and education.
    Keywords: management personnel economics, organisation, productivity, management
    JEL: L2 M2 O14 O32 O33
    Date: 2013–06
  11. By: Maciej Sobolewski; Grzegorz Poniatowski
    Abstract: The main purpose of this study is to determine what are the main factors which stand behind the diversity in performance of business services measured by their contribution to growth in the EU Member States. We show that in addition to typical growth factors which enhance labor productivity, also the extent of interconnectedness of business services with upstream industries is important to explain service-based economic growth. Our analysis yields two interesting results. Firstly, we show that patterns of industrial interconnectedness of business services are considerably diversified across the EU Member States indicating large differences in the integration of services as supplier with other sectors on a country level. Secondly we show that the diversified growth performance of business services across the EU25 countries can be explained by differences in labor productivity and differences in forward linkages. Our results indicate the fundamental role of business services as the main engine of growth in the European economy. This service-based growth is channeled mainly through increases in labor productivity and forward interconnectedness of services with downstream industries. On the policy making level our results indicate that investment in human and intangible capital are crucial for the service-dominated economy as they not only enhance economic growth inside knowledge intensive services but also facilitate transmission of growth impulses to downstream industries by increasing diffusion and integration of services as suppliers of high value added inputs to the economy.
    Keywords: Industrial Linkages,Business Services, Growth, Multipliers, Input-Output
    JEL: D57 L52 R15
    Date: 2013–06
  12. By: Hermann Pythagore Pierre Donfouet (CREM CNRS, UMR 6211, University of Rennes 1, France); P. Wilner Jeanty (Kinder Institute for Urban Research & Hobby Center for the Study of Texas Rice University); Eric Malin (CREM CNRS, UMR 6211, University of Rennes 1, France)
    Abstract: Previous studies in the environmental Kuznets curve have overlooked spatial interdependence and this could bias the estimates. This paper therefore addresses the issue of spatial interdependence in the environmental Kuznets curve by using panel data on European countries over the period of 1961-2009. The results obtained from the spatial dynamic panel suggest a significant degree of persistence in the per capita CO2 emissions in European countries over time. Furthermore, it has been found that per capita CO2 emissions in a nearby country lead to a domestic increase in per capita CO2 emissions and overall, the results are robust irrespective of the concept of neighborhood.
    Keywords: Environmental Kuznets curve, spatial dynamic panel
    JEL: Q56 C21
    Date: 2013–06
  13. By: Daouia, Abdelaati (TSE,UCL); Girard, Stéphane (INRIA - Grenoble Rhône-Alpes); Guillou, Armelle (IRMA-Université de Strasbourg)
    Abstract: The estimation of optimal support boundaries under the monotonicity constraint is relatively unexplored and still in full development. This article examines a new extreme-value based model which provides a valid alternative for completely envelopment frontier models that often super from lack of precision, and for purely stochastic ones that are known to be sensitive to model misspecification. We provide different motivating applications including the estimation of the minimal cost in production activity and the assessment of the reliability of nuclear reactors.
    Keywords: cost function, edge data, extreme-value index, free disposal hull, moment frontier
    JEL: C13 C14 D20
    Date: 2013–05
  14. By: Prater, Marvin; O'Neil Jr., Daniel; Adam, Sparger
    Abstract: The rail industry is an integral part of the agricultural transportation system of the United States. For producers and shippers of bulk commodities, railroads are particularly important for the movement to end users, many of whom are located long distances from the farms. Information on rail shipments from States to regions across the nation, defined as Business Economic Areas, has been aggregated in this report. State rail receipts by origin State, or where shipments originated, has also been collected. Each State that received or shipped a substantial amount of at least one of three major crops (corn, soybeans, and wheat) by rail has been described in this report by its characteristics. A State level breakdown of rail shipments, rail receipts, grain and oilseed production, animal and poultry production, grain and oilseed exports, and grain and oilseed rail rates per ton-mile have been included. This information can help to explain the variations in shipments and shipment size of these commodities. A summary of grain movement in the United States is included, as are descriptions of grain movements in the 30 States that ship substantial amounts of grain.
    Keywords: rail, grain, soybeans, wheat, corn, livestock, agricultural transportation, oilseeds, Agribusiness, Livestock Production/Industries, Marketing, Productivity Analysis,
    Date: 2013–06
  15. By: Mazurek, Jiří
    Abstract: The aim of the article is to examine beta and sigma convergence of fourteen Czech regions during 1995-2009. Using real GDP per capita panel data from the Czech Statistical Office it was found that Czech regions σ-diverged in the period and this divergence was accelerating in time regardless of whether the capital city Prague was included among regions or not. Also, statistically significant β-divergence was present during the same period. There are two main possible reasons for the divergence: inequalities in foreign and domestic investments as well as the accumulation of human and physical capital in the most attractive regions, while less competitive regions were left behind. Policy implications necessary to reverse the situation include government’s support of investments in poorer regions and also gaining more financial resources from European ESF and ERDF funds.
    Keywords: β-convergence Czech Republic; Czech regions; divergence; GDP per capita; σ-convergence
    Date: 2013–07–01

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