New Economics Papers
on Efficiency and Productivity
Issue of 2013‒09‒06
fifteen papers chosen by

  1. Canadian Labour Productivity Differences Across Firm Size Classes, 2002 to 2008 By Baldwin, John R.<br /> Leung, Danny<br /> Rispoli, Luke
  2. Path Dependent Patterns of Persistence in Productivity Growth. By Antonelli Cristiano; Crespi, Francesco; Scellato, Giuseppe
  3. Efficiency of College Education in the Labor Market of the United States By William T. Alpert; Alexander Vaninsky
  4. On the Measure of Distortions By Hugo A. Hopenhayn
  5. Prizes and Productivity- How Winning the Fields Medal Affects Scientific Output By Kirk B. Doran; George J. Borjas
  6. Globalization and Multiproduct Firms By Nocke, Volker; Yeaple, Stephen
  7. Rural-rural Migration and Land Conflicts: Implications on Agricultural Productivity in Uganda By Francis Mwesigye; Tomoya Matsumoto
  8. The Silver Lining of Price Spikes: How electricity price spikes can help overcome the energy efficiency gap By Mauritzen, Johannes
  9. Efficiency of Public Sector Organizations: Perspectives from Theories of Bureaucracy By Erkoc, Taptuk Emre
  10. Trade Liberalisation and Vertical Integration By Peter Arendorf Bache; Anders Laugesen
  11. Economics of Conservation Agriculture: An Overview By Singh, K.M.; Meena, M.S.
  12. Birthplace Diversity and Economic Prosperity By Alesina, Alberto; Harnoss, Johann; Rapoport, Hillel
  13. The Role of Polygyny in the Intrahousehold Efficiency of Agricultural Production in West Africa By Anyck Dauphin
  14. The economics of hydro-meteorological disasters: approaching the estimation of the total costs By Stefano Balbi; Carlo Giupponi; Roland Olschewski; Vahid Mojtahed
  15. An Analysis of the Impact of Socioeconomic Disadvantage and School Quality on the Probability of School Dropout By Mahuteau, Stéphane; Mavromaras, Kostas G.

  1. By: Baldwin, John R.<br /> Leung, Danny<br /> Rispoli, Luke
    Abstract: This paper examines differences in labour productivity across small, medium- and large-sized enterprises in Canada. In 2008, the level of labour productivity, as measured by nominal gross domestic product per hour worked, in large businesses was greater than that for medium-sized and small businesses. This gap between large businesses relative to small and medium-sized businesses narrowed slightly during the post-2000 period. The paper also examines the impact of changes in industrial structure on labour productivity.
    Keywords: Business performance and ownership, Economic accounts, Productivity accounts, Small and medium-sized businesses
    Date: 2013–08–26
  2. By: Antonelli Cristiano; Crespi, Francesco; Scellato, Giuseppe (University of Turin)
    Abstract: This paper contributes to the analysis of the persistence of firm productivity, here measured by the total factor productivity (TFP), and highlights its path dependent characteristics. The study contributes to the literature on persistence in productivity along four main lines. First, it develops a conceptual framework that links the persistence in productivity performance to persistence at the firm level in innovative activities, which include the adoption and imitation of innovations introduced by third parties. Second, it shows how the internal characteristics of companies, including the propensity of managers to leverage dynamic capabilities, can shape the dynamics of the process. Third, it confirms that external factors, such as the access to local pools of knowledge and the dynamics of economic activity, have relevant effects on persistence and shape its evolution along its path. Fourth, the use of Multiple Transition Probability Matrices (MTPMs) and the subsequent econometric analysis provides substantial evidence on the relevance of the crucial distinction, within non-ergodic dynamics, between past dependent processes, characterized by full hysteretic irrever sibility, and path dependent processes in which events that take place along the process may affect its direction and pace.
    Date: 2013–05
  3. By: William T. Alpert (University of Connecticut); Alexander Vaninsky (Hostos Community College)
    Abstract: The paper discusses the worthiness of the resources allocated for college education from the point of view of their value in the labor market. We use Data Envelopment Analysis (DEA) to weigh the share of GDP spent on a college education and weighted time of labor force college study against productivity, employment rate, and labor force participation. Based on the data of the United States labor market for the period of 1980 - 2010, we received that the efficiency of a college education had no statistically significant tendency to increase or decrease over the period of the research but was closely related to the business cycles with a lag of one year. JEL Classification:
    Keywords: College education; Efficiency; Labor force productivity; Employment rate; Labor force participation; Data Envelopment Analysis
    Date: 2013–08
  4. By: Hugo A. Hopenhayn (UCLA)
    Abstract: The paper considers formally the mapping from distortions to the allocations of resources across firms to aggregate productivity. TFP gaps are characterized as the integral of a strictly concave function with respect to an employment-weighted measure of distortions. Size related distortions are shown to correspond to a mean preserving spread of this measure, explaining the stronger effects on TFP found in the literature. An empirical lower bound on distortions based on size distribution of firms is derived and analyzed. The effect of curvature on the impact and measurement of distortions is also considered.
    Date: 2013
  5. By: Kirk B. Doran (Department of Economics, University of Notre Dame); George J. Borjas (Harvard Kennedy School, Harvard University)
    Abstract: Knowledge generation is key to economic growth, and scientific prizes are designed to encourage it. But how does winning a prestigious prize affect future output? We compare the productivity of Fields medalists (winners of the top Mathematics prize) to that of similarly brilliant contenders. The two groups have similar publication rates until the award year, after which the winners’ productivity declines. The medalists begin to “play the field,” studying unusual topics at the expense of writing papers. This strategy is consistent with a model of human capital investments under uncertainty: the wealth effect of the prize encourages riskier knowledge investments.
    Keywords: Knoweledge, Productivity, Prizes
    JEL: O31 J24 J22
    Date: 2013–08
  6. By: Nocke, Volker; Yeaple, Stephen
    Abstract: We present an international trade model with multiproduct firms. Firms are heterogeneously endowed with two types of capabilities that jointly determine the trade-off within firms between managing a large portfolio of products and producing at low marginal cost. The model can explain many of the documented cross- sectional correlations in firm performance measures, including why larger firms are more productive and more diversified, and yet more diversified firms trade at a discount. Globalization is shown to induce heterogeneous responses across firms in terms of scope and productivity, some of which are consistent with existing empirical work, while others are potentially testable.
    Keywords: multiproduct firms , trade liberalization , diversification discount , firm heterogeneity , productivity
    JEL: F12 F15
    Date: 2013
  7. By: Francis Mwesigye (National Graduate Institute for Policy Studies); Tomoya Matsumoto (National Graduate Institute for Policy Studies)
    Abstract: We use community and household data with plot-level information to explore the determinants of different forms of land conflicts and the conflicts’ impact on agricultural productivity in Uganda. Tracing rural-rural migration patterns, we find that communities that receive/host more immigrants (and thus have many coexisting tribes) tend to have more land conflicts than those sending migrants out. Unbundling conflicts by type reveals that the number of tribes and being in a ‘receiving’ community are associated with a higher probability of eviction conflicts than ‘sending’ communities and those with fewer tribes. Turning to conflict impact, we find that plots with conflicts have 17% lower yield than those without conflicts. Moreover, breaking down conflicts by type reveals that plots with eviction conflicts have 36% lower yield than those with inheritance conflicts. Our results suggest that rural-rural migration weakens community-specific informal land arrangements and conflict resolution mechanisms, which, in the absence of formal institutions, result in eviction conflicts that, in turn, hurt productivity.
    Date: 2013–08
  8. By: Mauritzen, Johannes (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: Studies have shown that many consumers and businesses fail to invest in energy efficiency improvements despite seemingly ample financial incentives to do so – the so-called energy efficiency gap. Attempts to explain this gap often focus on searching costs, information frictions and behavioral factors. Using data on Norwegian electricity prices and Google searches for heat pumps, I suggest that the inherently spikey nature of many deregulated electricity markets – often seen as a sign of inefficiency – has a strong and significant positive effect on searching for information on energy efficiency goods. I attempt to identify the informational/behavioral effect by using a novel method of measuring spikiness: decomposing the price series into a range of Loess smoothed series and deviations from these curves.
    Keywords: Price spikes; energy efficiency gap; deregulated electricity markets
    JEL: L00 L10 L50 Q00 Q40
    Date: 2013–08–29
  9. By: Erkoc, Taptuk Emre
    Abstract: Economic insights on the provision of public goods and services by public sector organizations went hand in hand with probing questions on the efficient allocation of resources within them concerning neo-classical assumptions on the theory of firm (Coase, 1937; Alchian and Demsetz, 1972). The rationale behind the unprecedented divergences from the neo-classical firm postulations on the basis of not-to-operate at the efficient production frontier has attracted attentions of researchers working not only on the private firms but also on the public sector. This paper investigates theoretical underpinnings of efficient allocation of resources within public sector organizations on the basis of a variety of arguments. Before examining the (in) efficient usage of resources in the public sector that is mostly based on the theory of bureaucracy, methodological and practical challenges to measure the efficiency performances of public intuitions are visited. Subsequently, institutional framework on the public provision of goods and services is scrutinised referring particularly to the discussion on incentive schemes and efficiency.
    Keywords: Efficiency, Government Output, Public Sector Organizations, Bureaucracy
    JEL: D73 H11
    Date: 2013–08–30
  10. By: Peter Arendorf Bache (Department of Economics and Business, Aarhus University); Anders Laugesen (Department of Economics and Business, Aarhus University)
    Abstract: We build a three-country model of international trade in final and intermediate goods and study the relation between different types of trade liberalisation and vertical integration. Firms are heterogeneous with respect to both productivity and factor intensity as observed in data. Final-good producers face decisions on exporting, vertical integration of intermediate-input production, and whether the intermediate-input production should be offshored to a low-wage country. We find that due to firm-level complementarities, the shares of final-good producers that pursue either vertical integration, offshoring, or exporting are all increasing when intermediate- or final-goods trade is liberalised and when the cost of vertical integration is reduced. At the same time, one will observe individual firms that shift away from either vertical integration, offshoring, or exporting. All these results hold for a class of productivity distributions to which the Pareto distribution belongs.
    Keywords: International Trade, Firm Heterogeneity, Incomplete Contracts, Vertical Integration, Offshoring, Exporting, Trade Liberalisation
    JEL: D23 F12 L23
    Date: 2013–09–02
  11. By: Singh, K.M.; Meena, M.S.
    Abstract: Conservation agriculture / RCT offer a new paradigm for agricultural research and development different from earlier one, which mainly aimed at achieving specific food grains production targets. A shift in paradigm has become a necessity in view of widespread problems of resource degradation, which accompanied past strategies to enhance production with little concern for resource integrity. Integrating concerns of productivity, resource conservation and quality and environment is now fundamental to sustained productivity growth. Developing and promoting CA systems will be highly demanding in terms of knowledge base. This will call for greatly enhanced capacity of scientists to address problems from a systems perspective; be able to work in close partnerships with farmers and other stakeholders and strengthened knowledge and information-sharing mechanisms. CA offers an opportunity for arresting and reversing downward spiral of resource degradation, decreasing cultivation costs and making agriculture more resource-use-efficient, competitive and sustainable. ‘Conserving resources-enhancing productivity’ has to be new mission.
    Keywords: Economics of conservation agriculture, Conservation agriculture, Resource conservation technologies, Benefits of Conservation agriculture.
    JEL: O31 O32 O33 Q16 Q2
    Date: 2013–08–17
  12. By: Alesina, Alberto (Harvard University); Harnoss, Johann (Harvard University); Rapoport, Hillel (Bar-Ilan University)
    Abstract: We use recent immigration data from 195 countries and propose an index of population diversity based on people's birthplaces. This new index is then decomposed into a size (share of foreign born) and a variety (diversity of immigrants) component and is available for 1990 and 2000 disaggregated by skill level. We show that birthplace diversity is largely uncorrelated with ethnic, linguistic or genetic diversity. Our main result is that the diversity of skilled immigration relates positively to economic development (as measured by income and TFP per capita and patent intensity) even after controlling for ethno-linguistic and genetic fractionalization, geography, trade, education, institutions, and origin-effects capturing income/productivity levels in the immigrants home countries. We make progress towards addressing endogeneity by specifying a gravity model to predict the share and diversity of immigration based on exogenous bilateral variables. The results are robust across various OLS and 2SLS specifications and suggestive of skill complementarities between native workers and immigrants, especially when the latter come from richer countries at intermediate levels of cultural proximity.
    Keywords: economic development, cultural diversity, genetic diversity, ethnic diversity, birthplace diversity, productivity, immigration
    JEL: O1 O4 F22 F43
    Date: 2013–08
  13. By: Anyck Dauphin
    Abstract: Polygyny is an institution with deep roots in West Africa. Many papers have attempted to explain the rationality and persistence of this phenomenon through time. Less effort has been devoted to studying the effect of polygyny on household economic behavior. This question is policy relevant given the pressure underway to eliminate polygyny. This paper provides new empirical evidence on whether polygyny leads to an improvement or a worsening of intra-household efficiency for three countries with high levels of polygyny: Benin, Burkina Faso and Senegal. The evidence we obtain is mixed. In Benin, polygyny does not seem to have an impact on intra-household efficiency, while it appears, in the longer run, to improve it in Burkina Faso, but to decrease it in Senegal.
    Keywords: Polygyny, Efficiency, Agriculture, Africa
    JEL: D13 D79 J12 O13 O55
    Date: 2013
  14. By: Stefano Balbi; Carlo Giupponi; Roland Olschewski; Vahid Mojtahed
    Abstract: Hydro-meteorological disasters have caused increasing losses in recent years. Efficient risk reduction policies require accurate assessment approaches, with careful consideration of costs, beyond direct tangible costs, which are commonly used in practice. Faced with possible risk reduction scenarios, limited financial resources require an improvement in the quality of cost estimation, thereby contributing to an efficient allocation of resources. This paper focuses on the concept of total costs of hydro-meteorological disasters, based on direct and indirect as well as tangible and intangible cost categories. These categories are defined and explained, supported by a comprehensive review of economic valuation methods. Based on this information, practice relevant suggestions are made concerning the most appropriate methods for different cases in terms of scale, availability of data and of technical resources. Our survey also provides critical insights to drawbacks of flood risk estimation, which need to be addressed and carefully dealt with in any future research in this area.
    Keywords: hydro-meteorological disasters, total cost, risk reduction, economic valuation, intangible costs, indirect costs, JEL Classification Q5
    Date: 2013–08
  15. By: Mahuteau, Stéphane (NILS, Flinders University); Mavromaras, Kostas G. (NILS, Flinders University)
    Abstract: PISA scores are an internationally established indicator of student and school performance. This paper builds on the evidence that better PISA scores are known to be associated with better later life outcomes. It uses the Australian PISA micro-level data in combination with its longitudinal continuation in the LSAY data, to measure the degree to which individual PISA scores are associated with individual early school dropouts. It distinguishes between student and school factors and estimates a model of the propensity to drop out from school between ages 15 and 18. The paper finds that PISA scores are a good predictor of early dropout, and that individual and social disadvantage plays a crucial role in this relationship both directly and indirectly.
    Keywords: PISA, socioeconomic disadvantage, school dropout, student outcomes, multilevel modelling
    JEL: I24 I21
    Date: 2013–08

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