New Economics Papers
on Efficiency and Productivity
Issue of 2013‒09‒25
seven papers chosen by

  1. Can area measurement error explain the inverse farm size productivity relationship? By Holden, Stein; Fisher, Monica
  2. R&D offshoring and the productivity growth of European regions By Castellani, Davide; Pieri, Fabio
  3. Talent, labor quality, and economic development By German Cubas; B. Ravikumar; Gustavo Ventura
  4. Structural change, labor productivity growth, and convergence of BRIC countries By Vatthanamixay Chansomphou; Masaru Ichihashi
  5. Productivity insurance: the role of unemployment benefits in a multi-sector model By David L. Fuller; Marianna Kudlyak; Damba Lkhagvasuren
  6. The global welfare impact of China: trade integration and technological change By Julian di Giovanni; Andrei A. Levchenko; Jing Zhang
  7. Measuring performance: does the assessment depend on the poverty proxy? By Geranda Notten

  1. By: Holden, Stein (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Fisher, Monica (International Maize and Wheat Improvement Center)
    Abstract: The existence of an inverse relationship (IR) between farm size and productivity in tropical agriculture remains a debated issue with policy relevance. Poor agricultural statistical data, including data on farm sizes and farm plot sizes that typically are self-reported by farmers, can lead to biased results and wrong policy conclusions. This study combines self-reported and GPS-measured farm plot and farm sizes to assess how measurement error affects the IR using three rounds of farm plot and household data from Malawi. The results show that measurement error covers up more than 60% of the IR for the total sample but leads to an upward bias in the IR on farms less than one ha. Land and labor market imperfections in combination with food self-sufficiency motives appear to explain most of the IR and lead to a strong IR on farms below one ha.
    Keywords: Inverse farm size – productivity relationship; Measurement error; Land and labor market imperfections; Land quality; Malawi.
    JEL: J43 O13 Q12
    Date: 2013–09–20
  2. By: Castellani, Davide (Department of Economics, Finance and Statistics, University of Perugia, Centro Studi Luca d'Agliano, Milan, Italy Halle Institute for Economic Research (IWH), Halle, Germany CIRCLE, Lund University, Sweden); Pieri, Fabio (Depto. de Economia Aplicada II (Estructura Economica), Universitat de Valencia, Spain)
    Abstract: The recent increase in R&D offshoring have raised fears that knowledge and competitiveness in advanced countries may be at risk of `hollowing out'. At the same time, economic research has stressed that this process is also likely to allow some reverse technology transfer and foster growth at home. This paper addresses this issue by investigating the extent to which R&D offshoring is associated with productivity dynamics of European regions. We find that offshoring regions have higher productivity growth, but this positive effect fades down with the number of investment projects carried out abroad. A large and positive correlation emerge between the extent of R&D offshoring and the home region productivity growth, supporting the idea that carrying out R&D abroad strengthen European competitiveness.
    Keywords: R&D Offshoring; Regional Productivity; Foreign Investments; Europe
    JEL: C23 F23 O47 O52 R11
    Date: 2013–05–11
  3. By: German Cubas; B. Ravikumar; Gustavo Ventura
    Abstract: We develop a theory of labor quality based on (i) the division of the labor force between unskilled and skilled workers and (ii) investments in skilled workers. In our theory, countries differ in two key dimensions: talent and total factor productivity (TFP). We measure talent using the observed achievement levels from the Programme for International Student Assessment (PISA) scores. Our findings imply that the quality of labor in rich countries is about twice as large as the quality in poor countries. Thus, the implied disparities in TFP levels are smaller relative to the standard growth model using a measure of labor quality based on Mincer returns. In our model, the resulting elasticity of output per worker with respect to TFP is about 2.
    Keywords: Economic development ; Education - Economic aspects ; Labor productivity
    Date: 2013
  4. By: Vatthanamixay Chansomphou (Graduate School for International Development and Cooperation); Masaru Ichihashi (Graduate School for International Development and Cooperation)
    Abstract: In this study, we seek to understand the patterns of structural change, labor productivity growth and convergence in BRIC countries. In the first part, we employ the dataset of labor productivity from de Vries et al. (2012) and the Groningen Growth and Development Center (2013) and utilize the shift and share analysis to investigate the contribution of within shift, static shift and dynamic shift effects on growth of labor productivity. In the second part, we use the convergence tests to check for the cross-country convergence in each economic sector. Our aggregate shift-share decomposition results report that labor productivity growth within sector itself is the main source of aggregate growth, while an effect of labor movement exists (shift effect) but not substantial. Among BRIC, we found that, during 1980-2008, China had the highest rate of labor productivity growth, following by India, Russia, and Brazil, respectively. The results of the convergence analysis show that service sectors in BRICs have faster catching-up rates than industrial sectors, and there is no convergence in agriculture. Among service sectors, financial, insurance, and real estate sector has highest speed of convergence. The BRICs results are then used to compare with the four OECD countriesf results. It is found that in OECD countries, the sectors that converge fastest are mining and finance, insurance, and real estate. Nevertheless, the magnitudes of speed of convergence in OECDs are not comparable to BRICs. This confirms the growth theory in that less developed countries converge faster than developed nations. In sum, our findings imply that service sectors are the driving force of economic growth and economic convergence in BRICs.
    Keywords: Structural change, shift-share analysis, sectoral convergence, BRICs
    JEL: C80 N10 O10 O11 O41 O47
    Date: 2013–08
  5. By: David L. Fuller; Marianna Kudlyak; Damba Lkhagvasuren
    Abstract: We construct a multi-sector search and matching model where the unemployed receive idiosyncratic productivity shocks that make working in certain sectors more productive than in the others. Agents must decide which sector to search in and face moving costs when leaving their current sector for another. In this environment, unemployment is associated with an additional risk: low future wages if mobility costs preclude search in the appropriate sector. This introduces a new role for unemployment benefits—productivity insurance while unemployed. Analytically, we characterize two competing effects of benefits on productivity, a moral hazard effect and a consumption effect. In a stylized quantitative analysis, we show that the consumption effect dominates, so that unemployment benefits increase per-worker productivity. We also analyze the welfare-maximizing benefit level and find that it decreases as moving costs increase.
    Date: 2013
  6. By: Julian di Giovanni; Andrei A. Levchenko; Jing Zhang
    Abstract: This paper evaluates the global welfare impact of China's trade integration and technological change in a quantitative Ricardian-Heckscher-Ohlin model implemented on 75 countries. We simulate two alternative productivity growth scenarios: a balanced" one in which China's productivity grows at the same rate in each sector, and an \unbalanced" one in which China's comparative disadvantage sectors catch up disproportionately faster to the world productivity frontier. Contrary to a well-known conjecture (Samuelson 2004), the large majority of countries in the sample, including the developed ones, experience an order of magnitude larger welfare gains when China's productivity growth is biased towards its comparative disadvantage sectors. We demonstrate both analytically and quantitatively that this fnding is driven by the inherently multilateral nature of world trade. As a separate but related exercise we quantify the worldwide welfare gains from China's trade integration.
    Keywords: Production (Economic theory) ; Technological innovations ; Welfare
    Date: 2013
  7. By: Geranda Notten
    Abstract: Poverty indicators often disagree about whether a person is poor or not. Yet, when it comes to assessing whether a program is successful in reaching the poor the dominant practice is to use an income poverty indicator. This paper investigates whether the choice of welfare indicator influences the pro-poorness assessment of an intervention. Using the official European Union income and material deprivation indicators, this paper compares the outcomes of four performance indicators for three types of income transfers in six high income European countries namely Germany, France, Ireland, Netherlands, Sweden and the United Kingdom. This study finds that the dominant practice of using an income indicator systematically underestimates the performance of income transfers; when the information from both indicators is combined programs are assessed as far more successful.
    Keywords: performance measurement, poverty, income, material deprivation, income transfers, European Union, EU-SILC, targetting
    JEL: I32 I38
    Date: 2013–09

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