New Economics Papers
on Efficiency and Productivity
Issue of 2013‒10‒18
fourteen papers chosen by

  1. Quality and health care performance in the Italian regions By De Nicola, Arianna; Mancuso, Paolo; Valdmanis , Vivian
  2. The Importance of Reallocation for Productivity Growth: Evidence from European and US Banking By Bos J.W.B.; Santen P.C. van; Schilp P.
  3. Upstream Product Market Regulations, ICT, R&D and Productivity By Gilbert Cette; Jimmy Lopez; Jacques Mairesse
  4. Aggregation of Malmquist productivity indexes allowing for reallocation of resources By Valentin Zelenyuk; Andreas Mayer
  5. Exports and Heterogeneity of Technology: A Latent Class Frontier Stochastic Approach By Youssouf KIENDREBEOGO; Patrick PLANE; Mohamed CHAFFAI
  6. Competition and Efficiency in the Mexican Banking Sector By Sara G. Castellanos; Jesus G. Garza-Garcia
  7. The relevance of commuting zones for regional spending efficiency By António Afonso; Ana Venâncio
  8. Optimal Directions for Directional Distance Functions: An Exploration of Potential Reductions of Greenhouse Gases By Hampf, Benjamin; Krüger, Jens
  9. Microfinance efficiency in the West African economic and monetary union: have reforms promoted sustainability or outreach? By Sandrine Kaplan
  10. Impact of Information and Communication Technology-based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya By Ogutu, Sylvester O.; Okello, Julius K.; Otieno, David J.
  11. Mergers, Coordinated Effects and Efficiency in the Portuguese Non-Life Insurance Industry By Duarte Brito; Pedro Pereira; Joaquim Ramalho
  12. Cost Structure of the Ontario Dairy Industry Revisited: Distributional Aspects By Rajsic, Predrag
  13. Burkina Faso : Determinants of Cereal Production, Stochastic Frontier Approach for Panel Data By World Bank
  14. Burkina Faso : What is Driving Cotton Production, Stochastic Frontier Approach for Panel Data By World Bank

  1. By: De Nicola, Arianna; Mancuso, Paolo; Valdmanis , Vivian
    Abstract: This paper estimates the total factor productivity of the Italian health care sector using a modified bootstrapped Malmquist Index including the quality of the production process provided to the population. Decomposing the productivity process in three different components (efficiency change, technological change and quality change) we can detemine if the increasing/decreasing health care productivity of the 20 Italian regions is strictly related to any of the changes during 1999-2008. The results highlights also significant difference in the terms of North-South divide.
    Keywords: Malmquist, quality, DEA, health care, regional differences, Italy.
    JEL: D24 I1 I11 I12
    Date: 2013–10
  2. By: Bos J.W.B.; Santen P.C. van; Schilp P. (GSBE)
    Abstract: This paper quantifies the effect of reallocation dynamics on aggregate productivity developments in the banking sectors of Europe and the United States. We document an increase in productivity over the period 1995-2009, on the order of 11 in the US and 19 in Europe. At an annual frequency, under-performing banks capture market share, while more productive banks lose market share, in particular in the US. The pattern of reallocation is markedly different between the geographical regions European productivity has grown by reallocating inputs through the first half of the sample, at the same time when reallocation diminished growth in the US. Within-firm growth has been rising steadily in both areas, largely due to technical change. The long- run positive effects of creative destruction are especially apparent in the US, where reallocation is an important driver of increases in aggregate productivity.
    Keywords: Single Equation Models; Single Variables: Truncated and Censored Models; Switching Regression Models; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity; Technological Change; Research and Development; Intellectual Property Rights: General; Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence;
    JEL: O47 O30 D24 C24
    Date: 2013
  3. By: Gilbert Cette; Jimmy Lopez; Jacques Mairesse
    Abstract: Our study aims at assessing the actual importance of the two main channels usually contemplated in the literature through which upstream sector anticompetitive regulations may impact productivity growth: business investments in R&D and in ICT. We thus estimate what are the specific impacts of these two channels and their shares in total impact as against alternative channels of investments in other forms of intangible capital we cannot explicitly consider for lack of appropriate data such as improvements in skills, management and organization. For this, we specify an extended production function relating productivity explicitly to R&D and ICT capital as well as to upstream regulations, and two factor demand functions relating R&D and ICT capital to upstream regulations. These relations are estimated on the basis of an unbalanced panel of 15 OECD countries and 13 industries over the period 1987-2007. Our estimates confirm the results of previous similar studies finding that the impact of upstream regulations on total factor productivity can be sizeable, and they provide evidence that a good part of the total impact, though not a predominant one, goes through both investments in ICT and R&D, and particularly the latter.
    JEL: C23 L16 L5 O43 O47
    Date: 2013–10
  4. By: Valentin Zelenyuk (CEPA - School of Economics, The University of Queensland); Andreas Mayer
    Abstract: In this paper we consider aggregate (group) Malmquist productivity index measures which allow inputs to be reallocated within the group (when in output orientation). This merges the single period aggregation results allowing input reallocation of Nesterenko and Zelenyuk (2007) with the aggregate Malmquist productivity index results of Zelenyuk (2006) to determine aggregate Malmquist productivity indexes that are justified by economic theory, consistent with previous aggregation results, and which maintain analogous decompositions over time to the original measures. Such measures are of direct relevance to firms or countries who have merged (making input reallocation possible), allowing them to measure potential productivity gains and how these have been realised (or not) over time.
    Date: 2013–10
  5. By: Youssouf KIENDREBEOGO; Patrick PLANE; Mohamed CHAFFAI (Universit� Sfax)
    Abstract: This paper explores the technology-discriminating role of export market participation. Exports are found to enhance firm's productivity, mainly due to the self-selection of more productive firms into export markets and/or the role of learning-by-exporting, suggesting that the underlying production technology is the same for all the firms. However, even after taking into account the firm-level unobserved heterogeneity, there might be unobserved cross-firm differences in technologies that may be inappropriately considered as inefficiency if this technological heterogeneity is not controlled for. Using data from Egypt and a latent class model, allowing the possibility of more than one technology, we find that export market participation importantly determines technological choices throughout two significant segments, even after controlling for the endogeneity of exports. Exporters tend choose the relatively more capital intensive technology, while non-exporting firms tend to specialize in the relatively labor intensive technology. This suggests another hypothesis in explaining the relationship between ex-ports and productivity performance: the technological segmentation between exporting and non-exporting firms.
    Keywords: Export Market Participation; Productivity Performance; Latent Class Model D22, F14, C14
    JEL: C14 F14 D2
    Date: 2013
  6. By: Sara G. Castellanos; Jesus G. Garza-Garcia
    Abstract: The Mexican banking sector experienced a process of liberalization which aimed towards increasing the level of competition and efficiency. This paper studies the evolution of the efficiency of the Mexican banking sector from 2002 to 2012 and also analyses its relationship with the degree of banking competition. To do so, efficiency scores are estimated by applying the non-parametric methodology, Data Envelopment Analysis. Furthermore, the Boone Indicator is used to assess the degree of competition and included among other possible determinants of bank efficiency. The main results indicate increasing trends of efficiency in the banking sector during the period of study. Moreover, a direct relationship between banking competition and efficiency is observed. Besides, the capitalization index, market share and loan intensity increase efficiency whereas noninterest expenses and non performing loans decrease the level of efficiency. Lastly, in regards to the relative efficiency of local or foreign ownership of banks, it is found that the system’s average efficiency trend is observed among both local and foreign banks, but local banks are somewhat more efficient.
    Keywords: Panel Data, Bank Competition, Mexican Banking Sector, Boone Indicator
    JEL: D4 G15 G21 L11 N2
    Date: 2013–10
  7. By: António Afonso; Ana Venâncio
    Abstract: We use Data Envelopment Analysis (DEA) efficiency scores to show that clustering municipalities into encompassing regional clusters improves spending efficiency of single stand- alone municipalities. We propose a new geographic aggregation based on municipalities-to- municipalities commuting flows, defined using hierarchical cluster analysis. Our example for Portugal shows that from an output oriented perspective, between 85 and 95 percent of municipalities would increase their efficiency scores, while from an input oriented perspective, between 81 and 97 percent of municipalities would also be better off in terms of efficiency. Our strategy and results are naturally quite relevant in a context of public spending control.
    Keywords: public spending efficiency, local government, data envelopment analyis (DEA), commuting.
    JEL: C14 H72 R50
    Date: 2013–09
  8. By: Hampf, Benjamin; Krüger, Jens
    Abstract: This study explores the reduction potential of greenhouse gases for major pollution emitting countries of the world using nonparametric productivity measurement methods and directional distance functions. In contrast to the existing literature we apply optimization methods to endogenously determine optimal directions for the efficiency analysis. These directions represent the compromise of output enhancement and emissions reduction. The results show that for reasonable directions the adoption of best-practices would lead to sizable emission reductions in a range of about 20 percent compared to current levels.
    Keywords: climate policy, nonparametric frontier functions, directional distance functions
    Date: 2013–03–12
  9. By: Sandrine Kaplan
    Abstract: This study assesses whether the undertaken reforms in the microfinance industry in the West African Economic and Monetary Union (WAEMU) have promoted sustainability or outreach. To this purpose we use a data envelopment analysis (DEA) to measure the social efficiency on the one hand and the financial efficiency on the other hand. Our results show that social efficiency decreases, while financial efficiency increases. Moreover, reforms have a negative impact on social efficiency. Indeed, prudential ratios and accounting standards that were implemented led MFIs to abandon their social role.
    Keywords: microfinance efficiency, outreach and sustainability, regulatory programs, WAEMU
    JEL: C23 C61 C67 G21 O16 O55
    Date: 2013–10–08
  10. By: Ogutu, Sylvester O.; Okello, Julius K.; Otieno, David J.
    Abstract: Information asymmetry has traditionally constrained smallholder farmers’ access to markets. Past studies indicate that it inhibits adoption of modern technologies that have the capacity to enhance productivity of smallholder farms. Hence, farm productivity and agricultural transformation has been stifled, leaving smallholder famers in grinding poverty. Improved smallholder farmers’ access to markets via the recent Information and Communication Technology (ICT) platforms could reverse this scenario. This study uses Propensity Score Matching (PSM) technique to evaluate the impact of participation in an ICT-based market information service (MIS) project on farm input use and productivity in Kenya. It finds strong empirical evidence on the benefits of ICT use in market linkage. Specifically, it finds that participation in the ICT-based MIS project has positive and significant impact on the usage of improved seeds and fertilizers. It also improves land and labour productivity, but has negative and significant impact on the usage of hired and family labour. These findings have vital policy implications on the use of ICT tools as a development strategy.
    Keywords: ICT, Impact assessment, PSM, Market Access, Input Use, Productivity, Crop Production/Industries, Production Economics, Research and Development/Tech Change/Emerging Technologies,
    Date: 2013–09
  11. By: Duarte Brito (Universidade Nova de Lisboa and CEFAGE-UE); Pedro Pereira (Autoridade da Concorrência and CEFAGE-UE); Joaquim Ramalho (CEFAGE-UE)
    Abstract: We evaluate the impact on market power and efficiency of a series of mergers on three Portuguese non-life insurance markets. We specify and estimate, with a panel of firmlevel data, a structural model which includes: preferences, technology, and a market equilibrium condition. Firms’ demand curves are not very elastic. Firms’ technologies exhibit scale and scope economies and high cost efficiency scores. We find that, for the period following the mergers, there is no evidence of: (i) an increase in market power through coordinated behavior, or (ii) changes in cost efficiency levels. In addition, social welfare increased.
    Keywords: Mergers; Market Power; Efficiency; Non-Life Insurance.
    JEL: D43 K21 L13
    Date: 2013
  12. By: Rajsic, Predrag
    Abstract: The initially stated objective of the Canadian dairy supply management–farm revenue risk reduction–has been met well by the program. However, it is less clear whether the program has served all farms equally well. Namely, it is not known how successful the program was in enhancing the cost-effectiveness of smaller farms. This paper uses the 2006 Ontario dairy farm-level accounting data to compare the estimated cost structure with that identified by Moschini (1988). Next, farm size and profit distribution changes are assessed. Finally, the paper provides a simple framework for examining the relationship between current farm size and quota purchases by individual farms. The results suggest that the general cost pattern identified in the early 1980s has been retained. Average cost declines as output increases at lower output levels. However, the minimum-cost farm size has increased about threefold. Additionally, both output and profit distributions have become more skewed, with a lesser contribution by smaller farms. There is evidence that the possibility of quota exchange facilitated the greater expansion of larger farms and that the process of divergence in size and profit between small and large farms is continuing. These results have bearing on the sustainability of smaller farms.
    Keywords: supply management, cost structure, quota purchases, Agribusiness, Agricultural and Food Policy, Production Economics,
    Date: 2013–08
  13. By: World Bank
    Keywords: Rural Development Knowledge and Information Systems Social Protections and Labor - Labor Policies Food and Beverage Industry Agriculture - Climate Change and Agriculture Crops and Crop Management Systems Rural Development Industry
    Date: 2013–06
  14. By: World Bank
    Keywords: Rural Development Knowledge and Information Systems Industry - Agricultural Industry Social Protections and Labor - Labor Policies Crops and Crop Management Systems Macroeconomics and Economic Growth - Regional Economic Development Rural Development Agriculture
    Date: 2013–06

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