New Economics Papers
on Efficiency and Productivity
Issue of 2013‒11‒02
twenty papers chosen by

  1. Total Factor Productivity and Technical Efficiency in the Ethiopian Manufacturing Sector By Melaku T. Abegaz
  2. Efficiency and productivity differential effects of land certification program in Ethiopia : Quasi-experimental evidence from Tigray: By Hagos, Hosaena Ghebru; Holden, Stein
  3. Green Investment Strategies and Export Performance: A Firm-level Investigation By Roberto Antonietti; Alberto Marzucchi
  4. Factor Intensity, Product Switching, and Productivity: Evidence from Chinese Exporters By Yue Ma; Heiwai Tang; Yifan Zhang
  5. Are mega-farms the future of global agriculture? Exploring the farm size-productivity relationship for large commercial farms in Ukraine By Klaus Deininger; Denys Nizalov; Sudhir K Singh
  6. Learning, Exporting and Firm Productivity: Evidence from Portuguese Manufacturing and Services Firms By Carlos Carreira
  7. Saving Rate, Total Factor Productivity and Growth Process for Developing Countries By Cuong Le Van; Tu Anh Nguyen; Tran Dinh Tuan
  8. Financial Deregulation and Productivity of Commercial Banks in Emerging economies: A case study of Mauritius By Kheswar Jankee
  9. Explaining Japan's Unproductive Two Decades By FUKAO Kyoji
  10. Industry-Wide Work Rules and Productivity: Evidence from Argentine Union Contract Data By Lamarche, Carlos
  11. Agricultural commercialization, land expansion, and homegrown land-scale farmers: Insights from Ghana: By Chapoto, Antony; Mabiso, Athur; Bonsu, Adwinmea
  12. How does profitability get affected by working capital management in food and beverages industry? By Thapa, Priya Darshini Pun
  13. Money on the Table? Firms' and Workers' Gains from Productivity Spillovers through Worker Mobility By Stoyanov, Andrey; Zubanov, Nikolay
  14. Spatial Spillovers of Foreign Direct Investment: The Case of Vietnam By Toan Thang TRAN; Thi Song Hanh PHAM
  15. Agricultural mechanization patterns in Nigeria: Insights from farm household typology and agricultural household model simulation: By Takeshima, Hiroyuki; Nin-Pratt, Alejandro; Diao, Xinshen
  16. Production theory: accounting for firm heterogeneity and technical change By Giovanni Dosi; Marco Grazzi; Luigi Marengo; Simona Settepanella
  17. Energy Efficiency in Market versus Planned Economies: Evidence from Transition Countries By Rabindra Nepal; Tooraj Jamasb
  18. Nonparametric cost and revenue functions under constant economies of scale: An enumeration approach for the single output or input case By Walter Briec; Kristiaan Kerstens; Ignace Van de Woestyne
  19. Land constraints and agricultural intensification in Ethiopia: A village-level analysis of high-potential areas: By Headey, Derek D.; Dereje, Mekdim; Ricker-Gilbert, Jacob; Josephson, Anna; Taffesse, Alemayehu Seyoum
  20. The influence of agglomerations on firm profitability By S. DE SCHOENMAKER; P. VAN CAUWENBERGE; H. VANDER BAUWHEDE

  1. By: Melaku T. Abegaz (Department of Economics, Addis Ababa University)
    Abstract: In this paper a Stochastic Frontier Model is used to examine the technical efficiency and total factor productivity (TFP) growth in the Ethiopian manufacturing sector over the period 1996– 2009. TFP growth is decomposed into technical change (progress), technical efficiency change, and scale effect. With a firm level unbalanced panel data collected by SA, individual estimations are made for each industrial group categorized by two digit ISIC except a three digit ISIC for food and beverage industrial groups. The empirical results indicate existence of large inefficiencies, inefficiency that explains at least 14 percent of output variation among firms. TFP has shown better progress after 2001/02 and the growth is largely explained by technical change which is a shift in production frontier. The effect of efficiency change is very small as most industrial groups have time invariant efficiency. In addition, the scale effect is zero or very small because most industrial groups have constant returns to scale or small deviation from constant returns to scale.
    Keywords: Ethiopian manufacturing, stochastic frontier analysis, technical change, technical efficiency, total factor productivity
    Date: 2013–04
  2. By: Hagos, Hosaena Ghebru; Holden, Stein
    Abstract: Taking advantage of a unique quasi-experimental survey design, this study analyzes the productivity impacts of the Ethiopian land certification program by identifying how the investment effects (technological gains) would measure up against the benefits from any improvements in input use intensity (technical efficiency). For this purpose, we adopted a data envelopment analysis–based Malmquist-type productivity index to decompose productivity differences into (1) within-group farm efficiency differences, reflecting the technical efficiency effect, and (2) differences in the group production frontier, reflecting the long-term investment (technological) effects.
    Keywords: Land tenure, productivity, Land productivity,
    Date: 2013
  3. By: Roberto Antonietti (Department of Economics and Management “Marco Fanno”, University of Padova, Italy); Alberto Marzucchi (Department of International Economics, Institutions and Development (DISEIS), Catholic University of Milan, Italy and INGENIO (CSIC-UPV), Spain)
    Abstract: In this paper we empirically investigate the relationship between investments in environmentally-oriented equipment and firms’ export performance. Drawing on Porter hypothesis and firm heterogeneity theory, we adopt a structural model where first we estimate the impact of green investment strategies on the level of productive efficiency (TFP), and second we assess whether induced productivity influences the extensive and intensive margin of exports. Relying on a rich firm-level dataset on Italian manufacturing, our results show that firms with higher productivity, induced among other factors by green investment involving environmental protection and reduction in the use of raw materials, have increased commitment to, and profits from, exports, especially towards countries adopting a more stringent environmental regulatory framework. Our evidence provides a ‘green investment-based’ explanation for the link between TFP-heterogeneity and trade.
    Keywords: Exports, Firm Heterogeneity, Green Investment Strategy, Total Factor Productivity
    JEL: Q55 Q56 F14 F18
    Date: 2013–09
  4. By: Yue Ma (Lingnan University); Heiwai Tang (Tufts University and MIT Sloan); Yifan Zhang (Lingnan University)
    Abstract: This paper analyzes the causal relations between firms' productivity, factor intensity and export participation. Using propensity score matching techniques and firm-level panel data for Chinese manufacturing firms over the 1998-2007 period, we find strong evidence of domestic firms self-selecting into export markets with higher productivity ex ante, and enhanced productivity ex post. No such pattern is observed among foreign-invested ?rms. We also find that both domestic and foreign new exporters exploit China?s low labor costs and specialize in their core competence, that is, firms become less capital-intensive after exporting, relative to the matched non-exporting counterparts in the same industry. To rationalize these results that contrast with most findings in the existing literature, we develop a variant of the multi-product model of Bernard, Redding, and Schott (2010) to consider varying capital intensity across products. Using transaction-level export data, we find evidence that Chinese exporters add new products that are more labor-intensive than existing products and drop products that are less labor- intensive, supporting the model predictions. Firms with a bigger decline in capital intensity after exporting are found to have a larger increase in measured TFP.
    Keywords: Exporters, Productivity, Factor Intensity, Multi-product Firms
    JEL: F11 L16 O53
    Date: 2013
  5. By: Klaus Deininger (World Bank); Denys Nizalov (Kyiv School of Economics/ Kyiv Economics Institute); Sudhir K Singh (World Bank)
    Abstract: With farms cultivating tens or hundreds of thousands of hectares, Ukraine is often used to demonstrate the existence of economies of scale in modern grain production. Panel data analysis for all the country’s farms with more than 200 hectares in 2001-2011 suggests that higher yields and profits are due to unobserved factors at rayon (district) and farm level rather than economies of scale. Productivity growth was driven not by farm expansion but by exit of unproductive and entry of more efficient farms. Higher initial shares of area under farms with more than 3,000 or 5,000 hectares at the rayon level significantly reduce subsequent exit, suggesting that land concentration reduces productivity growth. The paper draws implications for global evolution of farm structures.
    Keywords: Land reform, transition, agricultural productivity, Ukraine, market structure
    JEL: O13 Q15 Q18
    Date: 2013–09
  6. By: Carlos Carreira (GEMF/ Faculty of Economics University of Coimbra, Portugal)
    Abstract: Portugal, when compared with the EU-28 average, has a lower degree of openness to foreign trade. This paper provides a detailed analysis of the total factor productivity differences between Portuguese exporters and non-exporters over the period 1996–2004, in manufacturing and service sectors, and their contribution to aggregate productivity growth. It was found that exporters are the dominant source of industry productivity growth. Additionally, the within-firm effect dominates in manufacturing sector, while reallocation effect explains a large proportion of growth in service sector. Exporters in Portugal, like exporters elsewhere, are effectively more productive than non-exporters. However, the capacity of a firm to internalize knowledge from international markets seems to depend on firm’s knowledge. The results have important policy implications.
    Keywords: Exports; Total factor productivity; Productivity growth; Reallocation; Learning.
    JEL: F14 D24 O47 O33
    Date: 2013–10
  7. By: Cuong Le Van (CNRS, CES, Hanoi WRU, VCREME); Tu Anh Nguyen (Central Institute for Economic Management, CIEM, Vietnam); Tran Dinh Tuan
    Date: 2013
  8. By: Kheswar Jankee (Department of economics and statistics, University of Mauritius)
    Date: 2013
  9. By: FUKAO Kyoji
    Abstract: Using industry- and micro-level data, this paper examines why Japan's productivity growth has been slow for such a long time and how it can be accelerated in the future. Japan's capital-to-gross domestic product (GDP) ratio continued to increase after 1991, which must have contributed to the decline in the rate of return on capital in Japan by decreasing the marginal productivity of capital. On the other hand, accumulation of information and communications technology (ICT) capital and intangible investment in Japan was very slow. Compared with large firms, which enjoyed an acceleration in total factor productivity (TFP) growth in recent years, Japanese small and medium-sized enterprises (SMEs) were left behind in ICT capital and intangible investment, and their productivity growth has been very low. Furthermore, as large firms expanded their supply chains globally and relocated their factories abroad, research and development (R&D) spillovers from large firms to SMEs seem to have declined.
    Date: 2013–10
  10. By: Lamarche, Carlos (University of Kentucky)
    Abstract: In the early 1990's, the Argentine government promoted a framework for productivity-based negotiations between firms and unions at low levels of organization. The policy weakened the industry-wide collective bargaining system, which sets working conditions for all firms in an industry. This paper employs newly developed quantile regression approaches to investigate the effect of union practices on productivity within the context of the reform. The findings show that (i) industry-wide practices on displacement of workers and training have a negative impact on productivity; (ii) work practices do not appear to restrict economic efficiency in the post-reform period; (iii) union practices on technology acquisition have an adverse effect on high-productivity growth industries. Productivity seems to improve in an economy promoting policies to weaken industry-wide collective bargaining.
    Keywords: work practices, productivity, manufacturing, quantile regression
    JEL: J52 O14 O43 O54
    Date: 2013–10
  11. By: Chapoto, Antony; Mabiso, Athur; Bonsu, Adwinmea
    Abstract: The past decade has seen several African countries increasing their agricultural growth, a trend largely underpinned by increases in land area cultivated instead of productivity increases. Meanwhile, scholars debate whether Africa should pursue a strategy of large-scale or smallholder farms, paying little attention to a special group of smallholder farmers who have transitioned to become medium- and large-scale farmers. This study, therefore, begins to analyze this group of farmers, using qualitative data from in-depth interviews and focus group discussions in Ghana. We analyze their characteristics, ingredients of farm-size expansion, and commercialization.
    Keywords: Farm size, large scale farming, Commercialization, Agricultural productivity, Land acquisitions,
    Date: 2013
  12. By: Thapa, Priya Darshini Pun
    Abstract: This study examines the working capital management of the Food and Beverage Corporations from the U.S.A. and Canada during the 10 years study period from year 2000 to 2009. Firstly, unlike previous studies which advocate a linear relationship between the working capital management and profitability, it investigates the existence of a possible non-linear relationship. Secondly, the efficiency of working capital management was checked using performance index, utilization index and efficiency index rather than using the conventional turnover ratios. Thirdly, the distribution of working capital measure i.e. cash conversion cycle and factors affecting viz. leverage, growth, size, age, cash flow and fixed assets to total assets ratio has been studied. The results suggest the existence of concave relationship between the working capital management and profitability. The findings also revealed that the corporations were efficient during the study period.
    Keywords: Working capital management, profitability, food and beverage industry, optimal level of working capital
    JEL: M40
    Date: 2013–08–28
  13. By: Stoyanov, Andrey (York University, Canada); Zubanov, Nikolay (Goethe University Frankfurt)
    Abstract: We estimate how much of the gains from productivity spillovers through worker mobility is retained by the hiring firms, by the workers who bring spillovers, and by the other workers. Using linked employer-employee data from Danish manufacturing for the period 1995-2007, we find that at least two-thirds of the total output gain of 0.11% per year is netted by the firms, while the workers who bring spillovers receive at most 6% of it as the wage premium. The large share retained by the firms implies that spillovers through worker mobility are mostly a positive externality to them.
    Keywords: productivity spillovers, worker mobility, wages, matched employer-employee data
    JEL: D24 J31 J60
    Date: 2013–10
  14. By: Toan Thang TRAN (Central Institute for Economic Management, Vietnam); Thi Song Hanh PHAM (Sheffield Business School, Sheffield Hallam University)
    Abstract: In an effort to unlock the black box of mixed empirical evidence for productivity spillovers from foreign direct investment in host countries, this paper, using the case of Vietnam, examined the role of geographical proximity and inter firm interaction in determining productivity spillovers of FDI. The spatial productivity model specified based on the empirical spillovers literature and spatial econometric model. This paper confirms negative effect of horizontal spillovers. The distance and interaction are confirmed to be two determinants of the significance of spillover effects. The paper finds the positive backward and negative forward spillovers. Indirect effect (or the inter-regional spillovers) is found about twice to four times higher than the direct effect (or the intra-regional spillovers) but such kind of indirect effect is quickly attenuated for a certain distance. The paper also finds the evidence of the effect arising from the social interaction among local firms in productivity spillovers. The testing results suggest that local firm's productivity is substantially driven by the agglomeration effect and the presence of interand intra-regional FDI.
    Date: 2013
  15. By: Takeshima, Hiroyuki; Nin-Pratt, Alejandro; Diao, Xinshen
    Keywords: mechanization, households, productivity, Typology, Cluster analysis,
    Date: 2013
  16. By: Giovanni Dosi; Marco Grazzi; Luigi Marengo; Simona Settepanella
    Abstract: The paper presents a new framework to assess firm level heterogeneity and to study the rate and direction of technical change. Building on the analysis of revealed short-run production functions by Hildenbrand (1981), we propose the (normalized) volume of the zonotope composed by vectors-firms in a narrowly defined industry as an indicator of inter-firm heterogeneity. Moreover, the angles that the main diagonal of the zonotope form with the axes provides a measure of the rates and directions of technical change over time. The proposed framework can easily account for n-inputs and m-outputs and, crucially, the measures of heterogeneity and technical change do not require many of the standard assumptions from production theory.
    Keywords: Production theory, Heterogeneous firms, Activity Analysis, Technical change, Zonotopes, Production functions
    Date: 2013–10–29
  17. By: Rabindra Nepal (School of Economics, University of Queensland); Tooraj Jamasb (Business School, Durham University)
    Abstract: Economic theory suggests that market-based policies and reforms should promote energy efficiency in developing and transition countries. his paper, therefore, analyses the impacts of a varied set of market-oriented macro-level reforms on macro level energy efficiency across the transition countries. Since the early 1990s, these economies experienced a rapid marketization process which transformed them from central planning towards more market driven economies. The results from the relatively new bias corrected fixed-effect analysis (LSDVC) technique suggest that between 1990 and 2010, reforms in overall market liberalisation, financial sector and infrastructure industries, excluding the power sector, drove the energy efficiency improvements in these countries. Also, privatisation programmes only improved energy efficiency in the SEE countries. Thus, the empirical evidence support market driven energy efficiency policies aimed at addressing the market failures in the network industries and capital markets. We conclude that these results can help explain the energy efficiency policy puzzles in developing and transition countries where energy efficiency improvement can be a leading policy response to growing climate change and security of supply concerns.
    Keywords: Market Reforms, Energy Efficiency, Transition Countries, Institutions
    JEL: P28 Q54 C33
    Date: 2013–11
  18. By: Walter Briec (LAMPS, Université de Perpignan); Kristiaan Kerstens (CNRS-LEM and IESEG School of Management); Ignace Van de Woestyne (Hogeschool Universiteit Brussel)
    Abstract: This note shows how the linear programs needed to compute cost and revenue functions under constant returns to scale and a single output or input, respectively, can be replaced with a more efficient enumeration algorithm. A numerical example illustrates this algorithm
    Keywords: nonparametric cost and revenue functions, enumeration, linear programming
    Date: 2013–07
  19. By: Headey, Derek D.; Dereje, Mekdim; Ricker-Gilbert, Jacob; Josephson, Anna; Taffesse, Alemayehu Seyoum
    Abstract: Highland Ethiopia is one of the most densely populated regions of Africa and has long been associated with both Malthusian disasters and Boserupian agricultural intensification. This paper explores the race between these two countervailing forces, with the goal of informing two important policy questions. First, how do rural Ethiopians adapt to land constraints? And second, do land constraints significantly influence welfare outcomes in rural Ethiopia?
    Keywords: Smallholders, Population density, Farm size, Intensification, Agricultural productivity, Land use, Land allocation, Land management,
    Date: 2013
    Abstract: The geographic concentration of retail firms is a remarkable phenomenon. Existing literature suggests that retail firms benefit from spatial concentration in terms of heightened demand. However, the proximity to other firms also intensifies competition and results in higher costs for land and employees. To examine the net impact of these two opposing agglomeration effects, this paper analyzes the impact of localization, urbanization and diversity on firm profitability. The sample consists of Belgian single-establishment retail firms, during the period 2005-2010. The results show that urbanization has a negative and diversity a positive influence on profitability. Furthermore, weak evidence of localization effects is found, depending on the characteristics of the co-located firms. It seems that establishments of multi-establishment firms contribute positively to the profitability of single-establishment firms, while the presence of other single-establishment firms has a negative influence.
    Keywords: profitability, localization, urbanization, diversity
    Date: 2013–10

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