nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2013‒11‒22
nineteen papers chosen by
Angelo Zago
University of Verona

  1. Decomposing Malmquist Productivity Indexes into Explanatory Factors By Diewert, Erwin; Fox, Kevin
  2. Reference Technology Sets, Free Disposal Hulls and Productivity Decompositions By Diewert, Erwin; Fox, Kevin
  3. Knowledge spillover effects at the sub-regional level. Theory and estimation By Andrea Bonaccorsi; Cinzia Daraio
  4. Do wages reflect labor productivity? The case of Belgian regions. By Konings, Joep; Marcolin, Luca
  5. Productivity Measurement with Natural Capital By Nicola Brandt; Paul Schreyer; Vera Zipperer
  6. Is there a Trade-off between Employment and Productivity? By Junankar, Pramod N. (Raja)
  7. Girl power in agricultural production: how much does it yield? A case-study on the dairy sector in India. By Sneyers, Astrid; Vandeplas, Anneleen
  8. Evaluating the efficiency of municipalities in collecting and processing municipal solid waste: A shared input DEA-model. By Rogge, Nicky; De Jaeger, Simon
  9. Age-productivity patterns in talent occupations for men and women: a decomposition By Barbara Liberda; Joanna Tyrowicz; Magdalena Smyk
  10. On the Role of Productivity and Demographic Factors for Growth : The Case of Turkey, 2004-2012 By Murat Ungor; M. Koray Kalafatcilar
  11. Growth Effects of Remittances:Is there a U-Shaped Relationship? By Gazi Mainul Hassan; Mohammed S. Bhuyan
  12. Reaching for the Stars: Exclusivity in Firm-University Links in the Pharmaceutical Industry. By Kelchtermans, Stijn; Belderbos, Rene; Leten, Bart; Desair, Steven
  13. The effect of department size on quality of research in science: Evidence from the UK research assessment exercise. By Toivanen, Otto; Waterson, Michael
  15. Creating New Opportunities for Rural Producers. Impact Evaluation of a Pilot Program in Colombia By Sandra Rozo; Yuri Suarez Dillon Soares; Veronica Gonzalez Diez; Carlos Morales
  16. Ricardian Productivity Differences and the Gains from Trade By Andrei A. Levchenko; Jing Zhang
  17. The effects of international mobility on European researchers: comparing intra-EU and U.S. mobility. By Van Bouwel, Linda; Veugelers, Reinhilde
  18. Industrial Clusters and Economic Performance in Brazil By Jose Claudio Pires; Tulio Cravo; Simon Lodato; Caio Piza
  19. The Informativeness of Stock Prices, Misallocation and Aggregate Productivity By Vaidyanathan Venkateswaran; Hugo A. Hopenhayn; Joel David

  1. By: Diewert, Erwin; Fox, Kevin
    Abstract: Caves, Christensen, Diewert introduced Malmquist output, input and productivity indexes into production theory in a systematic way. These indexes use distance functions to represent the technology. In recent years, there have been many attempts to decompose Malmquist productivity indexes into explanatory components. This paper revisits this debate of how to decompose a Malmquist productivity index into explanatory factors, with a focus on extracting technical progress, technical efficiency change, and returns to scale components. In order to define these components, a reference technology is required. The paper does not make any convexity assumptions on the reference technology but instead follows the example of Tulkens and his coauthors in assuming that the reference technology satisfies free disposability assumptions.
    Keywords: Productivity indexes, Malmquist indexes, technical efficiency, technical progress, returns to scale, Data Envelopment Analysis, Free Disposal Hulls, n
    JEL: C43 D24 E23
    Date: 2013–09–18
  2. By: Diewert, Erwin; Fox, Kevin
    Abstract: Diewert and Fox (2013) proposed decompositions of a Malmquist-type productivity index into explanatory factors, with a focus on extracting technical progress, technical efficiency change and returns to scale components. A major problem with their decompositions is that it may be difficult to determine the appropriate reference technologies. Using relatively unrestrictive regularity conditions, the paper develops a data envelopment type approach for decomposing productivity growth for a panel of production units into explanatory factors based on the Free Disposal Hull methods pioneered by Tulkens and his co-authors.
    Keywords: Productivity indexes, Free Disposal Hulls, technical efficiency, technical progress, returns to scale, nonparametric approaches to production theory,
    Date: 2013–09–18
  3. By: Andrea Bonaccorsi (Department of Energy and Systems Engineering, University of Pisa, Italy); Cinzia Daraio (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza")
    Abstract: In this paper, we investigate a new approach for the measurement of spillovers. The concept of spillovers is central in many theories of geography, innovation and growth, particularly at the regional level. We evaluate the impact of size and intensity of knowledge production, as observed in publications and patents at the sub-regional level, on the efficiency of manufacturing activity. We employ nonparametric and robust conditional measures in efficiency analysis to a unique dataset at the subregional level (province) for Italy. We find that most Italian provinces are located in a region of absence or extremely low impact of knowledge spillovers. Nevertheless, a few provinces with maximum volume in both patents and publications and some medium-sized provinces with high knowledge intensity show knowledge spillovers.
    Keywords: knowledge spillovers, manufacturing industry, growth, efficiency analysis, conditional efficiency, robust nonparametric estimation
    Date: 2013
  4. By: Konings, Joep; Marcolin, Luca
    Date: 2013
  5. By: Nicola Brandt; Paul Schreyer; Vera Zipperer
    Abstract: Traditional measures of multi-factor productivity (MFP) growth generally do not recognise natural capital as inputs into the production process. Since productivity growth is measured as the residual between output and input growth, it will pick up the growth in unmeasured inputs, which can lead to a bias. The purpose of this paper is to gain a better understanding of the role of natural capital for productivity measurement and as a source of economic growth. To this aim, aggregate economy productivity measures mostly from the OECD Productivity Database are extended by incorporating natural capital as an additional input factor into the production function. More specifically, this paper considers oil, gas and various minerals as natural capital inputs, drawing on data from the World Bank. Results suggest that failing to account for natural capital tends to lead to an underestimation of productivity growth in countries where the use of natural capital in production is declining because of a dwindling natural capital stock. In return, productivity growth is sometimes overestimated in times of natural resource booms, if natural capital is not taken into account as an input factor. The direction of the adjustment to productivity growth depends on the rate of change of natural capital extraction relative to the rate of change of other inputs. The extended framework also makes the contribution of natural capital to economic growth explicit. This can be useful for countries relying on nonrenewable resources to better understand the need to develop other sources of growth, for example by investing in human or productive capital, to prepare for times when resources endowments become scarce. While the measurement of natural capital remains very incomplete, leaving out natural forests, water and soil, the measurement framework can readily be applied to more encompassing data on the natural capital stock, once it becomes available. Productivité multi-factorielle avec capital naturel Des mesures traditionnelles de croissance de la productivité multifactorielle, en général, ne prennent pas en compte le capital naturel en tant que facteur de production. Comme la croissance de productivité est la différence entre la croissance de la production et des intrants, cette mesure sera biaisée dès qu’il y aura des intrants non-mesurés, comme par exemple le capital naturel. L’objectif de ce rapport est donc de mieux comprendre le rôle du capital naturel dans les mesures de productivité, et comme source de croissance économique. Ainsi, il enrichit des mesures de productivité à l’échelle de l’économie agrégée, pour la plupart extraites de la base de données de productivité de l’OCDE, en intégrant explicitement le capital naturel comme facteur de production. Plus spécifiquement, le rapport considère le pétrole, le gaz naturel et des minéraux variés comme des éléments du capital naturel, en se servant des données de la Banque Mondiale. Les résultats suggèrent qu’ignorer le capital naturel a tendance à mener à une sous-estimation de la croissance de productivité dans les pays où l’utilisation du capital naturel est en déclin à cause des réserves en voie de disparition. En revanche, la croissance de productivité est parfois surestimée pendant des périodes de hausse des prix des ressources naturelles. La direction de la correction de la mesure de croissance de productivité dépend du taux de croissance relatif de l’extraction du capital naturel par rapport au taux de croissance des autres intrants. La mesure de productivité ainsi enrichie permet aussi de mesurer explicitement la contribution du capital naturel à la croissance économique. Ceci peut s’avérer très utile pour des pays dépendant des ressources naturelles non-renouvelables pour mieux comprendre leur besoin d’investir dans le capital humain ou productif pour se préparer pour des périodes de pénurie de leurs ressources naturelles. Même si la mesure de capital naturel utilisée dans ce rapport reste très restreinte, ne prenant en compte ni les forêts vierges, ni l’eau ou le sol, le cadre proposé peut facilement être appliqué à des données plus complètes, dès qu’elles seront disponibles.
    Keywords: multifactor productivity, green productivity, natural capital stock, natural resource accounting, productivité multifactorielle, productivité verte, stock de capital naturel, comptabilité des ressources naturelles
    JEL: D24 O47 Q3 Q50 Q56
    Date: 2013–10–30
  6. By: Junankar, Pramod N. (Raja) (University of New South Wales)
    Abstract: The aim of this paper is to analyse the possible trade-off between employment and productivity using panel data on world economies, developed and developing. We begin with the importance of productivity growth for developing countries, followed by a brief discussion of the concept of productivity and how it is measured. We discuss the concept of "decent work" and provide an index to measure decent work, and study its changes over time. First we provide some simple descriptive statistics and then carry out an econometric investigation using alternative estimation techniques. Our broad results suggest that there is a trade-off between employment and productivity.
    Keywords: employment, productivity, trade-off, economic development
    JEL: O11 O47 O17
    Date: 2013–11
  7. By: Sneyers, Astrid; Vandeplas, Anneleen
    Abstract: It is often argued that women have an important role to play in fostering sustainable and inclusive development. Several empirical studies indeed find a correlation between intra-household bargaining power and spending on children’s nutrition, health and education. The general perception of the impact of gender on agricultural productivity is far less favorable. As a result of constrained access to input markets, output markets, and land markets, female-headed households are usually found to be less productive in agriculture than male-headed households. This paper provides empirical evidence of the impact of female intra-household decision-making power on dairy productivity in India, based on evidence from a household-level dataset which was collected in 2008 in 50 villages spread over 5 districts in Andhra Pradesh, a state in the South of India. The results of our analysis suggest that equal, if not higher, productivity is achieved in households where a woman, rather than a man, is the primary decision-maker over production-related decisions. While caution is due in drawing overly strong conclusions, and more research is needed to corroborate these findings, our results provide a more nuanced view on the impact of gender on agricultural productivity than the one which is usually put forward in the literature.
    Keywords: agricultural productivity; dairy sector; gender; female decision-making power;
    Date: 2013–09
  8. By: Rogge, Nicky; De Jaeger, Simon
    Date: 2012–03
  9. By: Barbara Liberda (Faculty of Economic Sciences, University of Warsaw); Joanna Tyrowicz (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland); Magdalena Smyk (Faculty of Economic Sciences, University of Warsaw)
    Abstract: One could expect that in the so-called talent occupations, while access to these professions may differ between men and women, gender wage gap should be actually smaller due to high relevance of human capital quality. Wage regressions typically suggest an inverted U-shaped age-productivity pattern. However, such analyses confuse age, cohort and year effects. Deaton (1997) decomposition allows to disentangle these effects. We apply this method to inquire the age-productivity pattern for the so-called “talent†occupations. Using data from a transition economy (Poland) we find that indeed talent occupations have a steeper age-productivity pattern. However, gender differences are larger for talent occupations than for general occupations.
    Keywords: age-productivity pattern, gender wage gap, transition
    JEL: J24 J31 I20 J71
    Date: 2013
  10. By: Murat Ungor; M. Koray Kalafatcilar
    Abstract: [EN] Turkey has the highest average annual growth rate of GDP (measured in constant local currency) and the fifth highest average annual growth rate of, purchasing power parity (PPP)-adjusted, per capita income among all the OECD countries between 2004 and 2012. This note studies the sources of this high growth era in a comparative perspective, decomposing GDP per capita into three components: labor productivity, the ratio of employment-to-working-age population, and the ratio of working-age to total population. We find that growth in output per worker accounts for most of the speed up in Turkey’s GDP per capita growth during 2004-2007, with modest contributions from rising participation rates and increases in the working-age share of the total population. Similarly, declines in labor productivity are primarily responsible for contraction of output per capita during the 2007-2009 global recession. On the other hand, growth in employment-to-population ratio accounts for around two-thirds of growth in per capita output during 2009-2012. These findings suggest a productivity-based growth era before the global crisis and an employment-based growth era in the post-crisis period. [TR] Turkiye, 2004-2012 doneminde, reel GSYIH (yerel para birimi cinsinden) buyumesi olarak OECD ulkeleri arasinda en yuksek buyumeye; satin alma paritesi ile duzeltilmis kisi basina GSYIH buyumesi olarak da OECD ulkeleri arasinda en yuksek besinci buyumeye sahip ulkedir. Bu calismada, verimlilik ve demografik unsurlarin kisi basina gelir buyumesi uzerine etkileri ulkeler arasi karsilastirma yapilarak sunulmustur. Kisi basina gelir (i) emek verimliligi, (ii) istihdamin calisabilir nufusa orani ve (iii) calisabilir nufusun toplam nufusa orani olarak üc bilesene ayristirilmistir. 2004-2009 doneminde emek verimliligindeki artislar kisi basina gelir buyumesini etkileyen en onemli faktordur. Bununla birlikte, 2009-2012 doneminde istihdamin calisabilir nufusa oranindaki artislar kisi basina gelirde gozlenen buyumenin ucte ikisine yakinini aciklayabilmektedir. Bu bulgular, incelenen donemin kriz oncesi verimlilige dayali buyume donemi ve kriz sonrasinda istihdam kaynakli buyume donemi olarak ikiye ayrilabilecegine isaret etmektedir.
    Date: 2013
  11. By: Gazi Mainul Hassan (University of Waikato); Mohammed S. Bhuyan (University of Wollongong)
    Abstract: This paper shows that the effect of remittances on economic growth entails a U-shaped pattern where it is negative in the beginning but becomes positive later on. The analysis is based on the argument that recipient household savings out of remittances income is negligible or even negative in the initial periods but turns positive in the later part. Using time series data from Bangladesh and single-equation cointegration methods, we find that remittances’ effect on long-run growth is negative and falling until remittances-to-GDP ratio is roughly 9 percent and it starts to become positive when the ratio exceeds 17 percent.
    Keywords: remittances and growth; remittances utilisation; total factor productivity (TFP); cointegration; Bangladesh
    JEL: O10 O15 F22 F24
    Date: 2013–11–15
  12. By: Kelchtermans, Stijn; Belderbos, Rene; Leten, Bart; Desair, Steven
    Abstract: This paper analyzes under which conditions joint basic research with academic ‘star’ scientists improves firms’ technological performance. Using data on 61 of the most R&D intensive firms in the biopharmaceutical sector in 1991-2003, we find that collaboration with academic stars for basic research increases inequality in technological performance across firms, with only the upper tail of the performance distribution benefiting from such partnerships. Further, we find that joint basic research with top academic scientists is more beneficial if the firm and the star also do joint applied work. Finally, we find a dual effect of firms’ exclusive access to academic stars, with a positive impact on technological performance for exclusive access to ‘translational’ stars versus a negative effect for exclusive access to ‘ivory tower’ stars.
    Keywords: innovation; Pharmaceutical Industry; Industry-science links; Star scientists;
    Date: 2013–03
  13. By: Toivanen, Otto; Waterson, Michael
    Abstract: We examine whether the organisation of individual researchers into departments has an impact on the average research quality, beyond the impact of the individuals themselves. Using data on science disciplines generated from the UK Research Assessment Exercises in 1996, 2001 and 2008, we find that department size has an independent positive effect on research quality.
    Keywords: economies of scale; RAE; research quality; sciences; department size;
    Date: 2013–02
  14. By: Yasumasa Matsuda
    Abstract: This paper considers analysis of nonstationary irregularly spaced data that may have multivariate observations. The nonstationarity we focus on here means a local dependency of parameters that describe covariance structures. Nonparametric and parametric ways to estimate the local dependency of the parameters are proposed by an extension of traditional periodogram for stationary time series to that for nonstationary spatial data We introduce locally stationary processes for which consistency of the estimators are proved as well as demonstrate empirical efficiency of the methods by simulated and real examples.
    Date: 2013–05
  15. By: Sandra Rozo (Deaprtment of Economics, University of California Los Angeles, Los Angeles, USA); Yuri Suarez Dillon Soares (Office of Evaluation and Oversight, Inter-American Development Bank, Washington, USA); Veronica Gonzalez Diez (Office of Evaluation and Oversight, Inter-American Development Bank, Washington, USA); Carlos Morales (Office of Evaluation and Oversight, Inter-American Development Bank, Washington, USA)
    Abstract: Industrial clusters are commonly targeted to receive financial support allocated to local-based development projects. Cluster promotion is seen as an effective industrial policy tool aimed at improving productivity and employment generation. Nevertheless, despite its popularity as a regional development policy, identifying and assessing the economic performance of clusters is still a challenge for policy makers. The objective of this paper is twofold: identify the location of clusters in Brazil; and provide some insights of its effect on employment generation. This paper uses three measures of identification to test whether the correlation between clusters and economic performance depends on the way clusters are identified. Noticeably, the existing literature on clusters’ identification in Brazil ignores possible spatial dependence. To address this gap in the literature, this paper draws on Carroll et al. (2008) and uses Location Quotient (LQ) and Local Indicator of Spatial Association (LISA) simultaneously to identify potential clusters in Brazil in 27 industrial sectors and using a comprehensive census data of the formal sector covering 5564 Brazilian municipalities. In addition, the paper uses an annual municipal panel data for the period 2006-2009 to assess whether the presence of clusters is correlated to superior economic performance, particularly employment generation. The results show that potential clusters are correlated with better economic performance, however, different types of agglomerations present different association with economic performance. Firstly, municipalities in specialized clusters (SR) perform poorly in terms of employment generation. Secondly, the results suggest that clusters of municipalities with neighbors with similar industrial structure (Periphery Regions and Potential Cluster Region) perform much better than those that only present industry specialization (SR) and are not close to similar municipalities.
    Keywords: Drug Production, Productivity, Latin America
    JEL: O13 O33 O54 Q18
    Date: 2013–09
  16. By: Andrei A. Levchenko; Jing Zhang
    Abstract: This paper evaluates the role of sectoral heterogeneity in determining the gains from trade. We first show analytically that in the presence of sectoral Ricardian comparative advantage, a one- sector sufficient statistic formula that uses total trade volumes as a share of total absorption systematically understates the true gains from trade. Greater relative sectoral productivity differences lead to larger disparities between the gains implied by the one-sector formula and the true gains. Using data on overall and sectoral trade shares in a sample of 79 countries and 19 sectors we show that the multi-sector formula implies on average 30% higher gains from trade than the one-sector formula, and as much as 100% higher gains for some countries. We then set up and estimate a quantitative Ricardian-Heckscher-Ohlin model in which no version of the formula applies exactly, and compare a range of sufficient statistic formulas to the true gains in this model. Confirming the earlier results, formulas that do not take into account sectoral heterogeneity understate the true gains from trade in the model by as much as two-thirds. The one-sector formulas understate the gains by more in countries with greater dispersion in sectoral productivities.
    JEL: F4
    Date: 2013–11
  17. By: Van Bouwel, Linda; Veugelers, Reinhilde
    Abstract: Using survey data on European-born and European-educated researchers who are internationally mobile after their PhD within Europe or to the United States, we find positive reported effects from international mobility on a range of facets, including scientific productivity, research environment and career development. Researchers mobile to the United States consistently report stronger positive effects than their peers who are mobile within the EU. This apparent ‘U.S. premium’, however, is almost entirely due to selection.
    Keywords: international mobility; research productivity; career development; EU-US;
    Date: 2013–07
  18. By: Jose Claudio Pires; Tulio Cravo; Simon Lodato; Caio Piza
    Abstract: Industrial clusters, which are commonly targeted to receive financial support allocated to locally based development projects, are seen as an effective industrial policy tool for improving productivity and generating employment. Nevertheless, identifying clusters and assessing their economic performance is a challenge for policymakers. This paper aims to address this challenge by identifying the location of clusters based on neighbor relationships and specialization in Brazil and providing some insights on their effects on employment generation. The paper uses both Location Quotient and Local Indicator of Spatial Association to identify potential clusters in 27 industrial sectors in 5564 Brazilian municipalities. In addition, it uses annual municipal panel data for 2006-2009 to assess whether the presence of potential clusters is correlated with employment generation. The results show that clusters located in municipalities whose neighbors have similar industrial structures perform better than those that present industry specialization only.
    Keywords: Industrial cluster, regional economic development, spatial independence
    JEL: C0 R11 R12
    Date: 2013–10
  19. By: Vaidyanathan Venkateswaran (Pennsylvania State University); Hugo A. Hopenhayn (UCLA); Joel David (USC)
    Abstract: Capital markets function as aggregators of private information and in an environment with imperfectly informed firms, guide investment and production decisions. We study the implications of poorly functioning capital markets for the misallocation of factors of production across heterogeneous firms. Our theoretical framework combines a noisy rational expectations model of asset markets with a standard model of production by heterogeneous firms. We use a model calibrated to cross-country stock market and firm-level data to investigate the extent to which differences in capital market conditions can explain TFP differences across countries.
    Date: 2013

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