New Economics Papers
on Efficiency and Productivity
Issue of 2014‒03‒22
fifteen papers chosen by

  1. Panel Data Parametric Frontier Technique for Measuring Total-factor Energy Efficiency: Application to Japanese Regions By Honma, Satoshi; Hu, Jin-Li
  2. Micro-based evidence of EU competitiveness: The CompNet database By CompNet Task Force
  3. The efficiency of Chinese local banks: a comparison of DEA and SFA By Benjamin Miranda Tabak; Daniel Oliveira Cajueiro; Marina V. B. Dias
  4. How Do Electricity Shortages Affect Productivity? Evidence from India By Hunt Allcott; Allan Collard-Wexler; Stephen D. O'Connell
  5. Being efficient to stay strong in a weak economy. The case of calabrian manufacturing firms By Aiello, Francesco; Castiglione, Concetta
  6. The Contribution of Research and Innovation to Productivity and Economic Growth By Amani Elnasri; Kevin J. Fox
  7. Within and across department variability in individual productivity : the case of economics By Javier Ruiz-Castillo Ucelay; Antonio Perianes-Rodríguez
  8. "Reseteo" de un sistema financiero tras una crisis: un análisis de eficiencia By Ferro, Gustavo; León, Sonia M.; Romero, Carlos A.; Wilson, Damián
  9. Trade Liberalization, Intermediate Inputs and Firm Efficiency: Direct versus Indirect Modes of Import By Michele Imbruno
  10. Greasing the Wheels? The Effect of Corruption in Regulated Manufacturing Sectors of India By Takahiro Sato; Atsushi Kato
  11. Production theory: accounting for firm heterogeneity and technical change By G. Dosi; M. Grazzi; L. Marengo; S. Settepanella
  12. Global Value Chains and the Productivity of Canadian Manufacturing Firms By Baldwin, John R. Yan, Beiling
  13. Comparative Profitability of Organic and Conventional Cropping Systems: An Update to Per-Hectare and Whole-Farm Analysis By Delbridge, Timothy A.
  14. Profits and Economic Development By Dan Schwab; Eric Werker
  15. Lift ticket prices and quality in French ski resorts: Insights from a non-parametric analysis By François Charles Wolff

  1. By: Honma, Satoshi; Hu, Jin-Li
    Abstract: Using the stochastic frontier analysis (SFA) model, we estimate total-factor energy efficiency (TFEE) scores for 47 regions across Japan during 1996–2008. We extend the cross-sectional SFA model proposed by Zhou et al. (Applied Energy, 2012) to panel data models and add environmental variables. The results provide not only the TFEE scores, in which statistical noise is taken into account, but also the determinants of inefficiency. The three SFA TFEEs are compared with a TFEE derived from data envelopment analysis (DEA). The four TFEEs are highly correlated with one another. For the inefficiency estimates, the higher the manufacturing industry share and wholesale and retail trade share, the lower the TFEE score.
    Keywords: Stochastic frontier analysis (SFA), Data envelopment analysis (DEA), Total-factor energy efficiency (TFEE), Panel data, Shephard distance functions
    JEL: D24 Q4 R15
    Date: 2014–03–10
  2. By: CompNet Task Force
    Abstract: Drawing from confidential firm-level balance sheets in 11 European countries, the paper presents a novel sectoral database of comparable productivity indicators built by members of the Competitiveness Research Network (CompNet) using a newly developed research infrastructure. Beyond aggregate information available from industry statistics of Eurostat or EU KLEMS, the paper provides information on the distribution of firms across several dimensions related to competitiveness, e.g. productivity and size. The database comprises so far 11 countries, with information for 58 sectors over the period 1995-2011. The paper documents the development of the new research infrastructure, the construction of the database, and shows some preliminary results. Among them, it shows that there is large heterogeneity in terms of firm productivity or size within narrowly defined industries in all countries. Productivity, and above all, size distribution are very skewed across countries, with a thick left-tail of low productive firms. Moreover, firms at both ends of the distribution show very different dynamics in terms of productivity and unit labour costs. Within-sector heterogeneity and productivity dispersion are positively correlated to aggregate productivity given the possibility of reallocating resources from less to more productive firms. To this extent, we show how allocative efficiency varies across countries, and more interestingly, over different periods of time. Finally, we apply the new database to illustrate the importance of productivity dispersion to explain aggregate trade results.
    Keywords: cross country analysis, firm-level data, competitiveness, productivity and size distribution, total factor productivity, allocative efficiency
    JEL: L11 L25 D24 O4 O57
    Date: 2014–03
  3. By: Benjamin Miranda Tabak; Daniel Oliveira Cajueiro; Marina V. B. Dias
    Abstract: This study investigates to which extent results produced by a single frontier model are reliable, based on the application of data envelopment analysis and stochastic frontier approach to a sample of Chinese local banks. Our findings show they do produce a consistent trend on efficiency scores over the years. However, rank correlations indicate they diverge with respect to individual performance diagnosis. This shows that these models provide steady information on the efficiency of the banking system as a whole, but they become inconsistent at individual level
    Date: 2014–01
  4. By: Hunt Allcott; Allan Collard-Wexler; Stephen D. O'Connell
    Abstract: Endemic blackouts are a particularly salient example of how poor infrastructure might reduce growth in developing economies. As a case study, we analyze how Indian textile plants respond to weekly “power holidays.” We then study how electricity shortages affect all Indian manufacturers, using an instrument based on hydroelectricity production and a hybrid Leontief/Cobb-Douglas production function model. Shortages reduce average output by about five percent, but because most inputs can be stored during outages, productivity losses are much smaller. Plants without generators have much larger losses, and because of economies of scale in generator capacity, shortages more severely affect small plants.
    JEL: D04 D24 L11 L94 O12 O13 Q41
    Date: 2014–03
  5. By: Aiello, Francesco; Castiglione, Concetta
    Abstract: The aim of this work is to study the efficiency of firms operating in Calabria, a small and economically-lagging Italian region. The analysis is carried out by estimating a stochastic production frontier for an unbalanced panel of manufacturing firms which are observed over the 1998-2006 period. Results show that the efficiency score is, on average, about 60%. A declining trend is observed over the last three-year period, 2004-2006. Moreover, firm efficiency increases with firm age and when firms export. Inconclusive evidence is found for the role of investments in ICT and R&D. This is not very surprising given that private effort in technological activities is extremely low in Calabria (private R&D intensity was less than 0.075% of regional GDP in 2010).
    Keywords: Efficiency; ICT, R&D, Stochastic Frontier, Calabria, Manufacturing firms
    JEL: D22 D24 L63 O33 R12
    Date: 2014–03–12
  6. By: Amani Elnasri (School of Economics, Australian School of Business, the University of New South Wales); Kevin J. Fox (School of Economics, Australian School of Business, the University of New South Wales)
    Abstract: This paper examines the impact of investment in research and innovation on Australian market sector productivity. While previous studies have largely focused on a narrow class of private sector intangible assets as a source of productivity gains, this paper shows that there is a broad range of other business sector intangible assets that can significantly affect productivity. Moreover, the paper pays special attention to the role played by public support for research and innovation in the economy. The empirical results suggest that there are significant spillovers to productivity from public sector R&D spending on research agencies and higher education. No evidence is found for productivity spillovers from indirect public support for the business enterprise sector, civil sector or defence R&D. These findings could have implications for government innovation policy as they provide insights into possible productivity gains from government funding reallocations.
    Keywords: Productivity, Innovation, Intangible assets, Public support
    JEL: O3 O4 H4
    Date: 2014–01
  7. By: Javier Ruiz-Castillo Ucelay; Antonio Perianes-Rodríguez
    Abstract: University departments (or research institutes) are the governance units in any scientific field where the demand for and the supply of researchers interact. As a first step towards a formal model of this process, this paper investigates the characteristics of productivity distributions of a population of 2,530 individuals with at least one publication who were working in 81 top Economics departments in 2007. Individual productivity is measured in two ways: as the number of publications until 2007, and as a quality index that weights differently the articles published in four journal equivalent classes. The academic age of individuals since obtaining the PhD until 2007 is used to measure productivity per year. Independently of the two productivity measures, and both before and after age normalization, the main findings of the paper are the following three. Firstly, individuals within each department have very different productivities. Secondly, there is not a single pattern of productivity inequality and skewness at the department level. On the contrary, productivity distributions are very different across departments. However, the effect on overall productivity inequality of differences in productivity distributions across departments is accounted for to a large extent by scale factors well captured by departments’ mean productivities. Thirdly, this high degree of departmental heterogeneity is found to be compatible with considerably greater homogeneity across the members of a partition of the sample into seven countries and a residual category.
    Date: 2014–03
  8. By: Ferro, Gustavo; León, Sonia M.; Romero, Carlos A.; Wilson, Damián
    Abstract: We study the efficiency of the Argentine banking service after a crisis in 2001-2002. The financial system started in practice from zero and recovered jointly with the economy, but its productivity and average cost levels are stagnated since 2007. The analysis encompasses efficiency frontiers of the whole system and a comparison of subsamples for different categories of banks for the period 2005-2011. We try to determine if public banks are more efficient than private, if wholesale and investment banks differ in their efficiency from retail institutions, and local versus foreign entities. We apply a complete set of instruments (econometric and mathematical programming methods), and apply several consistency tests. Our findings show a modest average efficiency of the system, and also quite similar efficiency rankings for the different groups of banks. The consistency between methods depends on the model variants. Two possible sequels merit attention: the effect of mergers in recent years and economies of scale analysis.
    Keywords: Efficiency frontiers; banks; crisis
    JEL: G21 L51
    Date: 2014–03–14
  9. By: Michele Imbruno
    Abstract: This paper studies the impact of input trade liberalization on firm efficiency, aggregate productivity and welfare. We extend the Melitz (2003)’s framework to incorporate: a) trade in both intermediate inputs and final goods between similar countries, b) firm’s decision to import intermediate inputs in addition to the decision to export its final output. This model shows different effects from reducing input tariffs, according to whether intermediates are assumed to be imported directly by final good firms or indirectly through an efficient wholesale system.
    Keywords: Heterogeneous firms, Trade liberalization, Intermediate inputs, Productivity, Import-Export behaviour
    Date: 2014
  10. By: Takahiro Sato (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Atsushi Kato (School of Business, Aoyama Gakuin University)
    Abstract: We investigate whether corruption “greases the wheels” of bureaucracies and enhances economic performance. Specifically, we examine the interaction effect of corruption and regulation on the economic performance of manufacturing industries in India. Our estimation results show that the combination of corruption and regulation has significant positive effects on gross value added per worker, total factor productivity, and capital labor ratio. This indicates the existence of a “greasing the wheels” effect.
    Keywords: corruption, regulation, gross value added per worker, TFP
    JEL: D73 K42 L52 K23
    Date: 2014–03
  11. By: G. Dosi; M. Grazzi; L. Marengo; S. 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 provide 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.
    JEL: D24 D61 C67 C81 O30
    Date: 2014–03
  12. By: Baldwin, John R. Yan, Beiling
    Abstract: The paper examines whether the integration of Canadian manufacturing firms into a global value chain (GVC) improves their productivity. To control for the self-selection effect (more productive firms self-select to join a GVC), propensity-score matching and difference-in-difference methods are used. Becoming part of a GVC can enhance firms' productivity, both immediately and over time. The magnitude and timing of the effects vary by industrial sector, internationalization process, and import source/export destination country in a way that suggests the most substantial advantages of GVC participation are derived from technological improvements.
    Keywords: Manufacturing, Labour, Economic accounts, Globalization and the labour market, Productivity accounts
    Date: 2014–03–17
  13. By: Delbridge, Timothy A.
    Abstract: Introduction: Two recent papers, Delbridge et al. (2011) and Delbridge et al. (2013), have used agricultural trial data from Southwestern Minnesota to compare the profitability of organic and conventional cropping systems. These analyses found that organic cropping systems can earn more on a per-hectare basis (Delbridge et al., 2011) and a whole-farm basis (Delbridge et al., 2013) than a conventional cropping system, given the same machinery and labor endowments. However, in the years since the collection of the agricultural trial data on which these analyses are based, conventional grain prices have reached record levels and some organic crop producers have begun to abandon their organic certification and return to conventional production. The strong performance of conventional crop producers in 2011-2012 raises the question: would the results of these analyses hold if they included more recent data? This paper answers this question by updating the analyses performed by Delbridge et al. (2011) and Delbridge et al. (2013) with 2011 and 2012 yield and management data from the Variable Input Crop Management Systems (VICMS) trial and more recent input and output price information.
    Keywords: Crop Production/Industries, Farm Management,
    Date: 2014–03
  14. By: Dan Schwab (Boston University); Eric Werker (Harvard Business School, Business, Government and the International Economy)
    Abstract: Using industry-level manufacturing data, this paper demonstrates a negative effect of rents, measured by the mark-up ratio, on productivity growth. This result is robust to alternate specifications, including an instrumental variables approach. The negative effect is strongest in poor countries, suggesting that high profits stymie economic development rather than enable it. Consistent with the rent-seeking mechanism of the model, we find that high rents are associated with a slower reduction in tariffs. A country's average mark-up is a strong negative predictor of future economic growth, indicating that we may be measuring a phenomenon of the broader business environment.
    Date: 2014–03
  15. By: François Charles Wolff (INED - Institut National d'Etudes Démographiques Paris - INED, LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272)
    Abstract: Using a unique data set with 168 ski resorts located in France, this paper investigates the relationship between lift ticket prices and supply-related characteristics of ski resorts. A nonparametric analysis combined with a principal component analysis is used to identify the set of efficient ski resorts, defined as those where the lift ticket price is the cheapest for a given level of quality. Results show that the average inefficiencyper lift ticket price is less than 1.5 euros for resorts located in the Pyrenees and the Southern Alps. The average inefficiency is three times higher for ski resorts located in the Northern Alps, which is explained by the presence of large connected ski areas offering many more runs for a small surchage.
    Keywords: Data envelopment analysis; free disposal hull model; quality; lift ticket price; ski resorts
    Date: 2014–03–11

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