New Economics Papers
on Efficiency and Productivity
Issue of 2014‒03‒30
twelve papers chosen by

  1. Total factor productivity estimation for Polish manufacturing industry: A comparison of alternative methods By Malgorzata Sulimierska
  2. Nonparametric Least Squares Methods for Stochastic Frontier Models By Leopold Simar; Ingrid Van Keilegom; Valentin Zelenyuk
  3. Oil windfalls and tax inefficiency: evidence from Brazil By Fernando Antonio Slaibe Postali
  4. Multi-Output Efficiency with Good and Bad Outputs By Laurens Cherchye; Bram De Rock; Barnabé Walheer
  5. The decomposition of productivity gap between Estonia and Korea By Sepp, Jüri; Varblane, Uku
  6. Educational Diversity and Knowledge Transfers via Inter-Firm Labor Mobility By Marino, Marianna; Parrotta, Pierpaolo; Pozzoli, Dario
  7. Cross-Functional Knowledge Integration, Patenting and Firm’s Performance By Marco MC Ceccagnoli; Nicolas van Zeebroeck; Roberto Venturini
  8. Directed Technical Change and Capital Deepening: A Reconsideration of Kaldor’s Technical Progress Function By Schlicht, Ekkehart
  9. Externalities of Education on Efficiency and Production Uncertainty of Maize in Rural Malawi By Mussa, Richard
  10. Explaining gender differentials in agricultural production in Nigeria By Oseni, Gbemisola; Corral, Paul; Goldstein, Markus; Winters, Paul
  11. Part-time Work, Wages and Productivity:Evidence from Belgian Matched Panel Data By Andrea Garnero; Stephan Kampelmann; François Rycx
  12. Energy efficiency determinants: an empirical analysis of Spanish innovative firms By María Teresa Costa; José García-Quevedo; Agustí Segarra

  1. By: Malgorzata Sulimierska (Department of Economics, University of Sussex, Falmer, United Kingdom)
    Abstract: The concept of total factor productivity (TFP) and its measurement have been of interest to researchers for more than half a century, and are intensively discussed topics in debate on economic growth1. This chapter discusses the different problems related to methodologies for estimating TFP at the establishment (sector and firm) levels. These include simultaneity and selection bias, deflated input and output values, and endogeneity of product choice. It then describes existing techniques for overcoming these methodological problems - specifically, it is shown that these are addressed at sector level by computing TFP using a semi parametric technique at the establishment level. A manufacturing sector data is used at three levels of aggregation for Poland for the period 1995 to 2007; the results indicate significant TFP growth and also intensive dynamic changes to productivity over time. The results from three different techniques - index measures (non-parametric), parametric production function estimation (General Method of Moment - GMM) and production function – to account for endogeniety (semi-parametric) provide consistent results. This suggests that the estimates are sensitive to the technique and definitions of variables used, and indicate the biases related to traditional TFP estimations.sensitive to fat tails than climate policy based on CRRA utility.
    Keywords: Total Factor Productivity, Manufacturing
    JEL: L6 D2
    Date: 2014–03
  2. By: Leopold Simar (Institut de statistique, biostatistique et sciences actuarielles, Universite catholique de Louvain); Ingrid Van Keilegom (Institut de statistique, biostatistique et sciences actuarielles, Universite catholique de Louvain); Valentin Zelenyuk (School of Economics, The University of Queensland)
    Abstract: When analyzing productivity and efficiency of firms, stochastic frontier models are very attractive because they allow, as in typical regression models, to introduce some noise in the Data Generating Process. Most of the approaches so far have been using very restrictive fully parametric specified models, both for the frontier function and for the components of the stochastic terms. Recently, local MLE approaches were introduced to relax these parametric hypotheses. However, the high computational complexity of the latter makes them difficult to use, in particular if bootstrap-based inference is needed. In this work we show that most of the benefits of the local MLE approach can be obtained with less assumptions and involving much easier, faster and numerically more robust computations, by using nonparametric least-squares methods. Our approach can also be viewed as a semi-parametric generalization of the so-called “modified OLS†that was introduced in the parametric setup. If the final evaluation of individual efficiencies requires, as in the local MLE approach, the local specification of the distributions of noise and inefficiencies, it is shown that a lot can be learned on the production process without such specifications. Even elasticities of the mean inefficiency can be analyzed with unspecified noise distribution and a general class of local one-parameter scale family for inefficiencies. This allows to discuss the variation in inefficiency levels with respect to explanatory variables with minimal assumptions on the Data Generating Process. Our method is illustrated and compared with other methods with a real data set.
    Date: 2014–03
  3. By: Fernando Antonio Slaibe Postali
    Abstract: This paper investigates whether Brazilian municipalities are losing efficiency when collecting local taxes in response to oil windfalls. A two-stage procedure was adopted. First, we calculate the efficiency scores for tax collection using the Data Envelopment Analysis (DEA) method. In the second stage, the efficiency scores are used as the dependent variable in a quantile regression model to assess whether oil rents affect this indicator. The results reveal that the municipalities benefitting from oil revenues (royalties) reduce their efficiency in collecting taxes in response to such grants, which signals that they generate some type of X-inefficiency in municipal public management. Using a Cost-Minimization DEA, it is possible to avoid the problem of mixing technical efficiency with unobservable preferences on public goods. It is also possible to decompose efficiency within three components: technical, allocative and economic.
    Keywords: Data envelopment analysis; quantile regression; oil royalties; public sector
    JEL: H21 H71 Q33
    Date: 2014–03–18
  4. By: Laurens Cherchye; Bram De Rock; Barnabé Walheer
    Keywords: DEA; multi-output production; (sub-)joint inputs; output targets; undesirable outputs; electric utilities
    Date: 2013–09
  5. By: Sepp, Jüri; Varblane, Uku
    Abstract: The paper presents a decomposition of productivity gap between South-Korea and Estonia for the year 2006. After presenting stylised facts related to income conver-gence, we apply shift-share analysis to explain the patterns of structural disparities both at aggregated sectoral level and within the manufacturing sector. We propose an extension to conventional shift-share analysis with using relative productivity indi-cators. Decomposition shows that the overall productivity gap is mainly related to the manufacturing sector. The results show that at sectoral view, discrepancies in productivity levels of individual sectors (within-effect) play the dominant role in productivity gap formation, whereas we find some support for the structural-bonus hypothesis within the manufacturing sector. In line with the previous studies, relative-ly high productivity in financial intermediation and real estate sector as a feature of young market economies was confirmed. --
    Keywords: decomposition,productivity gap,structural change,employment
    Date: 2014
  6. By: Marino, Marianna (EPFL, Lausanne); Parrotta, Pierpaolo (Maastricht University); Pozzoli, Dario (KORA - Danish Institute for Local and Regional Government Research)
    Abstract: This article contributes to the literature on knowledge transfer via labor mobility by providing new evidence regarding the role of educational diversity in knowledge transfer. In tracing worker flows between firms in Denmark over the period 1995-2005, we find that knowledge carried by workers who have been previously exposed to educationally diverse workforces significantly increases the productivity of hiring firms. Several extensions of our baseline specification support this finding and show that insignificant effects are associated with the prior exposure of newly hired employees to either demographic or culturally diverse workplaces.
    Keywords: educational diversity, knowledge transfer, inter-firm labor mobility, firm productivity
    JEL: J24 J60 L20
    Date: 2014–03
  7. By: Marco MC Ceccagnoli; Nicolas van Zeebroeck; Roberto Venturini
    Abstract: Cross-functional knowledge integration and patenting are both reckoned to increase the productivity of human capital and the profitability of the firms implementing them. The combined effect of a joint use is in many ways ambiguous since those practices pursue different objectives in terms of managing the flow of information within the firm's boundaries. The presence of knowledge spillovers in situations of high technological rivalry could deteriorate the positive impact of knowledge integration. We investigate empirically different channels of interactions between patenting and knowledge integration and we find that they are substitutes in terms of economic profitability; consistently with our theory, the effect is exacerbated by high technological rivalry and scarce effectiveness of secrecy. Our empirical analysis is conducted using a cross-section database with detailed firm-level information on U.S. manufacturing firms.
    Keywords: R&D, Performance, Knowledge Integration, Patents, Spillovers
    Date: 2013
  8. By: Schlicht, Ekkehart
    Abstract: This note proposes a growth model that is derived from the standard Solow growth model by replacing the neoclassical production function with Kaldor’s technical progress function while maintaining a marginalist theory of factor prices in the spirit suggested by von Weizsäcker (1966, 1966b). The hybrid model so obtained accounts for balanced growth in a way that appears less arbitrary than the Solow model, especially because it directly accounts for Harrod neutral technical change, without any need for further assumptions.
    Keywords: directed technical change; directed technological change; bias in innovation; technical progress function; neoclassical production function; Harrod neutrality; Hicks neutrality; Cambridge theory of distribution; marginal productivity theory; Kaldor; Kennedy; von Weizsäcker; Solow model
    JEL: O30 O40 E12 E13 E25 B31 B59
    Date: 2014–03–17
  9. By: Mussa, Richard
    Abstract: The paper looks at the existence, nature and form of intrahousehold and interhousehold externalities of education on efficiency and production uncertainty of maize in rural Malawi. Data from the Third Integrated Household Survey are used. I find statistically and economically significant positive intrahousehold and interhousehold externalities of education on both efficiency and production uncertainty, and that the intrahousehold externality effects are larger than interhousehold externality effects. Community level schooling is found to substitute for household level schooling in the sense that farmers who reside in households where members are not educated have relatively higher efficiency and lower production uncertainty on account of living in communities where some inhabitants are educated. The paper also finds that the intrahousehold and interhousehold externality effects are more pronounced for the least efficient farmers, and that they are monotonic, and largest when schooling is relatively low.
    Keywords: intrahousehold; interhousehold;externality; Malawi
    JEL: D1
    Date: 2014–02–04
  10. By: Oseni, Gbemisola; Corral, Paul; Goldstein, Markus; Winters, Paul
    Abstract: This paper uses data from the General Household Survey Panel 2010/11 to analyze differences in agricultural productivity across male and female plot managers in Nigeria. The analysis utilizes the Oaxaca-Blinder decomposition method, which allows for decomposing the unconditional gender gap into (i) the portion caused by observable differences in the factors of production (endowment effect) and (ii) the unexplained portion caused by differences in returns to the same observed factors of production (structural effect). The analysis is conducted separately for the North and South regions, excluding the west of the country. The findings show that in the North, women produce 28 percent less than men after controlling for observed factors of production, while there are no significant gender differences in the South. In the decomposition results, the structural effect in the North is larger than the endowment at the mean. Although women in the North have access to less productive resources than men, the results indicate that even if given the same level of inputs, significant differences still emerge. However for the South, the decomposition results show that the endowment effect is more important than the structural effect. Access to resources explains most of the gender gap in the South and if women are given the same level of inputs as men, the gap will be minimal. The difference in the results for the North and South suggests that policy should vary by region.
    Keywords: Gender and Health,Gender and Development,Gender and Law,Rural Development Knowledge&Information Systems,Labor Policies
    Date: 2014–03–01
  11. By: Andrea Garnero; Stephan Kampelmann; François Rycx
    Abstract: The authors use matched employer-employee panel data on Belgian private-sector firms to estimate the relationship between wage/productivity differentials and the firm’s labor composition in terms of part-time and sex. Findings suggest that the groups of women and part-timers generate employer rents, but also that the origin of these rents differs (relatively lower wages for women, relatively higher productivity for part-timers). Interactions between gender and part-time suggest that the positive productivity effect is driven by male part-timers working more than 25 hours, whereas the share of female part-timers is associated with wage penalties. The authors conclude that men and women differ with respect to motives for reducing working hours and the types of part-time jobs available to them: women often have to accommodate domestic constraints by downgrading to more flexible jobs, whereas male part-time work is frequently related to training and collectively negotiated hours reductions that do not affect hourly pay.
    Keywords: wages; productivity; part-time employment; gender; matched panel data; GMM
    JEL: J39
    Date: 2013–11–22
  12. By: María Teresa Costa (Universitat de Barcelona & IEB); José García-Quevedo (Universitat de Barcelona & IEB); Agustí Segarra (GRIT, CREIP, Rovira i Virgili University)
    Abstract: This paper examines the extent to which innovative Spanish firms pursue improvements in energy efficiency (EE) within their innovation objectives. The increase in energy consumption and its impact on greenhouse gas emissions justifies the greater attention being paid to energy efficiency and especially to industrial EE. The ability of manufacturing companies to innovate and improve their EE has a substantial influence on reaching the objectives regarding climate change mitigation. Despite the effort to design more efficient energy policies, the EE determinants in manufacturing firms have been little studied in the empirical literature. From an exhaustive sample of Spanish manufacturing firms and using a probit model, we examine the energy efficiency determinants to those firms that have innovated. To carry out the econometric analysis, we use a panel data coming from CIS (Community Innovation Survey) for the period 2008-2011 that includes 4,458 manufacturing firms. Among firm characteristics, the empirical results underline the importance of size in facilitating the adoption of technology that improves energy efficiency; while among the factors related to companies’ behavior, the favorable influence of organizational innovations and innovations related with the reduction of environmental impacts stand out as the main factors in carrying out innovations with the objective of increasing energy efficiency.
    Keywords: Energy efficiency, corporate targets, innovation, Community Innovation Survey
    JEL: Q40 Q55 O31
    Date: 2014

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.