New Economics Papers
on Efficiency and Productivity
Issue of 2014‒04‒05
sixteen papers chosen by

  1. Micro-based evidence of EU competitiveness: the CompNet database By Lopez-Garcia, Paloma; di Mauro, Filippo; Benatti, Nicola; Angeloni, Chiara; Altomonte, Carlo; Bugamelli, Matteo; D’Aurizio, Leandro; Navaretti, Giorgio Barba; Forlani, Emanuele; Rossetti, Stefania; Zurlo, Davide; Berthou, Antoine; Sandoz-Dit-Bragard, Charlotte; Dhyne, Emmanuel; Amador, João; Opromolla, Luca David; Soares, Ana Cristina; Chiriacescu, Bogdan; Cazacu, Ana-Maria; Lalinsky, Tibor; Biewen, Elena; Blank, Sven; Meinen, Philipp; Hagemejer, Jan; Tello, Patry; Rodriguez-Caloca, Antonio; Cede, Urska; Galuscak, Kamil; Merikyll, Jaanika; Harasztosi, Peter
  2. Total Factor Productivity Estimation in Peru: Primal and Dual Approaches By Nikita Céspedes; Nelson Ramírez-Rondán
  3. A Longitudinal Parametric Approach to Estimate Local Government Efficiency By Pacheco, Francisca; Sanchez, Rafael; Villena, Mauricio
  4. Immigrants and Firms' Productivity: Evidence from France By Cristina Mitaritonna; Gianluca Orefice; Giovanni Peri
  5. Performance evaluation of production structures in agricultural holdings – case study By Turek Rahoveanu, Adrian; Turek Rahoveanu, Maria Magdalena
  6. Why Stars Matter By Ajay Agrawal; John McHale; Alexander Oettl
  7. Improved dairy cows in Uganda: Pathways to poverty alleviation and improved child nutrition: By Kabunga, Nassul S.
  8. The impact of public research contracts on scientific productivity By César Alonso-Borrego; Antonio Romero-Medina; Rocío Sánchez Mangas
  9. Origin of FDI and domestic productivity spillovers: does European FDI have a ‘productivity advantage’ in the ENP countries? By Vassilis Monastiriotis
  10. Health information, treatment, and worker productivity: Experimental evidence from malaria testing and treatment among Nigerian sugarcane cutters By Andrew Dillon; Jed Friedman; Pieter Serneels
  11. Productivity trends from 1890 to 2012 in advanced countries By Bergeaud, A.; Cette, G.; Lecat, R.
  12. Impact of Ghana’s agricultural mechanization services center program: By Benin, Samuel
  13. Does ICT remain a powerful engine of growth? By Cette, G.
  14. Regulation, Innovation and Technology Diffusion: Evidence from Building Energy Efficiency Standards in Germany By Makram El-Shagi; Claus Michelsen; Sebastian Rosenschon
  15. The concept of economic efficiency in agriculture By Chetroiu, Rodica; Călin, Ion
  16. Determining the Impact of Cultural Diversity on Regional Economies in Europe By Dirk Dohse; Robert Gold

  1. By: Lopez-Garcia, Paloma; di Mauro, Filippo; Benatti, Nicola; Angeloni, Chiara; Altomonte, Carlo; Bugamelli, Matteo; D’Aurizio, Leandro; Navaretti, Giorgio Barba; Forlani, Emanuele; Rossetti, Stefania; Zurlo, Davide; Berthou, Antoine; Sandoz-Dit-Bragard, Charlotte; Dhyne, Emmanuel; Amador, João; Opromolla, Luca David; Soares, Ana Cristina; Chiriacescu, Bogdan; Cazacu, Ana-Maria; Lalinsky, Tibor; Biewen, Elena; Blank, Sven; Meinen, Philipp; Hagemejer, Jan; Tello, Patry; Rodriguez-Caloca, Antonio; Cede, Urska; Galuscak, Kamil; Merikyll, Jaanika; Harasztosi, Peter
    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, describes 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. JEL Classification: L11, L25, D24, O4, O57
    Keywords: allocative efficiency, competitiveness, cross country analysis, firm-level data, productivity and size distribution, total factor productivity
    Date: 2014–02
  2. By: Nikita Céspedes (Central Bank of Peru); Nelson Ramírez-Rondán (Central Bank of Peru)
    Abstract: In this paper we estimate total factor productivity (TFP) growth for the Peruvian economy using the primal and dual methods for the period 2003-2012. According to the primal method, a procedure that uses the Solow residual as an indicator of productivity, TFP grew at an average annual rate of 1.6%, adjusted for the quality and usage of the factors of production. According to the dual method, a procedure that considers estimations of the marginal productivities of the factors of production, TFP grew at an annual rate of 1.7%.
    Keywords: Productivity, Primal, Dual, Peru, Solow residual
    JEL: C23 E23 O47
    Date: 2014–03
  3. By: Pacheco, Francisca; Sanchez, Rafael; Villena, Mauricio
    Abstract: Previous empirical works on municipal efficiency have mostly used cross-sectional data which makes it impossible to separate unobserved heterogeneity from inefficiency. Furthermore, they have also typically used a two stages approach which has been widely criticized as the assumptions made in the first stage are violated in the second stage, generating biased results. We present one of the first longitudinal parametric studies that analyze municipal efficiency and its determinants using a one step procedure. Furthermore, we are the first of this kind that analize overall efficiency as well as efficiency by clusters of municipalities in order to reduce heterogeneity. We use administrative datasets of Chilean municipalities for the 2008-2010 period and our results suggest that Chilean municipalities have on average an inefficiency level of 30% with a significant variance between clusters of municipalities. Also, our results suggest that socio-economic, fiscal and political variables affect municipal efficiency. In particular, we found that municipalities with tighter budget constraints are associated with more efficient municipalities.
    Keywords: Stochastic Frontiers, Efficiency, Municipalities, Budget
    JEL: H72 O54
    Date: 2014–03–11
  4. By: Cristina Mitaritonna; Gianluca Orefice; Giovanni Peri
    Abstract: Immigrants may complement native workers, allow reallocation by skill in the firm and lower costs. These effects could be beneficial for the firm and increase its productivity and profits. However not all firmes use immigrants. Allowing firms to have differential fixed cost in hiring immigrants, because of different information and access to their network, we analyze the impact of an increase in local supply of immigrants on firms' immigrant employment and productivity. Using micro-level data on French firms during the period 1995-2005, we show that a supply-driven increase in foreign born workers in a department (location) increases the productivity of firms in that department. We also find that this effect is significantly stronger for firms with initially low (or zero) level of foreign employment. Those are also the firms whose share of immigrants increases the most. We also find that the positive productivity effect of immigrants is associated with faster growth of capital and improved export performances (for extensive and intensive margin) of the firms. While these outcomes depend on the firm share of immigrants in employment we find a positive effect of immigration on wages of natives and on specialization of natives in complex occupations that is common to all firms in the district. Supply-driven increase in foreign born workers in a department (location) implies a re-allocation of native workers towards communication and cognitive intensive tasks.
    Keywords: immigrants;firms;productivity;heterogeneity;fixed cost of hiring
    JEL: F22 E25 J61
    Date: 2014–03
  5. By: Turek Rahoveanu, Adrian; Turek Rahoveanu, Maria Magdalena
    Abstract: The performance of production structures in agriculture is determined by a complex of factors, the most important are: the natural potential of agricultural holdings, financial resources necessary to purchase inputs, ensuring balance in the allocation of factors of production, technical and technological potential, the existing workforce and the readiness of the farm manager. Based on these considerations we want in this paper to analyze the aspects defining application of performance management in order to develop sustainable production structures, increase competitiveness of farms, farmers' income stabilization and Romanian rural development.
    Keywords: production structure, management, efficiency, competitiveness
    JEL: Q1 Q12
    Date: 2013–10–21
  6. By: Ajay Agrawal; John McHale; Alexander Oettl
    Abstract: The growing peer effects literature pays particular attention to the role of stars. We decompose the causal effect of hiring a star in terms of the productivity impact on: 1) co-located incumbents and 2) new recruits. Using longitudinal university department-level data we report that hiring a star does not increase overall incumbent productivity, although this aggregate effect hides offsetting effects on related (positive) versus unrelated (negative) colleagues. However, the primary impact comes from an increase in the average quality of subsequent recruits. This is most pronounced at mid-ranked institutions, suggesting implications for the socially optimal spatial organization of talent.
    JEL: I23 J24 O31
    Date: 2014–03
  7. By: Kabunga, Nassul S.
    Abstract: The introduction and dissemination of improved dairy cow breeds in Uganda is arguably the most significant step taken to develop a modern and commercial dairy industry in the country over the last two decades. This study uses a nationally representative sample of Ugandan households to rigorously examine the impact of adoption of improved dairy cow breeds on enterprise-, household-, and individual child-level nutrition outcomes. We find that adopting improved dairy cows significantly increases milk productivity, milk commercialization, and food expenditure.
    Keywords: Technology adoption, productivity, child nutrition, Poverty, Impact assessment, poverty alleviation, propensity score matching,
    Date: 2014
  8. By: César Alonso-Borrego; Antonio Romero-Medina; Rocío Sánchez Mangas
    Abstract: We analyze a competitive research-oriented public program established in Spain, the Ramon yCajal Program, intended to offer contracts in public research centers to high-quality researchers.We study the effects of the Program on the ex-post scientific productivity of its recipients, relativeto unsuccessful applicants with comparable curricula at the time of application. The full sampleresults demonstrate that the Program has a positive and significant effect on the scientific impactof the recipients, as measured by the average and the maximum impact factors, but the effect onthe number of published papers is not significant. Consequently, receiving a contract does notsignificantly affect the quantity, but increases the quality, of the contract recipients' publications.This result is primarily driven by the particular relevance of experimental sciences in the Program.
    Keywords: Ramon y Cajal Program, Brain Gain, Research Productivity, Government Research Programs, Human Capital, Policy Evaluation, Matching
    JEL: O38 D78 C21 I23 O31
    Date: 2014–05
  9. By: Vassilis Monastiriotis
    Abstract: The process of approximation between the EU and its ‘eastern neighbourhood’ has created conditions for deepening economic interactions and market integration, giving to the EU –and to EU businesses– an elevated role in the process of economic modernisation and transition in the neighbourhood countries. This raises the question as to whether European business activity in these countries produces indeed measureable economic advantages both in absolute and in relative terms (e.g., compared to business activity from other parts of the world). Similarly, a question arises as to whether European business activity reduces or amplifies spatial imbalances within the partner countries. This paper examines these issues for the case of capital flows (foreign ownership) and the related productivity spillovers, using firm-level data from the Business Environment and Enterprise Performance Survey (BEEPS) covering 28 transition countries over the period 2002-2009. We estimate the direct and intra-industry productivity effects of foreign ownership and examine how these differ across regional blocks (CEE, SEE and ENP), according to the origin of the foreign investor (EU versus non-EU), across geographical scales (pure industry versus regional spillovers) and for different types of locations (capital-city regions versus the rest). Our results suggest that FDI of EU origin plays a distinctive role in the countries concerned helping raise domestic productivity significantly more than investments from outside the EU. However, this process appears to operate in a spatially selective manner, thus enhancing regional disparities and spatial imbalances. This, then, assigns a particular responsibility for EU policy, as it continues to promote economic integration (and FDI flows) to its eastern neighbourhood, to devise interventions that will help redress these problems.
    Keywords: foreign direct investment
    Date: 2014–01–08
  10. By: Andrew Dillon; Jed Friedman; Pieter Serneels
    Abstract: Agricultural and other physically demanding sectors are important sources of growth in developing countries but prevalent diseases such as malaria adversely impact the productivity, labor supply, and occupational choice of workers in these sectors by reducing physical capacity. This study identifies the impact of malaria on worker earnings, labor supply, and daily productivity by randomizing the temporal order at which piece-rate workers at a large sugarcane plantation in Nigeria are offered malaria testing and treatment. The results indicate a significant and substantial intent to treat effect of the intervention – the offer of a workplace based malaria testing and treatment program increases worker earnings by approximately 10% over the weeks following the mobile clinic visit. The study further investigates the effect of health information by contrasting program effects by workers revealed health status. For workers who test positive for malaria, the treatment of illness increases labor supply, leading to higher earnings. For workers who test negative, and especially for those workers most likely to be surprised by the healthy diagnosis, the health information also leads to increased earnings via increased productivity. Possible mechanisms for this response include selection into higher return occupations as a result of changes in the perceived cost of effort. A model of the worker labor decision that includes health perceptions in the decision to supply effort suggests that, in endemic settings with poor quality health services, inaccurate health perceptions may lead workers to misallocate labor thus resulting in sub-optimal production and occupational choice. The results underline the importance of medical treatment but also of access to improved information about one’s health status, as the absence of either may lead workers to deliver lower than optimal effort levels in lower return occupations.
    Keywords: malaria, labor supply, labor productivity, randomized experiment
    JEL: I12 J22 J24 O12
    Date: 2014
  11. By: Bergeaud, A.; Cette, G.; Lecat, R.
    Abstract: In order to examine innovation diffusion and convergence processes, we study productivity trends, trend breaks and levels for 13 advanced countries over 1890-2012. We highlight two productivity waves, a big one following the second industrial revolution and a small one following the ICT revolution. The first big wave was staggered across countries, hitting the US first in the Interwar years and the rest of the world after World War II. It came long after the actual innovation could be implemented, emphasizing a long diffusion process. The productivity leader changed during the period under study, the Australian and UK leadership becoming a US one during the first part of the XXth century and, for very particular reasons, also a Norwegian, Dutch and French one at least for some years at the end of the XXth century. The convergence process has been erratic, halted by inappropriate institutions, technology shocks, financial crises but above all by wars, which led to major productivity level leaps, downwards for countries experiencing war on their soil, upwards for other countries. Productivity trend breaks are detected following wars, global financial crises, global supply shocks (such as the oil price shocks) and major policy changes (such as structural reforms in Canada or Sweden). The upward trend break for the US in the mid-1990s is confirmed, as well as the downward trend break for the Euro Area in the same period. The downward trend break observed as early as the mid-2000s for the US leads one to question the future contribution of the ICT revolution to productivity enhancement.
    Keywords: Productivity, convergence, technological change, global history.
    JEL: E22 N10 O47
    Date: 2014
  12. By: Benin, Samuel
    Abstract: Use of mechanization in African agriculture has returned strongly to the development agenda, particularly following the recent high food prices crisis. Many developing country governments—including Ghana, the case study of this paper—have resumed support for agricultural mechanization, typically in the form of providing subsidies for tractor purchase and establishment of private-sector-run agricultural mechanization service centers (AMSECs). The aim of this paper is to assess the impact of Ghana’s AMSEC program on various outcomes, using data from household surveys that were conducted with 270 farmers, some of them located in areas with the AMSEC program (treatment) and others located in areas without the program (control).
    Keywords: mechanization, productivity, Agricultural development, Agricultural policies, propensity score matching,
    Date: 2014
  13. By: Cette, G.
    Abstract: ICT productive performances have slowed down since the beginning of the 2000s, before the current crisis. This diagnosis could be due, at least partly, to some statistical mis-measurements of ICT improvements. Nevertheless, improvements in ICT performances will probably be positively impacted, in some years, by large technological developments as for example the productive use, in computers, of the 3D chip. The lag of ICT diffusion in non-US developed countries, mainly Europe and Japan, compare to the US, is explained by institutional aspects: a lower education level, on average, of the working-age population and more regulations on labour and product markets. By implementing structural reforms, these countries could benefit from a productivity acceleration linked to a catch-up of the US ICT diffusion level. And they could benefit, without any delay with the US, from the possible ICT productivity growth second wave.
    Keywords: ICT, productivity, growth, innovation.
    JEL: O31 O33 J24 O47 E22
    Date: 2014
  14. By: Makram El-Shagi; Claus Michelsen; Sebastian Rosenschon
    Abstract: The impact of environmental regulation on technology diffusion and innovations is studied using a unique data set of German residential buildings. We analyze how energy efficiency regulations, in terms of minimum standards, affects energy-use in newly constructed buildings and how it induces innovation in the residential-building industry. The data used consists of a large sample of German apartment houses built between 1950 and 2005. Based on this information, we determine their real energy requirements from energy performance certificates and energy billing information. We develop a new measure for regulation intensity and apply a panel-error-correction regression model to energy requirements of low and high quality housing. Our findings suggest that regulation significantly impacts technology adoption in low quality housing. This, in turn, induces improvements in the high quality segment where innovators respond to market signals.
    Keywords: Environmental regulation, innovation, technology diffusion, residential real estate, energy efficiency
    JEL: D2 Q4 R5
    Date: 2014
  15. By: Chetroiu, Rodica; Călin, Ion
    Abstract: The economic efficiency is a concept with a complex content, which expresses the useful effect achieved in an economic activity, in relation to the requested expenditures, or the effort for its realization. Through its applicative side, the efficiency (e) can be defined as a quantitative ratio between the effects (E) and the resources or efforts (R) made to obtain them, or, in other words, achieving maximum effect with a specified level of consumptions, or reaching the determined effect with minimum consumption: e = E / R max (maximizing the effects obtained per unit of allocated, consumed resources); e = R / E min (minimizing the resource consumption per unit of effect achieved). This concept is the most important qualitative indicator of the economic development, a key factor in accelerating economic growth. Applied in agriculture, it represents the obtaining the maximum amount of production per hectare or per animal, with minimal expenditure of manpower and materials. Determination of economic efficiency must be based on knowledge of the elements that characterize the production effort and having three main sources: the optimal use of resources, rational use of labor and production management.
    Keywords: economic efficiency, effects, resources, agriculture, concept
    JEL: Q0 Q1
    Date: 2013–10–21
  16. By: Dirk Dohse; Robert Gold
    Abstract: In recent decades, the ethnic composition of the European population has changed substantially, leading to a rapid increase of cultural diversity in the EU as a whole, at the level of individual member states, and at the regional level. This paper focusses on the regional level and investigates the relationship between cultural diversity and regional economic performance for the EU 27. Giving particular attention to regional innovation, GDP per capita, and its development over time, the paper finds that culturally more diverse regions are on average more innovative, which translates into higher growth and better economic performance. An important finding of this study is, however, that the positive effect of cultural diversity on regional economic performance is not present in all sub-samples of the European regions alike.
    Keywords: Regional Development, Cultural Diversity, Measurement Issues
    JEL: M13 O18 R11
    Date: 2014–03

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