New Economics Papers
on Efficiency and Productivity
Issue of 2014‒04‒29
twelve papers chosen by

  1. Does Land Titling Increase Smallholder Agricultural Productivity in Zambia? By Hichaambwa, Munguzwe; Sitko, Nicholas; Chamberlin, Jordan
  2. The Hidden Cost of Investment: The Impact of Adjustment Cost on Firm Performance Measurement and Regulation By Nick, Sebastian; Wetzel , Heike
  3. Allocation of Research Resources and Publication Productivity in Japan: A Growth Accounting Approach By Aoki, Shuhei; Kimura, Megumi
  4. Does R&D increase the profit contribution of intangible assets? An exploration of European and American automotive supplierss By Stefan Lutz
  5. Can general purpose technology theory explain economic growth? Electrical Power as a case study By Cristiano Andrea Ristuccia; Solomos Solomou
  6. Why liquidity matters to the export decision of the firm By Chan, Rosanna
  7. The Superstar Quest: Does Youth Talent Predict Professional Success for Female and Male Tennis Players? By Grove, Wayne A.; Jetter, Michael
  8. The Effectiveness of Competition Policy: An Econometric Assessment in Developed and Developing Countries By Samà, Danilo
  9. Eco-Efficienza con Data Envelopment Analysis By Giuliano Resce
  10. Competitiveness in the Latin American manufacturing sector. Trends and determinants By Alicia Garcia-Herrero; Enestor dos Santos; Pablo Urbiola; Marcos dal Bianco; Fernando Soto; Mauricio Hernandez; Arnulfo Rodríguez; Rosario Sanchez
  11. Trust-Based Work-Time and Product Improvements: Evidence from Firm Level Data By Godart, Olivier; Görg, Holger; Hanley, Aoife
  12. Access to Banking Finance and Exporting By Roberto Alvarez; Ricardo A. Lopez

  1. By: Hichaambwa, Munguzwe; Sitko, Nicholas; Chamberlin, Jordan
    Keywords: Agricultural and Food Policy,
    Date: 2014–02
  2. By: Nick, Sebastian (Energiewirtschaftliches Institut an der Universitaet zu Koeln); Wetzel , Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: In this study, we address a major problem in the measurement of firm performance and the regulation of natural monopolies, namely the intertemporal character of long-term investment decisions. In specific, we focus on the impact of adjustment costs of investments on estimates of firms' technical and cost inefficiency. We apply nonparametric dynamic data envelopment analysis to investigate the dynamic inefficiency of electricity distribution and transmission companies in the US during the years 2004 to 2011 and compare our results with their static counterparts. Our empirical findings reveal that ignoring long-term investments and their corresponding adjustment costs does significantly distort both firm-specific and industrial inefficiency estimates and may thus create misleading incentives for the regulated firms to cut investments.
    Keywords: Dynamic Inefficiency; Dynamic Directional Distance Function; Dynamic Data Envelopment Analysis; Electricity Transmission and Distribution
    JEL: D22 D24 D61 D92 L51
    Date: 2014–03–04
  3. By: Aoki, Shuhei; Kimura, Megumi
    Abstract: In Japan, as in many developed countries, the government's agencies for science have implemented several reforms to the scientic research system, which has concentrated research resources in the top research universities. However, the growth of research papers has stagnated in Japan during the 2000s. To analyze the reason for this, this paper develops a framework that decomposes the changes in research output. The framework is based on a model of universities and is an application of growth accounting that is widely used in economics. Using the framework, we nd that the change in the allocation of research funds between universities had only a small effect on research output. The stagnation in research output during the 2000s was mainly accounted for by the decrease in research time. We also conduct a counterfactual experiment to examine how the research output would increase if the misallocation of research resources were completely removed.
    Keywords: growth accounting, publication productivity, research time, allocation of research funds
    JEL: C43 D24 D61
    Date: 2014–03–10
  4. By: Stefan Lutz (Royal Docks Business School, University of East London)
    Abstract: Economic theory implies that research and development (R&D) efforts increase firm productivity and ultimately profits. In particular, R&D expenses lead to the development of intangible assets in the form of intellectual property (IP) and these assets command a return that increases overall profits of the firm. This hypothesis is investigated for the North American and European automotive supplier industries. Results indicate that R&D expenses in fact increase both intangible asset levels and their profit contributions. In particular, increases in the R&D expense to sales ratio lead to increases in the profit contribution of intangible assets relative to sales. This indicates that more R&D intensive IP should command higher royalty rates per sales when licensed to third parties and within multinational enterprises alike.
    Keywords: Productivity; Intellectual property; Royalties; MNE; Transfer pricing.
    JEL: D24 L20 L62 M21
    Date: 2014–02
  5. By: Cristiano Andrea Ristuccia; Solomos Solomou
    Abstract: Does the concept of General Purpose Technologies help explain periods of faster and slower productivity advance in economies? The paper develops a new comparative data set on the usage of electricity in the manufacturing sectors of the USA, Britain, France, Germany and Japan and proceeds to evaluate the hypothesis of a productivity bonus as postulated by many existing GPT models. Using the case of the diffusion of electrical power in the early twentieth century this paper shows that there was no generalized productivity boost from electrical power diffusion as postulated by many existing GPT models. The productivity gains from this GPT varied widely across economies and industries, suggesting that the power of GPTs to predict aggregate or sectoral growth is limited.
    Keywords: General Purpose Technologies, Economic Growth, Economic History,Productivity, Long Swings
    JEL: N11 N12 N13 N14 N60 O40
    Date: 2014–04–16
  6. By: Chan, Rosanna
    Abstract: Under financial constraints, exporting may have less to do with productivity and more to do with financial resources. The established relationship between exporting and productivity would differ when examined through the lens of the working capital needs of the firm. The hypothesis that working capital matters in the firm's exporting decision is explored in two ways: first, by articulating a dynamic working capital model of the firm that incorporates the firm's export decision. Secondly, by testing the hypothesis empirically using a unique firm level dataset from Bangladesh, where issues of financial constraints are particularly acute. The model shows that productivity determines export status of the firm as long as it is not under financial constraints. However, under financial constraints, export status is less dependent on productivity and more dependent on the availability of working capital. Empirical results support the model's prediction. The relationship between exporting time and the need for greater liquidity is also borne out empirically as shown by a positive and significant correlation between the amount of working capital and the distance of export destination. An important policy implication from the analysis is that short term liquidity is critical in allowing productive firms to export and that access to finance may prevent the benefits of trade liberalization within a country to be fully realized.
    Keywords: Economic Theory&Research,Banks&Banking Reform,Access to Finance,Debt Markets,Labor Policies
    Date: 2014–04–01
  7. By: Grove, Wayne A. (Le Moyne College); Jetter, Michael (Universidad EAFIT)
    Abstract: We estimate the relationship between international youth and professional tennis rankings. We find no difference between the predictiveness of rankings from age 14 & Under versus age 16 & Under competitions. The most persistent predictor of professional success is beating older top ranked juniors. Our results reveal stark gender differences. For example, ordinal junior rankings are more strongly associated with professional success for males than for females. In addition, future tennis stars are better signaled by U14 competition outcomes for females, but by U16 results for males.
    Keywords: productivity measures, labor supply, career outcomes, tennis
    JEL: D82 D91 J16 J22 J24
    Date: 2014–04
  8. By: Samà, Danilo
    Abstract: The ultimate objective of the present paper is to empirically investigate the effectiveness of competition policy in developed and developing countries. Although its importance is continuously increasing, the effectiveness of competition policy still seems to lack the attention that it would deserve. At the present state of art, the number of academic contributions that attempts to estimate its impact on relevant economic variables appears very limited, in particular for the less developed countries. However, an empirical literature aimed at measuring in objective terms the effect of competition policy on economic growth is emerging, starting from narrow variables of interest, such as Gross Domestic Product and Total Factor Productivity. As a result, the principal aim of the current work is to contribute to this branch of research, focusing on broader indicators of market performance, in order to understand whether the presence of an antitrust authority has a significant impact, thus an effective utility, on the level of competition of a country.
    Keywords: Competition Authorities, Competition Policy, Developed Countries, Developing Countries, Economic Development, Economic Growth, Law & Economics, Market Concentration, Market Efficiency, Market Performance, New Institutional Economics, Political Economy
    JEL: C21 C26 K21 L40
    Date: 2013
  9. By: Giuliano Resce (Università degli Studi di Firenze)
    Abstract: Nel valutare l’eco-efficienza con Data Envelopment Analisys è necessario scegliere uno tra gli approccio presenti in letteratura. Ognuno di essi si differenzia dagli altri sia per il modo di trattare il bad output sia per i risultati ottenuti. La valutazione risulta pertanto condizionata direttamente dalla metodologia che si decide di utilizzare e si mostra perciò quanto più importante conoscerne le peculiarità. Questo lavoro è volto ad analizzare le caratteristiche tecniche degli approcci più rilevanti ed evidenziandone le differenze, sia nella modalità in cui viene trattato il bad output, sia nei risultati. Nella parte finale tali diversità sono messe in evidenza riportando un caso di studio sui dati di 22 paesi dell’OECD.
    Keywords: Eco-efficienza, Data Envelopment Analysis, Undesiderable Outputs, Reference Technology
    JEL: C61 D24 Q56
    Date: 2014
  10. By: Alicia Garcia-Herrero; Enestor dos Santos; Pablo Urbiola; Marcos dal Bianco; Fernando Soto; Mauricio Hernandez; Arnulfo Rodríguez; Rosario Sanchez
    Abstract: After analysing the evolution of exports from the large Latin American countries over the last decade, and examining on a case by case basis the determinants for each country’s performance, this study concludes that competitiveness in the manufacturing sectors of most countries in the region went down from 2007 to 2012, after relatively favourable progress in the previous five-year period between 2002 and 2007. This recent deterioration, which has been more noticeable in countries such as Brazil and Colombia, is related to the real exchange rate appreciation, high labour costs and insufficient progress in labour productivity. The main exception to these regional trends is Mexico, where gains in the manufacturing sector’s competitiveness continued beyond 2007, partly because the exchange rate stayed relatively depreciated and labour costs, as well as work productivity, performed better than in the South American countries. However, from 2011 onwards, the reversal of these trends has been making it difficult for the Mexican manufacturing sector to gain competitiveness. Case studies of each of the region’s main countries show that in general the exchange rate, labour costs and work productivity were the main determinants in the evolution of manufacturing competitiveness in the last decade. In fact, the countries and periods where these variables performed poorly coincide with losses of market share in international trade and deteriorating competitiveness. Nevertheless, the impact of the remaining variables affecting the manufacturing sector’s competitiveness is not insignificant either. In fact, gains in competitiveness have been greater (and losses in competitiveness smaller) in Chile and Peru, where the institutional framework has improved and logistics and energy costs reduced or kept under control.
    Keywords: competitiveness, Latin America, manufacturing, exports
    JEL: F10 L60 O14 O54
    Date: 2014–03
  11. By: Godart, Olivier (Kiel Institute for the World Economy); Görg, Holger (Kiel Institute for the World Economy); Hanley, Aoife (Kiel Institute for the World Economy)
    Abstract: We explore whether the introduction of trust based working hours is related to the subsequent innovation performance of firms. Employing a panel data set of over 5,000 German establishments, we implement a propensity score matching approach where we only consider firms that did not use trust based work contracts initially. Our results show that firms which adopt such contracts tend to be between 11 to 14 percent more likely to improve products. These results hold when we control for another form of flexible time work arrangements, namely working time accounts. Thus, the positive relationship between the adoption of trust based working hours and innovation seems to be driven by the degree of control and self-management over working days, rather than by merely allowing time flexibility.
    Keywords: trust based work time, innovation, firm performance
    JEL: M54 M12
    Date: 2014–04
  12. By: Roberto Alvarez (University of Chile); Ricardo A. Lopez (International Business School, Brandeis University)
    Abstract: This paper uses firm-level data for the period 1995-2002 to examine whether access to finance increases the probability of exporting of Chilean manufacturing plants. We exploit information on firms´ access to banking debt and changes in the real exchange rate ??RER?? to identify the causal effect of finance on exporting. This is an interesting case to study. The Chilean economy experienced a sustained RER depreciation since 1999, which increased export profitability. We use these changes in RER as a quasi-experiment to study the impact of access to banking finance. Our results show that RER depreciations increase the probability of exporting for firms with access to banking finance and especially for firms in industries with higher financial needs. These results are robust to controlling for other firm characteristics affecting the probability of exporting and also for time varying industry-specific shocks that may affect export performance and banking finance.
    Keywords: Exporting, Banking Finance, Credit Constraints, Firm-Level Data, Chile
    JEL: F14 O16 O54
    Date: 2014–03

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.