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on Efficiency and Productivity |
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Issue of 2014‒06‒14
seventeen papers chosen by |
| By: | Jungsoo Park (Asian Development Bank Institute (ADBI)); Yung Chul Park |
| Abstract: | This study analyzes the effects of financial liberalization on the lending behavior of banks and non-bank financial institutions (NBFIs) before and after the 1997 Asian financial crisis, using panel regressions on Republic of Korea firm-level and industry-level data of the period 1991–2007. It also develops a financial liberalization index to incorporate the multifaceted nature of financial reform. Findings show that financial liberalization has led banks and NBFIs to allocate more of their loans to small and medium-sized firms with good performance histories, thereby helping these entities to improve their total factor productivity growth. This paper does not find similar effects of financial liberalization on efficiency at large firms or at the industry level. Heavier reliance on direct financing after the crisis has not improved the productivity of large firms. |
| Keywords: | Financial Liberalization, non-bank financial institutions, Lending Behavior, firm-level and industry-level data, Financial Reform, small and medium-sized firm, Total Factor Productivity Growth |
| JEL: | G20 O40 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:eab:microe:24163&r=eff |
| By: | Francesco Aiello; Fernanda Ricotta (Dipartimento di Economia, Statistica e Finanza, Università della Calabria) |
| Abstract: | This paper analyses the TFP heterogeneity of a sample of manufacturing firms operating in seven EU countries (Austria, France, Germany, Hungary, Italy, Spain and UK). TFP data refer to 2008. The empirical setting is based on the multilevel modelling which provides two main results. Firstly, we show that TFP heterogeneity is largely due to firm-specific features (85% of TFP variability in the empty-model). Interestingly, we find that some key-drivers of TFP (size, family-management, group membership, innovations and human capital) influence heterogeneity in productivity with the expect sign, but do not, on the whole, absorb much of firm-TFP variance, implying that differences in productivity are due to sizable yet unobservable firm characteristics. Secondly, as far the role of localization is concerned, we demonstrate that country-effect is more influential than region-effect in explaining individual productivity. Net of the country-effect, the localisation in different European regions explains about 5% of TFP firm heterogeneity. When considering the case of three individual countries (France, Italy and Spain), location in different regions explains 4.7% of TFP heterogeneity in Italy, while this proportion is lower (2.9%) in France and higher (7.6%) in Spain. |
| Keywords: | TFP heterogeneity, firm-behavior, localization, European countries, multilevel model |
| JEL: | C30 D22 L60 R15 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:clb:wpaper:201404&r=eff |
| By: | Rudiger Ahrend; Emily Farchy; Ioannis Kaplanis; Alexander C. Lembcke |
| Abstract: | This paper estimates agglomeration benefits based on city productivity differentials across five OECD countries (Germany, Mexico, Spain, United Kingdom, and United States). It highlights the relationship between cities’ governmental fragmentation and productivity, and represents the first empirical analysis of how metropolitan governance structures affect this relationship. The comparability of results in a multi-country setting is supported through the use of Functional Urban Areas – an internationally harmonised definition of cities based on economic linkages rather than administrative boundaries. In line with the previous literature, the analysis confirms that city productivity tends to increase with city size; doubling city size is found to be associated with an increase in productivity of between two and five percent. What is more, city productivity is positively associated with the population size of nearby cities. On the governance side, the paper finds that cities with fragmented governance structures tend to have lower levels of productivity. For a given population size, a metropolitan area with twice the number of municipalities is associated with around six percent lower productivity; an effect that is mitigated by almost half by the existence of a governance body at the metropolitan level. |
| Keywords: | productivity, governance, cities, agglomeration economies |
| JEL: | H73 R12 R23 R50 |
| Date: | 2014–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2014/5-en&r=eff |
| By: | Mercedes Beltrán (Universidad de Valencia (Spain)); Ernest Reig (Universidad de Valencia (Spain)) |
| Abstract: | This paper compares the organic and conventional citriculture systems in Spain from the perspective of their technical efficiency. The efficiency of the two growing systems is compared in relation to a metafrontier that envelops both technologies in order to identify the limitations each farming system faces. In addition, the paper analyzes how efficient each growing system is at using its own technology, that is, their efficiency in relation to the best practices in their group. Contrary to conventional practice, farms’ performance is analyzed in terms of the cost of specific growing tasks: soil and plant cover management, pruning, fertilization and phytosanitary treatments. The results highlight that both organic and conventional orchards would achieve substantial global cost savings if they reached the maximum level of efficiency that their technological restrictions permit. The gap between the levels of efficiency on the frontier of each of the systems and the metafrontier is much wider in the case of organic than in conventional citriculture. Consequently, there is evidence that the limitations imposed on organic citriculture by regulatory and technological determinants have a significant impact on the relative efficiency of organic orchards in citrus fruit production, with potential consequences as regards their financial viability. |
| Keywords: | Organic citrus farming, technical efficiency, Data Envelopment Analysis (DEA), meta-frontier |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1406&r=eff |
| By: | Antonio Cubel; Vicente Esteve; Maria Teresa Sanchis; Juan A. Sanchis-Llopis |
| Abstract: | This paper analyses the relationship between total factor productivity (TFP) and innovation-related variables during the second half of the 20th century. We perform this analysis for several European countries (France, Germany, the United Kingdom, and Spain) and the U.S., extending Coe and Helpman’s (1995) empirical specification to include human capital. We use a new dataset of patents data for the past 150 years to calculate the stock of knowledge using the perpetual inventory method. Our time series empirical analysis confirms the heterogeneous relationship between innovation variables (domestic stock of knowledge, imports of knowledge, and human capital) and productivity. Our results reveal the extent to which observed differences in technology adoption patterns and the levels of endowment of such resources can explain differences in TFP dynamics across countries. The estimated coefficients confirm the considerable gap that still exists between the European countries and the U.S. in innovation-related variables. Furthermore, we obtain a finding that may have important implications for innovation policies: the higher the level of investment in human capital, the higher the level of investment in domestic innovation, and the higher the response of TFP to a 1% increase in any of the aforementioned variables. |
| Keywords: | OECD,international technology diffusion, patents, productivity, cointegration |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:uae:wpaper:0614&r=eff |
| By: | Jan Hagemejer (National Bank of Poland; Faculty of Economic Sciences, University of Warsaw); Joanna Tyrowicz (Faculty of Economic Sciences, University of Warsaw; National Bank of Poland); Jan Svejnar (Columbia University) |
| Abstract: | Despite an apparent consensus in the literature that privatization leads to increased productivity and profitability of firms, the problem of endogeneity bias is profound and has been emphasized in a number of meta-analyses. We propose a new method to address the endogeneity bias and apply it to a universe of Polish medium and large firms over 1995-2009. Unlike some previous studies we find that improvement in firm performance is a rare phenomenon, which suggests that the endogeneity bias could have been indeed large. |
| Keywords: | privatization, firm performance, endogeneity bias |
| JEL: | P45 P52 C14 O16 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2014-14&r=eff |
| By: | Antonio José Orozco Gallo |
| Abstract: | Este estudio utiliza el Indicador de Luenberger para evaluar la eficiencia y productividad de los hospitales públicos en Colombia. El análisis empírico se realizó para una muestra de 336 hospitales durante el periodo 2003-2011. Los resultados indican una caída de la productividad de los hospitales públicos colombianos, sustentada en el deterioro del cambio tecnológico como resultado de una escasa inversión en tecnología. Evidencia de esto es que solo uno de cada veinticinco hospitales experimentó un desempeño eficiente y productivo, mientras uno de cada tres evidenció lo contrario. Por regiones, los hospitales de las zonas Central y Caribe fueron los más ineficientes e improductivos. Además, contribuyeron con dos terceras partes de la disminución de la productividad general.******ABSTRACT: We used the Luenberger Productivity Indicator to estimate efficiency and productivity for Colombian public hospitals. The empirical application was applied to a sample of 336 hospitals during the period 2003-2011. The results show a decline in productivity of Colombian public hospitals, explained by the decreased in technological change as a result of low investment in technology. Evidence for this is that one of every twenty five hospitals experienced efficient and productive performance, while, one of every three showed the opposite. The results summarized by regions revealed that Hospitals in Central and Caribbean regions were the most unproductive and inefficient, and they also contributed two-thirds of the overall decline in productivity. |
| Keywords: | salud, hospitales públicos, Indicador de Productividad de Luenberger, productividad, Colombia. |
| JEL: | D24 I10 L30 O33 |
| Date: | 2014–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:col:000102:011548&r=eff |
| By: | Laure Latruffe (Structures et Marchés Agricoles, Ressources et Territoires, INRA; Agrocampus Ouest); Céline Nauges (University of Brisbane) |
| Abstract: | Using a panel of French crop farms, we test whether farmers' technical efficiency (TE) under conventional practices is a significant driver of the conversion to organic farming. We find that the probability of conversion depends on the TE preceding the conversion, but that the direction of the effect depends on the farm size and type of production. This result is found to be robust whichever method of calculation of efficiency scores is used – parametric or non-parametric. |
| Keywords: | organic farming, conversion, Technical efficiency, france, conversion d'exploitationefficacité techniqueagriculture biologique |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:inr:wpaper:208239&r=eff |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:lmu:muenec:20959&r=eff |
| By: | Lisi, Domenico; Malo, Miguel |
| Abstract: | In this article, we study the impact of temporary employment (TE) on productivity and, in particular, we wonder if it differs according to sectors skill intensity. Our data set is an ad-hoc industry-level panel of European countries, which allows to deal with endogeneity problems. Our main result is that TE has a negative impact on productivity, but it is more damaging in skilled sectors. While an increase of 10 percentage points of the share of TE in skilled sectors decrease labour productivity growth about 1-1.5%, in unskilled sectors the decrease would be 0.5-0.8%. This result is robust to changes in the skill intensity index and in the sample composition. We also discuss policy implications of this result for labour market regulation. |
| Keywords: | Labour productivity, Temporary employment, Skill intensity, Differential effect. |
| JEL: | J24 J41 O47 |
| Date: | 2014–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:56470&r=eff |
| By: | Massimo Filippini (ETH Zurich, Switzerland); Elisa Tosetti (ETH Zurich, Switzerland) |
| Abstract: | In this paper we propose a general approach for estimating stochastic frontier mod- els, suitable when using long panel data sets. We measure efficiency as a linear combi- nation of a finite number of unobservable common factors, having coefficients that vary across firms, plus a time-invariant component. We adopt recently developed economet- ric techniques for large, cross sectionally correlated, non-stationary panel data models to estimate the frontier function. Given the long time span of the panel, we investigate whether the variables, including the unobservable common factors, are non-stationary, and, if so, whether they are cointegrated. To empirically illustrate our approach, we estimate a stochastic frontier model for energy demand, and compute the level of the “underlying energy efficiency” for 24 OECD countries over the period 1980 to 2008. In our specification, we control for variables such as Gross Domestic Product, energy price, climate and technological progress, that are known to impact on energy consumption. We also allow for hetero- geneity across countries in the impact of these factors on energy demand. Our panel unit root tests suggest that energy demand and its key determinants are integrated and that they exhibit a long-run relation. The estimation of efficiency scores points at European countries as the more efficient in consuming energy. |
| Keywords: | Energy demand; panels; common factors; principal components. |
| JEL: | C10 C31 C33 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:14-198&r=eff |
| By: | Rexhäuser, Sascha; Löschel, Andreas |
| Abstract: | Many countries, especially in Europe, have ambitious goals to transform their national energy systems towards renewable energies. Technological change in both renewable production and efficient use of energy can help to make these targets come true. Using a panel of German firms linked to the PATSTAT patent data, we study invention in both types of energy technologies and how their inventors differ in terms of central firm-specific characteristics. More importantly, we study the relation between conventional (i.e. non-energy) invention and energy invention within the firms. The results from dynamic count data models point to a stimulating effect of conventional inventions for energy efficiency technologies but have no effect on inventions in renewable energies. -- |
| Keywords: | innovation,invention,renewable energy,energy efficiency,dynamic count data |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14036&r=eff |
| By: | Aristovnik, Aleksander |
| Abstract: | Information and communication technology (ICT) is one of the most important driving forces promoting economic growth in the economy. However, one puzzling question concerns the efficient and effective impact of ICT on educational outputs and outcomes. Therefore, the purpose of the paper is to discuss and review some previous research studies on development of the information society and its impact on educational outputs/outcomes at regional level. Respectively, a definition, measurements and the empirical application of the efficiency and effectiveness of the ICT at the regional (NUTS 2) level in the EU is considered (based on 2007–2011 average data). The research findings suggest that a wide range of NUTS 2 regions is characterized by a relatively low efficiency rate of transforming information society progress into educational outputs/outcomes, particularly in Eastern and Southern Europe. |
| Keywords: | information technology; education; efficiency; DEA; EU; NUTS-2 regions |
| JEL: | C6 I2 R1 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:56455&r=eff |
| By: | Sojourner, Aaron J. (University of Minnesota); Frandsen, Brigham R. (Brigham Young University); Town, Robert J. (Wharton School, University of Pennsylvania); Grabowski, David C. (Harvard Medical School); Chen, Michelle M. (Florida International University) |
| Abstract: | This paper studies the effects of nursing home unionization on numerous labor, establishment, and consumer outcomes using a regression discontinuity design. We find negative effects of unionization on staffing levels and no decline in care quality, suggesting positive labor productivity effects. Some evidence suggests that nursing homes in less competitive local product markets and those with lower union density at the time of election experienced stronger union employment effects. Unionization appears to raise wages for a given worker while also shifting the composition of the workforce away from higher-earning workers. By combining credible identification of union effects, a comprehensive set of outcomes over time with measures of market-level characteristics, this study generates some of the best evidence available on many controversial questions in the economics of unions. Furthermore, it generates evidence from the service sector, which has grown in importance and where evidence has been thin. |
| Keywords: | trade union, nursing homes, labor productivity, regression discontinuity, collective bargaining, health care quality |
| JEL: | J0 J5 D2 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8240&r=eff |
| By: | Jovanovic, Dragan |
| Abstract: | We analyze the effects of synergies from horizontal mergers in a Cournot oligopoly where principals provide their agents with incentives to cut marginal costs prior to choosing output. We stress that synergies come at a cost which possibly leads to a countervailing incentive effect: The merged firm's principal may be induced to stifle managerial incentives in order to reduce her agency costs. Whenever this incentive effect dominates the well-known direct synergy effect, synergies actually reduce consumer surplus which opposes the use of an efficiency defense in merger control. -- |
| Keywords: | Managerial Incentives,Horizontal Mergers,Merger Control,Productive Efficiency Gains,Synergies,Efficiency Defense |
| JEL: | D21 D86 L22 L41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:88r&r=eff |
| By: | Cristina Mocci; Stefania Pozzuoli; Francesca Romagnoli; Cristina Tinti |
| Abstract: | The aim of this study is to assess the effects of anti-competitive service regulation on economic performance in Italy. This paper runs a cross-sector panel regression of the Italian value added growth on the OECD PMR sectoral regulation indicators (ETCR and RBSR) in the 1995-2008 period using the national Input-Output matrix. This analysis enriches the empirical understanding of the effects of regulation on national value added growth with relevant implications for policy making. The results prove that in Italy sectoral liberalization on total economy and manufacturing played a relevant role in increasing the value added. We find a negative and statistically significant relationship between the overall liberalization of services, as well as in Energy and Professions, and the performance of the whole economy and manufacturing sector in the considered period. Being Italy among the countries with a significant difference between the regulation (PMR) and the business perception (EFW-DB) indicators, this paper provides a sense of this misalignment in the years of the panel. In particular, evidence shows that economic agents reacted positively to reforms related to state participation (Post, Telecom, Railways) and simplification of paperwork for start-ups in Italy. |
| Keywords: | Regulation, sector analysis, growth |
| JEL: | O40 L51 L80 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:itt:wpaper:wp2014-3&r=eff |
| By: | Vedran Kojić (Faculty of Economics and Business, University of Zagreb); Zrinka Lukač (Faculty of Economics and Business, University of Zagreb) |
| Abstract: | In this paper, we propose a new original method to solve the production cost minimization problem with Cobb-Douglas production function by using the weighted arithmetic-geometric-mean inequality (weighted AM-GM inequality). Instead of using derivatives or the Lagrange multiplier method, the minimum costs and global minimizers in the case of the Cobb-Douglas production function are derived in the direct way. The result is first derived for the case of two inputs and then generalized for the problem with n inputs. |
| Keywords: | global optimization, Cobb-Douglas technology, without derivatives, arithmetic mean, geometric mean |
| JEL: | C61 C65 D24 |
| Date: | 2014–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:zag:wpaper:1403&r=eff |