New Economics Papers
on Efficiency and Productivity
Issue of 2014‒06‒28
fifteen papers chosen by

  1. A nonparametric approach to the decomposition of labor productivity in regional manufacturing By Juan Carlos Chávez; Luis Fernando López Ornelas  
  2. Production Factors, Productivity Dynamics and Quality Gains as Determinants of Healthcare Spending Growth in U.S. Hospitals By Juan Contreras; Elena Patel; Ignez Tristao
  3. Is green knowledge improving environmental productivity? Sectoral Evidence from Italian Regions. By Claudia Ghisetti; Francesco Quatraro
  4. Impact of non-farm work and land tenancy contracts on soil conservation measures By Kousar, Rakhshanda; Abdulai, Awudu
  5. Input aggregation bias in technical efficiency with multiple criteria analysis By Casasnovas, Valero L.; Aldanondo, Ana M.
  6. Productivity and Potential Output Before, During, and After the Great Recession By John Fernald
  7. Tax Collection, The Informal Sector, and Productivity By Julio C. Leal-Ordoñez
  8. The influence of landscape on farms’ economic efficiency – combining matching and DEA approaches in Styria, Austria By Lenglet, Jonathan; Franzel, Martin; Kirchweger, Stefan; Kapfer, Martin; Schaller, Lena; Kantelhardt, Jochen
  9. Changing patterns of electricity use in European manufacturing: A decomposition analysis By Wenzel, Lars; Wolf, André
  10. Adoption of conservation agriculture technology in diversified systems and impact on productivity: evidence from three districts in Bangladesh By Akter, Shaheen; Gathala, Mahesh Kumar
  11. Globalisation and the future of the welfare state By Chen, Yu-Fu; Görg, Holger; Görlich, Dennis; Molana, Hassan; Montagna, Catia; Temouri, Yama
  12. Rankings and university performance: a conditional multidimensional approach By Cinzia Daraio; Andrea Bonaccorsi; Leopold Simar
  13. Adoption and Impact of Improved Cow Breeds on Household Welfare and Child Nutrition Outcomes: Empirical Evidence from Uganda By Kabunga, Nassul
  14. Does anti-competitive service sector regulation harm exporters? Evidence from manufacturing firms in Spain By Monica Correa Lopez; Rafael Domenech
  15. Study on the Competitiveness of the Mexican Sugar Industry By Francisco Campos-Ortiz; Mariana Oviedo-Pacheco

  1. By: Juan Carlos Chávez; Luis Fernando López Ornelas  
    Abstract: This study decomposes both the labor productivity gap and the labor productivity growth into the contributions of technical efficiency, capital deepening and technological change for Mexican manufacturing at the regional level. In order to do so, we apply a methodology that combines two literatures: the nonparametric construction of production frontiers and the general decomposition approach developed by Shorrocks (2012) which is based on the Shapley value. The results indicate that regional differences in labor productivity are mainly attributed to technical efficiency, and, to a lesser extent, to regional differences in capital deepening. Moreover, labor productivity growth was not homogeneous across regions over the period 1998-2008. In both the north and the south, the increase in labor productivity was mainly driven by technical efficiency, while technological change was the most influential factor on labor productivity growth in the central regions.
    Keywords: Capital intensity, Labor productivity, Technical efficiency, Technological change, Manufacturing, Shapley value
    JEL: J24 L60 R1
    Date: 2013–07
  2. By: Juan Contreras; Elena Patel; Ignez Tristao
    Abstract: We analyze the contribution of production factors to revenue growth in almost the complete universe of U.S. hospitals, accounting for quality and productivity. Production factors (capital, labor, energy, materials and drugs) contributed 70% (drugs alone contributed 52 %), better health outcomes (higher quality) contributed 5 %, and better use of resources (productivity) contributed 25 %. We find increasing returns to scale, a markup of between 15% and 36% and a much larger productivity dispersion in the hospital sector than the one found in manufacturing, with gains coming mainly from within-hospital productivity growth and almost zero coming from net entry.
    Keywords: Health care cost growth, Health care productivity, Health production
    JEL: D24 I12 E22
    Date: 2013–09
  3. By: Claudia Ghisetti (Dipartimento di Economia e Management, Università  di Ferrara and SEEDS - Sustainability Environmental Economics and Dynamic Studies.); Francesco Quatraro (GREDEG-CNRS University of Nice-Sophia Antipolis (France) and BRICK, Collegio Carlo Alberto (Torino).)
    Abstract: This paper provides empirical investigation of the effects of environmental innovations (EIs) on environmental performances, as proxied by the environmental productivity (EP) measure. We focused on sectoral environmental productivity of Italian Regions by exploiting the Regional Accounting Matrix including Environmental Accounts(Regional NAMEA). Patent applications have been extracted by the Patstat Database and assigned to the environmental domain by adopting three international classifications of green technologies: the WIPO IPC green inventory, the European Patent Office climate change mitigation technologies classification (Y02) and the OECD ENV-Tech indicators. Econometric results outline that regions-sectors characterized by higher levels of green technologies (GTs) are actually those facing better environmental performance. These positive effects directly stem from the introduction of GT in the same sector, as well as from the introduction of GT in vertically related sectors.
    Keywords: environmental performance, regional NAMEA, environmental innovation, green technologies, vertical relatedness.
    JEL: O33 Q53 Q55 Q56 R11
    Date: 2014–05
  4. By: Kousar, Rakhshanda; Abdulai, Awudu
    Abstract: This paper examines the impacts of non-farm work and land tenancy arrangements on the intensity of investment in soil-improving measures and farm productivity. A multivariate tobit model that accounts for potential endogeneity between the intensity of investment and the non-farm work and tenancy arrangement variables is estimated for 341 rural households in Punjab province of Pakistan. Instrumental variable approach is also used to analyze the impact of tenancy arrangement and non-farm work on farm productivity. The empirical results show that participation in non-farm work and tenure security tend to increase the intensity of investment in long-term soil-improving measures, but decrease chemical fertilizer use intensity. We also find that increases in non-farm work and tenure security exert significant and positive effects on agricultural productivity. Investment in soil conservation measures is also found to significantly increase agricultural productivity.
    Keywords: farm productivity, land tenure, non-farm work, soil conservation., Environmental Economics and Policy, Land Economics/Use, Production Economics, Productivity Analysis,
    Date: 2014–04
  5. By: Casasnovas, Valero L.; Aldanondo, Ana M.
    Abstract: We extend the Tauer (2001) and Färe et al. (2004) analyses of aggregation bias in technical efficiency measurement to multiple criteria decision analysis. We show input aggregation conditions consistent with multiple criteria evaluation of overall efficiency in conjunction with variation in aggregation bias.
    Keywords: Data Envelopment Analysis, Input aggregation, multiple objectives
    JEL: C61 D20
    Date: 2014–06–12
  6. By: John Fernald
    Abstract: U.S. labor and total-factor productivity growth slowed prior to the Great Recession. The timing rules out explanations that focus on disruptions during or since the recession, and industry and state data rule out “bubble economy” stories related to housing or finance. The slowdown is located in industries that produce information technology (IT) or that use IT intensively, consistent with a return to normal productivity growth after nearly a decade of exceptional IT-fueled gains. A calibrated growth model suggests trend productivity growth has returned close to its 1973-1995 pace. Slower underlying productivity growth implies less economic slack than recently estimated by the Congressional Budget Office. As of 2013, about ¾ of the shortfall of actual output from (overly optimistic) pre-recession trends reflects a reduction in the level of potential.
    JEL: E23 E32 O41 O47
    Date: 2014–06
  7. By: Julio C. Leal-Ordoñez
    Abstract: Some authors argue that informality is associated with distorted firm decisions and inefficiency. In this paper, I assess the quantitative effect of incomplete tax enforcement on aggregate output and productivity using a dynamic general equilibrium framework. I calibrate the model using data for Mexico and investigate the effects of introducing enforcement improvements. Under complete enforcement, labor productivity and output would be 19% higher under perfect competition and 34% higher under monopolistic competition. The source of this gain is the removal of distortions induced by incomplete enforcement of taxes which affect the economy in three ways: by reducing the capital-labor ratios of informal establishments; by allowing low-productive entrepreneurs to enter; and by misallocating resources towards low-productive establishments. I isolate the effects of pure factor misallocation, distorted occupational choices, capital accumulation, and complementarities.
    Keywords: Tax enforcement, TFP, the informal sector
    JEL: E23 E26 O17 O40
    Date: 2013–12
  8. By: Lenglet, Jonathan; Franzel, Martin; Kirchweger, Stefan; Kapfer, Martin; Schaller, Lena; Kantelhardt, Jochen
    Abstract: The provision of commodities for feed, food and energy production is the main task of the agricultural sector but it is obvious that agriculture is also essential for the viability of most rural areas. Although the consequences of agriculture on the landscape are extensively described, the reverse is less documented. The objective is therefore to assess the efficiency of agricultural holdings in order to establish correlation between the purely economic factors and the landscape aspects. The study region “Mittleres Ennstal”, is located in the north-east of Styria in Austria. We apply a matching approach to obtain reliable data, then, a data Envelopment Analysis (DEA) is performed, followed by a second stage for interrelations analysis. Two databases supported by the European Commission were used: the IACS and the FADN. This chain process aims to provide sufficient data and allow performing an economic analysis in a proven framework. It enables us to establish ties between agricultural efficiency and the landscape and, to quantify the impact of the landscape on the competitiveness. The results show that the considered landscape features have no first order effect on the farms’ economic efficiency. However, it does not mean that agriculture and landscape are not linked together.
    Keywords: Landscape, Economic efficiency, Second stage DEA, Matching, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, International Relations/Trade, Q15,
    Date: 2014–04
  9. By: Wenzel, Lars; Wolf, André
    Abstract: This paper sets out to investigate the changing patterns of electricity intensity in European manufacturing for the time span 2000-2011. While GVA in Manufacturing has grown and electricity use has declined, it is not clear that this decrease in intensity is directly associated with improvements in technology. Decomposition of the effect suggests that a switch towards less energy intensive sectors accounted for roughly 10% of the total change in electricity intensity. A further level of disaggregation was added in order to account for the factor mix in the form of potential substitution between labor and electricity. The factor mix effect was largely positive, implying that substitution from labor to electricity has been the norm. The average decrease in labor intensity has been more pronounced than the corresponding decrease in electricity intensity. Accordingly, aggregate changes cannot purely be attributed to less electricity-dependent modes of production, but are rather due to general improvements in productivity. Interestingly, this does not appear to be driven by factor prices, as electricity prices grew significantly more than wage compensations within the period at hand. -- Diese Arbeit untersucht zeitliche Veränderungen der Stromintensität in der europäischen Industrie in der Zeitspanne 2000 bis 2011. Parallel zur steigenden industriellen Produktion ist der Stromverbrauch der Industrie im Mittel gesunken, dies ist jedoch nicht zwangsläufig das Ergebnis von technologischem Fortschritt. Eine Zerlegung in Struktur- und Intensitätskomponente ergibt, dass etwa 10 % der gesunkenen Stromintensität auf sektorale Effekte zurückzuführen sind. Um zusätzlich Änderungen im Substitutionsverhältnis von Arbeit und Energie zu berücksichtigen, wurde in einem weiteren Zerlegungsschritt ein Faktormixeffekt bestimmt. Dabei wurde im allgemeinen ein systematischer Anstieg des Arbeitseinsatzes in Relation zum Stromverbrauch festgestellt. Änderungen in der Intensität können damit nicht allgemein auf einen Wechsel zu weniger stromabhängigen Produktionsmethoden zurückgeführt werden. Interessanterweise schien dies nicht durch Änderungen in den Faktorpreisen verursacht worden zu sein, da die Strompreise deutlich stärker gewachsen sind als die Löhne.
    Keywords: decomposition analysis,electricity intensity,European manufacturing,Logarithmic Mean Divisia Index (LMDI)
    Date: 2014
  10. By: Akter, Shaheen; Gathala, Mahesh Kumar
    Abstract: Where land is an extremely limiting factor, production is increased through intensive cultivation with two or more crops in a year. We found that 82 per cent of the operating crop land is under 2 or more crops. Soil fertility depletion is one of the main biophysical limiting factors for sustaining per capita food production for smallholder farmers in this system. The adoption of conservation agricultural practices, as a way to tackle this challenge, has become an important issue in the development policy agenda for smallholder agriculture. This paper examines the adoption decisions for conservation tillage, using recent primary data collected from 606 farming households practising diverse cropping systems in three different districts where on-farm participatory trials were being carried out. The paper employs classical tests to identify variations in adoption and yield between participatory and non-participatory farmers as well as variation between cropping patterns and locations. A double hurdle model was employed to explain the factors influencing adoption decisions by farm households. The analysis reveals that several factors contribute to probability and intensity of adoption. Diversities exist between locations, cropping systems, and seasons. Policies that target conservation as a measure of sustainable agriculture must consider diversities for wider diffusion of technology.
    Keywords: Community/Rural/Urban Development, Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies, O33, Q18, C21, Q16, C24,
    Date: 2014–04
  11. By: Chen, Yu-Fu; Görg, Holger; Görlich, Dennis; Molana, Hassan; Montagna, Catia; Temouri, Yama
    Abstract: [Conclusion] Taken together, the analysis in this paper does not support the conventional wisdom that the welfare state hinders country competitiveness, or that social expenditure (financed through corporate taxation) deters inward foreign direct investment. Instead, we find that welfare expenditure is positively associated with country competetiveness if vertical linkages (leading to aggregate scale economies) are high. In such a case, as argued theoretically by Molana and Montagna (2006), there may be a virtuous cycle of higher social protection, aggregate productivity and welfare. Also, updating and extending Görg, Molana and Montagna (2009) with an analysis using firm level data on the relocation decisions of multinational firms, we find that social expenditure may be attractive to inward FDI and may also act to anchor firms in the home country. Overall, the theoretical and empirical analysis in this paper suggests that the relationship between globalization, international competitiveness and the welfare state is far more complex than what is implied by the conventional wisdom. Further research is warranted to examine exactly the channels through which WS policies affect microeconomic adjustments to globalisation and, through these, countries' competitiveness and aggregate performance. --
    Date: 2014
  12. By: Cinzia Daraio (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Andrea Bonaccorsi (Department of Electrical Systems and Automation, University of Pisa, Italy); Leopold Simar (Institute of Statistics, Biostatistics et Actuarial Sciences, Universite' Catholique de Louvain, Louvain-la-Neuve, Belgium)
    Abstract: University rankings are the subject of a paradox: the more they are criticized by social scientists and experts on methodological grounds, the more they receive attention in policy making and the media. In this paper we attempt to give a contribution to the birth of a new generation of rankings, one that might improve on the current state of the art, by integrating new kind of information and using new ranking techniques. Our approach tries to overcome four main criticisms of university rankings, namely: monodimensionality; statistical robustness; dependence on university size and subject mix; lack of consideration of the input-output structure. We provide an illustration on European universities and conclude by pointing on the importance of investing in data integration and open data at European level both for research and for policy making.
    Keywords: Rankings; European universities; DEA; conditional directional distances; robust frontiers; bootstrap
    Date: 2014
  13. By: Kabunga, Nassul
    Abstract: There is increasing evidence that improved agricultural technologies benefit smallholder farmers in sub-Saharan Africa. This evidence is however relatively clearer for innovations in smallholder crop production systems as compared to innovations in livestock production systems. Moreover, it is unclear whether the benefits of technology adoption in livestock systems are uniform across small and relatively large farmers. This study uses a national representative sample of 906 households to rigorously assess the impact of adoption of improved dairy cow breeds on enterprise-, household-, and individual child-level nutrition outcomes in Uganda. We find that adopting improved dairy cows significantly increases milk yield, household’s orientation to milk markets, and food expenditure. Consequently, adoption substantially reduces household poverty and stunting for children younger than age five. Considering heterogeneity, we find that adopting households with small farms increase milk yield, food expenditure and reduce poverty substantially while large farms increase not only ownmilk consumption and commercialization but also nutrition outcomes of children younger than age five.
    Keywords: improved dairy cows, milk productivity, child nutrition outcomes, poverty, propensity score matching, sub-Saharan Africa, Uganda, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Relations/Trade, Livestock Production/Industries, Production Economics, D1, I15, O13, O33, Q12, Q18,
    Date: 2014–04
  14. By: Monica Correa Lopez; Rafael Domenech
    Abstract: In a panel study of firm-level data from Spanish manufacturers, we show that reducing anti-competitive regulation in the provision of upstream services has a positive and sizeable effect on the volume of exports of downstream firms. Our estimates indicate that deregulation is very beneficial for the export performance of large corporations, especially if they are foreign-owned multinationals, while the evidence for SMEs is much weaker. Hence, firm characteristics matter for the connection between regulation and exports. Simulation exercises suggest that large firms increased their volume of exports by an average of 49% as a result of deregulation, such that the industries that benefited the most were typically more dependent on service inputs. The improvements in the regulatory framework of transportation services and energy provision that took place over the 1990s and 2000s in Spain had particularly strong effects on the volume of foreign sales.
    Keywords: Exports, Service regulation, Margins of trade, Firm size
    JEL: F14 L43 F23 D24
    Date: 2014–06
  15. By: Francisco Campos-Ortiz; Mariana Oviedo-Pacheco
    Abstract: In this paper, we study various key structural features of sugarcane production and sugar mills in Mexico. Regarding the production of sugarcane: (a) we document a U-shaped relationship between the size of sugarcane cultivation plots and their yield, and show suggestive evidence that this relationship is driven by the more intensive use of inputs in smaller and larger plots relative to those of medium size; (b) we argue that there are factors that complicate the functioning of the land market; and (c) we present evidence refuting the conjecture that the mechanism used to determine payments for sugarcane affects negatively the quality of this crop. With respect to sugar mills, we find that those mills that are able to generate electricity more efficiently tend to observe higher returns in sugar production.
    Keywords: Sugar, Sugar Industry, Competitiveness, Sugarcane, Plot Yield, Sugar Mill Efficiency
    JEL: D23 D24 L66 Q1
    Date: 2013–11

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