nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2014‒07‒05
nine papers chosen by
Angelo Zago
University of Verona

  1. Happiness matters: the role of well-being in productivity By DiMaria, Charles Henri; Peroni, Chiara; Sarracino, Francesco
  2. Closing the Gap: An Empirical Evidence on Firm’s Innovation, Productivity, and Exports By Tavassoli, Sam; Jienwatcharamongkhol, Viroj
  3. Does international trade improve environmental efficiency? An application of a super slacks-based measurement of efficiency By Honma, Satoshi
  4. Export Mix Changes and Firm Performance: Evidence from Chile By Roberto Álvarez; Andrés Zahler
  5. Productivity, Exporting and Financial Constraints of Chinese SMEs By Johannes Van Biesebroeck
  6. Hospital Mergers with Regulated Prices. By Brekke, Kurt R.; Siciliani, Luigi; Straume, Odd Rune
  7. Restructuring China’s Research Institutes: Impacts on China’s Research Orientation and Productivity By Daniel L.Tortorice; Gary H. Jefferson; Renai Jiang
  8. Geography and Firm Performance in the Japanese Production Network By Andrew B. BERNARD; Andreas MOXNES; SAITO Yukiko
  9. Do multinational retailers affect the export competitveness of host countries? By Angela Cheptea

  1. By: DiMaria, Charles Henri; Peroni, Chiara; Sarracino, Francesco
    Abstract: This article is about the link between people’s subjective well-being, defined as an evaluation of one’s own life, and productivity. Our aim is to test the hypothesis that subjective well-being contributes to productivity using a two step approach: first, we establish whether subjective well-being can be a candidate variable to study Total Factor Productivity; second, we assess how much subjective well-being contributes to productivity at aggregate level through efficiency gains. We adopt Data Envelopment Analysis to compute total factor productivity and efficiency indices using European Social Survey and AMECO data for 20 European countries. Results show that subjective well-being is an input and not an output to production.
    Keywords: productivity, subjective well-being, TFP, efficiency gains, life satisfaction, economic growth, DEA.
    JEL: E23 I31 O47
    Date: 2014–06–27
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:56983&r=eff
  2. By: Tavassoli, Sam (CSIR, Blekinge Inst of Technology); Jienwatcharamongkhol, Viroj (Department of Economics, Lund University, Sweden)
    Abstract: It is well known that exporters are productive firms. But the source of their productivity is left unexplained. This paper aims to endogenize the productivity heterogeneity of exporting firms by incorporating innovation in a structural model framework. In doing so, we close the gap between the innovation-productivity and productivity-export literature. Two waves of Swedish Community Innovation Survey (CIS) are merged. This allows for a setup that takes into account the links from innovation input to innovation output and also from innovation output to productivity and exports. The main findings highlight that exporters are productive firms with innovation output in the past, which in turn was driven by prior R&D and other innovation activity investments.
    Keywords: innovation; productivity; export; firm-level; structural model; community innovation survey
    JEL: C31 L60 O31
    Date: 2014–06–01
    URL: http://d.repec.org/n?u=RePEc:hhs:bthcsi:2014-006&r=eff
  3. By: Honma, Satoshi
    Abstract: This study analyzes environmental efficiency, and its determinants, for 98 countries in terms of four typical air pollutants—SO2, NOx, particulate matter 10 micrometers or less in diameter (PM10), and CO2—for the period 1970–2008. For this purpose, I propose a super slacks-based measure and data envelopment analysis (DEA) model with undesirable outputs—which has higher discriminating power than previous DEA efficiency indices, modifying the ones proposed in preceding articles. Furthermore, I analyze the determinants of environmental efficiency in association with the environmental Kuznets curve hypothesis and the pollution haven hypothesis. The panel regression results reveal that there is no Kuznets-type relationship between environmental efficiency and per-capita income. The impact of trade on environmental efficiency depends on relative per-capita income and capital–labor ratio, i.e., the higher the relative income and the lower the capital–labor ratio, the higher the environmental efficiency. Overall, the elasticities of trade openness for NOx, PM10, and CO2 are significantly negative for an average country in the sample.
    Keywords: Data envelopment analysis; Environmental efficiency; Environmental Kuznets curve; Pollution haven hypothesis; Super efficiency
    JEL: O13 Q53 Q54 Q56
    Date: 2014–06–28
    URL: http://d.repec.org/n?u=RePEc:pra:mprapa:56950&r=eff
  4. By: Roberto Álvarez; Andrés Zahler
    Abstract: In this paper we analyze changes in the export mix of Chilean firms, looking particularly at differences between large firms and SMEs. To do that, we use detailed information of exported products by firms during the period 1995-2005. Our econometric results, which look at the impact of export product churning on firm performance, are heterogeneous by type of change in export mix and by firm size. In general, export mix changes are associated with improvements on productivity, although our results suggest that this positive effect is only for SMEs. In terms of employment and sales, we find that export product churning has positive effect on large firms and lower - and in some case negative - on SMEs. It seems that changes in export mix are more important for firm growth in large firms, but not in terms of productivity. In contrast, SMEs can have a higher potential for productivity improvement through export product churning but this does not translate necessarily in significant increase in sales and employment.
    Keywords: Integration & Trade, Productivity, SME, Small and Medium Size Enterprises (SMEs), Firm performance, Export mix, Large firms, New products, Product mix
    Date: 2014–04
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:85354&r=eff
  5. By: Johannes Van Biesebroeck
    Abstract: While many studies explain the correlation between firm-level productivity and export status entirely by better firms self-selecting into exporting, a few studies find evidence of reverse causation. Especially in developing or ransition economies, exporters seem to improve performance after they start selling internationally. We provide evidence that the realization of scale conomies is one possible explanation for such a learning-by-exporting effect. Exporting enables small firms to expand output and exploit all scale economies that the production technology allows. With access to finance problems and weak contract enforcement at home, domestic expansion of SMEs is constrained by the necessity of awarding trade credit to new clients. We show that small firms with a lot of outstanding trade credit expand sales the most following export market entry. This is especially true if they operate in industries with higher scale economies or if they are located in provinces with weaker institutions. The same type of firms also enjoy the largest productivity gains immediately following export market entry.
    Keywords: Integration & Trade, SME, Productivity, Investment, SMEs, Export market entry, Small firms, Export market, New exporters, Trade credit
    Date: 2014–04
    URL: http://d.repec.org/n?u=RePEc:idb:brikps:85355&r=eff
  6. By: Brekke, Kurt R. (Dept. of Economics, Norwegian School of Economics and Business Administration); Siciliani, Luigi (University of York); Straume, Odd Rune (University of Minho)
    Abstract: We study the effects of a hospital merger using a spatial competition framework with semialtruistic hospitals that invest in quality and expend cost-containment effort facing regulated prices. We find that the merging hospitals always reduce quality, whereas non-merging hospitals respond by increasing (reducing) quality if qualities are strategic substitutes (complements). A merger leads to higher average treatment cost efficiency and, if qualities are strategic substitutes, might also increase average quality in the market. If a merger leads to hospital closure, the resulting effect on quality is positive (negative) for all hospitals in the market if qualities are strategic substitutes (complements). Whether qualities are strategic substitutes or complements depends on the degree of altruism, the effectiveness of cost-containment effort, and the degree of cost substitutability between quality and treatment volume.
    Keywords: Hospital mergers; Quality competition; Cost efficiency; Antitrust.
    JEL: I11 I18 L13 L44
    Date: 2014–06–30
    URL: http://d.repec.org/n?u=RePEc:hhs:nhheco:2014_021&r=eff
  7. By: Daniel L.Tortorice (International Business School, Brandeis University); Gary H. Jefferson (International Business School, Brandeis University); Renai Jiang (Xi'an Jiaotong University)
    Abstract: This paper evaluates the impact of the Chinese government’s initiative begun in 1999 to restructure the country’s approximately 3,500 research institutes. The paper reviews the evolution of China’s research sector over the period 1995 to 2010, identifying certain issues that are analyzed using a panel of sample research institutes. The econometric analysis is based on a balanced sample of these institutes, both converted and unconverted, spanning 1998, the year prior to the restructuring initiative, to 2005. In order to control for potential endogeneity and selection bias, the paper employs various econometric methods to evaluate the impact of the restructuring program on the performance of these institutes. We find that the restructuring program appears to have achieved its fundamental goals, that is, shifting the relevant resources toward a more commercial mission for the converted S&T enterprises and a more researchoriented mission, involving the use of government grants, for the non-profit research institutes. The results show modest gains in the efficiency of patent production, but given the lengthy gestation period, a longer duration is needed to assess how the patent production of China’s research institutes will adapt to the shift in their missions and reassignment of government resources.
    Keywords: Technological Innovation, R&D, Invention, Research Policy
    JEL: O31 O32 O33
    Date: 2014–05
    URL: http://d.repec.org/n?u=RePEc:brd:wpaper:72&r=eff
  8. By: Andrew B. BERNARD; Andreas MOXNES; SAITO Yukiko
    Abstract: Firms operate in complex supplier-customer networks that potentially range over long distances. However, the effects of supplier networks and supplier location on firm performance are largely unknown. This paper characterizes the domestic production network in Japan using detailed buyer-supplier data on over 950,000 firms. Beyond describing the characteristics of the Japanese production network, the paper examines the geographic features of the network links. Greater geographic distance plays an important role in reducing the probability of buyer-seller relations between pairs of firms. For a given firm, greater distance is associated with better performance measures of suppliers and customers. Geography, the density, and the quality of network connections are strongly correlated with downstream (customer) firm performance. Labor productivity, credit score, and size of a downstream firm are positively correlated with features of its upstream supply base including the number of suppliers and their average performance. In addition, geographic proximity of a firm's suppliers is associated with improved firm performance. The paper also provides the first evidence on the relationship between supplier network connections and downstream firm outcomes. Firm performance is better when its suppliers have more suppliers of their own. However, firm performance is lower when its suppliers are connected to more downstream customers.
    Date: 2014–06
    URL: http://d.repec.org/n?u=RePEc:eti:dpaper:14034&r=eff
  9. By: Angela Cheptea
    Abstract: The accelerated overseas expansion of multinational retailers (MRs) over the last decade transformed these companies into major regional and global actors. In this paper we question how MRs arriving in foreign markets affect the export performance of local firms. We develop a theoretical framework that explains the mechanisms by which multinational retailers establishing outlets abroad impact the export performance of local firms and test its predictions empirically for the agri-food sector. The adopted approach draws on recent empirical evidence of the effects of foreign direct investment (FDI) in the retail sector and recent developments in the literature on international trade with heterogeneous firms and on trade and intermediaries. First, incoming multinational retailers may increase the overall export capacity of local firms to any foreign market via an increase in their productivity. The growing competitive pressure in the upstream sector, induced by global retail chains, drives least productive firms out of the market and the average productivity of the sector increases. In addition, retail sector FDI generates productivity gains at the firm level: local suppliers of multinational retailers benefit from the retailers’ financial and technological support and become more productive in time. Thus, although the productivity threshold for exporting remains unchanged, some firms reach this threshold and start exporting, while firms above this threshold that experience productivity gains increase their volume of exports. Second, we consider the role of multinational retailers in matching foreign sellers and buyers. With their wide transnational networks of outlets and contacts, multinational retailers can become natural intermediaries between suppliers and consumers in countries where they operate. The local suppliers of a foreign retailer may sell more easily their products in retailer’s outlets situated in other countries, or, with the retailer’s help, identify at a lower cost potential buyers in these markets. Lower export sunk costs for retailer’s supplying firms determines the latter to export larger amounts to destination markets served by this retailer. For other destination markets these suppliers face the same export costs as other host country firms. These effects were first discussed empirically by Head, Jing and Swenson (2010), but only from an empirical point of view. They find evidence of the capability effect, but not for the linkage effect for the exports of Chinese cities. Unlike Head et al. (2010), we use a large panel of countries and data on the world’s top one hundred food retailers. We find evidence of both capability and linkage effects, but the latter does not apply to a country’s exports to the origin country of the foreign retailers it hosts.
    Keywords: multinational retailers, export competitiveness, productivity gains, transnational networks, intermediaries
    JEL: F12 F14 Q17 F23
    URL: http://d.repec.org/n?u=RePEc:iaw:iawdip:106&r=eff

This nep-eff issue is ©2014 by Angelo Zago. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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