nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2014‒09‒25
eleven papers chosen by

  1. Imported Intermediates and Productivity: Does Absorptive Capacity Matter? A Firm-Level Analysis for Uruguay By Adriana Peluffo; Dayna Zaclicever
  2. Scale Economies and Technical Efficiency of Quebec Dairy Farms By Alphonse G. Singbo; Bruno Larue
  3. Multiproduct Firms, Product Scope and Productivity: Evidence from India’s Product Reservation Policy By Joshua Wilde; Ishani Tewari
  4. Organisational Structure and Managerial Efficiency: A quasi-experimental analysis of German public theatres By Marta Zieba; Carol Newman
  5. Why tax effort falls short of capacity in Indian states: A Stochastic frontier approach By Garg, Sandya; Ashima Goyal; Rupayan Pal
  6. Running with the Red Queen: An integrated assessment of Agricultural Land Expansion and Global Biodiversity Decline By Bruno Lanz; Timothy Swanson; Simon Dietz
  7. Composite Input-Output Production Functions By Randall W. Jackson
  8. Network Efficiency and the Banking System By Nicola Giocoli
  9. Travel Distance and Fuel Efficiency: An Estimation of the Rebound Effect using Micro-Data in Switzerland By Sylvain Weber; Mehdi Farsi
  10. Independent directors: less informed, but better selected? New evidence from a two-way director-firm fixed effect model By Sandra Cavaco; Patricia Crifo; Antoine Reberioux; Gwenael Roudaut
  11. Local Banking and Local Economic Growth in Italy: Some Panel Evidence By Guglielmo Maria Caporale; Stefano Di Colli; Roberto Di Salvo; Juan Sergio Lopez

  1. By: Adriana Peluffo (Instituto de Economía Facultad de Ciencias Económicas Universidad de la República); Dayna Zaclicever (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
    Abstract: International trade is considered a vehicle for technology diffusion, which in turn can induce productivity growth. Particularly, trade may give domestic firms access to a larger variety and/or better quality of intermediate or capital inputs in which new technologies are embodied. However, the lack of sufficiently skilled labour, an issue especially relevant for small developing countries, may prevent firms from taking advantage of these technologies. Using a panel of Uruguayan manufacturing firms covering the period 1997-2008, we explore the impact of imported inputs on firms’ productivity and evaluate whether the effect is mediated by the firm’s absorptive capacity (proxied by the proportion of skilled labour). We apply an indirect (two-stage) approach by first estimating firms’ productivity and then using impact evaluation techniques to analyze causality between imported inputs and productivity. Our results show that imported intermediates have an enhancing effect on Uruguayan firms’ productivity and absorptive capacity plays a role on this effect.
    Keywords: productividad, importaciones, capacidad de absorción
    JEL: F14 D24 O33
    Date: 2013–07
  2. By: Alphonse G. Singbo; Bruno Larue
    Abstract: Canada’s average cost for milk production is amongst the highest in the world. The paper focusses on specific potential causes by estimating economies of scale and technical efficiency for a panel of Quebec dairy farms that spans the 2001-2010 period. The stochastic frontier analysis based on an input distance function is use to estimate returns to scale relationships across dairy farms. We show that there is significant economies scale to be exploited and that cost of production could also be reduced by improving technical efficiency. The results have important implications for Canada’s supply management policy, and more specifically for the trading of production quota between dairy farmers, as well as for the delivery of targeted extension services.
    Keywords: Economies of scale, technical efficiency, dairy policy, supply management
    JEL: Q12 Q18
    Date: 2014
  3. By: Joshua Wilde (Department of Economics, University of South Florida); Ishani Tewari (Yale School of Management)
    Abstract: We provide novel evidence showing product scope dynamics within a firm is an important dimension of productivity growth. This channel is identified by leveraging the gradual dismantling of an Indian regulation that “reserved” hundreds of products for manufacture in the small-scale sector. Following the removal of these product market restrictions, product churning and productivity rose. Multiproduct firms who were never in the reserved sector drive this increase, suggesting that the reservation policy constrained their ability to achieve the optimal product mix. Our findings underscore the importance of incorporating heterogeneity at the product-firm level in assessing the impact of size-contingent regulation.
    Keywords: Productivity, Multiproduct Firms, India, Dereservation, Products
    JEL: O10 O25 O40 L50
    Date: 2014–09
  4. By: Marta Zieba (Department of Economics, University of Limerick); Carol Newman (Department of Economics, Trinity College Dublin)
    Abstract: This paper examines the production technology and managerial efficiency of the performing arts sector in Germany using data on 79 theatres over a 32-year period. We examine how different organisational structures affect the efficiency of public theatres and find that theatres organised under public law are more efficient than theatres organised under private law. Using a difference-in-differences approach we examine the impact on efficiency of the exogenous demand shock experienced by theatres located near the East German border after reunification in 1990. We show that theatres organised under private law react positively to this competition shock as measured by their technical efficiency scores confirming that they respond better to market forces than theatres organised under public law.
    Keywords: organisational structure, managerial efficiency, natural experiment, public theatres, Germany
    Date: 2012–06
  5. By: Garg, Sandya (Indira Gandhi Institute of Development Research); Ashima Goyal (Indira Gandhi Institute of Development ResearchInstitute of Economic Growth); Rupayan Pal (Indira Gandhi Institute of Development Research)
    Abstract: Taxation is an important tool to enhance the economic development and to finance the expenditure responsibilities of a government. This paper attempts to measure the tax capacity and tax effort of 14 major Indian states from 1992-92 to 2010-11 using Stochastic Frontier Analysis. The use of tax capacity frontier helps to identify those states which are operating near their tax capacity and states which are away from tax frontier. The results indicate presence of large variation in tax effort index across states and which seems to be increasing over time. Econometric analysis suggests that economic and structural variables have significant impact on the tax capacity. While per-capita gross state domestic product has positive effect on states' own tax revenue, relative size of agriculture sector of a state has adverse effect on its own tax revenue. The evidence on tax efficiency suggests that the higher inter-governmental transfers tend to reduce tax efficiency. Outstanding liabilities and expenditure on debt repayment also indicate adverse effect on tax efficiency, but the adverse effect of the latter is lesser than the former. Enactment of Fiscal Responsibility and Budget Management Act seems to have improved the tax efficiency which has been further strengthened by the better law and order inside states. Higher political competition inside a state, represented by effective number of parties, has favourable effect on the tax efficiency of a state. Implications are drawn for policy.
    Keywords: tax capacity, tax effort, stochastic frontier analysis, fiscal federalism
    JEL: H21 H29 H71 H77
    Date: 2014–08
  6. By: Bruno Lanz; Timothy Swanson; Simon Dietz (Centre for International Environmental Studies, IHEID, The Graduate Institute of International and Development Studies, Geneva)
    Abstract: Modern agriculture relies on a small number of highly productive crops and the continued expansion of agricultural land area has led to a significant loss of biodiversity. In this paper we consider the macroeconomic consequences of a continued expansion of modern agriculture from the perspective of agricultural productivity and food production: as the genetic material supporting agriculture declines, pests and pathogens become more likely to adapt to crops and proliferate, increasing crop losses due to biological hazards. To evaluate the macroeconomic consequences of a reduction in agricultural productivity associated with the expansion of agriculture, we employ a quantitative, structurally estimated model of the global economy in which economic growth, population and food demand, agricultural innovations, and the process of land conversion are jointly determined. We show that even a small impact of global biodiversity on agricultural productivity calls for both a halt in agricultural land conversion and increased agricultural R&D in order to maintain food production associated with population and income growth.
    Keywords: Global biodiversity; Agricultural productivity; Endogenous innovations; Land conversion; Population dynamics; Food security; Quantitative growth model
    JEL: N10 N50 O31 O44 Q15 Q16 Q57
  7. By: Randall W. Jackson (Regional Research Institute, West Virginia University)
    Abstract: This document describes the algorithm used for creating an aggregated linear production function for an industry by weighting subsector production functions. The result can be used as a column in an interindustry (IxI) coefficients table or in a standard Use table (CxI) depending on the units (C or I) of the input data.
    Keywords: IO
    JEL: C67 R15
    Date: 2013–08–09
  8. By: Nicola Giocoli
    Abstract: Inspired by the Coasean “market vs firm” dichotomy, we offer a new definition of efficiency by applying the notions of network cost and network efficiency as developed in complex network theory. Network analysis is relevant for every system of interconnected exchanging agents. One such system is the banking sector. It is showed that the notions hereby presented may improve upon the predictions of Allen & Gale’s standard model, where agents exchange liquidity and where troubles in a local area of the network may lead to systemic collapse.
    Date: 2014–06–10
  9. By: Sylvain Weber (Institute of economic research IRENE, Faculty of Economics, University of Neuchâtel, Switzerland); Mehdi Farsi (Institute of economic research IRENE, Faculty of Economics, University of Neuchâtel, Switzerland)
    Abstract: We estimate the rebound effect for private transportation using cross-section micro-level data in Switzerland for 2010. Our simultaneous equations model accounts for endogeneity of travel distance, vehicle fuel intensity and vehicle weight. Compared to the literature, our paper provides an important contribution as micro-level data and simultaneous equations models have seldom been used to estimate the rebound effect. Moreover, among the distance measures we use, one is highly reliable as it was recorded using GIS (Geographical Information System) software. Our results, obtained by 3SLS, point to substantial direct rebound effects between 75% and 81%, which lie at the higher end of the estimates found in the literature. OLS estimates are however much lower and seem to under-estimate the rebound effect.
    Keywords: Rebound effect, Travel demand, Simultaneous equations model.
    JEL: C31 D12 Q41 R41
    Date: 2014–09
  10. By: Sandra Cavaco (LEMMA - Laboratoire d'économie mathématique et de microéconomie appliquée - Université Paris II - Panthéon-Assas : EA4442 - Sorbonne Universités); Patricia Crifo (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, UP10 - Université Paris 10, Paris Ouest Nanterre La Défense - Université Paris X - Paris Ouest Nanterre La Défense, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal, EconomiX - CNRS : UMR7166 - Université Paris X - Paris Ouest Nanterre La Défense); Antoine Reberioux (EconomiX - CNRS : UMR7166 - Université Paris X - Paris Ouest Nanterre La Défense, CREDDI/LEAD Université Antilles Guyane - Université des Antilles et de la Guyane); Gwenael Roudaut (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, AgroParisTech - AgroParisTech)
    Abstract: This paper develops a two-way director-firm fixed effect model to study the relationship between independent directors' individual heterogeneity and firm operating performance, using French data. This strategy allows considering and differentiating in a unified empirical framework mechanisms related to board functioning and to director selection. We first show that the independence status, netted out unobservable individual heterogeneity, is negatively related to performance. This result suggests that independent board members experience an informational gap compared to other affiliated members. However, we show that industry-specific expertise as well as informal connections inside the boardroom may help to bridge this gap. Finally, we provide evidence that independent directors have higher intrinsic ability as compared to affiliated board members, consistent with a reputation-based selection process.
    Keywords: independent director heterogeneity, information asymmetry, director selection, firm performance, two-way fixed effect model
    Date: 2014–09–03
  11. By: Guglielmo Maria Caporale; Stefano Di Colli; Roberto Di Salvo; Juan Sergio Lopez
    Abstract: This paper provides new evidence on the contribution of local banking to local economic growth (i.e. at county level - the Italian "province") in Italy. A comprehensive dataset is used, which includes control variables for social capital and human capital as well as indicators of the quality of local infrastructures and the production structure of the local economy. A linear within-estimator technique with fixed effects is applied to a modified version of the so-called Barro regression (Cecchetti and Karrhoubi, 2013) in order to address the well-known econometric issues of reverse causality and estimation bias resulting from unobserved district-specific influences.
    Keywords: Bank lending, local growth, panel data
    JEL: C33 E44 G01 G32
    Date: 2014

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