nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2014‒11‒01
eight papers chosen by

  1. Productivity: What Is It? How Is It Measured? What Has Canada's Performance Been Over the Period 1961 to 2012? By Macdonald, Ryan; Gu, Wulong; Baldwin, John R.; Yan, Beiling
  2. Productivity Evolution of Chinese Large and Small Firms in the Era of Globalisation By Yifan ZHANG
  3. Climate Change, Heat Stress, and U.S. Dairy Production By Key, Nigel; Sneeringer, Stacy; Marquardt, David
  4. Exports, R&D and Productivity: A test of the Bustos-model with enterprise data from France, Italy and Spain By Joachim Wagner
  5. Regional Integration, Productivity and Growth: A study of the Southern China region Creation Date: 1999 By Y. Wu
  6. Factor substitution, factor-augmenting technical progress, and trending factor shares: the Canadian evidence By Kenneth G. Stewart; Jiang Li
  7. Internal Trade, Productivity, and Interconnected Industries: A Quantitative Analysis By Trevor Tombe; Lukas Albrecht
  8. Does the capital structure affect banks’ profitability? Pre- and post financial crisis evidence from significant banks in France By 0. De Bandt; B. Camara; P. Pessarossi; M. Rose

  1. By: Macdonald, Ryan; Gu, Wulong; Baldwin, John R.; Yan, Beiling
    Abstract: This paper provides an overview of the productivity program at Statistics Canada and a brief description of Canada?s productivity performance. The paper defines productivity and the various measures that are used to investigate different aspects of productivity growth. It describes the difference between partial productivity measures (such as labour productivity) and a more complete measure (multifactor productivity) and the advantages and disadvantages of each. The paper explains why productivity is important. It outlines how productivity growth fits into the growth accounting framework and how this framework is used to examine the various sources of economic growth. The paper briefly discusses the challenges that face statisticians in measuring productivity growth. It also provides an overview of Canada?s long-term productivity performance and compares Canada to the United States?both in terms of productivity levels and productivity growth rates.
    Keywords: Economic accounts, Productivity accounts
    Date: 2014–09–15
  2. By: Yifan ZHANG (Lingan University, Hong Kong)
    Abstract: Using a large firm-level dataset from the Chinese manufacturing industry, this paper studies the productivity gap and productivity convergence between large and small firms in China. We find that small firms are less productive relative to large firms, but the productivity gap became smaller over the sample period 1999–2007. Based on static and dynamic Blinder-Oaxaca decompositions, we distinguish the endowment effect from the return effect, and quantify the impacts of exports and FDI on the productivity gap and productivity convergence.
    Keywords: China, Small firms, Productivity, Globalisation
    JEL: F11 L22 O53
    Date: 2014
  3. By: Key, Nigel; Sneeringer, Stacy; Marquardt, David
    Abstract: In the United States, climate change is likely to increase average daily temperatures and the frequency of heat waves, which can reduce meat and milk production in animals. Methods that livestock producers use to mitigate thermal stress—including modifications to animal management or housing—tend to increase production costs and capital expenditures. Dairy cows are particularly sensitive to heat stress, and the dairy sector has been estimated to bear over half of the costs of current heat stress to the livestock industry. In this report, we use operation-level economic data coupled with finely scaled climate data to estimate how the local thermal environment affects U.S. dairies’ effectiveness at producing outputs with a given level of inputs. We use this information to estimate the potential decline in milk production in 2030 resulting from climate change-induced heat stress. For four climate model scenarios, the results indicate modest heat stress-related production declines over the next 20 years, with the largest declines occurring in the South.
    Keywords: Climate change, dairy, heat stress, productivity, stochastic frontier, technical efficiency, Environmental Economics and Policy, Livestock Production/Industries,
    Date: 2014–09
  4. By: Joachim Wagner (Leuphana University Lueneburg, Germany)
    Abstract: This paper uses comparable firm level data from France, Italy and Spain to test a hypothesis derived by Bustos (AER 2011) in a model that explains the decision of heterogeneous firms to export and to engage in R&D. Using a non-parametric test for first order stochastic dominance it is shown that, in line with this hypothesis, the productivity distribution of firms with exports and R&D dominates that of exporters without R&D, which in turn dominates that of firms that neither export nor engage in R&D. These results are in line with findings for Argentina reported by Bustos, and with findings for Germany and Denmark. The model, therefore, seems to be useful to guide empirical work on the relation between exports, R&D and productivity.
    Keywords: Exports, R&D, productivity, EFIGE data, France, Italy, Spain
    JEL: F14
    Date: 2014–10
  5. By: Y. Wu
  6. By: Kenneth G. Stewart (Department of Economics, University of Victoria); Jiang Li
    Abstract: Revised productivity accounts recently released by Statistics Canada are used to estimate a Klump-McAdam-Willman normalized CES supply-side system for the half-century 1961–2010. The model permits distinct rates of factor-augmenting technical change for capital and labour that distinguish between short-term versus long-term effects, as well as a non-unitary elasticity of substitution and timevarying factor shares. The advantage of the Canadian data for this purpose is that they provide a unified treatment of measurement issues that have had to be improvised in the US and European data used by previous researchers. In contrast to the previous US results, we find an elasticity of substitution not significantly less than unity, and an absence of capital-augmenting technical change in both the short and long run. Technical change is thus solely labour augmenting, consistent with Uzawa’s steady state growth theorem. The model also yields plausible TFP estimates, and successfully captures trends in factor shares that have been the subject of recent study in international data.
    Keywords: normalized CES system, aggregate elasticity of substitution, biased technical change
    JEL: C51 E23 E25 O30 O51
    Date: 2014–10–16
  7. By: Trevor Tombe (University of Calgary); Lukas Albrecht
    Abstract: Trade costs within Canada are large, and vary substantially across industries and regions. When policy aimed at liberalizing internal trade (an area of interest in many countries) is done at the industry-level, knowledge of industry-specific costs and input-output linkages between sectors is critical. In this paper, we exploit unique Canadian data to measure the magnitude of internal trade costs between provinces for a variety of industries. Building on recent multisector international trade models, we quantify the effect of these costs on welfare and productivity. Our results highlight the importance of an industry-level analysis, especially incorporating inter-sectoral input-output linkages. We further estimate the gains from liberalizing specific industries, which provides a guide to policy makers intent on a sector-by-sector approach to internal trade reform. Gains are substantially larger in highly interconnected industries.
    Keywords: Internal Trade, Gains from Trade, Input-Output Linkages
    JEL: F1 F4 R1
    Date: 2014–09–23
  8. By: 0. De Bandt; B. Camara; P. Pessarossi; M. Rose
    Abstract: This paper studies the effect of banks’ capitalization on banks’ Return on Equity (ROE). A debate has emerged on the costs for banks of the increase in capital requirements under Basel III. We bring empirical evidence on this issue by analyzing the effect of different capitalization measures on banks’ ROE on a sample of large French banks over the period 1993-2012, controlling for risk-taking as well as a range of variables including the business model. We find that an increase in capital leads to a significant increase in ROE, albeit the economic effect is modest. Furthermore, the method chosen by a bank to increase capitalization (i.e. raising equity) does not alter the result. Over the period, we find some evidence of a negative relationship between the share of credit activities and ROE, which is driven by the 2002-2007 sub-period, characterized by a significant increase in other business line activities. Looking at revenue and cost components, the positive effect of capital on the ROE appears to be driven by an increase in efficiency.
    Keywords: ROE, solvency ratios, capital, banking regulation, Basel III.
    JEL: G21 G28
    Date: 2014

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