nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2014‒11‒22
29 papers chosen by

  1. How does schools’ efficiency look like across Europe? An empirical analysis of Germany, Spain, France, Italy and UK using OECD PISA2012 data By Tommaso Agasisti
  2. New Business Formation and the Productivity of Manufacturing Incumbents: Effects and Mechanisms By Michael Fritsch; Javier Changoluisa
  3. Evaluación de la eficiencia comparativa de empresas y entidades productivas: Indicadores y técnicas de análisis By Vergés, Joaquim
  4. Crop diversification, economic performance and household’s behaviours Evidence from Vietnam By Nguyen, Huy
  5. Efficiency of the R&D Sector in the EU-27 at the Regional Level: An Application of DEA By Aristovnik, Aleksander
  6. Elasticity of substitution and the slowdown of the Italian productivity By Saltari, Enrico; Federici, Daniela
  7. Convergence and growth. Labour productivity dynamics in the European Union. By Roberto Martino
  8. Do Organic Inputs in African Subsistence Agriculture Raise Productivity? Evidence from Plot Data of Malawi Household Surveys By Wouter Zant
  9. Productivity Spillovers in the Russian Federation: The Case of Chemical Market By Kuzyaeva, Anastasia; Didenko, Alexander
  10. Outward FDI and company performance in CEECs By Damijan, Jože; Kostevc, Crt; Rojec, Matija
  11. Productivity and welfare: an application to the Spanish banking industry By Alfredo Martín Oliver; Sonia Ruano Pardo; Vicente Salas Fumás
  12. Former Foreign Affiliates: Cast Out and Outperformed? By Beata Javorcik; Steven Poelhekke
  13. When firms and industries matter: understanding the sources of productivity growth By Ulf Lewrick; Lukas Mohler; Rolf Weder
  14. An international comparison of educational systems: an application of the global Malmquist-Luenberger index By Víctor Giménez; Claudio Thieme; Diego Prior; Emili Tortosa-Ausina
  15. Agricultural Production performance on Small farm holdings: Some Empirical Evidences from Bihar, India By Singh, R.K.P.; Kumar, Abhay; Singh, K.M.; Kumar, Anjani
  16. Relaxing Credit Constraints in Emerging Economies: The Impact of Public Loans on the Performance of Brazilian Manufacturers By Filipe Lage de Sousa; Gianmarco I. P. Ottaviano
  17. Expanding the Horizon: An Empirical Study of Sustainable Supply Chain Management and Firm Performance By Xichen Sun; Michiyuki Yagi; Katsuhiko Kokubu
  18. Fiscal policy and TFP in the OECD : Measuring direct and indirect effects By Gerdie Everaert; Freddy Heylen; Ruben Schoonackers
  19. Total Factor Productivity and the Propagation of Shocks; Empirical Evidence and Implications for the Business Cycle By Eric Mayer; Sebastian Rüth; Johann Scharler
  20. Incentive Regulation and Utility Benchmarking for Electricity Network Security By Tooraj Jamasb; Rabindra Nepal
  21. Corporate Environmental Initiatives and Shareholder Value: Focusing on the Role of Environmental Information and Its Credibility By Kimitaka Nishitani; Katsuhiko Kokubu
  22. Outward foreign direct investment and domestic performance : In search of a causal link By Emmanuel Dhyne; Selen Sarisoy Guerin
  23. Bounding the productivity default shock : Evidence from the The European Sovereign Debt Crisis By Alonso-Ortiz, Jorge; Colla, Esteban; Da-Rocha, Jose-Maria
  24. Performance and Performance Persistence of Socially Responsible Investment Funds in Europe and North America By Lean, Hooi Hooi; Ang, Wei Rong; Smyth, Russell
  25. Bank regulation, supervision and efficiency during the global financial crisis By Swamy, Vighneswara
  26. Effects of Agricultural Productivity Shocks on Female Labor Supply: Evidence from the Boll Weevil Plague in the US South By Ager, Philipp; Brückner, Markus; Herz, Benedikt
  27. Enhancing Rice Production in Uganda: Impact Evaluation of a Training Program and Guidebook Distribution in Uganda By Kijima, Yoko
  28. Should the host economy invest in a new industry? The roles of FDI spillovers, development level, and heterogeneity of firms By Huu Thanh Tam Nguyen; Ngoc-Sang Pham
  29. Evaluation of the Impact of School Canteen Programs on Internal Efficiency of Schools, Cognitive Acquisitions and Learning Capacities of Students in Rural Primary Schools in Senegal By Abdoulaye Diagne; Mouhamadou Moustapha Lô; Ousmane Sokhna; Fatoumata L. Diallo

  1. By: Tommaso Agasisti (Politecnico di Milano School of Management, Milano)
    Abstract: This research conducts a comparison of secondary schools’ efficiency in an international perspective, focusing on five economies in the European Union (UK, Germany, France, Italy and Spain) and employing an institutionlevel dataset built through data from the 2012 edition of the OECD’s Programme for International Student Assessment (PISA). Overall, around 2,700 schools from these five countries are included in the empirical analysis; it uses a bootstrap version of Data Envelopment Analysis (DEA), and a common (international) frontier of efficient schools is assumed. The production process is modelled in a very simple way, by including human and capital resources, together with students’ socioeconomic background, among inputs; and average scores in reading and mathematics, as outputs. Although within-country dispersion of efficiency scores is much wider than between-countries differences, some between-countries efficiency differentials can be observed. A second-stage tobit regression reveals that some factors are statistically associated with schools’ efficiency, as for example the indexes for the quality of educational resources and teachers’ morale. Conversely, the efficiency scores are inversely correlated with the proportion of students who perform below proficiency level 2, suggesting that there is not a trade-off between efficiency and equity. All these evidences can stimulate interesting reflections for national and European-based policy-makers.
    Keywords: schools’ efficiency, equity, OECD-PISA2012, bootstrap DEA, cross-country comparison
    JEL: I21 I28 C14 H52
    Date: 2014–10
  2. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Javier Changoluisa (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: We analyze the effect of new business formation on the productivity of incumbent manufacturing establishments. We obtain robust empirical evidence of productivity improvements that are due to the emergence of new businesses in the same industry, that is, on the output market. This effect is spatially limited to the respective region. Regional competition from new businesses on the input market and cross-industry effects are not related to incumbents' productivity changes. The effect that new competition has on incumbents is moderated by an incumbent's distance from the technological frontier; incumbents close to the frontier exhibit a more pronounced positive reaction.
    Keywords: New business formation, productivity, incumbent firms
    JEL: L26 D20 O12
    Date: 2014–10–27
  3. By: Vergés, Joaquim
    Abstract: This monograph intends to be a handbook or guide regarding efficiency analysis tools, for those interested in either reading –and properly understanding- specialised papers on the topic, or in carrying out efficiency analysis studies. In points 3 to 6 the more usual efficiency measures in the topic’s literature are presented and discussed; and it is highlighted the fact that each of them measure companies’ efficiency from a different perspective, at the time that, nevertheless, they are in fact formally interrelated. Then, points 7 and 8 are devoted to explain the more usual techniques for efficiency/productivity analysis we can find in research works; that is those methodologies more usual in academic journals’ articles: How the referred efficiency measures or indexes are applied (which means mainly the use of econometric tools) in order to get reliable conclusions on companies’ comparative efficiency. The approach covers both longitudinal analysis (comparison over time) and cross-section analysis (comparing the relative efficiency of two or more types of companies; public-owned and private ones, f. e.). The above is preceded (points 1 and 2) by a briefing on the different facets of the efficiency concept (what we talk about when we talk of efficiency), and a discussion on the necessary pre-conditions that should be present for any calculation and comparison of efficiency indexes may actually be interpreted as properly telling us ‘company A is more efficient than company B’.
    Keywords: companies efficiency, productivity analysis, econometrics for efficiency comparison, efficiency measures
    JEL: C1 D22 D24 M2
    Date: 2014–08–31
  4. By: Nguyen, Huy
    Abstract: This study examines economic performances and household’s behaviours in multiple crops farming in Vietnam. Smallholder farming systems in Vietnam is being transformed by integration between cash cropping and main food cropping operations. This transformation into diversified farming systems can affect the economies of scope, technical efficiency, and performances of farms. By using the approach of input distance function, we find the first evidence of both scale and scope economies that have important economic performance implications. There is an existence of substantial technical inefficiency in multiple crops farming, which implies that there may be opportunities to expand crop outputs by eliminating technical inefficiency. Enhancing education and further land reforms are main technical efficiency shifters. We also find the complementarity evidence between family labour and other inputs, except hired labour. Thus, policies that lead to more incentives to invest in crop faming activities should focus on the reduction of input costs.
    Keywords: crop diversification, input distance function, elasticity of substitution, stochastic frontier, and technical efficiency
    JEL: D13 O3 O33
    Date: 2014–09–30
  5. By: Aristovnik, Aleksander
    Abstract: The main aim of the paper is to measure the relative efficiency of the R&D sector in the EU-27 at the regional level. For this purpose, the paper applies a non-parametric approach, i.e. data envelopment analysis (DEA), to assess the relative technical efficiency of R&D activities across selected EU (NUTS-2) regions. The empirical analysis integrates available inputs (R&D expenditures, researchers and employment in high-tech sectors) and outputs (patent and high-tech patent applications) over the 2005–2010 period. The empirical results show that among regions with a high intensity of R&D activities the most efficient performers are Noord-Brabant (Netherlands), Stuttgart (Germany) and Tirol (Austria). In contrast, a wide range of NUTS-2 regions from the Baltics, Eastern and Southern Europe is characterized by an extremely low rate of knowledge production and its efficiency, particularly in Poland (Mazowieckie), Lithuania (Lietuva), Latvia (Latvija), Romania (Bucuresti-Ilfov), Bulgaria (Yugozapaden), Slovakia (Západné Slovensko), Greece (Attiki), Spain (Canarias) and Italy (Sardegna).
    Keywords: Data Envelopment Analysis (DEA); Efficiency; EU; NUTS-2 regions; R&D
    JEL: C61 O3 R1
    Date: 2014–07
  6. By: Saltari, Enrico; Federici, Daniela
    Abstract: The aim of this paper is to investigate the roots of the Italian total factor productivity slowdown. The analysis focusses on the specific pattern of technical progress in determining the TFP dynamics. This analysis can not be done with the Cobb-Douglas technology but requires the employ of a CES function which allows to distinguish between the direction and the bias of technical progress. We employ a CES specification embodying both labor- and capital-augmenting technical change, with a σ less than 1. We obtain three main results. 1) There seems to have been a structural break around the mid-nineties in the direction and bias of technological change; 2) The first half of the sample features a labor-augmenting technical change and a capital bias; 3) In the second part of the sample both these characteristics seem to disappear, and factor endowments evolution assumes a key role. This fact may be view as one of the potential causes of the Italian productivity stagnation.
    Keywords: CES production function; Elasticity of substitution; Factor-augmenting technical progress; ICT technical change.
    JEL: C30 E22 E23 O33
    Date: 2014–09–08
  7. By: Roberto Martino
    Abstract: This paper investigates labour productivity dynamics for 1263 regional economies of the European Union during 1991-2007. Despite convergence is usually found to occur conditionally to economy-wide factors, this study reveals a clear process of unconditional convergence for nancial and business-related market services. Indeed this sector is more likely to be characterised by standardized technologies of production. Such an evidence is not found for manufacturing and aggregate productivity, for which long run distribution dynamics are characterized by bimodality. The decomposition of the growth rate of aggregate labour productivity reveals that pure productivity gains drive growth. Structural change plays a minor role in the process, however it halves the contribution of the manufacturing sector for the richest regions, while it enhances the weight of nancial market services.
    Keywords: labour productivity, convergence, distribution dynamics, non parametric methods, structural change.
    JEL: C14 O11 O40 O47
    Date: 2014
  8. By: Wouter Zant (VU University Amsterdam)
    Abstract: We exploit plot data from the agricultural module of the third Malawi Integrated Household Survey (IHS-3) to investigate how organic cultivation techniques contribute to productivity of non-subsidized local maize and what to expect from using organic inputs on a larger scale. We approximate organic inputs with crop combinations and livestock, and use matching techniques for estimating impacts. Productivity of local maize–bean, local maize–groundnut and local maize–nkhwana, each combined with livestock and chemical fertilizer, is shown to be statistically similar to productivity of fertilized maize mono-cropping. Simulations show that large increases in total maize production are potentially feasible under conversion to organic cultivation techniques. Limited availability of labour and livestock are likely constraints.
    Keywords: crop productivity, soil fertility, organic inputs, Green Revolution, Malawi, Africa
    JEL: Q12 O13 O55
    Date: 2014–08–25
  9. By: Kuzyaeva, Anastasia; Didenko, Alexander
    Abstract: Over the last decades, much attention has been drawn to the question of productivity variation across countries. The differences in cross-country productivity could be explained by both foreign and domestic innovation. In order to estimate the influence of the former, the international transfer of technology should be considered. Foreign direct investment (FDI) and international trade are suggested to be major conduits of international technology transfer. The present paper aims to extend the current empirical literature by determining the effect and the source of productivity spillover in Russia on the example of chemical industry. In order to find out the existence of FDI and international trade productivity spillover we applied the methodology developed by Ericson and Pakes (1995) and Olley and Pakes (1996). The econometric model was tested on the companies from chemical industry for the period 2007-2012. The empirical results show that FDI and international trade productivity spillovers are present in Russian chemical industry. The size of FDI spillovers is economically more important than imports-related spillovers. Based on the empirical results, we may predict that Russian accession to the World Trade Organization in 2012 should result in productivity growth. However, further research on this topic will be possible when the statistical data is available for several years after annexation.
    Keywords: FDI, chemical industry, technology transfer, productivity spillover, international trade
    JEL: D24 F13 L65
    Date: 2014–09
  10. By: Damijan, Jože (University of Ljubljana, LICOS, VIVES and Institute for Economic Research, Ljubljana); Kostevc, Crt (University of Ljubljana and Institute for Economic Research, Ljubljana); Rojec, Matija (University of Ljubljana, Institute for Economic Research, Ljubljana, and Institute of Macroeconomic Analaysis and Development, Ljubljana)
    Abstract: Using a large sample of micro data we investigate what kind of CEECs-9 (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Poland, Romania, Slovakia and Slovenia) firms tend to invest abroad, and what is the impact of outward FDI on their productivity. We find that firms with outward FDI tend to be larger and more productive, i.e. the best firms tend to self-select into outward FDI. There is also a positive effect of outward FDI on productivity growth of investing firms from CEECs, but this effect is driven exclusively by the subsamples of Czech and Romanian firms, while the impact in other countries is substantially less pronounced. In addition, the positive effect does not appear to be long lasting as it is only statistically significant a year after the investment was made, while employing longer lags yielded positive but insignificant correlations. We also find the heterogeneity of effects by different host-country markets, i.e. investments by CEECs firms into either Western European or other CEECs yielded an above average effect on productivity growth of investing firms, investments into other parts of Europe did not significantly impact the growth of productivity, while North American subsidiaries were even negatively correlated with productivity growth.
    Keywords: FDI; cross-country comparisons; emerging economies; productivity growth; micro-data
    JEL: C30 F23 O47 O57
    Date: 2014–10–24
  11. By: Alfredo Martín Oliver (Universitat de les Illes Balears); Sonia Ruano Pardo (Banco de España); Vicente Salas Fumás (Universidad de Zaragoza)
    Abstract: This paper examines the links between productivity and social welfare, with an application to the banking industry. It models spatial price competition between bank branches jointly with banks’ decisions on the opening or closing of branches based on profit expectations. The model predicts that more productive banks set lower (higher) interest rates on loans (deposits) and increase their market share through both higher demand per branch and a larger network of branches. Specifically, the paper i) uses a new measure of bank productivity; ii) provides a productivity differences-based explanation of the distance between bank branches and bank customers; and iii) shows how the intensity of market competition may be unaffected when the number of banks decreases, provided that banks continue expanding their branch network. The empirical implementation of the model uses Spanish banks over the period 1993-2007 and it confirms the theoretical predictions of the paper
    Keywords: banking spatial competition, bank branch productivity, interest rates, branch dynamics, bank economic profits.
    JEL: E43 G21 L11 O30 R32
    Date: 2014–10
  12. By: Beata Javorcik (University of Oxford, United Kingdom); Steven Poelhekke (VU University Amsterdam, the Netherlands)
    Abstract: The literature has documented a positive effect of foreign ownership on firm performance. But is this effect due to a one-time knowledge transfer or does it rely on continuous injections of knowledge? To shed light on this question we focus on divestments, that is, foreign affiliates that are sold to local owners. To establish a causal effect of the ownership change we combine a difference-in-differences approach with propensity score matching. We use plant-level panel data from the Indonesian Census of Manufacturing covering the period 1990-2009. We consider 157 cases of divestment, where a large set of plant characteristics is available two years before and three years after the ownership change and for which observationally similar control plants exist. The results indicate that divestment is associated with a drop in total factor productivity accompanied by a dec line in output, markups as well as export and import intensity. The findings are consistent with the benefits of foreign ownership being driven by continuous supply of headquarter services from the foreign parent.
    Keywords: divestment, foreign direct investment, Indonesia and productivity
    JEL: F23
    Date: 2014–07–24
  13. By: Ulf Lewrick; Lukas Mohler; Rolf Weder
    Abstract: This paper presents a framework to assess the relative importance of three key sources of productivity growth that research on international trade focuses on: (i) inter-industry specialisation; (ii) intra-industry reallocation of resources across heterogeneous firms, including firm entry and exit; and (iii) technological progress. Detailed data on Swiss manufacturing firms illustrate how the framework can be empirically applied. Based on this example, we find that intra-industry reallocations are the most important source of growth in aggregate total factor productivity, reflecting in particular the productivity growth of large, incumbent firms and the entry of new firms. That said, inter-industry specialisation and general technological progress remain important supplementary sources of growth in Swiss manufacturing.
    Keywords: Growth, total factor productivity, inter-industry trade, intra-industry trade
    Date: 2014–10
  14. By: Víctor Giménez (Department of Business, Universitat Autònoma de Barcelona, Spain); Claudio Thieme (Faculty of Economics and Business, Universidad Diego Portales, Santiago, Chile); Diego Prior (Department of Business, Universitat Autònoma de Barcelona, Spain); Emili Tortosa-Ausina (IVIE, Valencia and Department of Economics, Universidad Jaume I, Castellón, Spain)
    Abstract: This study uses the global Malmquist-Luenberger productivity index to measure performance change in the educational systems of 28 countries participating in the TIMSS 2007 and 2011 for eighth grade basic education students in the discipline of mathematics. This methodology is particularly appropriate both for its desirable properties as well as its suitability for the educational context. Results indicate that the countries participating in the study not only chose different paths to improve their educational performance but, in addition, results varied remarkably among them. They also suggest that, on average, educational performance deteriorated between 2007 and 2011, although we also found (successful) efforts in several countries to improve equality.
    Keywords: education, efficiency, Malmquist-Luenberger, TIMSS
    JEL: C61 H52 I21
    Date: 2014
  15. By: Singh, R.K.P.; Kumar, Abhay; Singh, K.M.; Kumar, Anjani
    Abstract: Immediately after the green revolution period, there was an intense debate on the observed inverse relationship between farm size and per hectare agricultural productivity in India. It was subsequently argued that the higher productivity of small holdings would disappear with the adoption of superior technology, modernisation and growth in general. Recently, National Sample Survey data show that small holdings in Indian agriculture still exhibit a higher productivity than large holdings. This article contributes to the limited literature on farm size and productivity in small land holder's agriculture in Bihar, India. Plot wise panel data of VDSA project are used to reach at precise conclusion. The results provide evidence for a positive relationship between farm size and productivity in case of small land holders’ agriculture and hence, an inverse relationship does not seem to apply within small landholders’ agriculture. A strong positive relationship between farm size and output per hectare is a result of higher use of fertilizer, modern seeds and irrigation sources on comparatively larger land holders than small land holders in Bihar, India. It is mainly due to more uneconomic land holdings of sub-marginal and marginal farmers to have limited access to water resources, quality input and credit. Access to resources and technology must be considered together for any agricultural development programmes for small land holder's agriculture. It is therefore needed to look for ways of improving their access to resources for farming through increased opportunities for earning off farms and off season income or through improved credit market. Hence, small size and land fragmentation are key bottlenecks for the growth of agriculture in Bihar, India. The crop productivity of tiny landholders can be increased through improving their access to institutional financing system, agricultural extension network and farm technology centres. However, promotion of non-farm rural employment seems to be the most appropriate option for increasing crop productivity and improving livelihoods of small landholders in Bihar.
    Keywords: farm size, productivity, small landholders’ agriculture, Bihar, livelihood, adoption of modern technology
    JEL: O3 O32 O33 Q12
    Date: 2014–08–10
  16. By: Filipe Lage de Sousa; Gianmarco I. P. Ottaviano
    Abstract: Especially in developing countries credit constraints are often perceived as one of the most important market frictions constraining firm innovation and growth. Huge amounts of public money are being devoted to the removal of such constraints but their effectiveness is still subject to an intense policy debate. This paper contributes to this debate by analysing the effects of the Brazilian Development Bank (BNDES) loans. It finds that, before receiving BNDES support, granted firms are indeed more credit constrained than comparable non-granted firms. It also finds that BNDES support allows granted firms to achieve the same level of performance as similar non-granted firms that are not credit constrained. However, it does not allow granted firms to outperform similar non-granted ones.
    Keywords: Heterogeneous firms, productivity, public policy analysis, credit constraints
    JEL: O38 H00
    Date: 2014–10
  17. By: Xichen Sun (Student of Graduate School of Business Administration, Kobe University); Michiyuki Yagi (Interfaculty Initiative in the Social Science, Kobe University); Katsuhiko Kokubu (Graduate School of Business Administration, Kobe University)
    Abstract: As global competition is getting more and more intense, there is an increasing trend manifesting the increasing interest in sustainable supply chain management. This study introduces four sustainable supply chain indicators from the upstream (supplier), middle stream (focal firm) and downstream (customer) of a supply chain to empirically examine the relationship between sustainable supply chain performance and firm performance (ROA), as well as the relationship between environmental efficiency and other three indicators. It focuses on the Energy and Utilities industries. In this study we use global firm dataset from Bloomberg professional service, and the number of observation is 86 during 2005 to 2013. We find an inversely U-shaped curve relationship between environmental efficiency in supply chain and firm' s profitability (ROA); and a U-shaped relationship between investments in operational sustainability and firm' s profitability. Also a negative relationship is found between having a new product and ROA. We provide implications obtained from our analysis of regression results for managers. We contribute to the literature by responding to the call for more empirical research in this filed, providing the evidence that sustainable supply chain performance can bring actual benefits for the firm, as long as firms identify their own position accurately and take the right action.
    Keywords: sustainable supply chain, environmental efficiency, new product, firm performance
    Date: 2014–10
  18. By: Gerdie Everaert (Sherppa, Ghent University); Freddy Heylen (Sherppa, Ghent University); Ruben Schoonackers (Research Department, NBB)
    Abstract: This paper analyzes the direct and indirect effects of fiscal policy on total factor productivity (TFP) in a panel of OECD countries over the period 1970-2012. Our contribution is twofold. First, when estimating the impact of fiscal policy on TFP from a production function approach, we identify the worldwide available level of technology by exploiting the observed strong cross-sectional dependence between countries instead of using ad hoc proxies for technology. Second, next to direct effects, we allow for indirect effects of fiscal policy by modelling the access of countries to worldwide available technology as a function of fiscal policy and other variables. Empirically, we propose and implement a non-linear version of the Common Correlated Effects Pooled (CCEP) estimator of Pesaran (2006). The estimation results show that through the direct channel budget deficits harm TFP. A shift towards productive expenditures has a strong positive impact on TFP, whereas a shift towards social transfers reduces TFP. Through the indirect channel, significant positive effects on a country's access to global technology come from reducing the statutory corporate tax rate and from reducing barriers to trade.
    Keywords: Fiscal policy, TFP, Unobserved Common Factors, Panel Data
    JEL: C31 C33 E62 O38
    Date: 2014–11
  19. By: Eric Mayer; Sebastian Rüth; Johann Scharler
    Abstract: Using a sign restrictions approach, we document that total factor productivity (TFP) moves counter-cyclically in the aftermath of supply and demand side shocks. To interpret our empirical results, we conduct counter-factual simulations, based on a New Keynesian DSGE model in which TFP fluctuates endogenously due to time-varying labor effort. The simulations show that the decline in the output gap, following an adverse shock, is dampened by the endogenously improving TFP as long as the nominal interest rate remains strictly positive during the downturn. If the economy hits the zero lower bound, the decline in the output gap is amplified when TFP improves endogenously.
    Keywords: TFP, labor effort, zero lower bound
    JEL: E24 E30 E32 E40
    Date: 2014–10
  20. By: Tooraj Jamasb; Rabindra Nepal
    Abstract: The incentive regulation of costs related to physical and cyber security in electricity networks is an important but relatively unexplored and ambiguous issue. These costs can be part of a cost efficiency benchmarking or alternatively dealt separately. This paper discusses the issues and proposes on the options for incorporating network security costs within incentive regulation in a benchmarking framework. The relevant concerns and limitations associated with network security costs accounting and classification, choice of cost drivers, data adequacy and quality and the relevant benchmarking methodologies are discussed. The discussion suggests that the present regulatory treatment of network security costs using benchmarking is rather limited to being an informative regulatory tool than being deterministic. We discuss how alternative approaches outside of the benchmarking framework such as the use of stochastic cost-benefit analysis and cost-effectiveness analysis of network security investments can complement the results obtained from benchmarking.
    Keywords: benchmarking, network security, incentive regulation, exceptional events
    JEL: L94 L51 L98
    Date: 2014–10–03
  21. By: Kimitaka Nishitani (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Katsuhiko Kokubu (Graduate School of Business Administration, Kobe University)
    Abstract: The goal of this paper is to perform an empirical analysis on the impact on shareholder value of corporate environmental initiatives, focusing on the environmental disclosure and its credibility. The authors verified their hypothesis regarding this, which states, "corporations' environmental initiatives improve shareholder value via release of environmental reports. This trend grows stronger when the credibility of the disclosed information is enhanced." The results of the empirical analysis supported this hypothesis. Specifically, it was revealed that corporations that conduct more environmental initiatives release more environmental reports, and corporations that release more environmental reports have higher shareholder value, and the increased credibility gained via the disclosure of information that includes third-party reviews strengthens this trend even further.
    Keywords: Environmental Disclosures, Environmental Initiatives, Economic Performance, Improvement in Productivity, Increase in Demand, Fixed Effects Instrumental Variables Model
    Date: 2014–10
  22. By: Emmanuel Dhyne (Research Department - National Bank of Belgium and Université de Mons); Selen Sarisoy Guerin (Corresponding author, Trinity College Dublin)
    Abstract: The aim of this paper is to examine causal effects of outward foreign direct investment activities of corporations that start expanding abroad on a large number of domestic performance indicators. Our results indicate that there is no evidence in our data to show that FDI has statistically significant impact on productivity, employment and output. The only statistically significant result indicates that FDI causes positive growth in export intensity. On the other hand when we restrict our sample to Belgian manufacturing firms only, we do find that switching to OFDI causes a positive growth in TFP. This effect is coupled with an increase in wages and exports. On the other hand, we do not find any statistically significant evidence that internationalization of Belgian firms causes loss of employment for the unskilled worker as in other studies
    Keywords: multinational firms; propensity score matching, difference-in-differences
    JEL: F23 D21 C14
    Date: 2014–10
  23. By: Alonso-Ortiz, Jorge; Colla, Esteban; Da-Rocha, Jose-Maria
    Abstract: Interest rate spreads on sovereign debt were negatively correlated with the evolution of stock prices during The European Sovereign Debt Crisis. In particular, for a sample of 9 european countries there was a year (between 2009 and 2012) in which the correlation between stock prices and spreads was almost -1. We use this fact to estimate the upper bound of productivity default shocks using a continuous time structural model of default. At every instant the government maximizes expected tax revenues, where the only source of uncertainty is TFP, which follows a regime switching brownian motion. By estimating TFP regimes, to match interest rate spreads on sovereign debt and stock prices, we compute the ratio of the productivity if there was a default relative to the no default benchmark. This is a measure on how much productivity could countries loose at default. We found a robust negative relation between the costs of default and the probability of default. That is, financial markets incorporate into prices the risk of default immediately.
    Keywords: Default, Sovereign Debt, Financial Markets, Productivity
    JEL: E30 E44 G15
    Date: 2014–04–01
  24. By: Lean, Hooi Hooi; Ang, Wei Rong; Smyth, Russell
    Abstract: We analyze, and compare, performance and performance persistence of Socially Responsible Investment (SRI) funds in Europe and North America. We use a broad sample of 500 European and 248 North American SRI funds for the period January 2001 - December 2011. We find that SRI funds outperform the market benchmark in Europe and North America over this period and that North American SRI funds perform better than European SRI funds. We find little evidence of performance persistence in either region using a ranked portfolio approach; however, there is more evidence of performance persistence in European SRI funds than in their North American counterparts using a non-parametric ranked portfolio approach.
    Keywords: Performance Persistence, Socially Responsible Investment Funds, Carhart, Fama-French, Ranked Portfolio Approach, Contingency Table
    JEL: G11 G14 G15
    Date: 2014–10
  25. By: Swamy, Vighneswara
    Abstract: In this study, using the World Bank’s Bank Regulation and Supervision Survey (BRSS) data, we draw insights about the bank regulatory/supervisory styles, illustrate the differences in regulation/supervision among crisis, non-crisis and BRICS countries, and highlight the ways in which bank regulation and supervision has changed during the crisis period. The study suggests that crisis-countries had weaker regulatory and supervisory frameworks compared to those in emerging countries during the crisis. BRICS countries as a distinct block has demonstrated uniqueness in the regulatory/supervisory styles which is neither similar to crisis-countries nor with the non-crisis countries.
    Keywords: Central Banks, Banking Regulation, Capital adequacy, Regulation, Risk, Supervision, Financial markets and governance, Crisis
    JEL: E58 G18 G20 G21 G32 G38 L51 O16
    Date: 2014
  26. By: Ager, Philipp; Brückner, Markus; Herz, Benedikt
    Abstract: In the beginning of the 1890s, counties located in the Cotton Belt of the American South were hit by an agricultural plague, the boll weevil, that adversely affected cotton production and hence the demand for labor. We use variation in the incidence of the boll weevil multiplied with counties’ initial cotton share to construct instrumental variables estimates of the labor supply curve. Controlling for county and state-by-time fixed effects, we find a significant positive response of labor supply to changes in labor income. The effect is particularly large for females, consistent with evidence that females had a comparative advantage in picking cotton.
    Keywords: Labor Supply, Female Labor Force Participation, Agricultural Productivity Shocks, US South, Boll Weevil
    JEL: E24 J16 J21 N3 N31
    Date: 2014–10
  27. By: Kijima, Yoko
    Abstract: This paper provides an overview of rice sector development in Uganda and examines the effects of two technology dissemination programs on the enhancement of rice production in Eastern and Northern Uganda. One program was a JICA training program that provided on-the-job training at demonstration plots 3–4 times a year, while the other was to distribute a rice cultivation guidebook to households that were randomly selected. The training program was shown to have improved rice productivity. In contrast, there were no significant effects resulting from the distribution of the guidebook on technology adoption or rice production. Although the distribution of the guidebook was less costly and easier to implement than the training program, distribution of the guidebook alone cannot be a substitute for conventional training programs
    Keywords: rice production , Uganda , program evaluation, cultivation practices , technology adoption
    Date: 2014–09–17
  28. By: Huu Thanh Tam Nguyen (University of Evry Val d’Essonne, EPEE & Economics Department); Ngoc-Sang Pham (CES, University Paris I Pantheon-Sorbonne)
    Abstract: We consider a small open economy with two productive sectors (an old and a new). There are two types of firms in the new industry: a well planted multinational firm and a potential domestic firm. Our framework highlights a number of results. First, in a poor country with low return of training and weak FDI spillovers, the domestic firm does not exist in the new industry requiring a high fixed cost. Second, once the host economy has the capacity to create the new firm, the productivity of the domestic firm is the key factor allowing it to enter into the new industry, and even eliminate the multinational firm. Interestingly, in some cases where FDI spillovers are strong, the country should invest in the new industry, but not train specific workers. Last, credit constraints and labor/capital shares play important roles in the competition between the multinational firm and the domestic one.
    Keywords: FDI spillovers, investment in training, heterogeneous firms, entry cost
    JEL: F23 F4 O3
    Date: 2014
  29. By: Abdoulaye Diagne; Mouhamadou Moustapha Lô; Ousmane Sokhna; Fatoumata L. Diallo
    Abstract: This study evaluates the impact of school canteen programs on the performance of rural primary schools in Senegal using a “randomized experiment”. 120 schools which had never had school canteens were selected in the four poorest regions of Senegal. They were randomly assigned to treatment and control groups. Students in the second (CP) and fourth (CE2) years of primary school were observed in each of the selected schools. Many tests (student, Kolmogorov-Smirnov, Mann-Whitney Levene, Chi2) were performed in order to verify the random nature of the treatment assignment. The results show that, at the school level, the two groups are relatively homogenous, but there are some differences at the individual level. Thus, the double difference methods used to estimate the impact of the meal program on academic performance. The results are as follows: the canteen has a positive and significant impact on the overall score of students in grade 2 (10.56 points). This result is confirmed in both mathematics (12.32 points) and French (8.72 points). However, the impact is not significant for older children (more than 10 years old) in CP. In terms of gender, the study shows a difference in the impact in favour of girls in the fourth grade. Looking at the cognitive impact, we find that, except for the level of knowledge, the canteen has a greater impact on the cognitive ability of the youngest (aged six and seven years). Competencies in memory (33.23 points) and reasoning (23.92 points) improved by more. These results are all significant at the 5% confidence level. However, school canteens do not improve the internal efficacy of public primary schools: dropouts and repeated grades have certainly decreased, but none of the results are statistically significant. By improving the nutritional intake of children who benefit from the meals supplied to the school, the canteens have positive externalities on the nutritional intake of children living with the beneficiary students. Moreover, there are interaction effects between the school canteen and two traditional schooling quality inputs: poverty and class size. Regarding these results, we can state that universalizing school canteens can be an effective method to accelerate progress towards quality education for all.
    Keywords: School canteens, primary education, rural areas, school dropouts, repeated grades, nutritional intake, evaluations, double difference.
    JEL: O1 I21 I28 I38
    Date: 2013

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.