nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒01‒09
fourteen papers chosen by

  1. Knowledge Spillovers, ICT and Productivity Growth By Corrado, Carol; Haskel, Jonathan; Jona-Lasinio, Cecilia
  2. Techniques Choice, Misallocation and Total Factor Productivity By Uras, R.B.; Wang, P.
  3. Exporting and Firm Performance: Evidence from a Randomized Trial By Atkin, David; Khandelwal, Amit; Osman, Adam
  4. The Role of Energy Productivity in the U.S. Agriculture By V.E. Ball; R. Färe; S. Grosskop; D. Margaritis
  5. Technological Progress and Economic Geography_x0003_ By Jacques Thisse; Takatoshi Tabuchi; Xiwei Zhu
  6. Former Foreign Affiliates: Cast Out and Outperformed? By Javorcik, Beata; Poelhekke, Steven
  7. From productivity to exporting or vice versa? Evidence from the Tunisian manufacturing sector By Ayadi, Mohamed; Mattoussi, Wided
  8. Total Factor Energy Efficiency of Yangtze River Delta Region in China By Jiuwen Sun; Shanshan Li
  9. When pressure sinks performance: Evidence from diving competitions By Eleni Garbi; Christos Genakos; Mario Pagliero
  10. Technical Efficiency and CO2 Reduction Potentials: An Analysis of the German Electricity Generating Sector By Stefan Seifert; Astrid Cullmann; Christian von Hirschhausen
  11. Do Interconnections Matter for Bank Efficiency? By Solange Maria Guerra; Benjamin Miranda Tabak; Rodrigo Cesar de Cesar de Castro Miranda
  12. The Impact of Climate Change on Rice Production in Nepal By Prakash K. Karn
  13. How Important Are Internal Knowledge Flows for Firms' Innovative Performance in Spain? By Esther Goya
  14. Investigating the influence of firm characteristics on the ability to exercise market power: A stochastic frontier analysis approach with an application to the iron ore market By Germeshausen, Robert; Panke, Timo; Wetzel, Heike

  1. By: Corrado, Carol; Haskel, Jonathan; Jona-Lasinio, Cecilia
    Abstract: This paper looks at the channels through which intangible assets affect productivity. The econometric analysis exploits a new dataset on intangible investment (INTAN-Invest) in conjunction with EUKLEMS productivity estimates for 10 EU member states from 1998 to 2007. We find that (a) the marginal impact of ICT capital is higher when it is complemented with intangible capital, and (b) non-R&D intangible capital has a higher estimated output elasticity than its conventionally-calculated factor share. These findings suggest investments in knowledge-based capital, i.e., intangible capital, produce productivity growth spillovers via mechanisms beyond those previously established for R&D.
    Keywords: economic growth; ICT; intangible assets; intangible capital; productivity growth; spillovers
    JEL: E01 E22 O47
    Date: 2014–07
  2. By: Uras, R.B. (Tilburg University, Center For Economic Research); Wang, P.
    Abstract: We develop a generalized production framework with endogenous “production techniques” that serve to organize raw factor inputs in an efficient manner. We establish a positive relationship between production flexibility and cost efficiency. By allowing firms to differ in technology scales,capital constraints and technique limitations, we illustrate an amplification of the detrimental effects of technique limitations by production flexibility. We apply the structure to studying, both theoretically and quantitatively, the consequences of capital and technique misallocation across firms for theTFP and the interplay of their TFP effects with production flexibility. Using firm-level data from U.S. manufacturing industries, we find that, due to the ampli…fication effect of production flexibility, technique misallocation generates more TFP losses than capital misallocation. Our quantitative results suggest that the relative importance of technique misallocation on TFP is substantial for a broad range of manufacturing industries –with larger TFP gains from removing technique misallocation in industries using more flexible production technologies.
    Keywords: Capital and Technique Misallocation; Production Flexibility; Aggregate Productivity
    JEL: D24 E23 O11 O33
    Date: 2014
  3. By: Atkin, David; Khandelwal, Amit; Osman, Adam
    Abstract: We conduct a randomized control trial that generates exogenous variation in the access to foreign markets for rug producers in Egypt. Combined with detailed survey data, we causally identify the impact of exporting on firm performance. Treatment firms report 15-25 percent higher profits and exhibit large improvements in quality alongside reductions in output per hour relative to control firms. These findings do not simply reflect firms being offered higher margins to manufacture high-quality products that take longer to produce. Instead, we find evidence of learning-by-exporting whereby exporting improves technical efficiency. First, treatment firms have higher productivity and quality after accounting for rug specifications. Second, when asked to produce an identical domestic rug using the same inputs, treatment firms receive higher quality assessments despite no difference in production time. Third, treatment firms exhibit learning curves over time. Finally, we document knowledge transfers with quality increasing most along the specific dimensions that the knowledge pertained to.
    Keywords: exports; learning-by-exporting; market access; productivity; quality
    JEL: D24 F10 F14
    Date: 2014–12
  4. By: V.E. Ball; R. Färe; S. Grosskop; D. Margaritis
    Abstract: This paper investigates the role of energy on U.S. agricultural productivity using panel data at the state level for the period 1960-2004. We first provide a historical account of energy use in U.S. agriculture. To do this we rely on the Bennet cost indicator to study how the price and volume components of energy costs have developed over time. We then proceed to analyze the contribution of energy to productivity in U.S. agriculture employing the Bennet-Bowley productivity indicator. An important feature of the Bennet-Bowley indicator is its direct association with the change in (normalized) profits. Thus our study is also able to analyze the link between profitability and productivity in U.S. agriculture. Panel regression estimates indicate that energy prices have a negative effect on profitability in the U.S. agricultural sector. We also find that energy productivity has generally remained below total farm productivity following the 1973-1974 global energy crisis.
    Keywords: Energy, Bennet-Bowley indicator, Agricultural productivity
    Date: 2014–11
  5. By: Jacques Thisse; Takatoshi Tabuchi; Xiwei Zhu
    Abstract: New economic geography focuses on the impact of falling transport costs on the spatial distribution of activities. However, it disregards the role of technological innovations, which are central to modern economic growth, as well as the role of migration costs, which are a strong impediment to moving. We show that this neglect is unwarranted. Regardless of the level of transport costs, rising labor productivity fosters the agglomeration of activities, whereas falling transport costs do not affect the location of activities. When labor is heterogeneous, the number of workers residing in the more productive region increases by decreasing order of productive efficiency when labor productivity rises.
    Keywords: new economic geography; technological progress; labor productivity; migration costs; labor heterogeneity. Classifcation:
    JEL: J61 R12
    Date: 2014–11
  6. By: Javorcik, Beata; Poelhekke, Steven
    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 decline 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; productivity
    JEL: F23
    Date: 2014–07
  7. By: Ayadi, Mohamed; Mattoussi, Wided
    Abstract: In this paper, we explore the link between firm productivity and exporting using three firm level datasets of 1323 Tunisian manufacturing firms from 2004 to 2006. In particular, we examine whether more productive firms self-select into export markets, and
    Keywords: manufacturing industry, learning by exporting, self-selection, innovation, Tunisia
    Date: 2014
  8. By: Jiuwen Sun; Shanshan Li
    Abstract: Energy is always the important material for economic growth and social development. A new index of energy efficiency called total factor energy efficiency (TFEE) consists of energy, capital, labor and other input that produce GDP as output. TFEE index is accounted by DEA through multiple input-output frameworks. Malmquist index measures productivity changing in two periods. Then decomposed the Malmquist index into efficiency change (EFFCH) and technical change (TECH) to estimate whether EFFCH or TECH influence TFEE. This paper analyze the energy consumption of two provinces and one city in Yangtze River Delta region, in terms of the quality of energy consumption and intensity of energy consumption. It shows that the increasing rate of energy consumption in the Yangtze River Delta was slowing down by using the absolute quantity of energy consumed in the region and its proportion in the country. Then the total factor energy efficiency of the Yangtze River Delta region was estimated by using the Yangtze River Delta region's energy consumption and economic growth data during from 1992 to 2010, based on DEA-Malmquist. The changes of total factor energy efficiency can be decomposed in energy efficiency and find the energy efficiency trends. The empirical results show that the Yangtze River Delta region, due to technological progress and technical efficiency, pulls together all the elements of energy efficiency. With time as a dimension, from 1992 to 2008, the TFEE is greater than 1, which means that the TFP is increasing and reaches the efficient frontier in the Yangtze River Delta Region. In a deeper analysis, the trend of total factor energy efficiency shows a W pattern, with the high point appearing in 1998 and 2007 by 5.4% and 5.2% respectively. And the main cause is the technical progress. With region as a dimension, from 1992 to 2008, the TFEE of the provinces and one city in the Yangtze River Delta Region are greater than 1. It indicates that the TFE climbs and reaches the efficient frontier. However, in Shanghai the TFEE is 1.060 which is the highest, followed by Jiangsu and Zhejiang.
    Keywords: Energy consumption; Economic growth; Energy efficiency; DEA-Malmquist
    Date: 2014–11
  9. By: Eleni Garbi; Christos Genakos; Mario Pagliero
    Abstract: Tournaments are designed to enhance participants’ effort and productivity. However, ranking near the top may increase psychological pressure and reduce performance. We empirically study the impact of interim rank on performance using data from international diving tournaments. We find that competitors systematically underperform when ranked closer to the top, despite higher incentives to perform well.
    Keywords: Tournaments, incentives, choking under pressure.
    JEL: J24 L83 M52 Z13
    Date: 2014
  10. By: Stefan Seifert; Astrid Cullmann; Christian von Hirschhausen
    Abstract: In this paper, we analyze the technical efficiency of CO2 reduction potentials of German power and heat plants, using a non-parametric sequential Data Envelopment Analysis. We apply a metafrontier framework to evaluate plant-level efficiencies in the transformation of inputs into desirable (energy) and undesirable (CO2 emissions) outputs, taking into account different fossil fuel generation technologies. We dispose of a unique data set for coal-, lignite-, gas- and biomass-fired power plants from 2003 through 2010 that provides an unbalanced panel of 1459 observations. We find intra-group differences within energy generation technology, but natural gas fired power plants clearly have the highest efficiency. Furthermore, the analysis points to significant savings potentials for CO2 and fuel-input.
    Keywords: Electricity generation, non-parametric efficiency analysis, Germany, Panel 2003-1010
    JEL: L94 Q50 C14
    Date: 2014
  11. By: Solange Maria Guerra; Benjamin Miranda Tabak; Rodrigo Cesar de Cesar de Castro Miranda
    Abstract: This paper addresses the issue of how individual bank interconnectivity and the interbank network topology impact on Brazilian banking efficiency between 2007 and 2013. We use several network measures to analyze the effects of bank interconnections on cost, profit and risk-taking efficiency. The results suggest that interconnections matter for bank efficiency. We find that interconnectivity can increase cost and risk-taking inefficiency levels. We also find that the density of the network topology can reduce profit and risk-taking inefficiency levels
    Date: 2014–12
  12. By: Prakash K. Karn
    Abstract: This paper examines the sensitivity of rice yield in Nepal to changes in climate variables and the magnitude of potential impacts on rice productivity in the future. Our findings draw attention to the differential impacts on rice yield depending on which stage of rice development is affected. We estimate that a 1°C rise in day-time maximum temperature during the ripening phase of rice increases harvest by 27 kg. Ha-1, but our analyses also suggests that productivity declines when the daytime maximum temperature goes beyond 29.9°C. Since the average maximum temperature is already higher than this threshold, rice yield will likely diminish with any further increases in maximum temperature. Rainfall appears to have a strong negative effect on yield if it occurs when rice plants are in the nursery stage. Overall, under a double CO2 scenario predicted for 2100, rice yield in Nepal is expected to drop by about 4.2 per cent relative to current production levels. However, this prediction is does not account for any long-term positive effects from adaptation and carbon fertilization or negative effects from extreme events triggered by climate change.
    Keywords: Climate change, productivity changes, agricultural impact, rice yields, Nepal.
  13. By: Esther Goya (AQR-IREA Research Group, University of Barcelona)
    Abstract: The aim of this paper is to analyse the extent to which internal knowledge flows may have an impact on firms’ innovative performance. As most of innovation literature has focused its attention on external knowledge transfers, internal knowledge flows have faded into the background. However, transference of information and experience within firms can improve their technological performance impacting positively on their innovativeness leading to higher innovative sales. Voluntary and involuntary knowledge flows are taken under consideration as well as firm’s absorptive capacity. The dataset used is Technological Innovation Panel (PITEC) for Spain over the period 2004-2011. The results indicate that internal knowledge flows have a positive and significant influence on innovative sales. In particular, voluntary knowledge flows have a greater impact than involuntary knowledge transfers. Interestingly, internal knowledge flows increase innovative sales to a greater extent than their external counterparts. This finding highlights the importance of internal information which, as it was mentioned previously, usually remains in the shadows. Finally, absorptive capacity only seems to enhance efficiency in exploiting involuntary knowledge flows.
    Keywords: innovation performance, internal knowledge flows, absorptive capacity, Spain
    JEL: D22 L20 O31
    Date: 2014–11–10
  14. By: Germeshausen, Robert; Panke, Timo; Wetzel, Heike
    Abstract: This paper empirically analyzes the existence of market power in the global iron ore market during the period 1993-2012 using an innovative Stochastic Frontier Analysis approach introduced by Kumbhakar et al. (2012). In contrast to traditional econometric procedures, this approach allows for the estimation of firm- and time-specific Lerner indices and, therefore, the assessment of the influence of individual firm characteristics on the ability to generate markups. We find that markups on average amount to 20%. Moreover, location and experience are identified to be the most important determinants of the magnitude of firm-specific markups.
    Keywords: Estimation of market power,Lerner indices,Stochastic Frontier Analysis,Non-renewable resources
    JEL: D22 L11 L72
    Date: 2014

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