nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒01‒14
fourteen papers chosen by

  1. A Note on Reconciling Gross Output TFP Growth with Value Added TFP Growth By Diewert, W. Erwin
  2. Does Destination Matter? Causal Links Between Export Sales and Exporters’ Productivity By Shevtsova Yevgeniya
  3. EU Accession, Domestic Market Competition and Total Factor Productivity. Firm Level Evidence By Klaus S. Friesenbichler
  4. Sources of Labor Productivity Growth in the EU and the US: the Role of Intangible and ICT Capital By Massimiliano Iommi
  5. Health, productivity, and ageing By Maciej Lis; Iga Magda
  6. Summary of perceptions, impacts and rewards of row planting of teff: By Vandercasteelen, Joachim; Dereje, Mekdim; Minten, Bart; Seyoum Taffesse, Alemayehu
  7. School Inputs and Skills: Complementarity and Self-Productivity By Nicoletti, Cheti; Rabe, Birgitta
  8. The Effects of Remittances on Output per Worker in Sub-Saharan Africa: A Production Function Approach By John Ssozi; Simplice Asongu
  9. Has the internet fostered inclusive innovation in the developing world? By Paunov C.; Rollo V.
  10. Impact of Micro Economic Variables on Firms Performance By Hunjra, Ahmed Imran; Chani, Muhammad Irfan; Javed, Sehrish; Naeem, Sana; Ijaz, Muhammad Shahzad
  11. Trade liberalization and domestic suppliers: evidence from Chile By Andrea Linarello
  12. Distinguishing Neighborhood and Workplace Effects on Individual Productivity: Evidence from Sweden By Mellander, Charlotta; Stolarick, Kevin; Lobo, José
  13. Determinants of Bank Profitability and Basel Capital Regulation: Empirical Evidence from Nigeria By Ozili, Peterson
  14. Financial performance of banks in Pakistan after Merger and Acquisition By Abbas, Qamar; Hunjra, Ahmed Imran; Azam, Rauf I; Ijaz, Muhammad Shahzad; Zahid, Maliha

  1. By: Diewert, W. Erwin
    Abstract: The paper obtains relatively simple exact expressions that relate value added Total Factor Productivity growth (TFP growth or Multifactor Productivity Growth) in a value added framework to the corresponding measures of TFP growth in a gross output framework when Laspeyres or Paasche indexes are used to aggregate outputs and inputs. Basically, as the input base becomes smaller, the corresponding estimates of TFP growth become larger. A fairly simple approximate relationship between Fisher indexes of gross output TFP growth and the corresponding Fisher index of value added TFP growth is also derived. The methodology developed in this note can be applied in other situations.
    Keywords: Total Factor Productivity growth, TFP growth, Multifactor Productivity growth, MFP growth, Laspeyres, Paasche and Fisher index number formulae, magnif
    JEL: C43 D24
    Date: 2014–12–17
  2. By: Shevtsova Yevgeniya
    Abstract: The paper empirically explores the microeconomic exporting-productivity links using data from Ukrainian manufacturing and service sectors for the years 2000-2005 distinguishing between various industries and export destinations. Overall, the findings confirm self-selection of more productive firms into exporting showing that firms with higher total factor productivity (TFP) in the year prior to exporting are significantly more likely to engage in international trade. Also, age, and, to some extent, intangible assets positively affect the probability of becoming an exporter. The results also suggest significant positive post-entry productivity effect for the firms that enter export markets and negative productivity effect for the firms that exit. At the industry level the presence of learning-by-exporting effect is not universal and varies between industries and export destinations. Firms in capital-intensive industries that export to the countries of the European Union and other OECD countries experience stronger export-related productivity shocks than firms exporting to other CIS countries. The magnitude of the effect is also positively correlated with the capital intensity of the industries. These findings have important implications for industrial policies, suggesting that programs designed to upgrade firms’ productivity and innovative capabilities should be industry specific. Such policies, should they be implemented, will increase benefits arising from exporting, which should further enhance international competitiveness of Ukrainian firms.
    JEL: D24 F14 L25 R38
    Date: 2014–11–26
  3. By: Klaus S. Friesenbichler (WIFO)
    Abstract: In this paper we argue that changes in the EU membership status of the countries in Central and Eastern Europe led to less concentrated markets. This is due to the implementation of competition policy and other pro-competitive policies embedded in the Community Acquis, the body of European Union law. A regression analysis using data on 39,646 firms from six survey waves between 2002 and 2013 found EU membership to significantly increase the degree of domestic competition. While the effect of competition policy itself on market structures was statistically insignificant, the interaction between EU membership status and competition policy showed a strong and statistically significant competition enhancing effect. These findings were linked to a firm-level TFP analysis. Less concentrated markets were associated with higher productivity levels. This finding is robust after controlling for endogeneity issues. EU membership was only weakly associated with changes in TFP levels, but led to a decrease in the variance of the productivity measure across firms.
    Keywords: competition policy, productivity, Community Acquis, EU, Enterprise Surveys, ECA, CEE
    Date: 2014–12–18
  4. By: Massimiliano Iommi (ISTAT)
    Abstract: This paper provides a growth accounting analysis of the sources of labor productivity growth in the business sector of 13 EU Member States and the US in the years 1995-2009. The aim of the analysis is to provide new evidence on the role of intangible and ICT capital as drivers of economic growth. We adopt the approach first proposed by Corrado, Hulten and Sichel and we extend the standard growth accounting model treating a broad range of firm expenditures for intangibles as investments that create future value. Our main results are the following: Capitalizing intangibles increases labor productivity growth in the period 1995-2009 with respect to labor productivity growth estimated from current national accounts data; Capital deepening was the dominant source of growth in 11 out of the 14 countries included in the analysis and in the other three its contribution was very close to the contribution of multi factor productivity growth; The contribution of ICT capital and Intangible non-ICT capital to labor productivity growth was quite high in all countries that performed relatively well in terms of labor productivity growth; When focusing on the US and the EU15 countries, there is a positive relationship between the growth of ICT and Intangible non-ICT capital deepening and the growth of multifactor productivity.
    Keywords: Productivity growth, Intangibles, ICT
    JEL: O47 E22 E01
    Date: 2014
  5. By: Maciej Lis; Iga Magda
    Abstract: We provide a comparative cross-country analysis of individual age-wage proles for different health statuses. Using semi-parametric regressions run on EU-SILC data we aim at answering the question on the relationship b etween individual health and pro ductivity and its changes in the life cycle, separating the impact of health from traditional wage determinants. We nd that although the agepro ductivity proles vary much among countries, these dierences are not inuenced by the self-p erceived health status.
    Keywords: Health, Ageing, Productivity
    JEL: I19 J24
    Date: 2014–05
  6. By: Vandercasteelen, Joachim; Dereje, Mekdim; Minten, Bart; Seyoum Taffesse, Alemayehu
    Keywords: Agricultural research, Teff, productivity, yields, Labor, sowing methods,
    Date: 2014
  7. By: Nicoletti, Cheti (University of York); Rabe, Birgitta (ISER, University of Essex)
    Abstract: Using administrative data on schools in England, we estimate an education production model of cognitive skills at the end of secondary school. We provide empirical evidence of self-productivity of skills and of complementarity between secondary school inputs and skills at the end of primary school. Our inference relies on idiosyncratic variation in school expenditure and child fixed effect estimation that controls for the endogeneity of past skills. The persistence in cognitive ability is 0.221 and the return to school expenditure is three times higher for students at the top of the past attainment distribution than for those at the bottom.
    Keywords: education production function, test scores, school quality, complementarity
    JEL: I22 I24
    Date: 2014–12
  8. By: John Ssozi (Baylor University, USA); Simplice Asongu (Yaoundé/Cameroun)
    Abstract: This paper uses a production function to examine the channels through which remittances affect output per worker in 31 Sub-Saharan Africa (SSA) countries from 1980-2010. We find that remittances directly increase output per worker if complemented with education. The indirect effects vary with the economic characteristics of the recipient nations: while remittances have increased human capital among the low-income nations, among the upper-middle-income nations, they have mostly increased total factor productivity, but are still inversely related to factor inputs among the lower-middle-income nations of SSA. Finally, remittances are more effective when institutional risk is reducing.
    Keywords: remittances, output per worker, total factor productivity, Sub-Saharan Africa
    JEL: F22 F24 F35 F43 O15 O16 O43 O55
    Date: 2014–08
  9. By: Paunov C.; Rollo V. (UNU-MERIT)
    Abstract: Based on 50,013 firm observations covering 117 developing and emerging countries, this paper shows knowledge spillover effects from industries use of the internet boosted the average firms productivity and innovation performance. We document that industries digitization had heterogeneous impacts results from quantile regressions indicate that the most productive firms benefited much more than others. Wider Internet adoption rates were also of larger benefit to single-plant establishments, non-exporters and firms in remote locations, particularly to the most productive among these firms. Overall, we document that the internet can play an important role to support inclusive innovation, conditional on firms absorptive capacities.
    Keywords: Firm Behavior: Empirical Analysis; Microeconomic Analyses of Economic Development; Industrialization; Manufacturing and Service Industries; Choice of Technology; Technological Change: Choices and Consequences; Diffusion Processes;
    JEL: O33 O14 O12 D22
    Date: 2014
  10. By: Hunjra, Ahmed Imran; Chani, Muhammad Irfan; Javed, Sehrish; Naeem, Sana; Ijaz, Muhammad Shahzad
    Abstract: The aim of our study is to analyze the factors that affect performance of the cement sector focusing particularly on Pakistani firms. The study further finds the impact of size on performance, to examine the relationship between age of the firm and firm performance, to measure the effect of growth on firm’s performance and to highlight the impact of leverage on performance of the firm. There are twenty six cement companies listed in KSE. However, for the purpose of this paper only twenty companies were selected whose data was readily available over the period of eleven years from 2002 to 2012. Methodology: The data for the study was extracted from the annual reports of all the companies. In this study panel data analysis is used. Findings: After analyzing the data we have come to a point that all of the four variables have significant impact on the performance of the firm. We have seen that leverage has a positive impact effect on the performance of the firm when ROA is analyzed. Size, age and growth have a positive impact on return on equity (ROE) while leverage has a negative impact. Recommendations: This paper shows new insights for policy makers to improve the performance of Pakistani firms.
    Keywords: Microeconomic Variables, ROA, ROE, Panel approach, Cement sector
    JEL: D2 D24 D4 G31
    Date: 2014–02–16
  11. By: Andrea Linarello (Bank of Italy)
    Abstract: I examine the effect of reducing export tariffs on the productivity of domestic suppliers of exporting firms. Using a panel of Chilean firms during a period of trade liberalization with the European Union, the United States, and the Republic of Korea, I show that the average reduction in the export tariff of downstream industries (1.1 percentage points) increases the productivity of intermediate input suppliers by 1.5 percent. The increase in productivity among domestic suppliers accounts for 22.5 percent of aggregate productivity gains. I find that tariff cuts induce firms to acquire new machinery and pay higher wages to skilled workers. These findings are consistent with a simple model in which lower export tariffs increase the sales of exporting firms and increase the derived demand for intermediates through input-output linkages.
    Keywords: productivity, trade liberalization, exports; input-output linkages
    JEL: D21 F12 L60
    Date: 2014–11
  12. By: Mellander, Charlotta (Jönköping International Business School, Martin Prosperity Institute, Rotman School of Management, University of Toronto & Centre of Excellence for Science and Innovation Studies (CESIS)); Stolarick, Kevin (Urban Studies, University of Toronto); Lobo, José (School of Sustainability, Arizona State University)
    Abstract: We investigate the effects on individuals’ productivity (captured through their wage income) of two social networks in which individuals are embedded: their residential neighborhood and their workplace. We avail ourselves of Swedish micro-level data which makes it possible to identify individual workers, and who they live next to and work with. We vary the spatial extent of the non-workplace social networkfrom block group to the whole of a metropolitan areato examine which social community most affects an individual’s productivity. We distinguish between individuals engaged in “creative” and “non creative” occupations so as to starkly control for differences in education, training and skills. Our results suggest that residential neighborhoods do matter for individuals’ productivity, although the effect is stronger for noncreatives. For both creatives and noncreatives their workplace group has the greatest effect on income.
    Keywords: network effects; neighborhood; productivity; workplace; creative occupations
    JEL: J10 R20 R23
    Date: 2014–12–15
  13. By: Ozili, Peterson
    Abstract: This study, empirically, investigates the determinants of bank profitability. Overall, I find that the Basel capital regime had no significant effect on bank profitability. This result is significant because it lends support to the view that modified Basel accord in different countries might be aimed to meet other prudential objectives other than the intended objective - to reduce excessive bank risk-taking. Second, after employing NIM and ROA profitability metrics, I find that the determinants of bank profitability, and its significance, depends on the profitability metric employed. Third, I find that loan quality significantly influences bank interest margin while bank size and cost efficiency significantly influences return on asset. Finally, bank capital adequacy is observed to be a significant determinants of bank profitability.
    Keywords: Bank Profitabilty, Basel Capital Regulation
    JEL: E5 E58 G2 G21 N2 N20 N27
    Date: 2015–01
  14. By: Abbas, Qamar; Hunjra, Ahmed Imran; Azam, Rauf I; Ijaz, Muhammad Shahzad; Zahid, Maliha
    Abstract: Business transactions are going to be fast day by day because of dynamic changes in the global environment. Merger and Acquisition is a strategy adopted by the organizations globally to meet the needs of recent dynamic business environment. It has achieved much attention and importance in corporate world. In Pakistan, this strategy has been used widely in banking sector. Therefore, the objective of the study is to evaluate the financial performance of banks in Pakistan after M&A. The financial and accounting data for 10 banks was taken from the Financial Statement Analysis by State Bank of Pakistan. Profitability & Efficiency, Leverage, and Liquidity ratios were used to measure the financial performance, where pre and post ratio analysis was done. Results of the study show that there is no positive improvement in the financial performance of the banks in Pakistan after Merger and Acquisition.
    Keywords: Merger and Acquisition; Financial Performance; Profitability; Liquidity; Leverage; Pre & Post Analysis
    JEL: G3 G34
    Date: 2014–11–15

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