nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒01‒19
sixteen papers chosen by

  1. Summary of Efficiency and productivity differential effects of the land certification program in Ethiopia: By Ghebru, Hosaena; Holden, Stein
  2. Firm-Level Productivity Spillovers in China's Chemical Industry: A Spatial Hausman-Taylor Approach By Badi H. Baltagi; Peter H. Egger
  3. DOES R&D PROTECT SMES FROM THE HARDNESS OF THE CYCLE? EVIDENCE FROM SPANISH SMES (1990-2009) By Dolores Añón Higón; Miguel Manjón; Juan A. Máñez; Juan A. Sanchis-Llopis
  4. Working Paper - 214 - From Productivity to Exporting or Vice Versa Evidence from Tunisian Manufacturing Sector By AfDB AfDB
  5. Enterprise productivity: a three-speed Europe By Dall'Olio, Andrea; Iootty, Mariana; Kanehira, Naoto; Saliola, Federica
  6. Social Capital and Firm’s Productivity in Italy: a Multilevel Approach By Sebastiano Nerozzi; Vito Pipitone; Giorgio Ricchiuti
  7. Productivity Sorting and Mode of Export By Marco Grazzi; Chiara Tomasi
  8. Green inventions and greenhouse gas emission dynamics: A close examination of provincial Italian data By Ding Weina; Marianna Gilli; Massimiliano Mazzanti; Francesco Nicolli
  9. The impact of outward FDI on the performance of Chinese multinationals By Cozza , Claudio; Rabellotti , Roberta; Sanfilippo, Marco
  10. Inclusion of undesirable outputs in production technology modeling:The case of greenhouse gas emissions in French meat sheep farming By K Hervé Dakpo; Philippe Jeanneaux; Laure Latruffe
  11. The role of product diversification in skill-biased technological change By Nam, Choong Hyun
  12. 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
  13. Making the Most of Public Investment in MENA and CCA Oil-Exporting Countries By Maria A Albino-War; Svetlana Cerovic; Francesco Grigoli; Juan Flores; Javier Kapsoli; Haonan Qu; Yahia Said; Bahrom Shukurov; Martin Sommer; SeokHyun Yoon
  14. Determinants of Bank Profitability and Basel Capital Regulation: Empirical Evidence from Nigeria By Ozili, Peterson
  15. Modeling an Aggregate Agricultural Panel with Application to U.S. Farm Input Demands By Jesse Tack; Rulon Pope; Jeffrey LaFrance; Ricardo Cavazos
  16. Fertility, agricultural labor supply, and production: Instrumental variable evidence from Uganda: By Van Campenhout, Bjorn

  1. By: Ghebru, Hosaena; Holden, Stein
    Abstract: Although theory predicts that better property rights to land can increase land productivity through tenure security effects (investment effects) and through more efficient input use due to enhanced tradability of the land (factor intensity effect), empirical studies on the size and magnitude of these effects are very scarce. Taking advantage of a unique quasiexperimental survey design, this study analyzes the productivity impacts of the Ethiopian land certification program by identifying how the investment effects (technological gains) would measure up against the benefits from any improvements in input use intensity (technical efficiency). For this purpose, we adopted a data envelopment analysis–based Malmquist-type productivity index to decompose productivity differences into (1) within-group farm efficiency differences, reflecting the technical efficiency effect, and (2) differences in the group production frontier, reflecting the long-term investment (technological) effects.
    Keywords: Land use, Land rights, productivity, Land tenure,
    Date: 2014
  2. By: Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Peter H. Egger (ETH Zurich, Leonhardstrasse 21, 8092 Zurich)
    Abstract: This paper assesses the role of intra-sectoral spillovers in total factor productivity across Chinese producers in the chemical industry. We use a rich panel data-set of 12,552 firms observed over the period 2004-2006 and model output by the firm as a function of skilled and unskilled labor, capital, materials, and total factor productivity, which is broadly defined. The latter is a composite of observable factors such as export market participation, foreign as well as public ownership, the extent of accumulated intangible assets, and unobservable total factor productivity. Despite the richness of our data-set, it suffers from the lack of time variation in the number of skilled workers as well as in the variable indicating public ownership. We introduce spatial spillovers in total factor productivity through contextual effects of observable variables as well as spatial dependence of the disturbances. We extend the Hausman and Taylor (1981) estimator to account for spatial correlation in the error term. This approach permits estimating the effect of time-invariant variables which are wiped out by the fixed effects estimator. While the original Hausman and Taylor (1981) estimator assumes homoskedastic error components, we provide spatial variants that allow for both homoskedasticity and heteroskedasticity. Monte Carlo results show, that our estimation procedure performs well in small samples. We find evidence of positive spillovers across chemical manufacturers and a large and significant detrimental effect of public ownership on total factor productivity.
    Keywords: Technology Spillovers, Spatial econometrics, Panel data econometrics, Firm-level productivity, Chinese firms
    JEL: C23 C31 D24 L65
    Date: 2014–12
  3. By: Dolores Añón Higón (Department of Applied Economics II and ERICES, Universitat de València); Miguel Manjón (QURE-CREIP Department of Economics, Universitat Rovira i Virgili); Juan A. Máñez (Department of Applied Economics II and ERICES, Universitat de València); Juan A. Sanchis-Llopis (Department of Applied Economics II and ERICES, Universitat de València)
    Abstract: This paper analyses whether undertaking R&D activities allows SMEs to attenuate the negative impact of recessions on productivity. In contrast to other studies we use a firm level indicator of the cycle based on firms’ own perceptions, while total factor productivity is obtained using a control function methodology in which we recognise the potential role that R&D experience might have in shaping future firms’ productivity. The analysis is performed using a representative sample of Spanish SMEs for the period 1990-2009. Results show both that R&D activities render positive productivity returns, and that performing R&D helps to alleviate the negative effects of downturns on productivity. Additionally, R&D seems to have a countercyclical effect upon SME’s productivity over the business cycle, as we find that SMEs R&D productivity premium in recessions doubles that of expansions.
    Keywords: TFP, business cycle, R&D
    Date: 2014–12
  4. By: AfDB AfDB
    Date: 2014–12–30
  5. By: Dall'Olio, Andrea; Iootty, Mariana; Kanehira, Naoto; Saliola, Federica
    Abstract: Between 2003 and 2008 productivity patterns diverged between the fast growing, newest members of the European Union and the slower paced, elder ones – as would be expected. However, there are also striking divergences within the latter group, with productivity in Southern Europe going into reverse. This paper analyzes which factors - whether countrylevel or firm-specific ones - contributed more to the emergence of a three-speed Europe. The analysis combines firm-level data with country-level inputs. Among the newest members of the European Union, country characteristics including the stock of inward foreign direct investment, the availability of credit, and the quality of the business environment and the skills of the workforce prove to be the most important drivers. Firm specific characteristics are shown to matter as well, notably that small firms and firms which are part of international groups realize more productivity gains than larger domestic competitors. Among the more advanced member countries, firm-level characteristics are most important, with larger firms and firms with international affiliation demonstrating faster productivity gains. Country specific factors, such as the quality of the business environment, the size of outward FDI and the skills of the workforce, do matter as well. These explanations of diverging productivity patterns suggest that European Union nations can realize significant benefits from low cost policy interventions such as improving business regulations and encouraging firms’ internationalization. JEL Classification: D22, H11, O47, O52
    Keywords: doing business, European Union, firm characteristics, firm performance, foreign direct investment, global value chains, productivity, regulation
    Date: 2014–12
  6. By: Sebastiano Nerozzi; Vito Pipitone; Giorgio Ricchiuti (Dipartimento di Scienze per l'Economia e l'Impresa)
    Abstract: Matching and merging different databases, we study how firm’s productivity is affected by individual characteristics and provincial context conditions in Italy. Mainly, we focus on the relation between social capital, in its different forms and dimensions and calculated at provincial level and firms’ productivity, calculated using the non-parametric DEA approach. We find that exporting, self-financing firms, and firms belonging to groups, are more productive. In particular, Cooperative firms are more productive than limited company. Moreover, the variables capturing the social capital show strong positive correlation with firms’ productivity, indicating that a widespread civism intended as pro-social behavior independent of specific interpersonal bounds, seems to create an economic environment which is more favorable to entrepreneurship and collaboration among firms, since it increases interpersonal trust, lowers transaction costs, enhances the compliance of formal or informal rules of fairness and fosters a more transparent, impartial and efficient working of the public administration.
    Keywords: DEA, productivity, social capital, inequality, multilevel approach
    JEL: C19 D24 R10
    Date: 2014
  7. By: Marco Grazzi; Chiara Tomasi
    Abstract: This paper investigates the relation between firms' productivity and exporting behavior in presence of export intermediaries. Using a cross section of firm-level data for several advanced and developing economies, the study confirms the productivity-sorting prediction according to which domestic firms are less efficient than those resorting to an export intermediary, while the latter are less productive than producers which export directly. Our novel finding is that firms' productivity has a stronger effect on the probability of exporting directly than on the likelihood of exporting indirectly. This suggests for a stronger role of intermediaries in granting foreign market access to a large proportion of small and less productive firms.
    Keywords: heterogeneous firms, international trade, direct and indirect exports intermediation
    Date: 2014–12–19
  8. By: Ding Weina (Beijing Institute of Technology, Beijing, China.); Marianna Gilli (Department of Economics and Management, University of Ferrara, Italy.); Massimiliano Mazzanti (Department of Economics and Management, University of Ferrara, Italy.); Francesco Nicolli (IRCReS-CNR, Italy; Department of Economics and Management, University of Ferrara, Italy.)
    Abstract: Eco-innovation plays a crucial role in reducing carbon emissions. Exploiting the consolidated IPAT / STIRPAT framework, this paper studies whether a relationship exists between green technological change and both CO2 emissions and emission efficiency (CO2/VA), exploiting a rich panel covering 95 Italian provinces from 1990-2010. The main regression results suggest that green technology has not yet played a significant role in promoting environmental protection, although it significantly improved significantly environmental productivity. Notably, this result is not driven by regional differences, and the main evidence is consistent among different areas of the country.
    Keywords: CO2 emission, Technological Change, Green Patents, IPAT, Environmental Performance
    JEL: Q53 Q55
    Date: 2014–12
  9. By: Cozza , Claudio (BOFIT); Rabellotti , Roberta (BOFIT); Sanfilippo, Marco (BOFIT)
    Abstract: Using a new firm-level database, EMENDATA, this paper investigates the effects on Chinese multinational enterprises of Outward FDI (OFDI) into advanced European countries. Propensity score matching is combined with a difference-in-difference estimator to reduce the problems of self-selection of treated firms in foreign markets and to eliminate time-invariant and unobservable differences between those firms and the controls. The results provide robust evidence in support of the view that China’s OFDI had so far a positive impact on domestic activities in enhancing firms’ productivity and scales of operation, as measured by assets, sales and employment. Distinguishing among such investments on the basis of entry mode shows that acquisitions facilitate early access to intangible assets but are detrimental to financial performance, whereas greenfield investments have a positive impact on the scale and productivity of Chinese investors.
    Keywords: outward FDI; reverse spillovers; performance; Chinese multinationals
    JEL: F49
    Date: 2014–12–04
  10. By: K Hervé Dakpo; Philippe Jeanneaux; Laure Latruffe
    Abstract: We consider different models that assess eco-efficiency in the perspective of production frontier estimation. These models span from the ones that consider bad outputs as inputs, or as outputs under the weak disposability assumption, or under the weak G-disposability and the materials balance principles, or under the modeling of multiple sub-technologies like the by-production model, or under the natural and managerial disposability concepts. These models are confronted to livestock farming data (meat sheep) and greenhouse gas pollution in French grassland areas, to discuss their suitability in eco-efficiency measurement. A major contribution is that we propose a new version of the by-production approach by augmenting it with ‘interdependence constraints’. Although all models considered here confirm the existence of large improvement potentials, all except the by-production model converge to the same results as in the case where undesirable outputs are treated as inputs. By contrast, the by-production model with interdependence provides more realistic results than the other models.
    Keywords: eco-efficiency, bad outputs; materials balance principles, weak G-disposability, by-production technology, natural and managerial disposability, greenhouse gas emissions, meat sheep farming
    JEL: C61 Q12 Q53
    Date: 2014
  11. By: Nam, Choong Hyun
    Abstract: Since the 1980s, the labour demand has shifted toward more educated workers in the US. The most common explanation is that the productivity of skilled workers has risen relative to the unskilled, but it is not easy to explain why the aggregate labour productivity was stagnant during the 1980s. Alternatively, I have constructed a theoretical model which assumes that the demand for white-collar workers increases not because their productivity grows faster, but because increasing product variety requires white-collar workers as fixed input. Hence, the transition from Ford-style mass production towards more diversified one has shifted labour demand toward white-collar workers.
    Keywords: Skill Demand; product innovation; inequality; productivity
    JEL: E23 E24 E32 J31 L1 O3 O4
    Date: 2014–12–31
  12. By: Huu Thanh Tam Nguyen (EPEE - Université d'Evry Val d'Essonne); Ngoc-Sang Pham (Centre d'Economie de la 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: 2014–10
  13. By: Maria A Albino-War; Svetlana Cerovic; Francesco Grigoli; Juan Flores; Javier Kapsoli; Haonan Qu; Yahia Said; Bahrom Shukurov; Martin Sommer; SeokHyun Yoon
    Abstract: Over the past decade, rising oil prices have translated into high levels of public investment in most MENA and CCA oil exporters. This has prompted questions about the efficiency of public investment in generating growth and closing infrastructure gaps, as well as concerns about fiscal vulnerabilities. When public investment is inefficient, higher levels of spending may simply lead to larger budget deficits, without sufficiency increasing the quantity or quality of public infrastructure in support of economic growth. This paper examines the efficiency of public investment in the MENA and CCA oil exporters using several techniques, including a novel application of the efficiency frontier analysis, estimates of unit investment costs, and assessments of public investment processes. The analysis confirms that these oil exporters have substantial room to improve public investment efficiency. Reforms in the public financial and investment management systems are needed to achieve this objective.
    Keywords: Public investment;Middle East and Central Asia;North Africa;Central Asia and the Caucasus;Expenditure efficiency;Infrastructure;Transportation;Oil exporting countries;Public investment efficiency, natural resources, oil exporters, resource wealth management
    Date: 2014–11–12
  14. By: Ozili, Peterson
    Abstract: This study, empirically, investigates the determinants of bank profitability. After including the regulatory variable into the model, I find no significant difference in bank profitability during pre-and post-capital regulation regime. 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 asset quality is a strong determinant of bank interest margin, relative to return on asset. Also, I observe that economies of scale and scope enables larger banks to be profitable (ROA) relative to smaller banks. Overall, the insignificant effect of Basel capital regime on bank profitability seems to suggest that such regulation might not be aimed at decreasing bank profits.
    Keywords: Bank Profitabilty, Basel Capital Regulation
    JEL: E5 E58 G2 G21 N2 N20 N27
    Date: 2015–01
  15. By: Jesse Tack; Rulon Pope; Jeffrey LaFrance; Ricardo Cavazos
    Abstract: A recent class of factor demand models is discussed and used to analyze U.S. state-level production data. The approach accommodates output risk, heterogeneous technologies, technological change, endogenous variables, aggregation across agents, and more general flexible functional forms than previous models. We find the approach to flexibility found in the consumer literature empirically useful in the analysis of producer behavior as our results suggest that standard flexible models that have been ubiquitous in agricultural and industrial research are strongly rejected here in favor of a more general and flexible specification. Further, there is substantial heterogeneity of conditional own-price elasticities across states.
    Keywords: Aggregation, production, ex ante cost, serial correlation, spatial correlation
    JEL: C3 D2 D8 Q1
    Date: 2014–09
  16. By: Van Campenhout, Bjorn
    Abstract: Human fertility is likely to affect agricultural production through its effect on the supply of agricultural labor. Using the fact that in traditional, patriarchal societies sons are often preferred to daughters, we isolated exogenous variation in the number of children born to a mother and related it to agricultural labor supply and production outcomes in Uganda—a country that combines a dominant agricultural sector with one of the highest fertility rates in the world. We found that fertility has a sizable negative effect on household labor allocation to subsistence agriculture. Households with lower fertility devote significantly more time to land preparation and weeding, while larger households grow less matooke and sweet potatoes. We found no significant effect on agricultural productivity as measured in terms of yield per land area.
    Keywords: Gender, households, Labor supply, Population growth, Sociology, fertility, instrumental variables, boy preference,
    Date: 2014

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