nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒02‒28
eighteen papers chosen by

  1. Do Agricultural Extension Programmes Reduce Poverty and Vulnerability? Farm Size, Agricultural Productivity and Poverty in Uganda By Katsushi S. Imai ; Md. Faruq Hasan ; Eleonora Porreca
  2. Educational Mismatch and Firm Productivity: Do Skills, Technology and Uncertainty Matter? By Benoît Mahy ; François Rycx ; Guillaume Vermeylen
  3. Estimation of Input Distance Functions: A System Approach By Tsionas, Efthymios ; Kumbhakar, Subal C. ; Malikov, Emir
  4. The returns to foreign R&D By Belderbos R.A. ; Lokshin B. ; Sadowski B.
  5. Heterogeneous effect of residency matching and prospective payment on labor returns and hospital scale economies By Galina Besstremyannaya
  6. Measuring Job-Finding Rates and Matching Efficiency with Heterogeneous Jobseekers By Robert E. Hall ; Sam Schulhofer-Wohl
  7. Innovation and Productivity in Services: Evidence from Germany, Ireland and the United Kingdom By Bettina Peters ; Rebecca Riley ; Iulia Siedschlag ; Priit Vahter ; John McQuinn
  8. The main obstacles to firms. growth in Senegal: Implications for the long run By Maurel, Mathilde
  9. Catching up of Emerging Economies: The Role of Capital Goods Imports, FDI Inflows, Domestic Investment and Absorptive Capacity By Alexander Glas ; Michael Hübler ; Peter Nunnenkamp
  10. FDI Technological Spillovers and Access to Credit By Vlad Manole ; Mariana Spatareanu
  11. Efficiencies of Small Financial Cooperatives in Japan: Comparison of Estimation Methods By Kozo Harimaya ; Kei Tomimura ; Nobuyoshi Yamori
  12. Remittance and domestic labor productivity: evidence from remittance recipient countries By Al Mamun, Md. ; Sohag, Kazi ; Uddin, Gazi Salah ; Shahbaz, Muhammad
  13. Board of Directors and Cost Efficiency: Do Stock and Cooperative Organizations Differ? By Kozo Harimaya ; Kei Tomimura ; Nobuyoshi Yamori
  14. Comparative analysis on precision farming technologies in selected crops of North Eastern Karnataka By Gabriel, Shitu Adenipekun
  15. An Analysis of the Canada-U.S. ICT Investment Gap: An Update to 2013 By Jasmin JacLyn Thomas
  16. Energy-saving and emission-abatement potential of Chinese coal-fired power enterprise: A non-parametric analysis By Wei, Chu ; Löschel, Andreas ; Liu, Bing
  17. Does Innovation Mediate Good Firm Performance? By Llanto, Gilberto M. ; del Prado, Fatima
  18. Environmental Policy and the Size Distribution of Firms By Coria, Jessica ; Kyriakopoulou, Efthymia

  1. By: Katsushi S. Imai (School of Social Sciences, University of Manchester (UK) and RIEB, Kobe University (Japan) ); Md. Faruq Hasan (Department of Agricultural Extension, Hajee Mohammad Danesh Science and Technology University, Bangladesh ); Eleonora Porreca (University of Tor Vergata, Rome, Italy )
    Abstract: The present study examines the relationship between farm size, agricultural productivity and access to agricultural extension programmes in reducing poverty and vulnerability drawing upon LSMS panel data in Uganda in 2009-2012 covering three rounds. We first estimate household crop productivity using stochastic frontier analysis that can allow for stochastic shocks in the production function. Second, we have found a negative association between farm size and agricultural productivity for output per hectare, intensity of land use and net profit per hectare, but not for technical efficiency, suggesting that smallholders are generally more productive than large-holders. It is misleading to consolidate land or neglect smallholders in favour of large farmers on the grounds of economy of scale in crop production. Third, the effect of different types of agricultural extension programmes - namely NAADS or government, NGO, cooperatives, large farmer, input supplier and other types extension service providers - on the crop productivity is estimated by treatment effects model which controls for the sample selection bias associated with household participation in the agricultural extension as well as unobservable factors at household levels. It is found that participation in agricultural extension programs significantly raised crop productivity only in a few cases, but increased household expenditure per capita in all cases. Fourth, a substantial share of households was found to be vulnerable and education was found to be the key to reducing poverty and vulnerability. Finally, improvement in agricultural productivity reduces static poverty, but does not lead to reduction in household vulnerability. Agricultural policies tailored to local needs, such as agricultural extension programmes, should be thus combined with poverty or vulnerability alleviation policies targeting smallholders or the landless households.
    Keywords: Agricultural Productivity, Farm Size, Agricultural Extension, Poverty, Vulnerability, Treatment Effects Model, Uganda
    JEL: C21 C31 I32 N57 O13 O16
    Date: 2015–02
  2. By: Benoît Mahy ; François Rycx ; Guillaume Vermeylen
    Abstract: The authors provide first evidence on whether the direct relationship between educational mismatch and firm productivity varies across working environments. Using detailed Belgian linked employer-employee panel data for 1999-2010, they find the existence of a significant, positive (negative) impact of over- (under-)education on firm productivity. Moreover, their results show that the effect of over-education on productivity is stronger among firms: (i) with a higher share of high-skilled jobs, (ii) belonging to high-tech/knowledge-intensive industries, and (iii) evolving in a more uncertain economic environment. Interaction effects between under-education and working environments are less clear-cut. However, economic uncertainty is systematically found to accentuate the detrimental effect of under-education on productivity.
    Keywords: Educational mismatch; productivity; linked employer-employee panel data; working environments
    JEL: J21 J24
    Date: 2015–02–25
  3. By: Tsionas, Efthymios ; Kumbhakar, Subal C. ; Malikov, Emir
    Abstract: This article offers a methodology to address the endogeneity of inputs in the input distance function (IDF) formulation of the production processes. We propose to tackle endogenous input ratios appearing in the normalized IDF by considering a flexible (simultaneous) system of the IDF and the first-order conditions from the firm's cost minimization problem. Our model can accommodate both technical and (input) allocative inefficiencies amongst firms. We also present the algorithm for quantifying the cost of allocative inefficiency. We showcase our cost-system-based model by applying it to study the production of Norwegian dairy farms during the 1991--2008 period. Among other things, we find both an economically and statistically significant improvement in the levels of technical efficiency among dairy farms associated with the 1997 quota scheme change, which a more conventional single-equation stochastic frontier model appears to be unable to detect.
    Keywords: Cost Minimization, Dairy Production, Dairy Quota, Endogeneity, Input Distance Function, Stochastic Frontier
    JEL: C33 D24 Q12
    Date: 2015
  4. By: Belderbos R.A. ; Lokshin B. ; Sadowski B. (GSBE )
    Abstract: Extant research on RD internationalization has not examined how effective foreign RD investments are in generating positive returns for the investing firms, in particular in comparison and conjunction with the effects of domestic RD investments. We examine the effectiveness of international knowledge sourcing through foreign RD in an empirical analysis of the productivity effects of foreign and domestic RD investments in a large panel of firms based in the Netherlands. We argue that foreign and domestic RD will exhibit complementarity in their effects on productivity, but that the roles of domestic and foreign RD depend on the relative position of the home country with respect to the global technology frontier and the related relative opportunities for knowledge sourcing abroad. We estimate a dynamic panel data model derived from a knowledge stock augmented production function framework allowing for productivity convergence and declining returns to RD. We confirm that for firms active in industries in which the home country is behind the global technology frontier, foreign RD provides positive returns and has a complementary relationship with domestic RD. For industries at the global technology frontier, in contrast, domestic RD is the primary source of productivity growth.
    Keywords: Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity; Management of Technological Innovation and R&D; Technological Change: Choices and Consequences; Diffusion Processes;
    JEL: O32 O33 D24
    Date: 2015
  5. By: Galina Besstremyannaya (Stanford University )
    Abstract: The paper evaluates heterogeneous effect of participation in a residency matching program and changeover from fee-for-service to a prospective payment system on labor returns and economies of scale at acute-care public hospitals in Japan. A range of frontier technologies for multi-product output function is introduced with panel data quantile regression models, where endogenous treatment variables account for the fact that participation in both the residency matching program and the prospective payment reform was voluntary. The analysis exploits nationwide longitudinal databases on Japanese hospital participation in each of the reforms and on financial performance of regional and municipal hospitals in 2006-2012. The results demonstrate a labor-capital trade-off and lower labor intensity in the most productive hospitals. The residency matching program is positively associated with hospital production and labor productivity, especially in medium quantiles. Prospective payment has a negative effect on labor productivity, but it is only significant for hospitals in the highest quantiles.
    Keywords: quantile regressions, economies of scale, labor productivity, hospitals
    Date: 2015–02
  6. By: Robert E. Hall ; Sam Schulhofer-Wohl
    Abstract: Matching efficiency is the productivity of the process for matching jobseekers to available jobs. Job-finding is the output; vacant jobs and active jobseekers are the inputs. Measurement of matching efficiency follows the same principles as measuring a Hicks-neutral index of productivity of production. We develop a framework for measuring matching productivity when the population of jobseekers is heterogeneous. The efficiency index for each type of jobseeker is the monthly job-finding rate for the type adjusted for the overall tightness of the labor market. We find that overall matching efficiency declined over the period, at just below its earlier downward trend. We develop a new approach to measuring matching rates that avoids counting short-duration jobs as successes. And we show that the outward shift in the Beveridge curve in the post-crisis period is the result of pre-crisis trends, not a downward shift in matching efficiency attributable to the crisis.
    JEL: E24 J63
    Date: 2015–02
  7. By: Bettina Peters (Centre for European Economic Research (ZEW) ); Rebecca Riley (National Institute for Economic and Social Research of London ); Iulia Siedschlag (European Commission JRC-IPTS ); Priit Vahter (University of Tartu ); John McQuinn (Cambridge Econometrics )
    Abstract: This paper examines the links between innovation and productivity in service enterprises. For this purpose, we use micro data from the Community Innovation Survey 2008 in Germany, Ireland and the United Kingdom, and estimate an augmented structural model. Our results indicate that innovation in service enterprises is linked to higher productivity. In all three countries analysed, among the innovation types that we consider, the strongest link between innovation and productivity was found for marketing innovations. Our empirical evidence highlights the importance of internationalisation in the context of innovation outputs in all three countries. The determinants of innovation in service enterprises appear remarkably similar to the determinants of innovation in manufacturing enterprises.
    Keywords: Internationalisation of services; innovation; productivity
    JEL: L25 O31
    Date: 2014
  8. By: Maurel, Mathilde
    Abstract: Productivity gains are the prime engine of economic growth. This paper uses a rich amount of firms. accounting information from the Single Information Collecting Centre in Senegal over the period 1998-2011. To investigate the two main obstacles to growth,
    Keywords: productivity dynamics, total factor productivity, education, electricity supply
    Date: 2014
  9. By: Alexander Glas ; Michael Hübler ; Peter Nunnenkamp
    Abstract: We assess the role of capital goods imports and inflows of foreign direct investment (FDI) as transmission channels through which major emerging economies (BRICs, i.e., Brazil, Russian Federation, India and China) could catch up with advanced source countries in terms of total factor productivity (TFP). We find that the importance of these transmission mechanisms depends on the BRICs’ local capacity to absorb superior technologies and on domestic investment
    Keywords: total factor productivity; imports; foreign direct investment; absorptive capacity; BRICs
    JEL: F14 F21 O47
    Date: 2015–01
  10. By: Vlad Manole ; Mariana Spatareanu
    Abstract: Using a unique data set from the Czech Republic for 1994-2003, this study examines the relationship between technological spillovers from FDI and firms’ access to external finance. The empirical analysis indicates that overall, Czech firms benefit little from technological spillovers from FDI. However, a closer look at the financing of domestic firms suggests that firms that have access to external finance enjoy larger benefits from the presence of foreign firms, through increased productivity. The results highlight the importance of financial sector development and access to external financing to increasing the productivity and competitiveness of domestic firms by benefiting from technological spillovers from FDI. Our finding suggests that well-developed financial markets may be needed in order to take full advantage of the benefits associated with FDI inflows.
    Keywords: Spillovers, FDI , Access to finance
    JEL: F21
    Date: 2014–02
  11. By: Kozo Harimaya (College of Business Administration, Ritsumeikan University ); Kei Tomimura (Faculty of Business Administration, Aichi University ); Nobuyoshi Yamori (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan )
    Abstract: This study investigates the efficiency of Japanese credit cooperatives using a stochastic directional distance function approach and compares the results obtained from a slack-based data envelopment analysis model (SBM). Moreover, it focuses on the differences in the four groups classified by a type of common bond in a membership and considers the validity of small financial cooperatives. The findings reveal that ethnic minority-owned cooperatives that experienced a drastic consolidation in the last two decades are more efficient than the other groups and those owned through an industry-based membership are less efficient. Although the results slightly differ among alternative measures, this paper emphasizes the potential merger effects of small financial cooperatives in Japan.
    Keywords: Efficiency, Cooperative financial institutions, Consolidation
    JEL: C67 G21 G34
    Date: 2015–02
  12. By: Al Mamun, Md. ; Sohag, Kazi ; Uddin, Gazi Salah ; Shahbaz, Muhammad
    Abstract: For countries with significant labor force like China, India, Bangladesh, Pakistan etc. any long-run growth strategy should focus on augmenting the domestic labor productivity. The advent of globalization and factor mobility has given a recipe to reap up gains from labor abundance for most of the labor abundant countries by strategically converting abundant labor into capital. However, remittance inflow may become counterproductive strategy for growth, if it is viewed within the work-leisure framework. Using heterogeneous non-stationary panel data with cross-sectional bias this empirical study explores the best fitted estimator to explain remittance and labor productivity dynamics for 21 top remittance recipient countries of the world. Our results suggest that though remittance has a positive impact on domestic labor productivity; however, there is new evidence that such impact diminishes after certain level.
    Keywords: Labor productivity, Foreign Remittance
    JEL: C1
    Date: 2015–01–11
  13. By: Kozo Harimaya (College of Business Administration, Ritsumeikan University ); Kei Tomimura (Faculty of Business Administration, Aichi University ); Nobuyoshi Yamori (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan )
    Abstract: To discipline managers, various governance measures are being developed. They include stock options, shareholder lawsuits, hostile takeovers, and outside directors. In the literature, some studies have found evidence supporting the introduction of these measures, but others have found evidence opposed. Recently, however, some measures are being required not by stockholders but by the regulatory authorities. For example, the Tokyo Stock Exchange revised its listing standard in 2014 to require that virtually all listed companies appoint outside directors. Furthermore, the council of Japan's Financial Services Agency proposed cooperative banks to appoint outside or independent directors. It is notable that most previous studies have found evidence regarding stock companies, not cooperative companies. The effectiveness of various governance measures may be different between stock companies and cooperative companies. The subject of how to discipline managers of cooperative companies is particularly relevant to the Japanese banking market because cooperative banks play a significant role in the Japanese banking market. Therefore, this paper examines whether the effect of the numbers of directors and outside directors on firm performance varies across stock and cooperative banks in Japan. Our analysis consists of two stages. In the first stage, we estimate the stochastic frontier cost functions for stock and cooperative banks. Then we examine the differences in cost structures and efficiencies between them. In the second stage of the analysis, we seek to clarify the relationship between governance measures (e.g., the number of outside directors) and efficiencies by estimating a regression model. Results in this paper confirm that governance-related variables have a significant effect on cost efficiency for cooperative banks. In contrast, such variables have no significant effect for stock banks. These results suggest that the organizational type of financial institution does matter in terms of what governance measures are effective and needed. For example, as managers at cooperative banks are under weak pressure from owners due to lack of hostile takeover threat, other disciplinary measures, such as mandatory appointment of outside directors, are more desirable to compensate for the weak corporate governance inherent in cooperative institutions. Our results support the current proposals of the FSA's council to encourage cooperative financial institutions to appoint outside board directors as a means for strengthening bank governance.
    Keywords: Corporate Governance, Efficiency, Outside Directors, Cooperative Bank, Regional Bank
    JEL: G21 G29
    Date: 2015–02
  14. By: Gabriel, Shitu Adenipekun
    Abstract: Thesis submitted to the University of Agricultural Sciences, Raichur in partial fulfillment of the requirement for the Degree of Master of Science (Agriculture) in Agricultural Extension Education. Advisor: G.N. Maraddi
    Keywords: Precision farming, Crop production, Karnataka, Crop Production/Industries, Productivity Analysis,
    Date: 2014–06
  15. By: Jasmin JacLyn Thomas
    Abstract: Canada’s productivity performance reflects in large part our innovation record, both in terms of business sector R&D and information and communications technology (ICT) investment. The objective of this report is to examine the country’s ICT investment performance since 2000. The key finding is that, since the 2008 peak, business sector ICT investment in Canada has performed poorly, both relative to the Canadian non-business sector and to the business sector in the United States. By 2013, four years after the 2009 recession, nominal ICT investment in the business sector in Canada had failed to regain the 2008 level, falling on average 1.0 per cent per year over the 2008-2013 period. In contrast, despite government belttightening, nominal investment in the non-business sector in Canada advanced at a 2.0 per cent average annual rate. Equally, the United States, which experienced a more severe downturn than Canada, saw business sector nominal ICT investment grow at a 1.5 per cent average annual rate between 2008 and 2013. The fall in nominal ICT investment in Canada, combined with the increase in the United States, resulted in an 8.5 percentage point fall in the ICT investment per worker in Canada from 59.6 per cent of that of the US business sector in 2008 to 51.1 per cent in 2013. More research is needed to understand the reasons for the weak post-2008 ICT investment performance of Canada’s business sector.
    Keywords: Canada, United States, Software, Investment, Gap, Productivity, Business Sector, ICT, Computers, Communications, Labour Productivity, Growth, Productivity Growth
    JEL: L86 N92 E22 J24 O47 D24
    Date: 2015–01
  16. By: Wei, Chu ; Löschel, Andreas ; Liu, Bing
    Abstract: In the context of soaring demand for electricity, mitigating and controlling greenhouse gas emissions is a great challenge for China's power sector. Increasing attention has been placed on the evaluation of energy efficiency and CO2 abatement potential in the power sector. However, studies at the micro-level are relatively rare due to serious data limitations. This study uses the 2004 and 2008 Census data of Zhejiang province to construct a non-parametric frontier in order to assess the abatement space of energy and associated CO2 emission from China's coal-fired power enterprises. A Weighted Russell Directional Distance Function (WRDDF) is applied to construct an energy-saving potential index and a CO2 emission-abatement potential index. Both indicators depict the inefficiency level in terms of energy utilization and CO2 emissions of electric power plants. Our results show a substantial variation of energy-saving potential and CO2 abatement potential among enterprises. We find that large power enterprises are less efficient in 2004, but become more efficient than smaller enterprises in 2008. State-owned enterprises (SOE) are not significantly different in 2008 from 2004, but perform better than their non-SOE counterparts in 2008. This change in performance for large enterprises and SOE might be driven by the "top-1000 Enterprise Energy Conservation Action" that was implemented in 2006.
    Keywords: Energy-saving potential,CO2 abatement potential,Weighted Russell Directional Distance Function,Coal-fired power enterprise
    Date: 2015
  17. By: Llanto, Gilberto M. ; del Prado, Fatima
    Abstract: Private firms invest in physical capital and human resource but they are also advised to invest in innovations to be more productive and profitable. Innovations refer to the development, deployment, and economic utilization of new products, processes, and services. It is important for firms to know whether investment in innovations is investment well-spent. Our empirical results provided an affirmative response to the question raised in this paper: "Does innovation mediate good firm performance?" Product and process innovations lead to increase in sales and profits and improve labor productivity. The paper also showed that firm size, age, and foreign equity are important factors leading firms to innovate.
    Keywords: innovation, Philippines, process innovation, product innovation, firm performance, small and medium enterprises (SMEs)
    Date: 2015
  18. By: Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University ); Kyriakopoulou, Efthymia (Department of Economics, School of Business, Economics and Law, Göteborg University )
    Abstract: In this paper we analyze the e¤ects of environmental policies on the size distribution of firms. We model a stationary industry where the observed size distribution is a solution to the profit maximization problem of heterogeneous firms that di¤er in terms of their energy efficiency. We compare the equilibrium size distribution under emission taxes, uniform emission standards, and performance standards. Our results indicate that, unlike emission taxes and performance standards, emission standards introduce regulatory asymmetries favoring small firms. These asymmetries cause significant detrimental effects on total output and total welfare, yet lead to reduced emissions and help preserve small businesses.
    Keywords: Environmental regulations; energy efficiency; size distribution; emission taxes; emission standards; performance standards
    JEL: L25 Q55 Q58
    Date: 2015–02

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