nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒04‒19
33 papers chosen by

  1. Rethinking yield gaps By Beddow, Jason M.; Hurley, Terrance M.; Pardey, Philip G.; Alston, Julian M.
  2. When It Comes to Container Port Efficiency, Are All Developing Regions Equal? By Ancor Suárez-Alemán; Javier Morales Sarriera; Tomás Serebrisky; Lourdes Trujillo
  3. The New Normal: A Sector-level Perspective on Productivity Trends in Advanced Economies By Era Dabla-Norris; Si Guo; Vikram Haksar; Minsuk Kim; Kalpana Kochhar; Kevin Wiseman; Aleksandra Zdzienicka
  4. The Role of Resource Misallocation in Cross-country Differences in Manufacturing Productivity By Timmer, Marcel P.; Lashitew, Addisu A.; Inklaar, Robert
  5. Fiscal space for health in Sub-Saharan African countries: an efficiency approach By Novignon, Jacob; Nonvignon, Justice
  6. Food Security and Productivity: Impacts of Technology Adoption in Small Subsistence Farmers in Bolivia By Lina Salazar; Julián Aramburu; Mario González; Paul Winters
  7. The contribution of public and private R&D to UK productivity growth By Haskel, J; Goodridge, P; Hughes, A; Wallis, G
  8. The Rise and Fall of U.S. Farm Productivity Growth, 1910–2007 By Alston, Julian M.; Andersen, Matthew A.; Pardey, Philip G.
  9. The Level of Productivity in Traded and Non-Traded Sectors for a Large Panel of Countries By Rui Mano; Marola Castillo
  10. Accounting for the UK productivity puzzle: a decomposition and predictions By Haskel, J; Goodridge, P; Wallis, G
  11. Fiscal Decentralization and the Efficiency of Public Service Delivery By Moussé Sow; Ivohasina Fizara Razafimahefa
  12. Productivity Effects of Air Pollution: Evidence from Professional Soccer By Lichter, Andreas; Pestel, Nico; Sommer, Eric
  13. Spillovers from Universities: Evidence from the Land-Grant Program By Shimeng Liu
  14. Measuring the Effects of Demand and Supply Factors on Service Sector Productivity By OHYAMA Atsushi
  15. Estimating Potential Growth in the Middle East and Central Asia By Pritha Mitra; Amr Hosny; Gohar Abajyan; Mark Fischer
  16. Foreign exposure and heterogeneous performance of Italian firms: A survey of the empirical literature (1992-2014) By Valeria Gattai
  17. PMP and Uniqueness of the Calibrating Solution - Revision By Paris, Quirino
  18. Linkages among Estimated Technological Parameters, Production, Supply and Input Demand Elasticities for Agricultural Production Functions By Pagoulatos, Angelos; Debertin, David L.
  19. Intellectual Property Rights and appropriability of innovation capital: evidence from Polish manufacturing firms By Tomasz Kijek
  20. Does the Outsourcing Affect Labour Costs in Enterprises? Evidence from Firm-level Data By Anna Grzes
  21. Industrial agglomeration in Costa Rica : a descriptive analysis By Kumagai, Satoru; Ueki, Yasushi; Bullón, David; Sánchez, Natalia
  22. Public-private mix and performance of health care systems in CEE and CIS countries By Blazej Lyszczarz
  23. Structural Transformation — How Does Thailand Compare? By Vladimir Klyuev
  24. Network Form and Performance. The Case of Multi-Unit Franchising By Muriel Fadairo; Cintya Lanchimba; Josef Windsperger
  25. Does Aggregate Government Size Effect Private Economic Performance in Canada? By J. Stephen Ferris; Marcel-Cristian Voia
  26. A VBA model for calculating partnership efficiency By Lukáš Turèok; Athanasios Podaras
  27. Education and Software Piracy in the European Union By Nicolas Dias Gomes; Pedro André Cerqueira; Luís Alçada Almeida
  28. Measuring Potential Output at the Bank of Canada: The Extended Multivariate Filter and the Integrated Framework By Lise Pichette; Pierre St-Amant; Ben Tomlin; Karine Anoma
  29. Knowledge Spillovers, Absorptive Capacity and Growth: An Industry-level Analysis for OECD Countries By Bournakis, Ioannis; Christopoulos, Dimitris; Mallick, Sushanta
  30. THE “WRONG SKEWNESS” PROBLEM: A RE-SPECIFICATION OF STOCHASTIC FRONTIERS By Graziella Bonanno; Domenico De Giovanni; Filippo Domma
  31. Determinants of banking fee income in the EU banking industry - does market concentration matter? By Karolina Ruzickova; Petr Teply
  32. Assessment of the performance and competitiveness of the selected clusters in the Moravian-Silesian Region By Hana Stverkova; Vlasta Humlova
  33. Returns to Higher Education in Chile and Colombia By Carolina González-Velosa; Graciana Rucci; Miguel Sarzosa; Sergio Urzúa

  1. By: Beddow, Jason M.; Hurley, Terrance M.; Pardey, Philip G.; Alston, Julian M.
    Abstract: This is a prepublication version of J.M. Beddow, T.M. Hurley, P.G. Pardey, and J.M. Alston’s “Food Security: Yield Gap” chapter in N. Van Alfen, editor-in-chief, Encyclopedia of Agriculture and Food Systems, Vol. 3, San Diego: Elsevier, 2014, pp. 352-365.
    Keywords: food security, farm productivity, partial factor productivity, technical efficiency, economic efficiency, Crop Production/Industries, Productivity Analysis,
    Date: 2015–04
  2. By: Ancor Suárez-Alemán; Javier Morales Sarriera; Tomás Serebrisky; Lourdes Trujillo
    Abstract: This paper develops a port productivity and efficiency analysis of all developing regions between 2000 and 2010, using both parametric and nonparametric approaches. From a unique dataset -our sample covers 70 developing countries, 203 ports, and 1,750 data points-, we carry out an analysis of the evolution and drivers of productivity and efficiency changes across developing regions. We show that productivity growth rates between 2000 and 2010 vary significantly and that this heterogeneity is explained by pure efficiency changes rather than scale efficiency of technological changes. Therefore, we carry out a detailed efficiency analysis to determine the drivers of port efficiency. Time series results show an upward trend for port efficiency in developing regions, as it increased from 47 percent in 2000 to 57 percent in 2010. Our analysis indicates that private sector participation, the reduction of corruption in the public sector and improvements in liner connectivity and the existence of multimodal links increase the level of port efficiency in developing regions.
    Keywords: Trade Facilitation, Ports & Waterways, Productivity, Container traffic, Container terminals, Technical efficiency, Port efficiency
    Date: 2015–01
  3. By: Era Dabla-Norris; Si Guo; Vikram Haksar; Minsuk Kim; Kalpana Kochhar; Kevin Wiseman; Aleksandra Zdzienicka
    Abstract: Total factor productivity growth was stagnant or slowing in many advanced countries even prior to the crisis. This paper documents sector-level productivity patterns across advanced economies prior to the crisis and examines the role of product and labor market rigidities as well as innovation and investments in information technology and human capital in driving productivity differences across sectors and countries. Since productivity payoffs of reforms evolve over time, we also focus on large changes in the structural indicators examine their dynamic impact on productivity, employment, and output. Our results suggest that reform priorities depend on country-specific settings, including the scale of specific policy distortions and the distance from the technology frontier. Productivity gains from reforms are large and materialize predominantly in the medium term, with some important variations across industries and countries.
    Keywords: Total factor productivity;Labor productivity;Economic growth;Fiscal reforms;Developed countries;Productivity, Structural Reforms, Growth, Structural Change
    Date: 2015–03–18
  4. By: Timmer, Marcel P.; Lashitew, Addisu A.; Inklaar, Robert (Groningen University)
    Abstract: When capital and labor are not allocated to the more productive firms, aggregate total factor productivity (TFP) suffers. Can this explain observed productivity differences across countries? We estimate manufacturing TFP levels for 52 developing countries and decompose it into a part due to misallocation and a part due to (residual) technology differences. The results show that removing misallocation would increase TFP by an average of 60 percent, but productivity gaps relative to the US remain large. The degree of misallocation is uncorrelated with observed productivity.
    Date: 2014
  5. By: Novignon, Jacob; Nonvignon, Justice
    Abstract: The study argues that potential savings from efficiency could be effective alternative to increasing health system financing in SSA. Health system efficiency estimates were derived from the Data Envelopment Analysis and Stochastic Frontier Analysis and used to compute potential gains from efficiency. Data was sourced from the World Bank's world development indicators for 45 SSA countries in 2011. The results reveal that average potential saving in health expenditure from improved efficiency was 0.10% and 0.75% of GDP per capita in the DEA and SFA models, respectively. The results also showed that a 1% increase in efficiency of health expenditure reduced infant mortality rate by 0.91% compared to 0.40% reduction in infant mortality if health expenditure increased by 1%. The results imply that in the face of significant economic challenges and burden on government budget, improving health expenditure efficiency to create some fiscal space will be an important step.
    Keywords: Fiscal space for health, health expenditure, DEA, SFA
    JEL: H5 H51 I1
    Date: 2015–02–02
  6. By: Lina Salazar; Julián Aramburu; Mario González; Paul Winters
    Abstract: This paper presents the impact evaluation of CRIAR program, implemented in rural areas in Bolivia. The objective of CRIAR is to increase smallholders' agricultural income and food security through productivity improvements triggered by technological adoption. In this study, we use data from a sample of 1,287 households-817 beneficiaries and 470 controls- interviewed specifically for this evaluation. The econometric approach to estimate the program's impact is an instrumental variable model. This approach addresses possible endogeneity and self-selection issues that might arise from program's implementation. The results present evidence that program participation increased agricultural productivity, household income and improved food security. Overall, this study confirms the importance of considering the role of productive programs as policy tools to address vulnerability to food insecurity.
    Keywords: Technology transfer, Agricultural productivity, CRIAR, Bolivia, Instrumental Variables, Productivity, Food Security, Technology Adoption
    Date: 2015–01
  7. By: Haskel, J; Goodridge, P; Hughes, A; Wallis, G
    Date: 2015–04–09
  8. By: Alston, Julian M.; Andersen, Matthew A.; Pardey, Philip G.
    Abstract: Some studies have reported a slowdown in U.S. farm productivity growth, but the prevalent view among economists is to reject or downplay the slowdown hypothesis, implying that the rates of productivity growth experienced over the past half century can be projected forward. We set out to resolve this issue, which matters both for understanding the past and anticipating the future. Using newly compiled multifactor and partial-factor productivity estimates, developed for the purpose, we examine changes in the pattern of U.S. agricultural productivity growth over the past century. We detect sizable and significant slowdowns in the rate of productivity growth. Across the 48 contiguous states for which we have very detailed data for 1949–2007, U.S. multifactor productivity (MFP) growth averaged just 1.18 percent per year during 1990–2007 compared with 2.02 percent per year for the period 1949–1990. MFP in 44 of the 48 states has been growing at a statistically slower rate since 1990. Using a longer-run national series, since 1990 productivity growth has slowed compared with its longer-run growth rate, which averaged 1.52 percent per year for the entire period, 1910–2007. More subtly, the historically rapid rates of MFP growth during the 1960s, 1970s and 1980s can be seen as an aberration relative to the long-run trend. A cubic time-trend model fits the data very well, with an inflection around 1962. We speculate that a wave of technological progress through the middle of the twentieth century—reflecting the progressive adoption of various mechanical innovations, improved crop varieties, synthetic fertilizers and other chemicals, each in a decades long process—contributed to a sustained surge of faster-than-normal productivity growth throughout the third quarter of the century. A particular feature of this process was to move people off farms, a one-time transformation of agriculture that was largely completed by 1980.
    Keywords: Production Economics, Productivity Analysis,
    Date: 2015–01
  9. By: Rui Mano; Marola Castillo
    Abstract: This paper explains in detail the construction of series for productivity in the traded and nontraded sectors for a panel of 56 countries spanning 1989–2012. The level of productivity in each sector is defined as real value added per worker in constant 2005 Purchasing Power Parity (PPP) U.S. dollars. To construct these series, we collect industry-level data from several sources, and classify individual industries as traded/non-traded using their ratio of exports to value added. Finally, we aggregate the industry data up to a traded sector and a non-traded sector, accordingly. This new dataset has two main advantages relative to existing datasets: (i) it defines more finely the traded/non-traded sectors, by drawing on much more disaggregated industry source data; and (ii) it allows for meaningful comparisons of the level of productivity across countries/sectors because sectoral productivity is adjusted by its own price level.
    Keywords: Productivity;Industrial sector;Purchasing power parity;Cross country analysis;Panel analysis;Price indexes;Sectoral Productivity, Traded and Non-Traded Sectors, Purchasing Power Parity
    Date: 2015–02–27
  10. By: Haskel, J; Goodridge, P; Wallis, G
    Date: 2015–04–09
  11. By: Moussé Sow; Ivohasina Fizara Razafimahefa
    Abstract: This paper explores the impact of fiscal decentralization on the efficiency of public service delivery. It uses a stochastic frontier method to estimate time-varying efficiency coefficients and analyzes the impact of fiscal decentralization on those efficiency coefficients. The findings indicate that fiscal decentralization can improve the efficiency of public service delivery but only under specific conditions. First, the decentralization process requires adequate political and institutional environments. Second, a sufficient degree of expenditure decentralization seems necessary to obtain favorable outcomes. Third, decentralization of expenditure needs to be accompanied by sufficient decentralization of revenue. Absent those conditions, fiscal decentralization can worsen the efficiency of public service delivery.
    Keywords: Fiscal decentralization;Public services;Expenditure efficiency;Decentralization, efficiency, stochastic frontier analysis
    Date: 2015–03–17
  12. By: Lichter, Andreas (IZA); Pestel, Nico (IZA); Sommer, Eric (IZA)
    Abstract: In this paper, we estimate the causal effect of ambient air pollution on individuals' productivity by using panel data on the universe of professional soccer players in Germany over the period 1999-2011. Combining this data with hourly information on the concentration of particulate matter in spatial proximity to each stadium at the time of kickoff, we exploit exogenous variation in the players' exposure to air pollution due to match scheduling rules that are beyond the control of teams and players. Our analysis shows negative and non-linear effects of air pollution on short-run productivity. We further find that the effect increases with age and is stronger in case players face an additional physical burden.
    Keywords: air pollution, productivity, soccer, sports data, Germany
    JEL: J24 Q51 Q53
    Date: 2015–04
  13. By: Shimeng Liu
    Abstract: This paper estimates the short- and long-run effects of universities on geographic clustering of economic activity, labor market composition and local productivity and presents evidence of local spillovers from universities. I treat the designation of land-grant universities in the 1860s as a natural experiment after controlling for the confounding factors with a combination of synthetic control methods and event-study analyses. Three key results are obtained. First, the designation increased local population density by 6 percent within 10 years and 45 percent in 80 years. Second, the designation did not change the relative size of local manufacturing sector. Third, the designation enhanced local manufacturing output per worker by $2136 (1840 dollars; 57 percent) in 80 years while the short-run effects were negligible. This positive effect on the productivity in non-education sectors suggests the existence of local spillovers from universities. Over an 80-year horizon, my results indicate that the increase in manufacturing productivity reflects both the impact of direct spillovers from universities and general agglomeration economies that arise from the increase in population.
    Keywords: Land-Grant Universities, Short- and Long-Run Effects, Spillovers
    Date: 2015
  14. By: OHYAMA Atsushi
    Abstract: Economic activities in the service sector have been increasingly important in developed countries. Despite the importance of the service sector, there are several drawbacks with a conventional way of measuring service sector productivity. This paper proposes an alternative methodology in which we can separate demand and supply factors that influence service transactions. An empirical framework is constructed based on the model of Johnson and Myatt (2003) and allows us to identify cost factors separately from demand factors. This paper also demonstrates that demand factors significantly influence the conventional measure of service sector productivity.
    Date: 2015–04
  15. By: Pritha Mitra; Amr Hosny; Gohar Abajyan; Mark Fischer
    Abstract: The Middle East and Central Asia’s economic growth potential is slowing faster than in other emerging and developing regions, dampening hopes for reducing persistent unemployment and improving the region’s generally low living standards. Why? And is it possible to alter this course? This paper addresses these questions by estimating potential growth, examining its supply-side drivers, and assessing which of them could be most effective in raising potential growth. The analysis reveals that the region’s potential growth is expected to slow by ¾ of a percentage point more than the EMDC average over the next five years. The reasons behind this slowdown differ across the region. Lower productivity growth drives the slowdown in the Caucasus and Central Asia and is also weighing on growth across the Middle East (MENAP); while a lower labor contribution to potential growth is the main driver in MENAP. Moving forward, given some natural constraints on labor, total factor productivity growth is key to unlocking the region’s higher growth potential. For oil importers, raising physical capital accumulation through greater investment will also play an important role.
    Keywords: Economic growth;Middle East and Central Asia;Economic conditions;Potential output;Total factor productivity;Regional economics;potential growth, productivity, output gap, production function, Middle East and Central Asia
    Date: 2015–03–20
  16. By: Valeria Gattai
    Abstract: This paper surveys 67 contributions on internationalisation and performance of Italian enterprises. It covers empirical studies (including working papers), published between 1992 and 2014, taking a microeconomic perspective and analysing the potential links between firms’ global involvement and heterogeneity in economic, human capital and innovation and financial measures. The discussion is organised in an intuitive and non-technical way. At the same time, we devote particular attention to studying the different papers from many points of view, including their internationalisation measures, performance indicators, empirical approach, causality and results.
    Keywords: Internationalisation, Performance, Italy, Firm-level data, Survey
    JEL: F1 F2 L2
    Date: 2015–04
  17. By: Paris, Quirino
    Abstract: This paper demonstrates the existence of a unique solution of the PMP problem when both observed output quantities and limiting input prices are taken as calibrating benchmarks. This version of PMP avoids the use of a user-determined small positive number ε originally introduced for guaranteeing that the dual (shadow) price of binding input constraints be positive. Furthermore, the paper shows how to obtain endogenous output supply and input demand elasticities that match available information about them in the form of previously estimated parameters for an entire region or sector. The framework is applied to a sample of farms also for the case that admits no production for some of the crop activities. The calibrating solution is very close to the observed values of output quantities and input prices. The calibrating model does not use the matrix of fixed technical coefficient and reproduces identical calibrating solutions.
    Keywords: positive mathematical programming, solution uniqueness, supply elasticities, calibrating model, Productivity Analysis, Research Methods/ Statistical Methods, C6,
    Date: 2015–04–02
  18. By: Pagoulatos, Angelos; Debertin, David L.
    Abstract: The March, 2015 pdf version is recently-edited from a paper written in the late 1980s. A scanned copy of the paper as written in the late 1980s is also available for download. Students who wish to use their math skills to verify each equation and elasticity calculation may wish to download both versions.
    Keywords: production function, agricultural production function, production agriculture, agricultural production, Demand and Price Analysis, Production Economics, Teaching/Communication/Extension/Profession, Q12, Q11, D24,
    Date: 2015–03
  19. By: Tomasz Kijek (University of Life Sciences in Lublin)
    Abstract: This paper tries to find how firms use IPRs in the form of patents to protect innovation capital and find determinants of their effectiveness. The research is based on a large sample of 2960 Polish manufacturing firms that were engaged in developing and/or implementing a product or process innovation in the years 2010-2012. Besides descriptive statistics which show firms’ attitudes toward the effectiveness of patents and their determinants, I apply the knowledge production functionto find a link between patent propensity, R&D and innovation performance. Descriptive analyses show that Polish manufacturing firms rarely use patents as the appropriability mechanism which results in the low level of their perceived effectiveness. It also turns out that the perceived effectiveness of a patent depends on a firm’s size, theinnovation type and technological opportunities. In turn, the results of the knowledge production function estimationallow me to conclude that an increase in patent propensity affects the firm’s innovation performancepositively.
    Keywords: innovation capital;appropriability mechanism; intellectual property rights;patent;knowledge production function
    JEL: O31 O34
    Date: 2015–04
  20. By: Anna Grzes (University of Bialystok)
    Abstract: This empirical paper examines an impact of materials and services outsourcing on labour costs in two groups: industrial and construction enterprises, and services enterprises in Poland in the period 2005-2013. The analysis of this dependence was based on data of Central Statistical Office included in financial statement F-01/I-01. The preliminary analysis and econometric model showed that Polish industrial and construction, and service enterprises applied both types of outsourcing, but services outsourcing had more important effect on labour costs than materials outsourcing. However, the depreciation cost understood as technological progress had the biggest impact on labour costs, especially in industrial and construction firms.
    Keywords: cost; materials outsourcing, services outsourcing; Poland
    JEL: J30 L24 L60 L80
    Date: 2015–04
  21. By: Kumagai, Satoru; Ueki, Yasushi; Bullón, David; Sánchez, Natalia
    Abstract: This paper investigates the current situation of industrial agglomeration in Costa Rica, utilizing firm-level panel data for the period 2008-2012. We calculated Location Quotient and Theil Index based on employment by industry and found that 14 cantons have the industrial agglomerations for 9 industries. The analysis is in line with the nature of specific industries, the development of areas of concentration around free zones, and the evolving participation of Costa Rica in GVCs.
    Keywords: Costa Rica, Industrial structure, Industry, Productivity, Economic development, Industrial Agglomeration
    JEL: L60 O54 R12
    Date: 2015–03
  22. By: Blazej Lyszczarz (Nicolaus Copernicus University in Toruñ)
    Abstract: The role of the public and private sector in health care systems remains one of the crucial problems of these systems' operation. The purpose of this research is to identify the relationships between the performance of health systems in CEE and CIS (Central and Eastern Europe and Commonwealth of Independent State) countries and the mix of public-private sector in the health care of these countries. The study uses a zero unitarization method to construct three measures of health system performance in the following areas: (1) resources; (2) services; and (3) health status. The values of these measures are correlated with the share of public financing that represents the public-private mix in the health systems. The data used is from World Health Organization’s Health for All Database for 23 CEE and CIS countries and comprises the year 2010. The results show that the performance of health systems in the countries investigated is positively associated with a higher proportion of public financing. The strongest relationship links public financing with performance in the area of services production. For policy makers, these results imply that health systems in post-communist transition economies could be susceptible to a decreasing role of the state and that growing reliance on the market mechanism in health care can deteriorate the operation of these systems.
    Keywords: health care system; public-private mix; transition economies, health status
    JEL: I11 H51 P36
    Date: 2015–04
  23. By: Vladimir Klyuev
    Abstract: Thailand stands out in international comparison as a country with a high dispersion of productivity across sectors. It has especially low labor productivity in agriculture—a sector that employs a much larger share of the population than is typical for a country at Thailand’s level of income. This suggests large potential productivity gains from labor reallocation across sectors, but that process—which made a significant contribution to Thailand’s growth in the past—appears to have stalled lately. This paper establishes these facts and applies a simple model to discuss possible explanations. The reasons include a gap between the skills possessed by rural workers and those required in the modern sectors; the government’s price support programs for several agricultural commodities, particularly rice; and the uniform minimum wage. At the same time, agriculture plays a useful social and economic role as the employer of last resort. The paper makes a number of policy recommendations aimed at facilitating structural transformation in the Thai economy.
    Keywords: Labor productivity;Thailand;Agricultural sector;Migrant labor;Nonmetropolitan areas;structural transformation; industrialization; agricultural price support
    Date: 2015–03–04
  24. By: Muriel Fadairo (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France, Université Jean Monnet, Saint-Etienne, F-42000, France); Cintya Lanchimba (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France, Université Jean Monnet, Saint-Etienne, F-42000, France; National Polytechnic School of Quito, Ecuador); Josef Windsperger (University of Vienna, Austria, Faculty of Business, Economics and Statistics, Oskar-Morgenstern-Platz 1, 1090 Vienna)
    Abstract: Multi-unit franchising (MUF) is a governance form inside franchising networks where the franchisor transfers to the franchisees the right to own and operate more than one outlet. While previous empirical literature has revealed various advantages of MUF as compared to single-unit franchising (SUF), we study the impact of this governance form on the network performance, taking into account different contexts. Our results from propensity score matching show that MUF leads to higher performance. However, non-parametric estimations highlight thresholds suggesting that a mix of SUF and MUF is a more efficient governance form than a pure MUF network.
    Keywords: Network governance, franchising, propensity score matching, nonparametric regressions
    JEL: M21 L14 C14
    Date: 2015
  25. By: J. Stephen Ferris (Department of Economics, Carleton University); Marcel-Cristian Voia (Department of Economics, Carleton University)
    Abstract: This paper asks whether comprehensive, non-interest government size has an inverted Ushaped effect on private economic output in Canada and whether its current size is too large relative to the estimated tipping point. Using data from 1929 through 2011 and controlling for both correlations arising among the independent variables across time and endogeneity in the relationship between size and performance, we find evidence consistent with size producing an inverted U-shaped effect on private output that peaks in the range of 30 to 34 percent of GDP. Use of graphic nonparametric methods, conditional on the same control and instrument variables, reinforces the parametric estimates of threshold and quadratic models while illustrating visually the effect of controlling for endogeneity through instrumented variables.
    Keywords: Government Size, nonlinear time series, nonparametric methods, tipping point,endogeneity correction.
    JEL: H21 H23 C22 C26
    Date: 2014–11–10
  26. By: Lukáš Turèok (Technical University of Liberec); Athanasios Podaras (Technical University of Liberec)
    Abstract: The article presents the development of a software application that focuses on calculating partnership efficiency. Partnership efficiency is part of the theory of stocks. This software is developed by using Microsoft Excel and the programming language Visual Basic for Applications. The main goal is to create a simple, user-friendly interface designed to calculate partnership efficiency among contractual partners. The contribution is based on the assumption that small and medium-sized enterprises do not use complicated IT systems, but to cater for their needs, they mainly use Microsoft Excel. The main contribution of the article is the software application that calculates, in a short term period, partnership efficiency among contractual partners. The created application is also designed for educational purposes (e.g. aimed to assist university students in absorbing the practical implementation of the Cooperation Model).
    Keywords: dynamic model; partnership efficiency; stock keeping theory; visual basic for applications
    JEL: M29 C44 C61
    Date: 2015–04
  27. By: Nicolas Dias Gomes (Faculty of Economics, University of Coimbra, Portugal); Pedro André Cerqueira (Faculty of Economics, University of Coimbra and GEMF, Portugal); Luís Alçada Almeida (Faculty of Economics, University of Coimbra and INESC-Coimbra, Portugal)
    Abstract: In this paper we construct a panel data set from 2000 to 2011 for the EU 28, studying the impact of education on the levels of software piracy in a country. When an aggregated analysis is made, e.g. considering all ISCED (International Standard Classification of Education) levels, expenditure on public educational institutions as well as public spending on education have a deterrent effect on piracy, being significant. However, the effect of financial aid to students is positive. When the analysis is made taking into account the ISCED 1997 disaggregation, expenditure on ISCED 5-6 has a negative and significant effect. Taking into account the type of educational institutions, more expenditure on ISCED 1 to 4 will lower piracy. We also found that more financial help to students on higher levels of education, e.g. ISCED 5-6, have a positive and significant effect. Finally, more years of schooling of both primary and secondary education will have a deterrent effect on software piracy.
    Keywords: ISCED classification, Software Piracy, Education.
    JEL: C23 I21 O34
    Date: 2015–03
  28. By: Lise Pichette; Pierre St-Amant; Ben Tomlin; Karine Anoma
    Abstract: Estimating potential output and the output gap - the difference between actual output and its potential - is important for the proper conduct of monetary policy. However, the measurement and interpretation of potential output, and hence the output gap, is fraught with uncertainty, since it is unobservable. It is therefore important that we continually expand and improve upon existing models, and innovate by testing new approaches and incorporating them into the analysis of potential output and the output gap. Within this context, this paper first provides an assessment of the extended multivariate filter (EMVF), which the Bank has used since the late 1990s to come up with a baseline measure of the output gap. It is determined that the EMVF has several limitations that need to be addressed. Consequently, a modified version of the EMVF incorporating revised conditioning information is presented. In addition, a newly developed methodology, the integrated framework (IF), provides a separate analysis of trend labour input and trend labour productivity, and in doing so accounts for more long-term structural changes in the economy. While neither of these approaches is perfect, and both have limitations, they represent improvements over the conventional method. The paper also outlines how the modified EMVF, the IF, and information from the Bank’s Business Outlook Survey and other sources are used to come up with an estimate of the current output gap and the future growth rate of potential output.
    Keywords: Economic models, Inflation and prices, Labour markets, Productivity
    JEL: E E0 E3 E31 E5 E52
    Date: 2015
  29. By: Bournakis, Ioannis; Christopoulos, Dimitris; Mallick, Sushanta
    Abstract: Given the decline in growth momentum in the manufacturing sector in many OECD countries, the role of knowledge-based capital has emerged as a key driver for sustained growth. While empirical studies on estimating knowledge spillovers have usually been undertaken at the country level, the spillover effects can be more definitive only if the analysis is conducted at the industry-level. The effectiveness of international spillovers is conditional on recipient country’s absorptive capacity and this is an important component of the spillover mechanism that has not attracted significant attention so far. This paper therefore assesses the effect of spillovers in driving per capita output growth taking into account the role of absorptive capacity. Our main findings are first, the confirmation of the robust positive relationship between human capital and output growth for 14 OECD countries at industry level. Second, the gains from international spillover are conditional to the level of human capital and the degree of protection of intellectual property rights. Third, countries that improve absorptive capacity can potentially increase gains from spillovers via either trade or FDI (including vertical FDI). Finally, significant heterogeneity is found between high and low-tech industries. The former group is more effective in absorbing spillovers while the latter has failed to reach the critical level of technological advancement in order to absorb foreign and domestic knowledge.
    Keywords: Growth; R&D; Knowledge Spillovers; Absorptive Capacity; Human Capital; Intellectual Property Rights
    JEL: E24 F1 O3 O4
    Date: 2015–02–05
  30. By: Graziella Bonanno; Domenico De Giovanni; Filippo Domma (Dipartimento di Economia, Statistica e Finanza, Università della Calabria)
    Abstract: In this paper, we study the so-called “wrong skewness” anomaly in Stochastic Frontiers (SF), which consists in the observed difference between the expected and estimated sign of the asymmetry of the composite error. We propose a more general and flexible specification of the SF model, introducing dependence between the two error components and asymmetry (positive or negative) of the random error. This re-specification allows us to decompose the third moment of the composite error in three components, namely: i) the asymmetry of the inefficiency term; ii) the asymmetry of the random error; and iii) the structure of dependence between the error components. This decomposition suggests that the “wrong skewness” anomaly is an ill-posed problem, because we cannot establish ex ante the expected sign of the asymmetry of the composite error. We report a relevant special case that allows us to estimate the three components of the asymmetry of the composite error and, consequently, to interpret the estimated sign. We present two empirical applications. In the first dataset, where the classic SF displays wrong skewness, estimation of our model rejects the dependence hypothesis, but accepts the asymmetry of the random error, thus justifying the sign of the skewness of the composite error. In the second dataset, where the classic SF does not display any anomaly, estimation of our model provides evidence of the presence of both dependence between the error components and asymmetry of the random error.
    Keywords: Stochastic frontier models, Skewness, Generalised Logistic distribution, Dependence, Copula functions
    JEL: C13 C18 C46 D24
    Date: 2015–04
  31. By: Karolina Ruzickova (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic); Petr Teply (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic)
    Abstract: The wide change of banking models over last few decades has led to an increasing share of fee and commission income of banks. In this paper we deal with determinants of banking fees in the European Union with special emphasis on market concentration based on EU-27 data from 2007 to 2012. For the estimation we use System Generalized Method of Moments, which is appropriate for dynamic panel data, allows for time invariant and lagged dependent variables and is able to deal with endogeneity. We conclude that banks facing higher competition tend to expand more aggressively into non-traditional activities and therefore they report higher fee income shares. Moreover, we found that a higher equity to assets ratio is related with higher shares of fee income since by expanding into non-traditional businesses the bank needs more capital to prevent the potential risks of the new activity. Surprisingly, a high deposits to assets ratio tends to increase the fee income share, which may be possibly attributed to relatively high switching costs and to close relationship between depositor and bank in the EU banking sector. However, macroeconomic conditions do not seem to have a significant impact on the net fee and commission income share.
    Keywords: bank, fee and commission income, market concentration, GMM system
    JEL: C23 G21 L25
    Date: 2015–04
  32. By: Hana Stverkova (Technical University of Ostrava); Vlasta Humlova (Technical University of Ostrava)
    Abstract: In recent years have been recording the number of sectorial clusters of firms and their links with a research and academic sphere unprecedented prosperity in the Czech Republic. The trend and popularity of clusters in regions are considered as an important source of competitive advantage of given locality. In particular SMEs can in this way overcome a certain weaknesses of this type of business and strategically use of so-called synergistic effect. Many times, it was stressed to be SMEs as the foundation of any economy, but they do not have the necessary economic force. These problems help to remove specific form alliances – the cluster. The competitiveness of regions goes hand in hand with support for cluster organizations. Clusters are perceived as modern and well-defined type groupings of entities from certain industry or field. The aim of this paper is to evaluate and assess the efficiency and competitiveness of selected cluster groups in the Moravian and Silesian region. The partial aim is a generalization of international methodologies for assessing the performance of clusters and linking this methodology with the basic principles of competitiveness evaluation. On practical example will be applied Porter's diamond combined with the EFQM model and Cluster Management Excellence methodology. The outcome of the paper will be the evaluation of cluster initiatives. There will also be proposed basic precautions that should lead to the desired performance level of international excellence cluster. For the selection of appropriate proposals will be used the multi-criteria decision analysis, to identify those measures that are currently most advantageous for the cluster.
    Keywords: cluster, competitiveness, performance, BEE model, Moravian-Silesian Region
    JEL: M1 M14 M21 L62 R10
    Date: 2015–04
  33. By: Carolina González-Velosa; Graciana Rucci; Miguel Sarzosa; Sergio Urzúa
    Abstract: In the last decades, countries in Latin America and the Caribbean have experienced a dramatic increase in the levels of higher education enrollment. Using administrative data from Chile and Colombia, we find that this phenomenon is not always associated with higher private individual returns. In both countries, there is a significant dispersion in the net returns to higher education and a significant proportion of graduates could be facing negative returns. This means that, for many higher education graduates, net earnings might have been higher if they had not earned a higher education degree. We hypothesize that while there have been major policy efforts to increase coverage, institutional arrangements that encourage quality and relevance has been insufficient. Corrective measures in this direction are urgent. Sustainable growth requires a labor force with relevant skills and capabilities. In light of our results, it is not clear that the higher education systems in these countries are delivering these outcomes.
    Keywords: Higher Education, Labor Policy, Vocational & Technical Education, Labor markets, Higher education, Returns to higher education, Heterogeneity, Inequality, Skills, Productivity
    Date: 2015–03

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.