nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒05‒30
sixteen papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Efficiency of Australian TAFE and further education providers By Fieger, Peter; Villano, Renato; Cooksey, Ray
  2. Land Misallocation and Productivity By Diego Restuccia; Raul Santaeulalia-Llopis
  3. Land Reform and Productivity: A Quantitative Analysis with Micro Data By Tasso Adamopoulos; Diego Restuccia
  4. More is better than one: the impact of different numbers of input aggregators in technical efficiency estimation By Aldanondo, Ana M.; Casasnovas, Valero L.
  5. The export-productivity link for Brazilian manufacturing firms By Xavier Cirera; Daniel Lederman; Juan A. Mañez; María E. Rochina
  6. Two dimensional efficiency measurements in Australian TAFE Institutes By Fieger, Peter; Villano, Renato; Cooksey, Ray
  7. Bootstrap-based testing for network DEA: Some Theory and Applications By Kelly D.T.Trinh; Valentin Zelenyuk
  8. How Did Japan Catch-up On The West? A Sectoral Analysis Of Anglo-Japanese Productivity Differences, 1885-2000 By Broadberry, Stephen; Fukao, Kyoji; Zammit, Nick
  9. Recent trends in productivity in China: shift-share analysis of labour productivity growth and the evolution of the productivity gap By Margit Molnar; Thomas Chalaux
  10. Exact Relationships between Fisher Indexes and Theoretical Indexes By E. Grifell-TatjeÌ; C. A. K. Lovell
  11. Immigration, Trade and Productivity in Services: Evidence from U.K. Firms By Gianmarco I.P. Ottaviano; Giovanni Peri; Greg C. Wright
  12. The Bias of Technological Change in Europe By Johanna Vogel; Kurt Kratena; Kathrin Hranyai
  13. Bank Competition and Risk Appetite: Evidence from Tunisia By ZAGHDOUDI, Khemais; HAMDI, Helmi; DKHILI, Hichem; HAKIMI, Abdelaziz
  15. Financial Inclusion and Firms performance By Chauvet, Lisa; Jacolin, Luc
  16. Investigating the gender gap in agricultural productivity : evidence from Uganda By Ali,Daniel Ayalew; Bowen,Frederick H.; Deininger,Klaus W.; Duponchel,Marguerite Felicienne

  1. By: Fieger, Peter; Villano, Renato; Cooksey, Ray
    Abstract: Budgetary constraints on the public purse have led Australian Federal and State governments to focus increasingly on the efficiency of public institutions, including Technical and Further Education (TAFE) institutes. In this study, we define efficiency as the relationship between financial and administrative inputs and educational outputs. We employ stochastic frontier analysis in determining the efficiency of Australian TAFE institutes using data sourced from institutional annual reports, the Student Outcomes Survey and administrative databases. We found significant economies of scale effects and conclude that increasing institutional size for very small institutions may result in increased efficiencies.
    Keywords: Efficiency, Education, Productivity, Performance Measurment
    JEL: I21
    Date: 2015–03–05
  2. By: Diego Restuccia; Raul Santaeulalia-Llopis
    Abstract: Using detailed household-farm level data from Malawi, we measure real farm total factor productivity (TFP) controlling for a wide array of factor inputs, land quality, and transitory shocks. The distribution of farm TFP has substantial dispersion but factor inputs are roughly evenly spread among farmers, implying a strong negative effect on agricultural productivity. A reallocation of factors to their efficient use among existing farmers would increase agricultural productivity by a factor of 3.6-fold. The gains from reallocation are 2.6 times larger for farms with no marketed land than for farms that operate marketed land.
    Keywords: misallocation, land, productivity, agriculture, Malawi, micro data.
    JEL: O1 O4
    Date: 2015–05–16
  3. By: Tasso Adamopoulos; Diego Restuccia
    Abstract: We assess the effects of a major land-policy change on farm size and agricultural productivity using a quantitative model and micro-level data. The 1988 land reform in the Philippines imposed a ceiling on land holdings and severely restricted the transferability of the redistributed land. In the model, the land reform reduces agricultural productivity not only by misallocating resources across farms, but also by distorting farmers' occupation and technology adoption decisions. On impact the reform reduces farm size by 34% and agricultural productivity by 17%. A market allocation of the above-ceiling land produces only 1/3 of the size and productivity effects.
    Keywords: agriculture, misallocation, within-farm productivity, land reform.
    JEL: O11 O14 O4
    Date: 2015–05–15
  4. By: Aldanondo, Ana M.; Casasnovas, Valero L.
    Abstract: The results of an experiment with simulated data show that combining inputs with different criteria (as cost, material inputs aggregates and other) increases the accuracy of the Data Envelopment Analysis (DEA) technical efficiency estimator in data sets with dimensionality problems. The positive impact of this approach surpasses that of reducing the number of variables, since replacement of the original inputs with an equal number of aggregates improves DEA performance in a wide range of cases.
    Keywords: Technical efficiency, Aggregation bias, Monte Carlo, DEA Estimator accuracy
    JEL: C14 C61 D20
    Date: 2015–04
  5. By: Xavier Cirera (Economics Research World Bank Group); Daniel Lederman (Economics Research World Bank Group); Juan A. Mañez (University of Valencia and ERICES); María E. Rochina (University of Valencia and ERICES; University of Valencia and ERICES)
    Abstract: This paper explores the link between exports and total factor productivity (TFP) for Brazilian manufacturing firms over the period 2000-2008, both under the assumption of an exogenous or an endogenous law of motion for productivity. We first obtain TFP estimates under each alternative assumption following Wooldridge (2009) GMM procedure. Second, using stochastic dominance techniques we analyse whether the ex-ante most productive firms are those that start exporting (self-selection hypothesis). Finally, we test whether exporting boosts firms TFP growth (learning-by-exporting hypothesis) using matching techniques, to control for the possibility that selection into exports may not be a random process. Our results confirm the self-selection hypothesis and show that starting to export yields firms an extra TFP growth that emerges since the first year exporting but lasts only from this year to the next. Further, this extra TFP growth is much higher under the assumption of an endogenous law of motion for productivity, which reinforces the importance of accounting for firm export status to study the evolution of productivity.
    Keywords: TFP, export status, exogenous vs. endogenous Markov, semi-parametric approach, self-selection, stochastic dominance, learning-by exporting, matching techniques.
    Date: 2015–05
  6. By: Fieger, Peter; Villano, Renato; Cooksey, Ray
    Abstract: Technical and Further Education (TAFE) institutes provide for the majority of Australian government funded courses in vocational education. In this study we used institutional financial, educational, demographic and employed stochastic frontier analysis to develop two distinct efficiency measures. The first model examined institutional efficiency in the transformation of financial resources into teaching loads. The second model evaluated efficiency in the transformation of institutional resources into post-study employment outcomes. In both models we found significant inefficiencies in the Australian TAFE system. We then assessed the relationship between both efficiency measures. While there was no direct linear relationship, a distinct pattern was detectable. K-means cluster analysis was used to establish groupings of similar institutes and subsequent canonical discriminant analysis to develop a typology of these clusters. We conclude that, based on the measures developed in this study, there are inefficiencies in the Australian TAFE system for which an underlying typology exists.
    Keywords: Education, Efficiency, Productivity, Performance Measurement
    JEL: C1 I21
    Date: 2015–04–02
  7. By: Kelly D.T.Trinh (School of Economics, The University of Queensland); Valentin Zelenyuk (School of Economics, The University of Queensland)
    Abstract: Traditional data envelopment analysis (DEA) views a production technology process as a ‘black box’, while network DEA allows a researcher to look into the ‘black box’, to evaluate the overall performance and the performance of each sub-process of the system. The technical efficiency scores calculated from these approaches can be slightly, or sometimes vastly different. Our aim is to develop two bootstrap-based algorithms to test whether any observed difference between the results from the two approaches is statistically significant, or whether it is due to sampling and estimation noise. We focus on testing the equality of the first moment (i.e., the mean) and of the entire distribution of the technical efficiency scores. The bootstrap-based procedures can also be used for pairwise comparison between two network DEA models to perform sensitivity analysis of the resulting estimates across various network structures. In our empirical illustration of non-life insurance companies in Taiwan, both algorithms provide fairly robust results. We find statistical evidence suggesting that the first moment and the entire distribution of the overall technical efficiencies are significantly different between the DEA and network DEA models. However, the differences are not statistically significant for the two sub-processes across these models.
    Keywords: DEA,Network DEA,Subsampling Bootstrap
    Date: 2015–05
  8. By: Broadberry, Stephen (London School of Economics); Fukao, Kyoji (Hitotsubashi University); Zammit, Nick (University of Warwick)
    Abstract: Although Japanese economic growth after the Meiji Restoration is often characterised as a gradual process of trend acceleration, comparison with the United States suggests that catching-up only really started after 1950, due to the unusually dynamic performance of the US economy before 1950. A comparison with the United Kingdom, still the world productivity leader in 1868, reveals an earlier period of Japanese catching up between the 1890s and the 1920s, with a pause between the 1920s and the 1940s. Furthermore, this earlier process of catching up was driven by the dynamic productivity performance of Japanese manufacturing, which is also obscured by a comparison with the United States. Japan overtook the UK as a major exporter of manufactured goods not simply by catching-up in labour productivity terms, but by holding the growth of real wages below the growth of labour productivity so as to enjoy a unit labour cost advantage. Accounting for levels differences in labour productivity between Japan and the United Kingdom reveals an important role for capital in the catching-up process, casting doubt on the characterisation of Japan as following a distinctive Asian path of labour intensive industrialisation.
    Keywords: Labour productivity ; sectoral disaggregation ; international comparison JEL classification: N10 ; N30 ; O47 ; O57
  9. By: Margit Molnar; Thomas Chalaux
    Abstract: The Chinese economy has been undergoing fundamental structural changes since the start of reforms in 1978. An increasing number of farmers first got engaged in off-farm activities and then started to migrate to cities in the 1990s in search of jobs. Such movement of labour from less to more productive jobs boosted overall labour productivity and growth. Agglomeration and scale economies further pushed up productivity. While the productivity gains from internal migration will diminish gradually over time, urbanisation is likely to remain an important source of productivity growth in the coming decade or so. This paper first decomposes labour productivity growth over 2000-11 into a within-industry, a shift and a cross effect in a number of countries and compares China with other countries over this period. This shift-share analysis also allows a comparison of within-sector productivity gains across a large number of sectors and countries. Labour productivity alongside total factor productivity is also discussed from the perspective of its gap with the United States and growth rate over 2000-11 and in comparison with other BRIICS economies. In this analysis, manufacturing and service industries are looked at separately. This Working Paper relates to the 2015 OECD Economic Survey of China<P>Évolution récente de la productivité en Chine : analyse structurelle-résiduelle des gains de productivité du travail et évolution de l'écart de productivité<BR>L’économie chinoise connaît des mutations structurelles majeures depuis le début du processus de réforme, en 1978. Un nombre croissant d’exploitants agricoles commencèrent à cette époque à exercer une activité en dehors de leur exploitation, puis migrèrent vers les villes dans les années 90, à la recherche d’un travail. De tels mouvements de main-d’oeuvre, quittant des emplois peu productifs pour des emplois qui l’étaient davantage, ont stimulé la productivité globale du travail et la croissance. Les économies d’agglomération et d’échelle ont constitué à leur tour une nouvelle source de gains de productivité. Si les gains liés aux migrations intérieures vont diminuer au fil du temps, l’urbanisation va probablement demeurer une source majeure d’amélioration de la productivité dans la décennie à venir. Ce document de travail décompose les gains de productivité pour la période 2000-11 en fonction de l’effet intrasectoriel, des variations de parts et de l’effet transversal, et compare la Chine à d’autres pays pour la même période. Cette analyse structurelle-résiduelle permet également de comparer la composante intrasectorielle des gains de productivité sur un grand nombre de secteurs et de pays. La productivité de la main-d’oeuvre et la productivité globale des facteurs sont également analysées du point de vue de leur écart avec les États-Unis et du taux de croissance entre 2000 et 2011, et en comparaison avec d’autres pays BRIICS. L’industrie et les services sont considérés séparément dans cette analyse. Ce document de travail se rapporte à l’Étude économique de la Chine, OCDE, 2015 que-chine.htm
    Keywords: services, China, manufacturing, total factor productivity, labour productivity, BRIIC economies, productivity gap, pays BRIICS, écart de productivité, productivité globale des facteurs, productivité du travail, Chine, services, industrie
    JEL: D24 J24
    Date: 2015–05–22
  10. By: E. Grifell-TatjeÌ (Universitat AutoÌ€noma de Barcelona); C. A. K. Lovell (School of Economics, The University of Queensland)
    Abstract: In this paper we develop exact relationships between empirical Fisher indexes and their theoretical Malmquist and Konüs counterparts. We begin by using implicit Malmquist price and price recovery indexes to establish exact relationships between Malmquist quantity and productivity indexes and Fisher quantity and productivity indexes. We then show that Malmquist quantity and productivity indexes and Fisher price and price recovery indexes “almost†satisfy the product test with the relevant value change, and we derive a quantity mix function that ensures satisfaction of the product test. We next use implicit Konüs quantity and productivity indexes to establish exact relationships between Konüs price and price recovery indexes and Fisher price and price recovery indexes. We then show that Konüs price and price recovery indexes and Fisher quantity and productivity indexes “almost†satisfy the product test with the relevant value change, we derive a price mix function that ensures satisfaction of the product test, and we show that this price mix function differs fundamentally from the quantity mix function relating Malmquist and Fisher indexes.
    Keywords: implicit Malmquist indexes, implicit Konüs indexes, Fisher indexes, quantity mix and price mix functions
    JEL: C43 D24 D61
    Date: 2015–06
  11. By: Gianmarco I.P. Ottaviano; Giovanni Peri; Greg C. Wright
    Abstract: This paper explores the impact of immigrants on the imports, exports and productivity of service-producing firms in the U.K. Immigrants may substitute for imported intermediate inputs (offshore production) and they may impact the productivity of the firm as well as its export behavior. The first effect can be understood as the re-assignment of offshore productive tasks to immigrant workers. The second can be seen as a productivity or cost cutting effect due to immigration, and the third as the effect of immigrants on specific bilateral trade costs. We test the predictions of our model using differences in immigrant inflows across U.K. labor markets, instrumented with an enclave-based instrument that distinguishes between aggregate and bilateral immigration, as well as immigrant diversity. We find that immigrants increase overall productivity in service-producing firms, revealing a cost cutting impact on these firms. Immigrants also reduce the extent of country-specific offshoring, consistent with a reallocation of tasks and, finally, they increase country-specific exports, implying an important role in reducing communication and trade costs for services.
    JEL: F16 F22 F23
    Date: 2015–05
  12. By: Johanna Vogel; Kurt Kratena; Kathrin Hranyai
    Abstract: This paper is concerned with measuring and influencing the direction of technological change. First, it provides a comprehensive assessment of the factor bias of technological change using panel data from the World Input-Output Database (WIOD) for 25 EU countries from 1995 to 2009. We measure the bias with respect to the inputs capital, energy, non-energy materials and three types of labour (low-, medium- and high-skilled). For this purpose, the factor cost share approach based on the duality of production theory is applied. Estimating the system of cost share equations derived from a translog cost function, we find that technological change was low- and medium-skilled labour-saving, high-skilled labour-using, and energy- and materials-using. Second, the paper addresses the question how technological change could be redirected towards saving more energy and less labour. Patent applications in energy- and labour-saving technology fields are used to model the direction of technological change. We construct stocks of patents in these fields and integrate them into the system of cost share equations as proxies for the level of technology. Upon finding that they were indeed energy and labour saving over our sample period, we regress them on policy variables to identify instruments for shifting the bias away from saving labour towards saving energy. We conclude that one way to achieve this, at least partly, would be an increase in the energy tax rate coupled with a matching reduction in the social security contributions paid by employers for low-skilled workers.
    Keywords: Factor bias of technological change, translog cost function, induced innovation, environmental innovation, ICT, robotics, count data models for panel data, Europe, WIOD
    JEL: O33 O31 D24 Q55 Q58 C33 C35
    Date: 2015–05
  13. By: ZAGHDOUDI, Khemais; HAMDI, Helmi; DKHILI, Hichem; HAKIMI, Abdelaziz
    Abstract: In this paper, we investigate whether bank competition increases risk taking for the case of the Tunisian banks. Our data set covers nine Tunisian banks observed during the period from1980 to 2009 and we conducted an econometric model based on panel data estimations. The econometric results reveal the presence of a positive relationship between competition and bank risk taking. This shows that the functions of Tunisian banks remain based on the basic traditional activities and banks need to diversify their activities in safe functions to keep the banking sector stable and avoid bank failure.
    Keywords: Bank competition, Tunisian banks, Bank risk taking, Panel data analysis.
    JEL: G21 L11
    Date: 2015–05–19
  14. By: Francesco Aiello; Graziella Bonanno (Dipartimento di Economia, Statistica e Finanza, Università della Calabria)
    Abstract: Banking is increasingly a-spatial. However, the environment matters for small banks. Indeed, they are embedded in narrowed markets and hence benefit from proximity to their member-customers. By referring to multilevel approach, this article aims at measuring how much the performance of Italian mutual-cooperative banks is determined by both geographical (provincial level) and individual characteristics (small bank level). The effect of local markets explains 28.27% of bank heterogeneity in the empty multilevel model and 33% in the most extended model. Moreover, it is found that bank efficiency increases with market concentration and demand density and decreases with branching in local markets.
    Keywords: Multilevel model, mutual-cooperative banks, local markets, cost efficiency
    JEL: G21 C13 D00 R19
    Date: 2015–05
  15. By: Chauvet, Lisa; Jacolin, Luc
    Abstract: This study focuses on the impact financial development on the performance of firms in countries with low financial development. Previous studies focusing on financial depth alone find that financial development does not affect, or has a negative effect on, economic growth in developing countries with undersized financial systems. Using firm-level data in panel for a sample of 26 countries, we find that this hypothesis is invalidated if one takes into account not only financial depth but also financial inclusion, i.e. the distribution of access to financial services. Contrary to developed countries where financial inclusion is nearly universal, differences in access to credit among firms help explaining differences in firms perfor- mance. We measure financial inclusion as the share of firms who have access to bank overdraft facilities, or, alternatively, to any external source of financing, at the sectoral level. We find that whereas financial devel- opment does not affect firm performance on average, financial inclusion has a positive effect on firms growth. Where financial inclusion is low, financial development may create crowding out effects in favor of a minority of firms or government that phase out or reverse its expected positive effects of financial development on growth. Additional testing show that these effects affect all firms, irrespective of size, or whether they have access to bank credit or not. We interpret these results as showing that financial deepening increases firms growth only if it widely distributed among firms, i. e. financial inclusion is high.
    Keywords: Financial development; Financial inclusion; Firms peformance;
    JEL: G10 O16 O50
    Date: 2015–05
  16. By: Ali,Daniel Ayalew; Bowen,Frederick H.; Deininger,Klaus W.; Duponchel,Marguerite Felicienne
    Abstract: Women comprise 50 percent of the agricultural labor force in Sub-Saharan Africa, but manage plots that are reportedly on average 20 to 30 percent less productive. As a source of income inequality and aggregate productivity loss, the country-specific magnitude and drivers of this gender gap are of great interest. Using national data from the Uganda National Panel Survey for 2009/10 and 2010/11, the gap before controlling for endowments was estimated to be 17.5 percent. Panel data methods were combined with an Oaxaca decomposition to investigate the gender differences in resource endowment and return to endowment driving this gap. Although men have greater access to inputs, input use is so low and inverse returns to plot size so strong in Uganda that smaller female-managed plots have a net endowment advantage of 12 percent, revealing a larger unexplained gap of 29.5 percent. Two-fifths of this unexplained gap is attributed to differential returns to the child dependency ratio and one-fifth to differential returns to transport access, implying that greater child care responsibilities and difficulty accessing input and output markets from areas without transport are the largest drivers of the gap. Smaller and less robust drivers include differential uptake of cash crops, and differential uptake and return to improved seeds and pesticides.
    Keywords: Regional Economic Development,Housing&Human Habitats,Labor Policies,Crops and Crop Management Systems,Rural Development Knowledge&Information Systems
    Date: 2015–05–11

This nep-eff issue is ©2015 by Angelo Zago. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.