nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒07‒11
seven papers chosen by

  1. Why Do South Korean Firms Produce So Much More Output per Worker than Ghanaian Ones? By Baptist, Simon; Teal, Francis J.
  2. Temporary employment protection reforms and productivity: evidence from an industry-level panel of EU countries By Kristel Jacquier
  3. Economy-wide Estimates of Rebound Effects: Evidence from Panel Data By Adetutu, Morakinyo; Glass, Anthony; Weyman-Jones, Thomas
  4. Labor Supply and Productivity Responses to Non-Salary Benefits: Do They Work? If So, at What Level Do They Work Best? By Spencer, Marilyn; Gevrek, Deniz; Chambers, Valrie; Bowden, Randall
  5. Immigration, trade and productivity in services: evidence from UK firms By Gianmarco I. P. Ottaviano; Giovanni Peri; Greg C. Wright
  6. Labor Demand and ICT Adoption in Spain By Manuel Hidalgo-Pérez; Jesús Rodríguez López; José M. Okean
  7. Pyramid capitalism : political connections, regulation, and firm productivity in Egypt By Diwan,Ishac; Keefer,Philip E.; Schiffbauer,Marc Tobias

  1. By: Baptist, Simon (Economist Intelligence Unit); Teal, Francis J. (University of Oxford)
    Abstract: Macro analysis of the sources of income differences has produced very different results as to the importance of education. In this paper we investigate the roles of education and technology in explaining differences in firm level productivity across Ghana and South Korea. The labour productivity differentials across these firms exceed those implied by macro analysis. Median value-added per employee is over thirty times higher in South Korean than in Ghanaian manufacturing firms. We show that if we allow for a non-linear effect of education on output the whole of the average productivity differences across the countries can be explained. We discuss the policy implications that flow from this finding.
    Keywords: African and Asian manufacturing, productivity, efficiency, human capital
    JEL: O14 D24
    Date: 2015–06
  2. By: Kristel Jacquier (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: We investigate the impact of reforms on employment protection for temporary contracts on Total Factor Productivity (TFP) using panel data of industries across 14 European countries. Within-industry variation over the period 1992-2007 is exploited to capture reforms. The legislation on temporary contracts (EPT) affects the use of such contracts, making it a valid instrument to prove a causal relationship between a change in legislation and macroeconomic performances. Indeed, the two stage estimates emphasize the negative relationship between the share of temporary employment and TFP at the industrial level. Marginal effects prove that increasing regulation on temporary jobs has a strong negative impact on the use of fixed-term contracts if employment protection on regular contract (EPR) is low. When employment protection on open-ended contract reaches its highest level; this effect is stronger. Our study shows that asymmetric institutional change might indeed leads to lower productivity growth through a surge in temporary employment.
    Date: 2015–03
  3. By: Adetutu, Morakinyo; Glass, Anthony; Weyman-Jones, Thomas
    Abstract: Energy consumption and greenhouse emissions across many countries have increased overtime despite widespread energy efficiency improvements. One explanation offered in the literature is the rebound effect (RE), however there is a debate about the magnitude and appropriate model for estimating RE. Using a combined stochastic frontier analysis and two-stage dynamic panel data approach for 55 countries covering 1980-2010, we explore these two issues of magnitude and model. Our central estimates indicate that, in the short-run, 100% energy efficiency improvement is followed by 90% rebound in energy consumption, but in the long-run it leads to a 36% decrease in energy consumption. Overall, our estimated cross-country RE magnitudes indicate the need to consider or account for RE when energy forecasts and policy measures are derived from potential energy efficiency savings.
    Keywords: Energy Efficiency, Input Distance Function, Panel Data, Rebound Effects, Stochastic Frontier Analysis
    JEL: C23 D2 Q43
    Date: 2015–07–02
  4. By: Spencer, Marilyn (Texas A&M University Corpus Christi); Gevrek, Deniz (Texas A&M University Corpus Christi); Chambers, Valrie (Stetson University); Bowden, Randall (Texas A&M University Corpus Christi)
    Abstract: This study explores the impact of a particular low marginal-cost employee benefit on employees' intended retention and performance. By utilizing a unique data set constructed by surveying full-time faculty and staff members at a public university in the United States, we study the impact of this employee benefit on faculty and staff performance and retention. We focus on the impact of reduction in dependent college tuition at various levels on employees' intentions to work harder and stay at their current job by using both OLS and Ordered Probit models. We also simulate the direct opportunity cost (reduction in revenue) in dollars and as a percent of total budgeted revenue to facilitate administrative decision making. The results provide evidence that for institutions where employee retention and productivity are a priority, maximizing or offering dependent college tuition waiver may be a relatively low-cost benefit to increase intended retention and productivity. In addition, the amount of the tuition waiver, number of dependents and annual salary are statistically significant predictors of intended increased productivity and intent to stay employed at the current institution. Employee retention and productivity is a challenge for all organizations. Although pay, benefits, and organizational culture tend to be key indicators of job satisfaction, little attention is given to specific types of benefits. This study is the first comprehensive attempt to explore the relationship between the impact of this low-cost employee benefit and employee performance and retention in a higher education institution in the United States.
    Keywords: higher education, retention, employee satisfaction, productivity, job satisfaction, fringe benefits
    JEL: J22 J32 J45 M52
    Date: 2015–06
  5. 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 serviceproducing 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.
    Keywords: Immigration; services trade
    JEL: F10 F16 F22 F23
    Date: 2015–05
  6. By: Manuel Hidalgo-Pérez (Universidad Pablo de Olavide); Jesús Rodríguez López (U. Pablo de Olavide); José M. Okean (U. Pablo de Olavide)
    Abstract: Spain is delayed in adopting information and communication technologies (ICT) and its productivity per hour worked presents a downward trend since the mid 90s. In this paper we argue that these two facts are related. Using the EU KLEMS dataset we test the capital-skill complementarity hypothesis in a cross-section of sectors in Spain. We find that the substitutability between workers and ICT assets falls as worker skill level rises, and that this feature holds across all sectors. Further- more, the ICT assets are complementary with skilled workers. The fraction of workers employed with medium and high skills across sectors rose by 21% and 12%, respectively, to the disadvantage of low skilled workers, due to an adjustment within sectors more than to a composition effect between sectors. Finally, using a regression analysis, we conclude that some labor market institutions are likely behind the evolution of sectorial productivity and ICT investment in Spain.
    Keywords: Productivity, TFP, ICT, education
    JEL: I24 J24 O40
    Date: 2015–07
  7. By: Diwan,Ishac; Keefer,Philip E.; Schiffbauer,Marc Tobias
    Abstract: This paper uses an original database of 469 politically connected firms under the Mubarak regime in Egypt to explore the economic effects of close state-business relations. Previous research has shown that political connections are lucrative. The paper addresses several questions raised by this research. Do connected firms receive favorable regulatory treatment? They do: connected firms are more likely to benefit from trade protection, energy subsidies, access to land, and regulatory enforcement. Does regulatory capture account for the high value of connected firms? In the sample, regulatory capture as revealed by energy subsidies and trade protection account for the higher profits of politically connected firms. Do politically connected firms hurt aggregate growth? The paper identifies the growth effects of the entry of politically connected firms by comparing detailed 4-digit sectors where they entered, between 1996 and 2006, and sectors that remained unconnected. The entry of connected firms into new, modern, and previously unconnected sectors slows aggregate employment growth and skews the distribution of employment toward less productive, smaller firms.
    Keywords: E-Business,Small Scale Enterprises,Economic Theory&Research,Banks&Banking Reform,Microfinance
    Date: 2015–07–02

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.