nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒08‒25
eight papers chosen by

  1. Intangible Investment and Technical Efficiency: The Case of Software-Intensive Manufacturing Firms in Turkey By Derya Findik; Aysit Tansel
  2. The role of productivity and other factors in the internationalization of Polish firms. The initial results of a survey By Tomasz Brodzicki; Tomasz Jurkiewicz; Stanislaw Uminski; Krystyna Gawlikowska-Hueckel
  3. The Innovation Union Scoreboard is flawed: The Case of Sweden – not the innovation leader of the EU – updated version By Edquist , Charles; Zabala-Iturriagagoitia , Jon Mikel
  4. Ethnic Diversity and the Efficiency of Public Spending in Developing Countries By Urbain Thierry Yogo
  5. Accessibility and Transit Performance By Alireza Ermagun; David Levinson
  6. Is Privatization Working in Ukraine? New Estimates from Comprehensive Manufacturing Firm Data, 1989-2013 By Brown, J. David; Earle, John S.; Shpak, Solomiya; Vakhitov, Volodymyr
  7. Profit-Sharing and Wages: An Empirical Analysis Using French Data Between 2000 and 2007 By Noélie Delahaie; Richard Duhautois
  8. Resources on the Stage: A Firm Level Analysis of the ICT Adoption in Turkey By Findik, Derya; Tansel, Aysit

  1. By: Derya Findik (Science and Technology Policy Studies Program, Middle East Technical University); Aysit Tansel (Cornell University, Middle East Technical University, IZA, and ERF Cairo)
    Abstract: This chapter analyzes the effect of intangible investment on firm efficiency with an emphasis on its software component. Stochastic production frontier approach is used to simultaneously estimate the production function and the determinants of technical efficiency in the software intensive manufacturing firms in Turkey for the period 2003-2007. Firms are classified based on the technology group. High technology and low technology firms are estimated separately in order to reveal differentials in their firm efficiency. The results show that the effect of software investment on firm efficiency is larger in high technology firms which operate in areas such as chemicals, electricity, and machinery as compared to that of the low technology firms which operate in areas such as textiles, food, paper, and unclassified manufacturing. Further, among the high technology firms, the effect of the software investment is smaller than the effect of research and development personnel expenditure. This result shows that the presence of R&D personnel is more important than the software investment for software intensive manufacturing firms in Turkey.
    Keywords: Intangible assets, Software investment, Efficiency, Software intensive firms, Stochastic frontier analysis, Production.
    JEL: L21 L22 L23 L25
    Date: 2015–08
  2. By: Tomasz Brodzicki (University of Gdansk, Faculty of Economics; Institute for Development); Tomasz Jurkiewicz (University of Gdańsk, Faculty of Management, Department of Statistics); Stanislaw Uminski (Institute for Development; Faculty of Economics, University of Gdansk); Krystyna Gawlikowska-Hueckel (Institute for Development; Faculty of Economics, University of Gdansk)
    Abstract: Evidence from recent empirical micro-level surveys such as Bernard & Jensen (1995, 2001), Clerides et al. (1998) or Eaton et al. (2004) indicates large firm heterogeneity. Following a seminal contribution by Melitz (2003) theoretical models started to include firm heterogeneity by incorporating the actual distribution of productivity between firms. The models prove that only very productive firms are able to enter and remain on more demanding foreign markets. Export status is linked to productivity advantage. Apart from several studies the literature on the role of firm heterogeneity in Poland's trade is in its infancy. The goal of this article is to present the initial results of a large survey of Polish exporting and non-exporting firms aimed at filling this important gap. The survey included numerous questions in the area of firm competitiveness, innovation potential, export performance and strategies as well as barriers to exporting and policy expectations. The results of the survey have been supplemented with analysis of detailed financial data provided by InfoCredit allowing us to estimate numerous indices linked to economic and financial performance of enterprises including: capital and labour productivity, overall productivity measured by TFP and profitability.
    Keywords: exporters, non-exporters, Poland's trade, firms' survey
    JEL: F12 F14 C83
    Date: 2015–08
  3. By: Edquist , Charles (CIRCLE, Lund University); Zabala-Iturriagagoitia , Jon Mikel (Deusto Business School, Deusto University)
    Abstract: According to the Innovation Union Scoreboard published by the European Commission, Sweden has been, and still is, an innovation leader within the EU and one of the most innovative countries in Europe. In this paper, the performance of the Swedish national innovation system is analyzed using exactly the same data as those employed by the Innovation Union Scoreboard for the years 2014 and 2015. <p> We argue that the Summary Innovation Index provided by the Innovation Union Scoreboard is highly misleading. Instead of merely calculating this Summary Innovation Index, the individual indicators that constitute this composite innovation indicator need to be analyzed in much greater depth in order to reach a correct measure of the performance of innovation systems. We argue that input and output indicators need to be considered as two separate types of indicators and each type should then be measured individually. Thereafter the input and output indicators should be compared to one another, as is normally done in productivity and efficiency measurements. <p> To check whether our approach provides results similar to those of the Innovation Union Scoreboard (or not), we apply it and analyze the relative position of Sweden - appointed the innovation leader of the EU, by the EU. A theoretical background and reasons for selecting the indicators used are also given and a new position regarding Sweden’s innovation performance compared to the other EU countries is calculated. <p> Our conclusion is that Sweden cannot be seen as an innovation leader in the EU. This means in turn that the Innovation Union Scoreboard is flawed and may therefore mislead researchers, policy-makers, politicians as well as the general public – since it is widely reported in the media.
    Keywords: Innovation system; innovation policy; innovation performance; Sweden; indicators; input; output
    JEL: O30 O38 O49 O52
    Date: 2015–08–11
  4. By: Urbain Thierry Yogo (CERDI - Centre d'études et de recherches sur le developpement international - CNRS - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: This paper examines the effect of ethnic diversity on the efficiency of public spending in a set of developing countries. For this purpose, we use Data Envelopment Analysis to assess the efficiency of public spending in the sectors of health, education and infrastructure in 77 developing countries over the period 1996-2012. Further, we investigate the effect of ethnic diversity on the cross country variation in efficiency. Two main findings emerge. First, barely 12% of the sample of countries under study makes an efficient use of public expenditure. Second, no matters the level of aggregation, ethnic polarization is positively associated with higher efficiency. In contrast, ethnic fractionalization does have a negative or at the best no effect on efficiency, especially at the finest level of disaggregation.
    Date: 2015–06–08
  5. By: Alireza Ermagun; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This study disentangles the impact of financial and physical dimensions of transit service operators on net transit accessibility for 46 of the 50 largest metropolitan areas in the United States. To investigate this interaction along with the production efficiency of transit agencies, two types of analysis are used: a set of linear and quadratic regressions and a data envelopment analysis. We find that vehicle revenue kilometers and operational expenses play a pivotal role in enhancing the accessibility to jobs by transit. The bivariate linear regression models indicate a 1% increase in operational expenses and vehicle revenue kilometers increase the number of jobs that can be reached within 30 minutes by 0.96 and 0.95%, respectively. The results of the quadratic functional form, also, show transit services may have both increasing and decreasing accessibility returns to scale depending on system size, and the results are sensitive to the model used. Overall, the highest system efficiency (access produced per input) is found in the New York, Washington, and Milwaukee metropolitan areas, while Riverside, Detroit, and Austin perform with the lowest efficiency.
    Keywords: Public transit; Accessibility; Envelope of output; Returns to scale; Metropolitan area
    JEL: C31 D24 L92 O18 R14 R41 R42 R48
    Date: 2015
  6. By: Brown, J. David (U.S. Census Bureau); Earle, John S. (George Mason University); Shpak, Solomiya (George Mason University); Vakhitov, Volodymyr (Kyiv School of Economics)
    Abstract: This paper estimates the relative multi-factor productivity (MFP) of privatized and state-owned enterprises using a long panel on all initially state-owned manufacturing firms in Ukraine. The large size and length of the time series in the data permit us to track the privatization process and to estimate the impact of privatization within industry-year cells and with controls for firm fixed effects and trends. Results with these methods imply an average 5-10% relative MFP for majority privatized versus state-owned firms. The gap increases with time since privatization, reaching about 15-17% five years after privatization. It also increases with calendar time although recent privatizations are associated with smaller relative MFP. We find no evidence of "sequencing" of privatization based on 1992 relative MFP, but the data suggest a higher survival rate for privatized versus state firms and one that is more closely linked to 1992 MFP. The results also imply that MFP gains from privatization are decreasing in pre-privatization MFP. The relatively few cases in which foreign investors take control result in much higher relative MFP, 22-40% on average, compared to domestic private ownership, but the gap is much lower when the foreign source country is "offshore" – an indirect channel for Ukrainian nationals – and it is also lower when the source is Russia. Privatization of 100% ownership has much larger effects than partial privatization of either minority or majority stakes, ownership structures that have largely disappeared since the early 2000s, as Ukraine has sold off remaining shares. Nevertheless, our database contains more than 1000 majority state-owned manufacturing firms as of 2013 that could be considered for privatization in the future.
    JEL: D24 G34 L33 P31
    Date: 2015–08
  7. By: Noélie Delahaie (IRES - Institut de Recherches Economiques et Sociales - IRES); Richard Duhautois (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS, CEE - Centre d'études de l'emploi - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)
    Abstract: Economic theory presents two main views on the effect of profit-sharing on wages. First, profitsharing may substitute for base wages and have a neutral effect on total compensation. Second, it may be interpreted as an “efficiency wage” that increases total compensation. Existing empirical literature does not allow a determination of which of these two arguments is valid. This paper attempts to tackle this issue in the case of France for the 2000-2007 period. Based on a differencein-differences selection model, our results suggest that profit-sharing has a neutral effect on total compensation. Several years after its implementation within firms, profit-sharing lowers base wages, which are offset by profit-sharing bonuses.
    Date: 2015
  8. By: Findik, Derya (Middle East Technical University); Tansel, Aysit (Cornell University)
    Abstract: This study examines the impact of firm resources on ICT adoption by the Turkish business enterprises using firm level data. ICT adoption is measured at three levels: The first level is technology ownership. The second level is the presence of enterprise resource planning (ERP) and customer resource management (CRM), and the third level is the use of narrowband and broadband technologies. The effects of the three main features of each technology level, which are complementarity, specificity, and the complexity, are analyzed by using firm level data in Turkey. This study has three main conclusions. As for the complementarity, firm's resources play an important role in the adoption of technology while advancing from single technology to the multiple ones. Further, in the use of specific technologies such as ERP and CRM, firm resources generate differential effects between those technologies. Finally, the use of simple technologies does not require the same amount of firm resources as complex technologies.
    Keywords: adoption, ICT, complementarity, specificity, complexity
    JEL: D22 D24 O30 O47
    Date: 2015–08

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