nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒10‒17
eleven papers chosen by

  2. Explaining total factor productivity growth in German dairy farming: A Malmquist Index Analysis By Allendorf, Joseph
  3. Product and labour market regulations, production prices, wages and productivity By Cette G.; Lopez J.; Mairesse J.
  4. Knowledge Spillovers through FDI and Trade: Moderating Role of Quality-Adjusted Human Capital By Muhammad Ali; Uwe Cantner; Ipsita Roy
  5. Automation, Performance and International Competition: Firm-level Comparisons of Process Innovation By Kromann, Lene; Sørensen, Anders
  6. Exporting firm dynamics and productivity growth: Evidence from China By Xiaobing, Huang; Xiaolian, Liu
  7. Did closures do any good? Labour productivity, mine dynamics, and rationalization in interwar Ruhr coal-mining By Tobias A. Jopp; Martin Uebele
  9. Is Organic Agriculture and Fair Trade Certification a way out of Crisis? Evidence from Black Pepper Farmers in India By Parvathi, Priyanka; Waibel, Hermann
  10. Comparing micro-evidence on rent sharing from three different approaches By Dobbelaere S.; Mairesse J.
  11. Carbon dioxide emission standards for US power plants: An efficiency analysis perspective By Hampf, Benjamin; Rødseth, Kenneth Løvold

  1. By: Allendorf, Joseph; Hirsch, Stefan
    Abstract: This paper presents factor productivity growth measures in the European food industry over the period 2001-2008 by using data envelopment analysis. The Malmquist productivity growth indicator is used to identify the contributions of technical change, technical efficiency change and scale change. The study contributes to the literature by analysing the dairy and meat processing industries in eight European countries based on a sample of 4,584 firms. Results will underline differences between these countries concerning the productivity growth measures as well as differences between different company sizes. Further research should include an impulse response analysis for the effect of investment spikes.
    Keywords: Total factor productivity, Malmquist-Index, dairy industry, meat industry, Industrial Organization, Productivity Analysis,
    Date: 2015
  2. By: Allendorf, Joseph
    Abstract: This study assesses the total factor productivity (TFP) growth for a sample of North-Rhine Westphalian dairy farms over the periods 2007-2014 and provides first-hand evidence of productivity growth of these farms before the milk market is liberalised. As first step a non-parametric Malmquist approach is therefore used to identify the productivity indices. The second step includes a panel regression to shed light on determinants of TFP growth. Expected results will show how TFP growth is influenced by their core components and which exogenous drivers affect the productivity growth.
    Keywords: Total factor productivity, Malmquist-Index, dairy farms, DEA, Farm Management, Production Economics, Productivity Analysis,
    Date: 2015
  3. By: Cette G.; Lopez J.; Mairesse J. (UNU-MERIT)
    Abstract: This study is an attempt to evaluate the effects of product and labour market regulations on industry productivity through their various impacts on changes in production prices and wages. In a first stage, the estimation of a regression equation on an industrycountry panel, with controls for countryindustry and countryyear fixed effects, show that multi-factor productivity is negatively and significantly influenced by both indicators of industrial prices from same industry and weighted average of industrial prices from other industries, and by indicators of country wages weighted by industry labour shares for low and high skilled workers. In a second stage, an economic policy simulation of the implications of these results on the basis of their calibration by the OECD product and labour market anti-competitive regulation indicators suggests that nearly all countries could expect sizeable gains in multifactor productivity from deregulation reforms.
    Keywords: Single Equation Models; Single Variables: Models with Panel Data; Longitudinal Data; Spatial Time Series; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices; Regulation and Industrial Policy: General; Institutions and Growth; Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence;
    JEL: C23 L16 L50 O43 O47
    Date: 2015
  4. By: Muhammad Ali (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Ipsita Roy
    Abstract: The paper extends the findings of Coe and Helpman (1995) model of R&D spillovers by considering foreign direct investment (FDI) as a channel for knowl- edge spillovers in addition to imports. Deeper insights on the issue are provided by examining inter-relationship between knowledge spillovers from imports and inward FDI. Moreover, human capital is added to the discussion as one of the appropri- ability conditions for knowledge spillovers. However, in comparison to most studies that rely on physical, monetary or indicator-based measures of human capital, the current study proposes a quality-based indicator of human capital that allows for better comparison of human capital stock across countries. Quality adjusted hu- man capital is derived by weighting human capital data based on average years of schooling using journal publications in science and technology and patent ap- plications. Using cointegration estimation method on 20 European countries from 1995 to 2010, the direct effects of FDI-related as well as import-related spillovers on domestic productivity are confirmed. Furthermore, a strong complementary rela- tionship is found between knowledge spillovers through the channels of imports and inward FDI implying strong joint effect on domestic productivity. When consider- ing quality-adjusted human capital, countries with better human capital are found to benefit not only from direct productivity effects, but also from absorption and transmission of international knowledge spillovers through imports and inward FDI. Finally, technological distance with the frontier does not appear to play a role in the absorption of knowledge spillovers.
    Keywords: Knowledge spillovers, foreign direct investment, international trade, human capital
    JEL: F14 I25 J24
    Date: 2015–10–08
  5. By: Kromann, Lene (Department of Economics, Copenhagen Business School); Sørensen, Anders (Department of Economics, Copenhagen Business School)
    Abstract: This paper presents new evidence on tradeinduced automation in manufacturing firms using unique data combining a retrospective survey that we have assembled with register data for 2005-2010. In particular, we establish a causal effect where firms that have specialized in product types for which the Chinese exports to the world market has risen sharply invest more in automated capital compared to firms that have specialized in other product types. We also study the relationship between automation and firm performance and find that firms with high increases in scale and scope of automation have faster productivity growth than other firms. Moreover, automation improves the efficiency of all stages of the production process by reducing setup time, run time, and inspection time and increasing uptime and quantity produced per worker. The efficiency improvement varies by type of automation.  
    Keywords: automation; productivity; production theory; efficiency
    JEL: D24 L11 L22 O33
    Date: 2015–10–01
  6. By: Xiaobing, Huang; Xiaolian, Liu
    Abstract: This paper analyzes the reallocation effects generated by dynamics of exporting firms adopting DOPD productivity decomposition. The authors select the exporting firm samples from the dataset of Annual Surveys of Industrial Production for the period from 2005 to 2009. The study indicates that the surviving ability of exporters is weak, and that firm turnover is turbulent. The reallocation effects generated by firm dynamics contributes almost half of productivity improvement. It mainly originates from between-firm effects, rather than firm turnover effects, with the entry effects being negative. This suggests that there is market misallocation, which maybe caused by uneven regional development, industrial monopoly or state-owned enterprises.
    Keywords: exporting firms,firm dynamics,productivity growth,reallocation effect,China
    JEL: F14 D40 D22 D24
    Date: 2015
  7. By: Tobias A. Jopp (History Department, Tsinghua University); Martin Uebele (University of Regensburg)
    Abstract: Over the later 1920s and up to the mid-1930s, German coal-mining saw an exceptional surge in labour productivity led primarily by the Ruhr coalminesÕ performance. It is a commonly accepted view that the economy-wide Ôrationalization boomÕ between currency stabilization and the depression years explains that pattern. We test the related hypothesis that Ônegative rationalizationÕ in the form of a massive wave of mine closures over 1924-29 played a significant role in pushing aggregate labour productivity in the Ruhr coal district up to new levels. Based on an original dataset on the population of Ruhr coalmines, the sources of productivity change over the extended period 1913-38 are identified using the decomposition method of Foster, Haltiwanger and Krizan (2001). Results suggest that labour productivity in Ruhr coal-mining was driven to a large extent by improvements at individual mines attributable to the intensified mechanization of underground operations. Closures regularly raised aggregate productivity in the year after the closure had been conducted; closures also pushed productivity by way of ceding resources to high(er) productivity surviving mines over gradual shut-down. However, on the whole, turnover-effects were marginal compared to the effects stemming from the producer dynamics among surviving mines. Thus, the practical productivity implications of mine closures over the rationalization boom are negligible and still overrated in the relevant literature. These findings call for testing more rigorously the relative importance of Ônegative rationalizationÕ in the form of plant closures in other branches of the Weimar economy.
    Keywords: closures, coal-mining, Germany, labour productivity, productivity decomposition, rationalization
    JEL: L11 N14 N54
    Date: 2015–10
  8. By: Ayenew, Habtamu Yesigat; Sauer, Johannes; Abate-Kassa, Getachew; Schickramm, Lena
    Abstract: This paper systematically investigates the role of the quality of rural employment on agricultural production efficiency in developing countries, taking Ethiopia and Tanzania as cases. We use data of the Living Standards Measurement Study-Integrated Surveys on Agriculture (LSMS-ISA) collected in 2011. In the analysis, an output-oriented distance function approach that accounts for different technological, demographic, socio-economic, institutional and quality of rural employment indicators is applied. The findings of the analysis support the idea that the quality of rural employment could be seen as an effective element of rural development policies and strategies in sub-Saharan Africa. Better integration of quality rural employment aspects (creation of jobs, improving quality of jobs, promoting public employment programs etc.) contribute to improve technical efficiency in agricultural production.
    Keywords: Quality of rural employment, distance function, efficiency, poverty reduction, Food Security and Poverty, Labor and Human Capital, Productivity Analysis,
    Date: 2015
  9. By: Parvathi, Priyanka; Waibel, Hermann
    Abstract: This article examines the impact of a joint organic and fair trade certification on productivity and material costs based on data collected from 277 smallholder black pepper farmers in India. We estimate a multinomial endogenous switching regression along with a counterfactual analysis to ascertain the effects of certification. Our results indicate that certified farmers have higher yields. Counterfactual study shows that conventional farmers can increase their yields by 35% with less than half the costs by venturing into organic and fair trade networks. Further, treatment and transitional heterogeneity effects reveal that a joint organic and fair trade certification has the strongest effect on productivity for the less successful farmers.
    Keywords: Impact evaluation, Eendogenous Switching Regression, Organic Farming, Fair Trade, Crop Production/Industries, Environmental Economics and Policy, Productivity Analysis,
    Date: 2015
  10. By: Dobbelaere S.; Mairesse J. (UNU-MERIT)
    Abstract: Empirical labor economists have resorted to estimating the responsiveness of workers wages on firms ability to pay to assess the extent to which employers share rents with their employees. This paper compares this labor economics approach with two other approaches that rely on standard micro production data only the productivity approach for which estimates of the output elasticities of labor and materials and data on the respective revenue shares are needed and the accounting approach which boils down to directly computing the extent of rent sharing from firm accounting information. Using matched employer-employee data on 60,294 employees working in 9,849 firms over the period 1984-2001 in France, we quantify industry differences in rent-sharing parameters derived from the three approaches. We find a median absolute extent of rent sharing of about 0.30 using either the productivity or the accounting approach. Only exploiting firm-level information brings this median rent-sharing parameter down to 0.16 using the labor economics approach. Controlling for unobserved worker ability further reduces the median absolute extent of rent sharing to 0.08. Our analysis makes clear that the three different approaches face important trade-offs. Hence, empirical economists interested in establishing that profits are shared should select the appropriate approach based on the particular research question and on the data at hand.
    Keywords: Single Equation Models; Single Variables: Models with Panel Data; Longitudinal Data; Spatial Time Series; Firm Behavior: Theory; Wage Level and Structure; Wage Differentials; Trade Unions: Objectives, Structure, and Effects;
    JEL: C23 D21 J31 J51
    Date: 2015
  11. By: Hampf, Benjamin; Rødseth, Kenneth Løvold
    Abstract: On June 25, 2013, President Obama announced his plan to introduce carbon dioxide emission standards for electricity generation. This paper proposes an efficiency analysis approach that addresses which mission rates (and standards) would be feasible if the existing generating units adopt best practices. A new efficiency measure is introduced and further decomposed to identify different sources' contributions to emission rate improvements. Estimating two Data Envelopment Analysis (DEA) models - the well-known joint production model and the new materials balance model - on a dataset consisting of 160 bituminous-fired generating units, we find that the average generating unit's electricity-to-carbon dioxide ratio is 15.3 percent below the corresponding best-practice ratio. Further examinations reveal that this discrepancy can largely be attributed to non-discretionary factors and not to managerial inefficiency. Moreover, even if the best practice ratios could be implemented, the generating units would not be able to comply with the EPA's recently proposed carbon dioxide standard.
    Keywords: Emission standards,Carbon dioxide emissions,Materials balance condition,Electricity generation,Weak G-disposability,Data Envelopment Analysis
    JEL: Q53 Q48 D24
    Date: 2014

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