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on Efficiency and Productivity |
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Issue of 2015‒11‒21
fifteen papers chosen by |
| By: | Ligia Alba Melo-Becerra (Banco de la República de Colombia); Antonio José Orozco-Gallo (Banco de la República de Colombia) |
| Abstract: | This paper assesses the efficiency of crop and livestock production in Colombia by using a sample of 1,565 households. The study considers households located in different production systems which differ in geography, climate and soil types. These conditions affect technical efficiency and thus render analysis under the same production frontier as inadequate. For this reason, stochastic metafrontier techniques are preferred, allowing the estimation of technical efficiency within each production system and between production systems in relation to the sector as a whole. Results suggest that households in some production systems could be benefiting from better production conditions due to advantages in the availability of natural resources and climate as well as to more favorable socio-economic conditions. Additionally, we found that, in all systems, households with higher production have higher measures of technical efficiency. Thus, significant gains could be achieved in the sector through measures that contribute to improve the efficiency of households within their production systems and by policies that help reduce the technology gap in relation to the meta-frontier. These policies would bring positive impacts on the quality of life of small farmers and on the productivity of the sector. Classification JEL: C14, Q12, D24 |
| Keywords: | Stochastic frontier analysis, technical efficiency, metafrontier production function, Colombia |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:914&r=eff |
| By: | Bairagi, Subir |
| Abstract: | This paper estimates productivity and efficiency of ten major microfinance institutions (MFIs) in Bangladesh using the stochastic frontier output distance function approach. Cobb-Douglas specification is applied with two outputs and four inputs for the period 2003-2011. Analysis reveals that on an average the rate of total factor productivity (TFP) growth in MFIs was 2.6%, mostly due to technological progress (2.5%), while the average efficiency change was only 0.1%. The mean efficiency of microfinance firms was 0.765, which implies that MFIs could have produced 23.5% more with the current levels of input bundles if they had been fully efficient. The determinants of firms’ inefficiencies are cost per borrower and operational self-sufficiency, significant at the 1% level. The smaller MFIs (RDRS, Shakti, SSS, and JCF) define better frontiers than others, while bigger MFIs (BRAC, ASA, and GB) have been catching up faster than others. |
| Keywords: | Stochastic frontier output distance, total factor productivity (TFP), microfinance institutions (MFIs) |
| JEL: | G21 Q12 Q14 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67917&r=eff |
| By: | Johannes W. Fedderke and Yang Liu |
| Abstract: | This paper examines the nature and sources of productivity growth in South African manufacturing sectors, in international comparative perspective. On panel data estimations, we find that the evidence tends to support Schumpeterian explanations of productivity growth for a panel of countries including both developed and developing countries, and a panel of the South African manufacturing sectors. By contrast, for a panel of OECD manufacturing sectors, semi-endogenous productivity growth is supported. However, we also report evidence that suggests that sectors are not homogeneous. For this reason time series evidence may be more reliable than panel data. Time series evidence for South Africa suggests that prospects for the sustained productivity growth associated with Schumpeterian innovation processes, is restricted to a narrow set of sectors, strongly associated with the chemicals and related sectors, machinery and transport equipment, and basic iron and steel sectors. Semi-endogenous growth finds much weaker support. For the OECD manufacturing sectors, both semi-endogenous and Schumpeterian growth finds support, with semi-endogenous growth more prevalent than for South African manufacturing. The sustained productivity growth associated with Schumpeterian growth frameworks is relatively rare everywhere. |
| JEL: | O47 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:554&r=eff |
| By: | Christopher F Baum (Boston College; DIW Berlin); Hans Lööf (Royal Institute of Technology, Stockholm); Pardis Nabavi (Royal Institute of Technology, Stockholm) |
| Abstract: | This paper examines variations in productivity growth due to innovation within a given location and between different locations. Implementing a dynamic panel data approach on Swedish micro data, we test the sepa- rate and complementary effects of internal innovation efforts and spillovers from the local milieu. Measuring the potential knowledge spillover by ac- cess to knowledgeintensive services, the estimation results produce strong evidence of differences in the capacity to benefit from external knowledge among persistent innovators, temporary innovators and non-innovators. The results are consistent regardless of whether innovation efforts are measured in terms of the frequency of patent applications or the rate of R&D investment. |
| Keywords: | Innovation, spillovers, TFP growth, panel data |
| JEL: | C23 O31 O32 |
| Date: | 2015–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:885&r=eff |
| By: | Diego Restuccia (University of Toronto); Pedro Bento (West Virginia University) |
| Abstract: | We construct a new dataset using census, survey, and registry data from hundreds of sources to document a clear positive relationship between aggregate productivity and average establishment size in manufacturing across 134 countries. We rationalize this relationship using a standard model of reallocation among production units that features endogenous entry and productivity investment. The model connects small operational scales to the prevalence in poor countries of correlated distortions (the elasticity between wedges and establishment productivity). The model also rationalizes the finding in poor countries of low establishment-level productivity and low aggregate productivity investment. A calibrated version of the model implies that when correlated distortions change from 0.09 in the U.S. to 0.5 in India, establishment size and productivity fall by a factor of more than five, and aggregate productivity by a factor of three. These substantial size and productivity losses are large compared to the existing literature and more in line with actual data for the differences in size and productivity between India and the United States. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1391&r=eff |
| By: | Matthew Calver; Roland Tusz; Erika Rodrigues |
| Abstract: | There were slightly more than 300,000 interprovincial migrants in Canadain 2014, representing 0.85 per cent of the population. Interprovincial migrationprovidessignificant economic benefits by reallocating labour from low-productivity regions with high unemployment to high productivity regions with low unemployment.A previous report released by the Centre for the Study of Living Standards estimated the impact of net interprovincial migration on aggregate output and productivity between 1987 and 2006.This study uses the same basicmethodology to provide updated estimates, which is extendedto estimatethe long-term effects.We estimatethat interprovincial migration raised GDP by $1.23 billion (chained 2007 dollars) in 2014, or 0.071 per cent of GDP. This may seem like a small amount, but migration flows are often persistent. We estimate that cumulative net migration flows over the 1987-2014 period increased GDP by $15.8 billion dollars(0.9 per cent of GDP) in 2014and generatedcumulative benefits of $146 billionover the 1987-2014 period.Mostof these gains can be attributed tomigration toAlbertaand British Columbia, which areby far the largest destinationsof net interprovincial migration. |
| Keywords: | Migration, Interprovincial Migration, Canada, Output, Productivity, Output Growth, Productivity Growth |
| JEL: | O15 R23 D24 J24 N32 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1519&r=eff |
| By: | Belke, Ansgar; Haskamp, Ulrich; Setzer, Ralph |
| Abstract: | The financial crisis affected regions in Europe in a different magnitude. This is why we examine whether regions which incorporate banks with a higher intermediation quality grow faster in 'normal' times and are more resilient in 'bad' ones. For this purpose, we measure the intermediation quality of a bank by estimating its profit and cost efficiency while taking the changing banking environment after the nancial crisis into account. Next, we aggregate the efficiencies of all banks within a NUTS 2 region to obtain a regional proxy for financial quality in twelve European countries. Our results show that relatively more profit efficient banks foster growth in their region. The link between financial quality and growth is valid in 'normal' and in 'bad' times. These results provide evidence to the importance of swiftly restoring bank protability in euro area crisis countries through addressing high non-performing loans ratios and decisive actions on bank recapitalization. |
| Abstract: | Die Finanzkrise hat sich unterschiedlich stark auf Regionen in Europa ausgewirkt. Aus diesem Grund untersuchen wir, ob Regionen, in denen sich Banken befinden, welche sich durch eine hohe Qualität als Finanzintermediär auszeichnen, in normalen Zeiten schneller wachsen und in Krisenzeiten widerstandsfähiger sind. Um ein Maß für die Qualität einer Bank als Finanzintermediär zu erhalten, schätzen wir die Profit- und Kosteneffizienz unter Berücksichtigung der sich nach der Finanzkrise ändernden wirtschaftlichen und regulatorischen Bedingungen für den Bankensektor. Als nächstes aggregieren wir die Effizienzwerte für alle Banken in einer NUTS-2 Region. Dadurch erhalten wir ein regionales Maß für die Qualität von Banken als Finanzintermediär in zwölf europäischen Ländern. Unser Ergebnis ist, dass es wachstumsförderlich ist, wenn in einer Region Banken operieren, die vergleichsweise profiteffizient sind. Diese Beziehung zwischen der Qualität als Finanzintermediär und Wachstum ist zudem auch in Krisenzeiten vorhanden. Das bedeutet, dass es wichtig ist, die Bankenprofitabilität in europäischen Krisenstaaten wiederherzustellen. Dies kann dadurch gelingen, dass man den Anteil an notleidenden Krediten verringert und die Banken rasch rekapitalisiert. |
| Keywords: | bank efficiency,financial development,regional growth,europe |
| JEL: | G21 O16 O47 O52 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:586&r=eff |
| By: | Pierola Castro,Martha D.; Fernandes,Ana Margarida; Farolec,Thomas |
| Abstract: | Using highly disaggregated firm-level customs transaction data for imports and exports in Peru over the 2000?2012 period, this paper explores the relationship between imports of intermediate inputs and firm export performance. The paper shows that greater use, variety, and quality of imported intermediate inputs is significantly correlated with higher exports, faster export growth, greater diversification of export markets, and higher quality exports (as measured by relative unit prices) at the firm level. This relationship is robust and persistent to controls for unobserved firm heterogeneity and year fixed effects. The use of imported inputs is also associated with higher productivity at the firm level. Considering the relationship between specific trade policy measures and the import performance of those exporters that are direct importers, the analysis shows that those exposed to higher tariffs and nontariff measures import less in total and exhibit lower import variety. The use of the advanced clearance procedure as the modality to clear customs for imports is favorable to the import performance of exporter-importers, in that the users of the modality import more and import a more diversified bundle of inputs than those that do not use it, even after controlling for firm size. |
| Keywords: | Free Trade,Economic Theory&Research,Trade Policy,Debt Markets,Currencies and Exchange Rates |
| Date: | 2015–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7492&r=eff |
| By: | Francesco Amodio (Universitat Pompeu Fabra); Michele Di Maio (University of Naples) |
| Abstract: | This paper investigates the effect of conflict on firms' output value and input misallocation in the context of Palestine during the Second Intifada. Using a unique establishment-level dataset, we compare firms' outcomes and input usage over time across districts experiencing differential changes in conflict intensity. We show how conflict diminishes the total and per-worker value of firms' output through the distortions it generates in firms' access to input markets. In particular, lack of access to the market for imported material inputs leads firms to adjust input usage accordingly, substituting domestically produced materials for imported ones. We also empirically identify the relative amount of conflict-induced input distortions. Furthermore, we find that conflict affects dis-proportionally more those sectors which were more intensive in imported materials and had higher average output value in pre-conflict years. Conflict is thus shown to be particularly harmful for the most productive sectors of the economy. |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:379&r=eff |
| By: | JINJI Naoto; SAKAMOTO Hiroaki |
| Abstract: | Using Japanese firm-level data, we investigate the firm-level relationship between export status and environmental performance in terms of carbon dioxide (CO₂) emissions intensity and energy intensity. As in previous studies, we first find that exporting firms have significantly lower CO₂ emissions/energy intensity. We then investigate the effects of exporting on CO₂ emissions/energy intensity by employing the propensity score matching (PSM) method, and find that the effects significantly vary across industries. Whereas exporting significantly improves environmental performance in most industries, exporting actually increases CO₂ emissions/energy intensity in the iron & steel industry. This finding suggests that the effect of exporting varies across industries. |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15130&r=eff |
| By: | Bibek Adhikari (Department of Economics, Tulane University) |
| Abstract: | Theoretical prediction that a value-added tax (VAT) does not distort firms' production decisions has led to its rapid adoption worldwide, but there is surprisingly little empirical evidence. This paper provides one of the first causal estimates of the efficiency gains of introducing a VAT in a worldwide sample of countries. I compute the counterfactual trajectory of GDP per worker in the absence of a VAT using synthetic controls, which is a weighted average of countries without a VAT that closely resembles the economic structure and outcomes of the country with a VAT for several years before the adoption of a VAT. In line with previous studies, I find that the VAT has, on average, positive and economically meaningful impact on economic efficiency. However, this result is driven by richer countries only. There is no significant impact of the VAT on poorer countries. I find similar results when estimating the impact of the VAT on total factor productivity and capital stock per worker, two important channels through which a VAT affects economic efficiency. This paper provides evidence that a success of VAT almost entirely depends on the initial level of income of a country, which, in result, determines whether a country is able to properly design and enforce a VAT. The findings are robust across a series of placebo studies and sensitivity checks. |
| Keywords: | value-added tax, economic efficiency, synthetic control methods |
| JEL: | H20 H25 O40 E6 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:tul:wpaper:1524&r=eff |
| By: | Iacovone,Leonardo; Sanchez Bayardo,Luis Fernando; Sharma,Siddharth |
| Abstract: | This paper examines whether labor productivity converged across Peru?s regions (?departments?) during 2002-12. Given the large differences in labor productivity across the regions of Peru, such convergence has the potential to raise aggregate productivity and incomes, and also reduce regional inequalities. The paper finds that labor productivity in the secondary sector (especially manufacturing) and the mining sector has converged across Peruvian departments. The paper does not find robust evidence for labor productivity convergence in agriculture and services. These patterns are consistent with recent cross-country evidence and with the hypothesis that productivity convergence is more likely in sectors with greater scope for market integration, because of the effects of competition and knowledge flows. The convergence in labor productivity within manufacturing and mining has been sufficient to lead to convergence in aggregate labor productivity across departments. But because services and agriculture continue to employ the majority of workers in Peru, aggregate convergence is slower than that within manufacturing. The paper also finds that poverty rates are not converging across departments. The limited impact of labor productivity convergence on poverty could be tied to the facts that not all sectors are experiencing productivity convergence, poorer people are employed in sectors where convergence has been slower (such as agriculture), and there is very little labor reallocation toward converging sectors (such as manufacturing). |
| Keywords: | Labor Markets,Trade and Regional Integration,Economic Theory&Research,Regional Economic Development,Labor Policies |
| Date: | 2015–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7499&r=eff |
| By: | Bjuggren, Per-Olof (The Ratio institute and Jönköping School of Economics.); Nordström, Louise (louise.nordstrom@jibs.hj.se); Palmberg, Johanna (Entreprenörskapsforum and Royal School of Technology (KTH)) |
| Abstract: | Female leadership is an expanding area of research. It is a popular topic discussed frequently in both academia and in the popular press. Despite this, comparative studies of the impact of female leadership on firm level performance between family and non-family firms are rare. The present study has the ambition to fill this gap. This paper investigates female leadership in family firms and how it affects firm profitability. A unique database of ownership and leadership in private Swedish firms makes it possible to analyze difference in firm performance due to female leadership in family and non-family firms. Even though much has been written regarding the role of women in family firms we do not know so much about how female leadership in family firms affect the profitability of the firm. The analysis indicates that female leadership makes much more of a positive difference for performance in family firms. The effect is negative in non-family firms. |
| Keywords: | Family firms; Female Representation; Financial Performance |
| JEL: | G34 J31 L25 |
| Date: | 2015–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0259&r=eff |
| By: | Ali, Muhammad |
| Abstract: | This study seeks to investigate the internal and external determinants of the Pakistan banking sector, specifically after the recent financial crisis of 2008. The sample data comprises of total 26 banks, which include 17 conventional, 5 Islamic and 4 public banks. The selected sample covers the period of five years from 2009 to 2013. A balanced panel data regression model has been used and considered return on assets (ROA) and return on equity (ROE) as an alternative of bank's profitability. The results of the study suggest that bank’s profitability is significantly affected by its internal determinants while external determinants are insignificant. We find operating efficiency, liquidity, non-performing loans to total assets and real GDP has negative impact, whereas financial risk, gearing ratio, asset management, bank size, deposits, loans to total assets and inflation show positive impact on the assets side. On the other side, operating efficiency, gearing ratio, asset management, liquidity, deposits and real GDP have a positive impact while financial risk, bank size, asset quality and inflation exert negative impact on the equity side. During the study period, findings suggest that the Pakistan banking industry has managed well to avoid significant impact of external factors like inflation and GDP over profitability while efficient management is required to improve internal factors to be more profitable. |
| Keywords: | Banks, Assets, Operating costs, Profits, Assets size, Bank-specific determinants, Profitability. |
| JEL: | E0 E2 E4 |
| Date: | 2015–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67987&r=eff |
| By: | Facundo Albornoz (Department of Economics, Universidad de San Andres & CONICET); Melina Furman (Universidad de San Andres & CONICET); María Eugenia Podestá (Universidad de San Andres); Paula Razquin (Universidad de San Andres); Pablo Ernesto Warnes (Department of Economics, Universidad de San Andres) |
| Abstract: | In this work we examine the differences in terms of outcomes between students who attend public and private schools in Argentina. To do this we use the results from the PISA standardized test exams conducted in the years 2009 and 2012 in Argentina. These exams asses 15 year old student's performance in Mathematics, Reading and Science Literacy. PISA also collects data on each student assessed, on his environment and on the type of school he assists. In Argentina students who attend private schools achieve on average significantly higher outcomes in the PISA exams than their counterparts in public schools.We find that in 2009 this difference can be explained by very strong disparities in educational resources between both types of schools. However, in 2012 these disparities in educational resources are reduced considerably, but the difference in outcomes persists.We find evidence that suggests that this persistence can be explained by the unchanging differences in socio-economic composition between both types of schools, indicating that the difference in outcomes between private and public schools may be explained at least in part by peer effects. |
| Keywords: | outcomes, public school, private school |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:sad:wpaper:123&r=eff |