nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2015‒12‒20
thirteen papers chosen by

  1. Sources of energy productivity change in China during 1997-2012: A decomposition analysis based on the Luenberger productivity indicator By Ke Wang; Yi-Ming Wei
  2. TFP, Labor Productivity and the (Un)observed Labor Input: Temporary Agency Work By Alexander Schiersch
  3. Productivity Growth and Convergence: Revisiting Kumar and Russell (2002) By Kelly D.T.Trinh; Valentin Zelenyuk
  4. The dynamic relationship between bank asset diversification and efficiency: Evidence from the Chinese banking sector By Kai Du; Andrew C. Worthington; Valentin Zelenyuk
  5. Environmental Policies, Innovation and Productivity in the EU By Roberta De Santis; Cecilia Jona Lasinio
  6. Policies for Productivity Growth By Chang-Tai Hsieh
  7. An Empirical Estimation of Asia's Untapped Regional Integration Potential Using Data Envelopment Analysis By Naeher, Dominik
  8. Off-shoring, specialization and R&D* By Bournakis, Ioannis; Vecchi, Michela; Venturini, Francesco
  9. Productivity, size and exporting dynamics of firms: Evidence for Mexico By Cardoso-Vargas, Carlos Enrique
  10. Efficiency and Risk Convergence of Eurozone Financial Markets By Wild, Joerg
  11. Positive and Negative Effects of Financial Development on Export Prices By ; Volodymyr Lugovskyy
  12. Does the Extent of Per-Case Payment System Affect Hospital Efficiency? Evidence from the Italian NHS By Cavalieri, M.;; Guccio, C.;; Lisi, D.;; Pignataro, G.;
  13. A Vision of the Growth Process in a Technologically Progressive Economy:the United States, 1899-1941. By Bakker, Gerben; Crafts, Nicholas; Woltjer, Pieter

  1. By: Ke Wang; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)
    Abstract: Given that different energy inputs play different roles in production and that energy policy decision making requires an evaluation of productivity change in individual energy input to provide insight into the scope for improvement of the utilization of specific energy input, this study develops, based on the Luenberger productivity indicator and data envelopment analysis models, an aggregated specific energy productivity indicator combining the individual energy input productivity indicators that account for the contributions of each specific energy input towards energy productivity change. In addition, these indicators can be further decomposed into four factors: pure efficiency change, scale efficiency change, pure technology change, and scale of technology change. These decompositions enable a determination of which specific energy input is the driving force of energy productivity change and which of the four factors is the primary contributor of energy productivity change. An empirical analysis of China¡¯s energy productivity change over the period 1997-2012 indicates that (i) China¡¯s energy productivity growth may be overestimated if energy consumption structure is omitted; (ii) in regard to the contribution of specific energy input towards energy productivity growth, oil and electricity show positive contributions, but coal and natural gas show negative contributions; (iii) energy-specific productivity changes are mainly caused by technical changes rather than efficiency changes; (iv) the Porter Hypothesis is partially supported in China that carbon emissions control regulations may lead to energy productivity growth.
    Keywords: Carbon emissions, Data envelopment analysis, Driving force, Input specific productivity indicator
    JEL: Q54 Q40
    Date: 2015–10–02
  2. By: Alexander Schiersch
    Abstract: The study focuses on the question of whether productivity estimates are biased due to the emergence of a new input that is usually omitted: temporary agency worker (TAW). The study analyzes labor productivity and TFP by means of a structural approach using a representative dataset of German manufacturing firms. The empirical results show, once TAW is taken into account, that: i) labor productivity in most manufacturing sectors is significantly lower; ii) average TFP differs significantly in most sectors; but iii) the coefficients for regular labor are not significantly different between estimations with and without TAW.
    Keywords: Temporary agency work, total factor productivity, labor productivity, omitted variable bias, structural productivity estimation
    JEL: D24 J24 L24 L60
    Date: 2015
  3. By: Kelly D.T.Trinh (School of Economics, The University of Queensland); Valentin Zelenyuk (School of Economics, The University of Queensland)
    Abstract: In this paper, we first investigate the replicability of the seminal work of Kumar and Russell (The American Economic Review, 2002) on productivity growth and convergence. We then compare Kumar and Russell’s results with estimates obtained using alternative approaches that allow for statistical noise (e.g., measurement error) in the data. When statistical noise is accounted for, some of the conclusions found in their study are confirmed and some are not. In particular, capital deepening still remains as the key factor driving the transformation of the distribution of labor productivity from a unimodal distribution into a bimodal distribution with a higher mean. However, we cannot confirm that capital deepening contributes to world convergence. We find instead statistical evidence that indicates efficiency change is a key driver of world convergence.
    Keywords: DEA, Stochastic DEA, Local Likelihood Estimator, Productivity Growth, Convergence
    JEL: O47 D24 C14 C44
    Date: 2015–12
  4. By: Kai Du (Entrepreneurship, Commercialization & Innovation Centre, University of Adelaide); Andrew C. Worthington (Department of Accounting, Finance and Economics, Griffith University); Valentin Zelenyuk (School of Economics, The University of Queensland)
    Abstract: In this paper, we investigate the impact of earning asset diversification on Chinese bank efficiency from 2006 to 2011. To do so, we adapt the Simar and Wilson (2007) Journal of Econometrics approach to allow for technology change over time. Regression results reveal that increasing the asset share of other earning assets (including securities and derivatives) is positively associated with bank efficiency. Decreasing the share of nonearning assets in total assets or increasing total equity has a similar impact. Our results also suggest that financial reforms currently being undertaken in China, including removing the regulatory requirement concerning the ratio of loans to deposits (a new draft amendment to the existing commercial banking law) and interest rate liberalization (a proposed draft amendment), are likely to induce a significant positive effect on bank efficiency.
    Keywords: Asset diversification; Data envelopment analysis; Truncated regression; Bootstrapping; Chinese banks
    JEL: D21 C13 G21 C44
    Date: 2015–12
  5. By: Roberta De Santis; Cecilia Jona Lasinio
    Abstract: In this paper we test the weak Porter hypothesis on a sample of European economies in the period 1995-2008. We focus on the channels through which tighter environmental regulation affects productivity and innovation. Our findings suggest that the “weak” Porter hypothesis cannot be rejected and that the choice of policy instruments is not neutral. In particular, market based environmental stringency measures seem to be the most suitable to stimulate innovation and productivity growth. Consistently with the strategic reorientation of environmental policies in the European Union since the end of the eighties, our results indicate that the EU might privilege market based instruments in order to meet more effectively the 2030 targets, especially through the channels of innovation and productivity enhancement.
    Keywords: environmental regulation, productivity, innovation, Porter hypothesis
    JEL: D24 Q50 Q55 O47 O31
    Date: 2015–11
  6. By: Chang-Tai Hsieh
    Abstract: Growth, investment and trade are the outcomes of the processes by which people with ideas start firms. But where does the productive capacity of firms come from? What are the barriers that prevent resources to flow to the firms with the greatest potential? Why is it that not all people that possess entrepreneurial talent choose to start firms? This paper reviews the micro forces that matter for aggregate productivity growth focusing on six issues: costs to reallocating labour and capital, the influence of firm ownership and political connections, informality, the allocation of talent across the economy, barriers to internal trade and the working of housing markets. It concludes that the forces are complex but matter tremendously for macro productivity and addressing them requires a wide combination of policies.<P>Le rôle des politiques publiques pour la croissance de la productivité<BR>La croissance, l’investissement et le commerce découlent de processus par lesquels les personnes qui ont des idées créent des entreprises. Mais d’où vient la capacité productive des entreprises? Quels sont les obstacles qui empêchent la circulation des ressources vers les entreprises ayant le plus grand potentiel? Comment se fait-il que toutes les personnes qui ont un talent d’entrepreneur ne choisissent pas de créer des entreprises? Ce document examine les facteurs microéconomiques qui influencent la croissance de la productivité agrégée en se concentrant principalement sur six d’entre eux : les coûts de la réaffectation du travail et du capital, l’influence de la propriété de l’entreprise et des relations politiques, l’informalité, la répartition des talents à travers l’économie, les obstacles au commerce intérieur et le fonctionnement des marchés du logement. La conclusion est que ces facteurs sont complexes mais ont un effet considérable sur la productivité au niveau macroéconomique et leur traitement exige l’application d’un large éventail de politiques publiques.
    Keywords: productivity, institutions, growth, institutions, productivité, croissance
    JEL: O4 O43 O47
    Date: 2015–12–14
  7. By: Naeher, Dominik (Goethe University Frankfurt)
    Abstract: This paper uses directed bilateral flow data on multiple dimensions of economic integration to construct a composite index of regional integration outcomes covering 19 regions in various parts of the world. As a first step, the multidimensional indicator is used to rank regions according to their current degree of regional integration, which allows for a direct comparison of Asia’s regional integration performance with those of other regions of the world. As a second step, the constructed indicator of regional integration outcomes is used as the output variable in a data envelopment analysis (DEA) to estimate Asia’s untapped regional integration potential.
    Keywords: Asia; composite index; data envelopment analysis; integration potential; regional integration
    JEL: F02 F10 F13 F15
    Date: 2015–08–21
  8. By: Bournakis, Ioannis; Vecchi, Michela; Venturini, Francesco
    Abstract: This paper investigates whether off-shoring promotes technological specialization by reallocating resources towards high-tech industries and/or stimulating within industry R&D. Using data for the US, Japan and Europe, our results show that material off-shoring promotes high-tech specialization through input reallocation between sectors, while service off-shoring favours technologically advanced production by increasing within-industry productivity, mainly via its positive impact on R&D. Conversely, we find that the increasing fragmentation of core production tasks, captured by narrow off-shoring, has adverse effects on technological specialisation, which suggests that this type of off-shoring is mainly pursued for cost-reduction motives.
    Keywords: High-tech specialization, off-shoring, productivity, R&D, OECD industries
    JEL: F14 L16 O30
    Date: 2015–12–15
  9. By: Cardoso-Vargas, Carlos Enrique
    Abstract: This paper examines the relationship between size and productivity on the export dynamics of a developing country like Mexico. The theoretical framework that guides the empirical evaluation is based on a simple model inspired by Melitz (2003). The results suggest that differences in size and productivity of firms indicate who will be able to internationalize and which markets can sell. According to estimates there are other feasible locations to replace the neighboring market of North America as the main buyer; however, the limiting factor for achieving this goal would be the low productivity of firms. In particular, it is that if transport costs are doubled, as is expected in destinations beyond the area of North America, would imply an increase in productivity of the firms of at least 9%. Finally, we find that the financial crisis caused a selection effect with respect to firms with higher productivity, while those firms that reported very low levels of productivity ceased its export activities
    Keywords: Productivity, international trade, heterogeneous firms
    JEL: D22 D24 F14
    Date: 2015–07–09
  10. By: Wild, Joerg
    Abstract: This paper discusses beta and sigma convergence of commercial, savings, and cooperative banks in the Eurozone from 1999 to 2012. For this purpose, concepts of the growth and efficiency convergence literature are consulted and GMM, fixed effects models, and OLS are applied. Convergence is analyzed by calculating two efficiency metrics – data envelop- ment analysis (DEA) and stochastic frontier analysis (SFA) – and two risk metrics – equity to total assets (E/TA or EQTOAS) and Z-scores (ZSCORN). For commercial banks, efficiency convergence of both metrics is found, however, savings banks show no signs of convergence and cooperative banks only show signs of SFA convergence. Banks of all three specializa- tions show E/TA convergence, but only savings banks convergence with respect to Z-scores. Nevertheless, the EU’s Single Market Program still has a long way to go to create identical conditions for all member countries’ financial markets. The discovery that there are considerable differences between banks’ specializations, and even more, that there is convergence with respect to E/TA as a risk metric are among the main academic contributions of this paper. The final published manuscript can be obtained under: 9.015.
    Keywords: Bank efficiency, Financial risk, Convergence, DEA, SFA, Eurozone
    JEL: C5 F36 G01 G15 G21
    Date: 2015–09–09
  11. By: (Indiana University); Volodymyr Lugovskyy (Indiana University)
    Abstract: We present a model of international trade in which credit constrained firms endogenously choose quality and countries differ in their level of financial development. This model produces a novel result where the total effect of financial development on export prices exhibits a U-shaped relationship with the exporter's labor productivity. The effect is positive for countries with the lowest and highest levels of productivity and negative for the countries in the middle. This occurs because financial development has two opposing effects on export prices: it reduces the costs of production while enabling costly quality upgrading. We confirm this pattern using a sample of U.S. imports from all exporters worldwide. This finding suggests that financial development has different implications for countries with different levels of productivity and income.
    Keywords: Financial development, Quality, Export prices, Labor productivity
    Date: 2015–10
  12. By: Cavalieri, M.;; Guccio, C.;; Lisi, D.;; Pignataro, G.;
    Abstract: Recently increasing public pressure to contain costs in the healthcare sector has led many national governments to introduce some type of prospective payment system and reduce the scope of global budgeting. This study investigates the extent to which the reimbursement systems of the Italian hospital sector have an impact on hospitals’ technical efficiency. Because of high variation in the financing and provision of healthcare servicesamong regions and hospitals, Italy represents an interesting case study to test these effects. A two-stage Data Envelopment Analysis was employed, in which the efficiency scores of all Italian hospitals were first calculated and then regressed on different environmental variables to capture the role of reimbursement systems. The results found a significant impact of the use of Diagnostic-Related Group-based prospective payment systems on hospitals’ efficiency.
    Keywords: hospital efficiency; Data Envelopment Analysis; prospective payment systems; hospital ownership type;
    JEL: C14 I11 I18
    Date: 2015–12
  13. By: Bakker, Gerben (London School of Economics); Crafts, Nicholas (University of Warwick); Woltjer, Pieter (Wageningen University)
    Abstract: We develop new aggregate and sectoral Total Factor Productivity (TFP) estimates for the United States between 1899 and 1941 through better coverage of sectors and better measured labor quality, and show TFP-growth was lower than previously thought, broadly based across sectors, strongly variant intertemporally, and consistent with many diverse sources of innovation. We then test and reject three prominent claims. First, the 1930s did not have the highest TFP-growth of the twentieth century. Second, TFP-growth was not predominantly caused by four leading sectors. Third, TFP-growth was not caused by a ‘yeast process’ originating in a dominant technology such as electricity.
    Keywords: Harberger diagram; mushrooms; productivity growth; total factor productivity; yeast JEL Classification: N11, N12, O47, O51
    Date: 2015

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