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on Efficiency and Productivity |
|
Issue of 2016‒05‒14
twenty-two papers chosen by |
| By: | Malikov, Emir |
| Abstract: | The existing control-function-based approaches to the identification of firm-level production functions are exclusively concerned with the estimation of single-output production functions despite that, in practice, most firms produce multiple outputs. While one can always opt to employ a single-product specification of the production process by a priori aggregating the firm's outputs, such a formulation is rarely an accurate portrayal of the firm's productive process. This paper extends the control-function-based approach to the structural identification and estimation of firm-level production functions and productivity to the multi-product setting. Specifically, I consider the nonparametric estimation of multi-product production functions. Among other advantages, explicit modeling of multiple outputs allows the identification of cross-output elasticities representing the technological trade-off between individual outputs along the firm's production possibilities frontier, which a traditional single-output production function approach is unable to deliver. To showcase the methodology, I apply it to study the multi-product production technology of Norwegian dairy farms during the 1998-2008 period. |
| Keywords: | control function, dairy, endogeneity, multiple-output, production function, productivity, sieve estimation, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, C14, D24, L10, Q12, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:235108&r=eff |
| By: | Li, Zongzhang; Ma, Yanan |
| Abstract: | This paper examines the impacts of rural education on agricultural productivity in China. The approach we take involves two-stage process. First, we use DEA_Malmquist method to measure total factor productivity change, technical change and efficiency change in China over the period 1985 to 2011. We find that China has experienced an increase in total factor productivity, and that productivity growth was mostly attributed to technical progress, rather than to improvement in efficiency. And then, with a panel dataset covering 30 provinces, we investigate the impact of rural education on productivity growth of China. The results indicated that the development of rural education plays positive role on China’s agricultural productivity growth. Moreover, empirical results of regression models show that rural education enhances agricultural total factor productivity through technological progress rather than by promoting technical efficiency. |
| Keywords: | Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies, Teaching/Communication/Extension/Profession, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:212048&r=eff |
| By: | Lokossou, Jourdain; Arouna, Aminou; Diagne, Aliou; Biaou, Gauthier |
| Abstract: | This study examines the relationship between adoption of NERICA varieties and the Total Factor Productivity among men and women. Data were collected from 342 rice farmers randomly selected in the central and northwest Benin. Total Factor Productivity was estimated using a Cobb-Douglass production function. The impact was estimated using the Local Average Treatment Effect. Results show that the adoption of NERICA variety improves Total Factor Productivity of potential adopters and it benefits men and women differently. Potential women adopters got a higher gain on their Total Factor Productivity than men. This finding suggests that targeting women with NERICA increase significantly rice productivity more than the case where men are targeted. |
| Keywords: | Impact assessment, NERICA Rice adoption, Total Factor Productivity, Gender, Benin, Agricultural and Food Policy, Crop Production/Industries, C13, C36, O33, Q12, Q16, R20, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:212056&r=eff |
| By: | Maurer, Jacob; Griffin, Terry; Sharda, Ajay |
| Abstract: | Data envelopment analysis (DEA) has been applied to agricultural decision making units (DMU) such as individual farmers, groups of farmers, or other firms. Rather than firms as the DMU, each sub-field region within a farmer’s field can be evaluated as the DMU such that the efficiency of different management practices are evaluated. A hypothetical grid superimposed upon a field creates the DMU’s so that scale efficiency can be visually assessed in a map. Input variables include as-applied maps of inputs, geospatial data on soil characteristics, and remotely sensed imagery. Output variables are based upon yield monitor sensors from harvest equipment from one or more years and therefore one or more crops grown in rotation. Both bio-physical agronomic relationships and economic characteristics are evaluated. Based on our novel technique for evaluating geo-referenced technical efficiency scores, tests for global and local spatial autocorrelation indicate presence of spatial effects; thereby providing insights into natural versus man-made variability. |
| Keywords: | data envelopment analysis, technical efficiency, precision agriculture, variable rate, Production Economics, Q10, Q15, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea16:230115&r=eff |
| By: | Dong, Yizhe; Girardone, Claudia; Kuo, Jing-Ming |
| Abstract: | We employ a hand-collected unique dataset on banks operating in China between 2003 and 2011 to investigate the impact of board governance features (size, composition and functioning) on bank efficiency and risk taking. Our evidence suggests that board characteristics tend to have a greater influence on banks’ profit and cost efficiency than on loan quality. We find that the proportion of female directors on the board appears not only to be linked to higher profit and cost efficiency but also to lower traditional banking risk. Similarly, board independence is associated with higher profit efficiency of banks; while the opposite is found for executive directors and in the presence of dual leadership of the CEO/chairperson. Among the control variables, we found that liquidity negatively affects profit and cost efficiency, while positively affecting risk. Interestingly, we find some evidence of an incremental effect of specific board characteristics on efficiency for banks with more concentrated ownership structures and state-owned institutions; while for banks with CEO performance-related pay schemes the effect on efficiency when significant is usually negative. Our results offer useful insights to policy makers in China charged with the task of improving the governance mechanisms in banking institutions. |
| Keywords: | Board governance; Bank efficiency; Asset quality; Bank ownership; Performance-related compensation; Chinese banking sector |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:esy:uefcwp:16588&r=eff |
| By: | Luigi Brighi; Paolo Silvestri |
| Abstract: | The purpose of the paper is to study inefficiency in the production technology of the childcare service and to carry out a comparative analysis of public and private day-care centres. An empirical analysis on cross-section micro-data from a region of northern Italy has been conducted by using an input-distance function with a translog specification. Estimates of the multi-output production technology and input-oriented technical inefficiency are obtained in a stochastic frontier model with a half-normally distributed one-sided error. Heteroscedasticity has been modelled to investigate the determinants of inefficiency and estimate their marginal effects. We find that production exhibits increasing returns with an estimated elasticity of scale of 1.21. Separability between inputs and outputs is rejected at a 5% level of significance. The average estimate of technical inefficiency is 10% and public centres are more inefficient than private centres by 4.1 percentage points. The proportion of part-time children and the presence of mixed-age classrooms are significant determinants of inefficiency which equally affect both public and private centres. |
| Keywords: | Childcare, Day-Care Center, Technical Inefficiency, Stochastic Frontier Analysis, Input-Distance Function |
| JEL: | H44 J13 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:mod:recent:117&r=eff |
| By: | Ahmed, Riaz |
| Abstract: | Does investment in social infrastructure affect the productivity of manufacturing firms in developing countries? To test this question, I empirically investigate the impact of social infrastructure indicators at district level on firm productivity using firm level data from Pakistan. I split my sample into rural and urban regions to capture the effect of regional disparities in investment in social goods while controlling for a potential selection bias from firms' decision to locate in regions with better infrastructure equipment. My findings reveal that indicators of health and education are positively and significantly related to firm level productivity in manufacturing industries in Pakistan. However, these results hold for urban districts only. For rural regions, both health and education show a negative impact on firm productivity. |
| Keywords: | Firm Productivity,Social Infrastructure,Health and Education,Pakistan |
| JEL: | D24 H51 H52 I15 I25 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16038&r=eff |
| By: | Kapelko, Magdalena |
| Abstract: | This paper assesses the dynamic inefficiency of the Polish meat processing industry during the period between 2004 and 2012. This study employs also a comparison of dynamic with static inefficiency measures to address the importance of accounting for adjustment costs when measuring a firm's inefficiency. Dynamic and static cost inefficiencies and their decomposition into technical, allocative, and scale inefficiency are derived using Data Envelopment Analysis. Results showed that firms' low levels of dynmaic cost inefficiency were due to dynamic allocative inefficiency rather than technical and scale inefficiency. The 2008 financial crisis appears to have hampered firms' dynamic technical performance, but has also had a positive influence on the dynamic allocative and scale inefficiencies. WE further show that the average static measures tend to underestimate all inefficiency compenents compared to dynmaic counterparts. |
| Keywords: | dynamic inefficiency, static inefficiency, Data Envelopment Analysis, meat processing industry, Food Consumption/Nutrition/Food Safety, Production Economics, C61, D24, D61, D92, L66, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:211830&r=eff |
| By: | Benabdelkader, Mohamed |
| Abstract: | The determinants of total factor productivity (TFP) of the manufacturing industries, in particular innovation and industrial policy, constituted the seminal contribution of Crépon, Duguet and Mairesse in the late 1990. This study aims to explain the TFP of the 5 branches composing the manufacturing industries in Morocco on the 1985-2013 period through its panel regression on innovation, trade openness and industrial policy variables, as well as their interactions, while testing the model assumptions in the light of the Moroccan reality. This study will also provide conclusions related to the relevance of the original model as well as extensions and implications for further research. |
| Keywords: | Crepon-Duguet-Mairesse model; industrial policy; innovation; panel data; total factor productivity |
| JEL: | C33 C51 L52 L6 O32 O47 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70950&r=eff |
| By: | Ma, Xingliang; Smale, Melinda; Spielman, David J.; Zambrano, Patricia; Nazli, Hina; Zaidi, Fatima |
| Abstract: | Bt cotton remains one of the most widely grown biotech crops among smallholder farmers. Numerous studies, including those previously conducted in Pakistan, attest to its yield and cost advantages. However, the effectiveness of Bt toxin, which depends on many technical constraints, is heterogeneous. Furthermore, in Pakistan, the diffusion of Bt cotton varieties occurred despite a weak regulatory system and without seed quality control; evidence demonstrates that varieties sold as Bt may not contain the genes or express them effectively. We use data collected from a sample that is statistically representative of the nation’s cotton growers to test the effects of Bt cotton use on productivity in a damage control framework. Unlike previous studies, we employ five measures of Bt identity: name, official approval status, farmer belief, laboratory tests of Bt presence in plant tissue, and biophysical assays measuring Bt effectiveness. Only farmers’ belief that a variety is Bt affects cotton productivity. Although all measures reduce damage from pests, the biophysical indicators have the largest effect, and official approval has the weakest. For applied economists, findings highlight the importance of getting the data right concerning Bt. For policy makers, they suggest the need, on ethical if not productivity grounds, to monitor variety integrity closer to point of sale. |
| Keywords: | cotton, hybrids, biotechnology, genetically engineered crops, genetically modified organisms, smallholders, intensive farming, Bt cotton, damage abatement, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1520&r=eff |
| By: | Larson, Donald; Savastano, Sara; Murray, Siobhan; Palacios-Lopez, Amparo |
| Abstract: | African governments and international development groups see boosting productivity on smallholder farms as key to reducing rural poverty and safeguarding the food security of farming and non-farming households. Prompting smallholder farmers to use more fertilizer has been a key tactic. Closing the productivity gap between male and female farmers has been another avenue toward achieving the same goal. The results in this paper suggest the two are related. Fertilizer use and maize yields among smallholder farmers in Uganda are increased by improved access to markets and extension services, and reduced by ex ante risk-mitigating production decisions. Standard ordinary least squares regression results indicate that gender matters as well; however, the measured productivity gap between male and female farmers disappears when gender is included in a list of determinants meant to capture the indirect effects of market and extension access. |
| Keywords: | Smallholder farmers, productivity, gender, maize, Uganda, Agricultural and Food Policy, Consumer/Household Economics, D13, O12, 013, Q12, Q18, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:212032&r=eff |
| By: | Graziano Abrate; Federico Boffa; Fabrizio Erbetta; Davide Vannoni |
| Abstract: | This paper explores the link between voters information, corruption and efficiency in the context of a career concern model where politically connected local monopolies are in charge of the provision of a local public service. We find that both a corrupt environment and a low level of voters? information on managerial actions induce managers to reduce effort levels, thereby contributing to drive down efficiency. We test our predictions using data on solid waste management services provided by a large sample of Italian municipalities. We estimate a stochastic cost frontier model that provides robust evidence that services provided in more corrupt regions and in regions with low voters? information are substantially less cost efficient. We show that the negative impact of a corrupt environment is weaker for municipalities ruled by left-wing parties, while the positive impact of voters? information is larger if the waste collection service is managed by limited liability companies. We finally quantify potential cost savings associated to operating in a less corrupt environment and in one in which voters are more informed through a simulation on six major Italian cities. The magnitude of the figures suggests that effective anti-corruption measures, and/or carefully designed incentives for citizens to acquire information, can generate sig- nificant economic benefits. |
| Keywords: | corruption, voters' information, efficiency, solid waste |
| JEL: | D24 D72 D73 L25 Q53 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:446&r=eff |
| By: | Jin, Shaosheng; Guo, Haiyue; Delgado, Michael; Wang, H. |
| Abstract: | This paper systematically investigated the impact of foreign direct investment (FDI) on Chinese food firms’ total factor productivity (TFP) by using the firm-level census data between 1998 and 2007 (174,539 sample food firms). We tested for “own-plant” effects, intra-industry effects, regional effects and vertical effects. The results show that food firms’ foreign ownership has weakly positive or no impact on the productivity of invested firms. At the industry level, FDI generates adverse influences on domestic firms productivity in some sub food sectors. Further, mixed regional effects are observed in different sub food sectors and across investment with different origins. Finally, both positive backward and forward spillovers generated by FDI originating outside Hong Kong, Macaw and Taiwan (HMT) are observed, while HMT investment has negative vertical spillovers. |
| Keywords: | food industry, foreign direct investment (FDI), China, productivity, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Q13 Q17 Q18, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:211813&r=eff |
| By: | Thath, Rido |
| Abstract: | Using the data from the Cambodia Socio-Economic Survey (CSES) 2009, the study examined the impact of agricultural labor and land productivity on poverty among Cambodian rice farming households. The results showed that improving productivity of land and, especially, that of labor reduced poverty in two of Cambodia’s rice producing regions, the Tonle Sap and the Plain. There was no evidence of such impact in two other regions, the Mountain and the Cost. When the productivity of the less productive farming households were raised up to the mean level of productivity, only labor productivity was found to have an impact on poverty reduction in the Tonle Sap and the Plain, indicating that improving agricultural labor productivity is the key to poverty reduction. In Cambodia, improving rice productivity in the Tonle Sap and the Plain region is the most poverty reducing. |
| Keywords: | Land productivity, labor productivity, Cambodia, rice production, rural poverty |
| JEL: | I32 Q12 |
| Date: | 2016–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70920&r=eff |
| By: | Liverpool-Tasie, L. S. L. S.; Omonona, B.T.; Sanou, A.; Ogunleye, W. |
| Abstract: | Increasing the use of modern inputs including fertilizer is key for raising agricultural productivity and reducing poverty in Nigeria, particularly and Africa more generally. However, based on recent empirical evidence from Nigeria, simply increasing the quantity of fertilizer used by smallholders is not likely to successfully drive this process. A more holistic approach that addresses the constraints to fertilizer profitability in Nigeria with appropriate consideration of the factors which will increase the efficiency of fertilizer use is necessary. |
| Keywords: | Food Security and Poverty, |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midcpb:234952&r=eff |
| By: | Stefan Bender; Nicholas Bloom; David Card; John Van Reenen; Stefanie Wolter |
| Abstract: | Recent research suggests that much of the cross-firm variation in measured productivity is due to differences in use of advanced management practices. Many of these practices – including monitoring, goal setting, and the use of incentives – are mediated through employee decision-making and effort. To the extent that these practices are complementary with workers’ skills, better-managed firms will tend to recruit higher-ability workers and adopt pay practices to retain these employees. We use a unique data set that combines detailed survey data on the management practices of German manufacturing firms with longitudinal earnings records for their employees to study the relationship between productivity, management, worker ability, and pay. As documented by Bloom and Van Reenen (2007) there is a strong partial correlation between management practice scores and firm-level productivity in Germany. In our preferred TFP estimates only a small fraction of this correlation is explained by the higher human capital of the average employee at better-managed firms. A larger share (about 13%) is attributable to the human capital of the highest-paid workers, a group we interpret as representing the managers of the firm. And a similar amount is mediated through the pay premiums offered by better-managed firms. Looking at employee inflows and outflows, we confirm that better-managed firms systematically recruit and retain workers with higher average human capital. Overall, we conclude that workforce selection and positive pay premiums explain just under 30% of the measured impact of management practices on productivity in German manufacturing. |
| Keywords: | management practices; productivity; wages |
| JEL: | J1 J50 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66433&r=eff |
| By: | Barath, Lajos; Ferto, Imre; Bojnec, Stefan |
| Abstract: | This paper investigates farm technical efficiency (TE), taking into account technological heterogeneity among farms in the case of the Slovenian Farm Accountancy Data Network sample of farms in the 2007-2010 period. A random parameter model is used to analyse inter- and intra-sectoral heterogeneity of farms. The empirical results confirmed that it is important to handle both inter- and intra-sectoral heterogeneity. Additionally the estimations based on propensity score matching (PSM) demonstrated that farms in less favoured areas (LFAs) are slightly technically less efficient than farms in non-LFAs. However, combined PSM and difference in difference estimator cast serious doubts that LFA farms are less efficient in terms of TE. Both groups of farms are able to adopt technologies to natural and other conditions for their operation. |
| Keywords: | technical efficiency, type of farming, less favoured areas, random parameter model, propensity score matching difference in differences, Agricultural and Food Policy, Farm Management, G22, L25, Q12, Q14, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:229061&r=eff |
| By: | Holger Breinlich |
| Abstract: | I use an event study approach to present novel evidence on the impact of trade liberalization on firmlevel profits. Using the uncertainty surrounding the negotiation and ratification process of the Canada- United States Free Trade Agreement of 1989 (CUSFTA), I estimate the impact of different types of tariff reductions on the abnormal returns of Canadian manufacturing firms. I find that Canadian import tariff reductions lead to lower, and reductions in Canadian intermediate input tariffs to higher abnormal returns. The impact of U.S. tariff reductions is less clear and depends on the size of the affected firms. I also calculate the total profit increase implied by my estimates. Overall, CUSFTA increased per-period profits by around 1.2%. This was mainly driven by intermediate input tariff reductions which more than offset the negative effect of Canadian import tariff reductions. |
| Keywords: | profitability; trade liberalization; stock market event studies; Canada-U.S. free trade agreement |
| JEL: | J1 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66412&r=eff |
| By: | Antonio Musolesi; Cem Ertur |
| Abstract: | This paper provides an econometric examination of technological knowledge spillovers among countries by focusing on the issue of error cross-sectional dependence, particularly on the dif- ferent ways – weak and strong – that this dependence may affect model specification and estimation. A preliminary analysis based on estimation of the exponent of cross-sectional de- pendence provides a clear result in favor of strong cross-sectional dependence. This result has relevant implications in terms of econometric modeling and suggests that a factor structure is preferable to a spatial error model. The common correlated effects approach is then used be- cause it remains valid in a variety of situations that are likely to occur, such as the presence of both forms of dependence or the existence of nonstationary factors. According to the estimation results, richer countries benefit more from domestic R&D and geographic spillovers than poorer countries, while smaller countries benefit more from spillovers originating from trade. The re- sults also suggest that when the problem of (possibly many) correlated unobserved factors is addressed, the quantity of education no longer has a significant effect. Finally, a comparison of the results with those obtained from a spatial model provides interesting insights into the bias that may arise when we allow only for weak dependence, despite the presence of strong dependence in the data. |
| Keywords: | cross-sectional dependence; large panels; factor models; spatial models; heterogeneous slopes; unit root; total factor productivity; research and development; human capital |
| JEL: | C23 C5 F0 O3 |
| Date: | 2016–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:2016035&r=eff |
| By: | Alicia Rambaldi (School of Economics, The University of Queensland); T. H. Y. Tran (Department of Economics, Yale University); Antonio Peyrache (School of Economics, The University of Queensland) |
| Abstract: | The paper proposes an approach for identifying and estimating the economic parameters of interest when all the variables are measured with errors and these are correlated. Two propositions show how the parameters of interest and the bias are identified. Three Monte Carlo simulations illustrate the results. The empirical application estimates returns to scale and technological progress in US manufacturing sectors. The results can be linked to previous works in the literature to demonstrate the ambiguous bias in least squares estimates of returns to scale parameters and to compare estimates of trends in technological change using two alternative identification approaches. Creation-Date: 2016-04-08 |
| Keywords: | unobserved components; time-varying parameters; least squares bias; returns to scale; technological change |
| JEL: | C18 C32 E23 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:557&r=eff |
| By: | Kantelhardt, Jochen; Kirchweger, Stefan |
| Abstract: | Organic farms work under very heterogeneous natural-site and socio-economic conditions. This heterogeneity is of clear relevance for economic efficiency and for the decision of farms to convert to organic farming. In order to produce proper results efficiency analysis must consider such heterogeneity and self-selection aspects. This applies in particular to data envelopment analysis, since this technique does not calculate error terms, but include heterogeneity into efficiency results. One way to control for such effects is matching. Matching is based on the assumption that under a given vector of observable variables, the outcome of one individual is independent of the adoption of a specific treatment. In our paper we present how to implement matching into efficiency analysis of organic farms. We give a brief overview on literature applying this technique and we discuss which insights the application of matching might contribute to the current discussion on organic farming. |
| Keywords: | Dairy Farming, Farm Competitiveness, Low-input farming, Cluster Analysis, Matching Method, Farm Management, Livestock Production/Industries, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:212024&r=eff |
| By: | Martin Foureaux Koppensteiner |
| Abstract: | Students in Brazil are typically assigned to classes based on the age ranking in their cohort. I exploit this rule to estimate the effects on maths achievement of being in class with older peers for students in fifth grade. I find that being assigned to the older class leads to a drop in Math scores of about 0.4 of a standard deviation for students at the cut-off. I provide evidence that heterogeneity in age is an important factor behind this effect. Information on teaching practices and student behaviour sheds light on how class heterogeneity harms learning. |
| Keywords: | Primary education, group effects, group heterogeneity, regression discontinuity, Brazil. |
| JEL: | I20 I21 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:16/10&r=eff |