nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2016‒06‒18
twenty-one papers chosen by

  1. Productivité agricole, intégration et transformation structurelle de l’économie marocaine By Chatri, Abdellatif; Maarouf, Abdelwahab; Ezzahid, Elhaj
  2. Accounting for fishing vessel time allocation at sea when measuring efficiency By Gillespie, Patrick R.; Breen, Ben
  3. Sustainable Upland Farm Businesses (1): Exploring determinants of efficiency among England’s upland farms By Dwyer, Janet; Vigani, Mauro
  4. Fossil energy in economic growth: A study of the energy direction of technical change, 1950-2012 By Gregor Semieniuk
  5. Productivity effects of eco-innovations using data on eco-patents By Giovanni Marin; Francesca Lotti
  6. A quantitative explanation of the low productivity in South-Eastern European economies: the role of misallocations By Petre Caraiani
  7. Effect of family labour on output of farms in selected EU Member States: A non-parametric quantile regression approach By Kostov, Philip; Davidova, Sophia; Bailey, Alastair
  8. Management as a Technology? By Nicholas Bloom; Raffaella Sadun; John Van Reenen
  9. Importing and firm performance New evidence from South Africa By Lawrence Edwards; Marco Sanfilippo; Asha Sundaram
  10. The impact of risk management practices on wheat productivity in France and Hungary By Vigani, Mauro; Kathage, Jonas
  11. Can Investing in Hedge Funds Improve Efficiency for Economically Important Investors? By Yu-Chin Hsu; Rachel J. Huang; Larry Y. Tzeng; Christine W. Wang
  12. Productivity spillovers through labor flows: The effect of productivity gap, foreign-owned firms, and skill-relatedness By Zsolt Csafordi; Laszlo Lorincz; Balazs Lengyel; Karoly Miklos Kiss
  13. Revisiting the matching function By Kohlbrecher, Britta; Merkl, Christian; Nordmeier, Daniela
  14. Links between weak investment and the slowdown in productivity and potential output growth across the OECD By Patrice Ollivaud; Yvan Guillemette; David Turner
  15. Energy efficiency gains from trade in intermediate inputs: Firm-level evidence from Indonesia By Michele Imbruno; Tobias D Ketterer
  16. BIG DATA …and Grains Productivity By MacCuspie, Peter
  17. Profit Efficiency of Chinese Pear Farmers By Shakur, Shamim; Wang, Yan
  18. Diversification and Productivity in Crop-livestock Farming Systems in the Forest Savannah Agro-ecological Zone of Ghana By Asante, Bright; Villano, Renato; Patrick, Ian; Battese, George
  19. Agricultural Production, Weather Variability, and Technical Change: 40 Years of Evidence from Indi By Michler, Jeffrey; Shively, Gerald
  20. Empirical estimation of weather impacts on dairy production and quality By Bell, Kendon
  21. Socioeconomic Development and Its Effect on Performance of Islamic Banks: Dynamic Panel Approaches By Chowdhury, M. Ashraful Ferdous; Haque, M. Mahmudul; Alhabshi, Syed Othman; Masih, Abul Mansur M.

  1. By: Chatri, Abdellatif; Maarouf, Abdelwahab; Ezzahid, Elhaj
    Abstract: This paper aims to verify how the performance of the agricultural sector affects the process of structural transformation of the Moroccan economy. It analyzes the dynamics of productivity in two ways. First, the speed of convergence of agricultural productivity to the level recorded by other sectors of the economy. The second, the decomposition of the change in aggregate productivity into the structural changes or reallocation effect and the within or intra effect. Furthermore, the paper uses the Input-Output methodology for measuring the degree of integration of the Moroccan economy and seeing if there was or not emergence of new leading sectors.
    Keywords: Agriculture, Input-Output Analysis, Morocco, productivity, structural transformation.
    JEL: C5 C67 E23 E24 O10 O13 O47
    Date: 2015–07–21
  2. By: Gillespie, Patrick R.; Breen, Ben
    Abstract: Rising fuel and input costs are having a significant impact on the profitability of the fishing sector and increasing the need for vessels to improve operational efficiency. In particular, smaller vessels that do not have the economies of scale must maximize input-output efficiency to remain viable. There is also the consideration that improved fuel efficiency in fishing vessels will reduce the carbon footprint of the sector. Measuring vessel and fleet efficiency is important for these reasons, but it is also important to correctly measure efficiency to determine how best to manage a fleet and determine how ecosystem, regulatory and market changes will impact fleet viability and operability. This paper uses stochastic frontier analysis (SFA) to assess the efficiency of fishing vessels in the Irish demersal otter trawl nephrops fishery. Clear evidence of efficiency-heterogeneity across vessels in the fishery is reported, even when controlling for vessel-specific characteristics, such as vessel length, age and engine power. The drivers of efficiency are also investigated and we find that the use of vehicle monitoring systems (VMS) data allows for more spatially and temporally detailed information to improve fleet efficiency analysis.
    Keywords: nephrops, coastal, fishery, stochastic frontier analysis, efficiency, firm, Agricultural and Food Policy, Environmental Economics and Policy, Q220, D220,
    Date: 2016–04
  3. By: Dwyer, Janet; Vigani, Mauro
    Abstract: This paper represents the start of a research programme to investigate in detail the economics of English upland farming, in order to pursue greater economic, environmental and social sustainability in future. The Farm Business Survey sample of farms in the English LFA is analysed, examining economic performance over 4 years (2010 to 2013), looking for potential determinants of efficiency. The analysis examines technical efficiency as a first indicator, and analyses data for the 263 LFA grazing livestock farms in the dataset. A stochastic frontier approach is used to test hypotheses concerning whether farm scale, and/or various indicators of farming intensity, CAP subsidy and risk management, have significant influence upon performance. The results highlight some of the challenges in identifying and applying suitable indicators and suggest that the LFA may best be analysed by differentiating between higher-altitude and lower-lying farms, as the economic characteristics of these two groups are distinct. Within these groups we identify specific strategies as potentially significant, including early recruitment of ewe lambs into breeding and the sale of wool, as well as diversification off the holding, for lower lying farms; while agri-environment support and extensification appear influential among the higher-altitude group. Planned next steps include applying meta-frontier techniques; also analysing for determinants of profitability; and building a discussion and exchange forum with farmers and other stakeholders, through the Uplands Alliance, to maximise the value of these analyses via a wider community of learning.
    Keywords: Agricultural and Food Policy,
    Date: 2016–04
  4. By: Gregor Semieniuk (Science Policy Research Unit, University of Sussex)
    Abstract: Climate change mitigation challenges national economies to increase productivity while reducing fossil energy consumption. Fossil energy-saving technical change has been as- sumed to accomplish this, yet empirical evidence is scarce. This paper investigates the long-run relationship between the rate and direction of technical change with respect to fossil energy and labor in the world economy. Growth rates of labor productivity and the fossil energy-labor ratio are examined for more than 95% of world output be- tween 1950 and 2012. The average elasticity of the energy-labor ratio with respect to labor productivity is close to one, implying highly energy-using technical change, but no trade-o between factor productivity growth rates. This stylized fact suggests the importance of a cheap, abundant energy supply for robust global growth, and a more important role for renewable energy. Integrated assessment models do not incorporate this restriction which may result in poorly speci ed baseline scenarios.
    Keywords: labor productivity, fossil energy productivity, energy-using technical change, decoupling, long-run trends, stylized fact
    JEL: N10 O44 O47 Q43
    Date: 2016–11
  5. By: Giovanni Marin (IRCrES-CNR); Francesca Lotti (Bank of Italy)
    Abstract: We investigate the productivity effects of eco-innovations at the firm level using a modified version of the CDM model (Crepon et al., 1998). The distinctive nature of environmental innovations, especially as regards the need for government intervention to create market opportunities, is likely to affect the way they are pursued and their effect on productivity. The analysis is based on an unbalanced panel sample of Italian manufacturing firms merged with data on patent applications and balance sheet information. When looking at innovation’s return on productivity , we observe that eco-innovations exhibit a generally lower return relative to other innovations, at least in the short run. This differential effect is more pronounced for polluting firms, which are likely to face higher compliance costs for environmental regulations than other firms. This result holds for both the extensive (probability of patenting) and intensive (patent count) margin.
    Keywords: R&D, innovation, productivity, patents, eco-patents.
    JEL: L60 Q55
    Date: 2016–06
  6. By: Petre Caraiani
    Abstract: Abstract It is well known that Southeast Europe is the least developed area in Europe. Using a methodology based on the idea of heterogeneous firms, this paper studies the degree to which firm heterogeneity and resource misallocation can explain the lower TFP in Southeast Europe. The results show a significant degree of heterogeneity and resource misallocation, although the results are sensitive to the calibration used. There are evidences that firm-level productivity depends on firm size, while taxation negatively influences it. There is also some evidence that foreign-owned firms are more competitive, as are exporting firms. Results are generally robust across the various specifications used, but less so relative to the measure of productivity used. Additional evidences suggest that infrastructure-related obstacles as well as institutional instability drive the output distortion, while no factor is underlined as a significant driver of capital distortions, suggesting the need for better data sources for the latter.
    Keywords: total factor productivity, firm heterogeneity, South East Europe
    JEL: D24 O47 L25
    Date: 2016–02
  7. By: Kostov, Philip; Davidova, Sophia; Bailey, Alastair
    Abstract: There is very little empirical evidence supporting the claims that family farming is a ‘superior’ form of organisation for agricultural production. This paper investigates the comparative output effects of family labour in several EU Member States. No positive output effects can be discerned when farms are characterised by a low level of technical efficiency. In the case of efficient farms, the incremental effects of family labour are characterised by a number of thresholds. The paper only finds limited support for the claimed positive output effects of family farming and these only materialise after a considerable family involvement is committed.
    Keywords: family farms, quantile regression, production effects, Agricultural and Food Policy, Farm Management, C21, L25, Q12,
    Date: 2016–04
  8. By: Nicholas Bloom (Stanford University - Department of Economics); Raffaella Sadun (Harvard Business School, Strategy Unit); John Van Reenen (London School of Economics)
    Abstract: Are some management practices akin to a technology that can explain company and national productivity, or do they simply reflect contingent management styles? We collect data on core management practices from over 11,000 firms in 34 countries. We find large cross-country differences in the adoption of basic management practices, with the US having the highest size-weighted average management score. We present a formal model of "Management as a Technology", and structurally estimate it using panel data to recover parameters including the depreciation rate and adjustment costs of managerial capital (both found to be larger than for tangible non-managerial capital). Our model also predicts (i) a positive effect of management on firm performance; (ii) a positive relationship between product market competition and average management quality (part of which stems from the larger covariance between management with firm size as competition strengthens); and (iii) a rise (fall) in the level (dispersion) of management with firm age. We find strong empirical support for all of these predictions in our data. Finally, building on our model, we find that differences in management practices account for about 30% of cross-country total factor productivity differences.
    Keywords: management practices, productivity, competition
    JEL: L2 M2 O32 O33
    Date: 2016–05
  9. By: Lawrence Edwards; Marco Sanfilippo; Asha Sundaram
    Abstract: This paper uses firm-level data from company tax declarations to analyse the complementary relationship between direct access to imported intermediate inputs and manufacturing firm performance in South Africa.There are three main findings. The first is on firm heterogeneity, showing that importers consistently demonstrate premiums in terms of productivity, employment, wages, and capital intensity in production compared to firms that do not trade. The second supports the hypothesis of firm learning by importing. Finally, we show that importing also has implications for exporting, especially if inputs are sourced from advanced economies.
    Keywords: Business, Delivery of goods, International trade
    Date: 2016
  10. By: Vigani, Mauro; Kathage, Jonas
    Abstract: Wheat is a key staple crop for global food security, but its production is strongly concentrated in a few regions, among which the EU is the first producer. EU farmers are struggling to keep high productivity levels due to global market and climate challenges. Risk management practices (RMP) are often advocated as viable tools to cope against these uncertainties, but their adoption can also subtract resources to the production activity, resulting in a controversial impact on the overall farm productivity. This paper analysis whether and how much four RMP contribute to wheat farming efficiency in France and Hungary using i) a stochastic frontier model to obtain a measure of farms efficiency; ii) an endogenous switching regression model to quantify the RMP impact. Results show that RMP can benefit farm efficiency, but not all the RMP have the same effect. While insurance, diversification and contract farming can positively affect farm efficiency, cultivating different varieties can reduce farm efficiency of about 10% depending on the production conditions.
    Keywords: risk management, wheat, productivity, stochastic frontier, endogenous switching regression, Agricultural and Food Policy, Crop Production/Industries, Risk and Uncertainty, J43, G22, G32, Q12, Q18,
    Date: 2016–04
  11. By: Yu-Chin Hsu (Institute of Economics, Academia Sinica, Taipei, Taiwan); Rachel J. Huang (Department of Finance, National Central University, Taiwan); Larry Y. Tzeng (Department of Finance, National Taiwan University, Taiwan); Christine W. Wang (Risk Management Institute at the National University of Singapore)
    Abstract: The purpose of this paper is to examine the performance of hedge funds from the efficient diversification point of view for economically important investors, which is defined as in Tsetlin et al. (2015). We adopt the generalized almost second-degree stochastic dominance (GASSD) rule proposed by Tsetlin et al. (2015). The rule includes second-degree stochastic dominance as a special case and is a consensus rule for all economically important investors. We establish statistical estimations and tests for the GASSD efficiency of a given portfolio relative to all possible portfolios formed from a given set of assets. We find that for all economically important investors, adding hedge funds to a diversified portfolio can improve efficiency. The results explain the popularity of hedge funds in practice. JEL Classification: D80, D81
    Keywords: almost stochastic dominance, portfolio efficiency, hedge funds
    Date: 2016–06
  12. By: Zsolt Csafordi (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Laszlo Lorincz (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Balazs Lengyel (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and International Business School, Budapest); Karoly Miklos Kiss (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and University of Pannonia, Faculty of Business and Economics)
    Abstract: What puts productivity spillovers into effect through worker mobility across firms? Productivity difference between the sending and receiving firms have been found to drive these spillovers; while an alternative explanation suggests that labor flows from foreign-owned companies provide productivity gains for the firm. We argue here that skill-relatedness across firms also matters because industry-specific skills are important for organizational learning and production. Hungarian employee-employer linked panel data from 2003-2011 imply that productivity gap rules out the effect of foreign spillovers. Furthermore, we find that flows from skill-related industries outperform the effect of flows from unrelated industries.
    Keywords: skill-relatedness network, firm productivity, knowledge spillover, labor mobility, productivity gap, foreign ownership
    JEL: D22 J24 J60 M51
    Date: 2016–05
  13. By: Kohlbrecher, Britta; Merkl, Christian; Nordmeier, Daniela
    Abstract: There is strong empirical evidence for Cobb-Douglas matching functions. We show in this paper that this widely found relation between matches on the one hand and unemployment and vacancies on the other hand can be the result of different underlying mechanisms. Obviously, it can be generated by assuming a Cobb-Douglas matching function. Less obvious, the same relationship results from a vacancy free entry condition and idiosyncratic productivity shocks. A positive aggregate productivity shock leads to more vacancy posting, a shift of the idiosyncratic selection cutoff and thereby more hiring. We calibrate a model with both mechanisms to administrative German labor market data and show that idiosyncratic productivity for new contacts is an important driver of the elasticity of the job-finding rate with respect to market tightness. Accounting for idiosyncratic productivity can explain the observed negative time trend in estimated matching efficiency and asymmetric business cycle responses to large aggregate shocks.
    Keywords: matching function,idiosyncratic productivity,job creation,vacancies,time trend,asymmetries
    JEL: E24 E32 E20 E30
    Date: 2016
  14. By: Patrice Ollivaud; Yvan Guillemette; David Turner
    Abstract: The OECD framework for estimating potential output is combined with previous OECD empirical research to analyse the causes of recent weak productivity growth. Current weak labour productivity growth in many OECD countries reflects historically weak contributions from both total factor productivity (TFP) growth and capital deepening. The slowdown in trend productivity growth in the pre-crisis period is mostly explained by a long-established slowdown in TFP growth, but since the crisis, the further deceleration is mainly due to weak capital deepening, a development apparent in practically every OECD country. Much of the weakness in the growth of the capital stock since the financial crisis can be explained by an accelerator response of investment to continued demand weakness, leading in turn to a deterioration in potential output via a hysteresis-like effect. Circumstantial evidence suggests that a misallocation of capital in the pre-crisis period also contributed to the slowdown in capital stock growth, particularly among the most severely affected countries. In many OECD countries, declining government investment as a share of GDP has further exacerbated post-crisis weakness in capital stock growth, both directly and probably indirectly via adverse spillover effects on business investment. Finally, at a time when the use of conventional macro policy instruments has become increasingly constrained, the slower pace of structural reform represents a missed opportunity, not least because more competitionfriendly product market regulation could have boosted both investment and potential growth. Les liens entre la faiblesse de l'investissement et le ralentissement de la croissance de la productivité et de la production potentielle dans l'OCDE Le cadre général de l’OCDE pour l’estimation du potentiel de production est combiné à des résultats empiriques antérieurs de l’OCDE pour analyser les causes de la faiblesse récente de la croissance de la productivité. La faible croissance de la productivité du travail de ces dernières années reflète des contributions historiquement faibles à la fois de la productivité totale des facteurs (PTF) et de l’intensité capitalistique. Le ralentissement de la croissance tendancielle de la productivité avant la crise est principalement expliqué par un ralentissement de longue date de la croissance de la PTF ; néanmoins, depuis la crise, l’accentuation de la décélération s’explique surtout par une plus faible contribution de l’intensité capitalistique, qui s’observe dans pratiquement tous les pays de l’OCDE. Une part substantielle de la faiblesse de la croissance du stock de capital depuis la crise financière peut s’expliquer par la réponse de l’investissement, via un effet accélérateur, à la faiblesse prolongée de la demande, conduisant à son tour à une détérioration de la production potentielle suivant un effet de type hystérèse. Des preuves circonstancielles suggèrent qu’une mauvaise allocation du capital avant la crise a aussi contribué au ralentissement de la croissance du stock de capital, notamment parmi les pays les plus sévèrement touchés. Dans beaucoup de pays de l’OCDE, la baisse de l’investissement public en point de PIB a encore aggravé la faiblesse post-crise de la croissance du stock de capital, à la fois directement et aussi probablement indirectement via des effets négatifs sur l’investissement des entreprises. Enfin, dans un contexte où les instruments conventionnels de politiques macroéconomiques sont de plus en plus contraints, le ralentissement du rythme des réformes structurelles représente une opportunité manquée, ne serait-ce qu’en raison du soutien à la fois à l’investissement et à la croissance du potentiel qu’auraient pu fournir des réglementations plus adéquates du marché des produits.
    Keywords: investment, potential output, financial crisis, capital stock, global financial crisis, investissement, stock du capital, crise financière, potentiel de production, crise financière globale
    JEL: E22 E27 E32 E65 E66
    Date: 2016–06–08
  15. By: Michele Imbruno; Tobias D Ketterer
    Abstract: This paper investigates whether importing intermediate goods improves firm-level environmental performance in a developing country, using data from the Indonesian manufacturing sector. We build a simple theoretical model showing that trade integration of input markets entails energy efficiency improvements within importers relative to nonimporters. To empirically isolate the impact of firm participation in foreign intermediate input markets we use ‘nearest neighbour’ propensity score matching and difference-indifference techniques. Covering the period 1991-2005, we find evidence that becoming an importer of foreign intermediates boosts energy efficiency, implying beneficial effects for the environment.
    Keywords: Trade, Intermediate Inputs, Energy Efficiency, Environment, Indonesia.
    Date: 2016
  16. By: MacCuspie, Peter
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy,
    Date: 2016–02
  17. By: Shakur, Shamim; Wang, Yan
    Keywords: Agricultural and Food Policy,
    Date: 2016–02
  18. By: Asante, Bright; Villano, Renato; Patrick, Ian; Battese, George
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Livestock Production/Industries,
    Date: 2016–02
  19. By: Michler, Jeffrey; Shively, Gerald
    Abstract: We pose the simple question: how large of a role does the weather play in determining variability of agricultural production in India? Despite the long standing interest in agricultural economics of estimating the effect of weather on crop output, few quantitative measures of impact exist. We use a long panel of parcel level data from six villages in India that covers $44$ seasons from 1976 to 2011. Estimation the impact of weather variability on yield is complicated by the role of technological change over this period. In our descriptive analysis we generate several stylized facts about how agricultural production in the subcontinent has changed over the last $40$ years. Most importantly, mean yields have increased and the variance in crop production, measured relative to the mean, has decreased. In a regression context, using a multilevel model, we find strong evidence of technical change and that weather variability makes up only a small share of total variability in yield. We conclude that Green Revolution technologies have reduced the amount of weather related risk faced by farmers, even when we account for greater amounts of variation in weather due to climate change
    Keywords: Weather Risk, Agricultural Production, Technical Change, Multilevel Models, Rural India, Agricultural and Food Policy, Crop Production/Industries, International Development, Production Economics, Risk and Uncertainty, C11, D81, O12, O13, Q16, Q12,
    Date: 2016
  20. By: Bell, Kendon
    Keywords: Livestock Production/Industries,
    Date: 2016–02
  21. By: Chowdhury, M. Ashraful Ferdous; Haque, M. Mahmudul; Alhabshi, Syed Othman; Masih, Abul Mansur M.
    Abstract: Islamic banks are highly incorporated with social issues because of their rules and regulations. Profit not only depends on its own return and investment but also on trust, moral issues which may be more related to banking profitability. To test these gaps, this chapter attempts to investigate the socioeconomic factors along with bank-specific factors of global Islamic banks using dynamic GMM and Quantile regression. The dataset used in this study involves 55 full-fledged Islamic Banks from 24 countries across the globe. The results suggest that Return on Assets (ROA) is significantly positive to bank-specific factors such as credit risk has and statistically negative to cost-to-income ratio. It is also suggested that the relationship between risk and return is heterogeneous or dissimilar across different quantiles. Findings of the study tend to unravel that the socioeconomic factors especially political stability and investment freedom have positive and significant relation to the Islamic bank performance.
    Keywords: ROA – Socioeconomic factors – Credit risk – Dynamic GMM – Quantile regression
    JEL: C22 C58 G21
    Date: 2016–05–26

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