nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2016‒07‒16
twelve papers chosen by

  2. Health insurance coverage and firm performance: Evidence using firm level data from Vietnam By Hiroyuki Yamada; Tien Manh Vu
  3. Productivity Measures for the Colombian Manufacturing Industry By Camila Casas; Alejandra González
  4. State-contingent analysis of farmers’ response to weather variability: Irrigated dairy farming in the Murray Valley, Australia By Mallawaarachchi, Thilak; Nauges, Céline; Quiggin, John; Sanders, Orion
  5. Cost-constrained measures of environmental efficiency: a material balance approach By Aldanondo, Ana M.; Casasnovas, Valero L.; Almansa, M. Carmen
  6. Services Trade Restrictiveness and Manufacturing Productivity: The Role of Institutions By Cosimo Beverelli; Matteo Fiorini; Bernard Hoekman
  7. How Productive is Rural Infrastructure? Evidence on Some Agricultural Crops in Colombia By Ignacio Lozano-Espitia; Lina Ma. Ramírez-Villegas
  8. Returns to fertilizer use: does it pay enough? Some new evidence from Sub-Saharan Africa By Koussoubé, Estelle; Nauges, Céline
  9. Robust frontier estimation from noisy data: a Tikhonov regularization approach By Daouia, Abdelaati; Florens, Jean-Pierre; Simar, Léopold
  10. Assessing Indonesia’s Long Run Growth: The Role of Total Factor Productivity and Human Capital By Armida Alisjahbana; Viktor Pirmana
  11. Competitive Strategy, Performance Appraisal and Firm Results By Bayo-Moriones, Alberto; Galdon-Sanchez, Jose Enrique; Martinez-de-Morentin, Sara
  12. Land Inequality or Productivity: What Mattered in Southern Vietnam after 1975? By Minh-Tam T. Bui and Arayah Preechametta

  1. By: Lidia Mannarino; Valeria Pupo; Fernanda Ricotta (Dipartimento di Economia, Statistica e Finanza, Università della Calabria)
    Abstract: The main aim of this research is to investigate the influence the institutional environment has on the difference in performance between Italian family firms run by a family member and firms run by a professional manager. By using total factor productivity (TFP) as a measure of performance, we find that family-run firms are less productive than firms run by outside managers when institutional quality is high, but that the results are less obvious when institutional quality is low. The difference in performance is not significant, but by using the level of corruption as a measure of institutional quality, older family firms are found to be more productive than firms run by outside managers.
    Keywords: Family firms, TFP, Institutions
    JEL: G34 D24 O43
    Date: 2016–06
  2. By: Hiroyuki Yamada (Faculty of Economics, Keio University); Tien Manh Vu (International Research Fellow of the Japan Society for the Promotion of Science, Osaka School of International Public Policy, Osaka University)
    Abstract: In literature, there is limited direct evidence regarding the effect of health insurance coverage on firm performance and worker productivity. In this paper, we study the impacts of health insurance on medium and large-scale domestic private firms' performance and productivity in Vietnam, using a large firm level census dataset. We deploy propensity-score matching methods, and find statistically positive health insurance effects on both aggregate profit and profit per worker for both complying and non-complying medium and large-scale firms. Given the full sample results, we recommend an improvement in government monitoring as one of the important policy options to induce medium and large-scale firms to contribute to health insurance premiums for their employees.
    Keywords: Health insurance, Medium and large-scale firms, Propensity-score matching, Vietnam
    JEL: D22 I13 I15 I18 O25
    Date: 2016–07
  3. By: Camila Casas (Banco de la República de Colombia); Alejandra González (Banco de la República de Colombia)
    Abstract: In this paper we present estimates for the coefficients of a production function, and the corresponding total factor productivity (TFP) for the Colombian manufacturing industry during 2005{2013. We follow several structural microeconometric techniques to estimate the production function parameters. We compare the estimation results across methodologies, as well as their robustness to changes in our estimation sample, variable definitions, and/or weights used to aggregate the estimated firm-level TFP into an industry-level average TFP. Our results show that, in general, all estimation methodologies result in a similar growth pattern during our sample period. Moreover, the general growth trend is not affected greatly by the additional changes mentioned above. However, the level of productivity (and the estimated TFP growth) does depend on how the production function is estimated Classification JEL: D24, L25, L60
    Keywords: Total factor productivity, production function, manufacturing industry
    Date: 2016–06
  4. By: Mallawaarachchi, Thilak; Nauges, Céline; Quiggin, John; Sanders, Orion
    Abstract: The agricultural sector is commonly regarded as one of the most vulnerable to climate change. Current understanding of the impact of climate change on this sector relies on the underlying assumptions about farmers’ possible responses to weather variability, including changes in crop choice, input combinations and land management practices. Many previous analyses rely on the implicit (and restrictive) assumption that farmers operate under a fixed technology set across different states of nature. This assumption, represented through stochastic production or profit functions, is commonly made but seldom tested, and may understate farmers’ responses to climate change if state-contingent production technologies are, in reality, more flexible. The potential for farmers to adapt production technologies in response to unforeseen events is at the core of the state-contingent approach. Advanced in Chambers and Quiggin (2000), the theory contends that producers can manage uncertainty through the allocation of productive inputs to different states of nature. In this article we test the assumption that farmers’ observed behaviour is consistent with the state-contingent production theory using farm-level data from Australia. More precisely, we estimate the milk production technology for a sample of irrigated dairy farms from the southern Murray–Darling Basin over the period from 2006-07 to 2009-10.
    Keywords: dairy industry; Murray–Darling basin; state-contingent theory; weather variability
    Date: 2016–07
  5. By: Aldanondo, Ana M.; Casasnovas, Valero L.; Almansa, M. Carmen
    Abstract: Joint cost-environmental efficiency analysis based on the material balance principle (MBP) has an important short-coming, in that the measures of allocative efficiency it produces do not fully integrate environmental and economic outcomes. Their limitation lies in their failure to take into account some decision-making units (DMU) use a combination of inputs that is more environmentally-harmful than that of the least-cost unit, or, more rarely, more costly than that of the least-polluting unit. Input substitution can therefore bring both environmental and economic benefits. This paper develops a method for differentiating between environmental allocative efficiency gains that involve an economic trade-off and those that do not. Drawing insight from the literature on multi-criteria analysis, we extend the MBP approach to new measures of cost-constrained environmental efficiency using data envelopment analysis (DEA). The proposed approach is illustrated by an application geared to assessing the efficiency of a sample of greenhouse horticultural production units in Almeria, Spain. The results for this case show that it is possible to increase environmental allocative efficiency by up to 34 % on average without incurring additional costs.
    Keywords: Cross constrained cost-environmental efficiency, material balance condition, nitrogen pollution, green house horticulture
    JEL: C61 D24 Q12 Q50
    Date: 2016–07–11
  6. By: Cosimo Beverelli; Matteo Fiorini; Bernard Hoekman
    Abstract: We study the effect of services trade restrictiveness on manufacturing productivity for a broad cross-section of countries at different stages of economic development. Decreasing services trade restrictiveness has a positive indirect impact on the manufacturing sectors that use services as intermediate inputs in production. We identify a critical role of local institutions in shaping this effect: countries with high institutional capacity benefit the most from services trade policy reforms in terms of increased productivity in downstream industries. We argue that this reflects the characteristics of many services and services trade and provide a theoretical framework to formalize our suggested mechanisms.
    Keywords: services trade, institutions, productivity
    JEL: F14 F15 F61 F63
    Date: 2015–09
  7. By: Ignacio Lozano-Espitia (Banco de la República de Colombia); Lina Ma. Ramírez-Villegas (Banco de la República de Colombia)
    Abstract: This paper evaluates the role of rural infrastructure on the performance of some agricultural crops in Colombia. The study utilizes geo-referenced cross sectional data of four crops, coffee, rice, beans and plantains, collected for the majority of municipalities. Using genetic matching models, we find that both having access to irrigation and drainage systems and better infrastructure for marketing –rural roads and nearby retail and wholesale centers– significantly increase crop yield as well as planted and harvested areas. Results are robust to a suitable set of matching algorithms. The positive and significant impact on agricultural development provides support to reorient agricultural policy towards the supply of public goods that pushes up productivity. Classification JEL: H41, Q12, Q15, R42, C21
    Keywords: Public Goods, Agricultural Productivity, Irrigation System, Road Maintenance, Treatment Effect Models
    Date: 2016–06
  8. By: Koussoubé, Estelle; Nauges, Céline
    Abstract: The low level of modern inputs adoption by African farmers is considered to be a major impediment to food security and poverty reduction in Sub-Saharan Africa. The government of Burkina Faso, following the example of a number of other countries in the region, launched a subsidy program in 2008 to encourage farmers’ uptake of chemical fertilizers and foster cereal production. This article explores the importance of fertilizer profitability in explaining the relative, apparent low use of chemical fertilizers by farmers in Burkina Faso. Using largescale plot data, we estimate maize yield response to nitrogen to be 19 kg/ha on average and to vary with soil characteristics. Profitability, which we measure through the calculation of a marginal value cost ratio, is estimated at 1.4 on those plots which received fertilizers, with significant variations across regions. For those plots on which fertilizers were not applied, we predict that fertilizers should have been profitable in most cases under the current level of subsidized fertilizer prices. These findings suggest that the low uptake of chemical fertilizers might have been driven by factors other than profitability, including insufficient supply of subsidized fertilizers to farmers in need. Our results also call for increasing the availability of credit to farmers in order to encourage adoption of chemical fertilizers. Finally, our results also show that not taking into account the endogeneity of nitrogen use in the yield equation may produce biased estimates of the maize yield response to nitrogen.
    Keywords: Burkina Faso; fertilizers; maize yield; subsidization program; technology adoption.
    Date: 2016–07
  9. By: Daouia, Abdelaati; Florens, Jean-Pierre; Simar, Léopold
    Abstract: The aim of this paper is to construct a robust nonparametric estimator for the production frontier. The main tool is a concept of robust regression boundary defined as a special probability-weighted moment (PWM). We first study this problem under a regression model with one-sided errors where the regression function defines the achievable maximum output, for a given level of inputs-usage, and the regression error defines the inefficiency term. Then we consider a stochastic frontier model where the regression errors are assumed to be composite. It is more realistic to assume that the actually observed outputs are contaminated by a stochastic noise. The additive regression errors in the frontier model are then composed from this noise term and the one-sided ineficiency term. In contrast to the one-sided error model, where the direct use of empirical PWMs is fruitful, the composite error problem requires a substantial different treatment based on deconvolution techniques. To ensure the identifiability of the model we can only assume an independent Gaussian noise. In doing so, the estimation of the robust PWM frontiers, including the true regression boundary, necessitates the computation of a survival function estimator from an ill-posed equation. A Tikhonov regularized solution is constructed and nonparametric frontier estimation is performed. We unravel the asymptotic behavior of the resulting frontier estimators in both one-sided and composite error models. The procedure is very easy and fast to implement. Practical guidelines to effect the necessary computations are described via a simulated example. The usefulness of the approach is discussed through two concrete data sets from the sector of Delivery Services.
    Keywords: Deconvolution, Nonparametric estimation, Probability-weighted moment, Production function, Robustness, Stochastic frontier, Tikhonov regularization.
    JEL: C1 C13 C14 C49
    Date: 2016–06
  10. By: Armida Alisjahbana (Department of Economics, Padjadjaran University); Viktor Pirmana (Department of Economics, Padjadjaran University)
    Abstract: This paper revisits Indonesia’s long run growth trajectory with particular emphasis on the contribution of human capital accumulation and Total Factor Productivity for the period 2000-2035. The study utilizes the growth accounting framework that estimates contribution of growth in capital stock, human capital, and Total Factor Productivity (TFP) for the period after Indonesia’s crisis of 1997- 1998. This study extends an earlier study by Alisjahbana (2009) in methodology, and emphasis in the role of human capital to long term growth trajectory. The period of analysis is concentrated from the year 2000 onwards with the following periodization: 2000-2004 (economic stabilization period); 2005-2009 (President SBY First Administration); 2010-2014 (President SBY Second Administration) and the overall period from 2000-2014. Based on the earlier study, it is expected that the pattern of sources of growth post crisis will be enhanced, in which TFP growth and the role of human capital have become more prominent. Results of the sources of economic growth during the 2000-2014 periods are used to project Indonesia’s long run growth trajectory until 2035. The study utilizes the most recent relevant data sets such as Indonesia’s population projection 2010- 2035. The study also benefits from the most current government long-term policy direction in human resources development as well as human capital accumulation.
    Keywords: Economic Growth, Total Factor Productivity, Human Capital, Indonesia 2035
    JEL: O11 O47 O53
    Date: 2015–10
  11. By: Bayo-Moriones, Alberto (University of Navarra); Galdon-Sanchez, Jose Enrique (Universidad Pública de Navarra); Martinez-de-Morentin, Sara (Universidad Pública de Navarra)
    Abstract: In this study, we address the relationship between performance appraisal and competitive strategy, as well as the impact of this relationship on firm performance. The results indicate that the adoption of developmental performance appraisal and the use of administrative performance appraisal are higher among firms that pursue differentiation strategies compared to those competing on costs. Regarding firm performance, the interaction between a developmental appraisal system and a quality strategy displays higher return on equity and sales per employee. Those firms that combine a focus on innovation with administrative performance appraisal also enjoy higher performance. Finally, when the firm competes on the basis of cost reduction, the use of administrative appraisal increases the sales per employee.
    Keywords: performance appraisal, competitive strategy, firm performance, developmental appraisal, administrative appraisal
    JEL: M12 M52
    Date: 2016–07
  12. By: Minh-Tam T. Bui and Arayah Preechametta
    Abstract: Land redistribution and agricultural collective production were the key components of agrarian reforms implemented by the Vietnamese Communist Party in the south of the country after 1975. Land inequality was serious in the region under the Republic of Vietnam's regime. The new government struggled with agricultural collectivisation contributing to the decline in rice productivity. This study explains the persistence of a market-based agricultural production in the southern economy under the new political regime. Beside the economic reasons and arguments of local peasants' everyday politics cited in the literature, we argue that the de facto political power of the middle-class landowners was an important factor impeding the performance of agricultural cooperatives. It also implies that agricultural productivity was more vital than land inequality during the study period. We apply the model of Acemoglu and Robinson explaining how de facto political power helps elites to maintain their economic institutions in spite of a political change.
    Keywords: land inequality, agrarian reform, collectivisation, de facto political power, Vietnam
    Date: 2016–07–01

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