nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2016‒09‒04
nine papers chosen by

  1. Improvement of Technical Efficiency of Firm Groups By Louisa Andriamasy; Walter Briec; Stéphane Mussard
  2. Bring Back Our Light: Power Outages and Industrial Performance in Sub-Saharan Africa By Justice Tei Mensah
  3. Productivity and Convergence in European Agriculture By Lajos Barath; Imre Ferto
  4. An Evaluation of the Cost and Revenue Efficiency of the Banking Sector in Zimbabwe By Sanderson Abel; Pierre Le Roux
  5. Imputation in U.S. Manufacturing Data and Its Implications for Productivity Dispersion By T. Kirk White; Jerome P. Reiter; Amil Petrin
  6. Explaining economic growth in developed economies after 1980 By Carlos Ballestero; Carlos E. Posada
  7. Dividend taxation of non-listed companies, resource allocation and productivity By Määttänen, Niku; Ropponen, Olli
  8. Does Firm Heterogeneity Matter for Aggregate Dynamics? Evidence from the Allocation of Capital and Labor By Thomas Winberry; Pablo Ottonello
  9. On Some Relations between Several Generalized Convex DEA Models By Louisa Andriamasy; Walter Briec; Stéphane Mussard

  1. By: Louisa Andriamasy (CAEPEM, IAE, Université de Perpignan); Walter Briec (CAEPEM, IAE, Université de Perpignan); Stéphane Mussard (CHROME, Université de Nîmes; LAMETA, Université de Montpellier; GREDI, Universite de Sherbrooke; LISER, Luxembourg)
    Abstract: Cooperation between firms can never improve the technical efficiency of any coalition of firms. This standard result of the productivity measurement literature is based on the directional distance function computed on firm groups. Directional distance functions are usually defined on the standard sum of input/output vectors. In this paper, the aggregation of input/output vectors is generalized thanks to an isomorphism in order to capture three results: the cooperation improves technical efficiency ; the cooperation reduces technical efficiency ; and finally the cooperation between firms yields no variation of technical efficiency, i.e., the distance function is quasi linear. The improvement of technical efficiency is shown to be compatible with semilattice technologies. In this case, the firms merge according to their inputs only because constraints are imposed on outputs, and conversely, they may merge according to the outputs they can produce because some limitations are imposed on the use of inputs.
    Keywords: Aggregation, Cooperative games, Distance functions, Productivity, Technical efficiency.
    JEL: D21 D24
    Date: 2016–04
  2. By: Justice Tei Mensah (Swedish University of Agricultural Sciences)
    Abstract: Power cuts have become a characteristic feature of many Sub-Saharan African economies. This paper attempts to investigate the micro and macro impacts of power outages by estimating the effects on firm revenue and productivity, and output growth of the manufacturing and industrial sectors. Further, I evaluate the impact of self-generation in ameliorating the effects of electricity shortages on firm performance using a quasi-experimental approach. Results from the analysis reveal significant negative effects of electricity shortages on firm revenue and productivity, and output growth of manufacturing and industrial sectors. Finally, contrary to the notion that self-generation may be helpful to firms during outage periods, evidence from this paper suggest the reliance on self-generation is associated with productivity losses albeit short run revenue gains.
    Keywords: Power Outages, Sub-Saharan Africa, Electricity, Productivity, Firms
    JEL: D04 D24 L11 L94 O12
    Date: 2016–06
  3. By: Lajos Barath (ETH Zürich, Agricultural Economics Group); Imre Ferto (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: In the paper we investigate relative productivity levels and decompose productivity change for European agriculture between 2004 and 2013. More specifically (1) we contribute to the debate whether agricultural Total Factor Productivity (TFP) has declined or not in the European Union (EU); (2) we compare the relative TFP level across EU member states and investigate the difference between ‘old’ member states (OMS, i.e. the EU-15) and ‘new’ member states (NMS) and (3) we test whether TFP is converging or not among member states. The empirical analysis applies the aggregate quantity framework developed in O’Donnell (2008), using country level panel data from the Economic Accounts for Agriculture for 23 EU member states. The results imply that TFP has slightly decreased in the EU over the analysed period; however there are significant differences in this respect between the OMS and NMS and across member states. Finally, our estimations support the productivity convergence hypothesis across the member sates.
    Keywords: Total Factor Productivity (TFP) level, Agricultural productivity in the EU; Färe-Primont TFP index; TFP components; technical efficiency, scale efficiency, mix efficiency
    JEL: Q12
    Date: 2016–08
  4. By: Sanderson Abel; Pierre Le Roux
    Abstract: The study was meant to evaluate the cost and revenue efficiency of the Zimbabwean banking sector during the period 2009-2014. The study employed the Data Envelopment Analysis and the Tobit Regression methods. The estimation of cost and revenue efficiency shows that revenue and cost efficiency increased during the period 2009-2012. This coincided with high positive growth rates and economic stability. Efficiency declined in 2013-14 as a result of government controls on banking sector pricing and general decline in economic activity. The study found that private banks were more revenue and cost efficient compared to public banks. Domestic banks were relatively cost and revenue efficient compared to foreign banks supporting the home field advantage hypothesis. The study further found that commercial banks were cost and revenue efficient than building societies. Cost and revenue efficiency is determined by cost income ratio, capital adequacy, macroeconomic growth, and inflation. The results shows that credit risk is significant in explaining cost efficiency. The study recommends that the Zimbabwean government should improve the macroeconomic operating environment and desist from tampering with the smooth flow of market forces. The government should refrain from imposing anticompetitive measures as they negatively affect banking sector efficiency. Financial sector reforms which improve competition should be adopted to enhance efficiency.
    Keywords: Cost Efficiency, Revenue Efficiency, data envelopment analysis, Tobit, multicurrency, Zimbabwe
    JEL: G21 G28 C67
    Date: 2016–08
  5. By: T. Kirk White; Jerome P. Reiter; Amil Petrin
    Abstract: In the U.S. Census Bureau's 2002 and 2007 Censuses of Manufactures 79% and 73% of observations respectively have imputed data for at least one variable used to compute total factor productivity. The Bureau primarily imputes for missing values using mean-imputation methods which can reduce the true underlying variance of the imputed variables. For every variable entering TFP in 2002 and 2007 we show the dispersion is significantly smaller in the Census mean-imputed versus the Census non-imputed data. As an alternative to mean imputation we show how to use classification and regression trees (CART) to allow for a distribution of multiple possible impute values based on other plants that are CART-algorithmically determined to be similar based on other observed variables. For 90% of the 473 industries in 2002 and the 84% of the 471 industries in 2007 we find that TFP dispersion increases as we move from Census mean-imputed data to Census non-imputed data to the CART-imputed data.
    JEL: C80 L11 L60
    Date: 2016–08
  6. By: Carlos Ballestero; Carlos E. Posada
    Abstract: We use the Aguion and Howitt (2009) theoretical model of endogenous economic growth to explain the declining economic growth in developed economies in the period 1981-2009. Aguion and Howitt theoretical framework combines Solownian and Schumpeterian elements in a single scenario, so that labor-augmenting technological progress and capital accumulation per efficiency unit of labor are both caused not only by exogenous changes in the investment rate but also by shocks to the degree of efficiency in the Research and Development (R&D) expenditure process. Empirical results revealed that per worker output growth rates and capital stock per efficiency unit of labor growth rates both have a common panel unit root. Since the panel cointegration tests and estimates revealed a statistical significant negative long-run relationship between per worker output growth rate and capital stock per efficiency unit of labor, the interpretation of the econometric results analized from the Aguion and Howitt ?s theoretical perspective is that labor-augmenting technological progress is endogenously falling over time mainly because of an exogenous deterioration of the environment conditions for the transformation of the investment rate and R&D expenditures in technological progress.
    Keywords: Economic growth, Solownian and Schumpeterian models of growth, investment rate, R&D expenditures, Capital stock per efficient unit of labor
    JEL: O11 O31 O33 O41 O47 O57
    Date: 2016–08–01
  7. By: Määttänen, Niku; Ropponen, Olli
    Abstract: Abstract We consider the taxation of non-listed companies and their owners in Finland. We analyse how the current highly non-linear dividend taxation influences the allocation of labour and capital across different firms, average labour productivity and the equilibrium wage level. To this end, we use a general equilibrium model of firm investment where firms may have different production technologies. We find that the current tax system is likely to distort resource allocation compared to linear dividend taxation. This works to lower the average labour productivity as well as the general wage level.
    Keywords: Dividend taxation, non-listed companies, productivity
    JEL: D92 G35 H24
    Date: 2016–08–26
  8. By: Thomas Winberry (University of Chicago); Pablo Ottonello (University of Michigan)
    Abstract: It is well-documented that there is tremendous heterogeneity in firms’ productivity, investment, and hiring, implying the allocation of resources is important in determining aggregate dynamics. In this project, we measure the dynamics of the allocation of capital and labor across firms and use this measurement to understand how heterogeneity matters for aggregate business cycles. We measure the allocation of resources using the distribution of marginal products across firms. Preliminary empirical results using Compustat data suggest that the dispersion of the marginal product of capital is strongly countercyclical, while the dispersion in the marginal product of labor is acyclical, implying that models with frictions to capital adjustment are most promising for explaining the data. To discriminate between particular models, we plan to quantitatively map their predictions for the distribution in terms of informative micro-level wedges, in the spirit of Hsieh and Klenow (2009).
    Date: 2016
  9. By: Louisa Andriamasy (CAEPEM, IAE, Université de Perpignan); Walter Briec (CAEPEM, IAE, Université de Perpignan); Stéphane Mussard (CHROME, Université de Nîmes; LAMETA, Université de Montpellier; GREDI, Universite de Sherbrooke; LISER, Luxembourg)
    Abstract: The purpose of this paper is to establish a topological relation between several classes of known generalized convex models extending the approach proposed by Banker, Charnes and Cooper [6]. Using some basic algebraic convex structures proposed by Avriel [4] and Ben- Tal [9] we analyze the Painlevé-Kuratowski limit of the CES-CET and Alpha-returns to scale models. It is shown that their topological limits yield the B-convex and Cobb-Douglas production models. Along this line some semi-lattice production models satisfying an α-returns to scale assumption are proposed.
    Keywords: Non-parametric production models, Kuratowski-Painlevé limit, lattice, CES-CET model, generalized convexity, α-returns to scale.
    Date: 2016–04

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.