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on Efficiency and Productivity |
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Issue of 2016‒11‒13
twenty-one papers chosen by |
| By: | Elina Berghäll |
| Abstract: | Contradictory empirical and theoretical evidence on the relationship between innovation and competition has been reconciled in a model that yields an inverted U-shaped curve. I test whether the predictions of the model are supported by the data with an unbalanced panel of firms for 1990-2003 in a high productivity growth, high-tech industry, Finnish ICT manufacturing. In particular, I investigate how well alternative, yet rigorous measures of innovation and the technology gap, such as R&D intensity, R&D elasticity, technical change, technical efficiency and total factor productivity fare with respect to competition measured by the Lerner index. The results prove sensitive to the choice of variable. Overall, the model is not supported by the empirical evidence of the industry. |
| Keywords: | competition, innovation, technical efficiency, technology frontier, R&D intensity |
| JEL: | O25 L50 L60 D20 O30 |
| Date: | 2016–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:77&r=eff |
| By: | Pedro Bento; Diego Restuccia |
| Abstract: | We consider a tractable model of heterogeneous production units that features endogenous entry and productivity investment to assess the quantitative impact of policy distortions on aggregate output and establishment size. Relative to the standard factor misallocation framework, policy distortions featuring a positive productivity elasticity of distortions imply larger reductions in output through smaller investments in establishment productivity. A calibrated version of the model implies that when the productivity elasticity of distortions increases from 0.09 in the U.S. to 0.5 in India, aggregate output and average establishment size fall by 53 and 86 percent, compared to 37 and 0 percent in the standard factor misallocation model. Entry productivity investment and factor misallocation contribute equally to the reduction in output, whereas the effect of lower life-cycle productivity growth is fully offset by increased entry and reduced productivity dispersion. Establishment size differences in the model are consistent with evidence from a comprehensive dataset we construct on average establishment size in manufacturing using census data for 134 countries. |
| JEL: | O1 O4 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22809&r=eff |
| By: | Babatunde, R.O.; Salami, M.F.; Mohammed, B.A. |
| Abstract: | This study examines the determinants of yield gap in rain fed and irrigated rice production systems in Kwara state, Nigeria. The objectives of the research are to; estimate the Profitability of rice production under rain fed and irrigated rice production systems; determine the technical efficiency of the farmers and to assess the determinants of yield gap in both production systems. These objectives were analyzed using: Gross Margin Budgetary analysis, Stochastic Frontier and Linear Regression Model respectively. The result shows that the gross margin for rain fed production system is ₦28,147.88 per hectare while, that of irrigated rice production system is ₦45,944.91 per hectare. The technical efficiency of rain fed rice production in the study area is 0.830 while that of irrigated rice production is 0.927. The determinants of yield gap in rain fed rice production system are: household size, family labour usage, urea fertilizer usage, farm size and variety of seed planted. The determinants of yield gap in irrigated rice production system are: farming experience, membership of association, farm size, and variety of seed planted. It was concluded that rice production in the study area is more profitable under the irrigated rice production system than the rain fed production system. This research therefore recommends that irrigation facilities and farm inputs (urea fertilizer, improved rice variety) should be made available to farmers as and when due. |
| Keywords: | Yield gap, Irrigation, Production systems, Rice, Crop Production/Industries, Production Economics, Productivity Analysis, |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaae16:246400&r=eff |
| By: | Jelliffe, Jeremy L.; Bravo-Ureta, Boris E.; Deom, C. Michael; Okello, David Kalule |
| Abstract: | The major objective of this study is to evaluate the adoption of groundnut varieties that are high yielding, drought tolerant, and groundnut rosette disease (GRD) resistant in eastern Uganda. In particular, this study examines differences in adoption and farm-level productivity associated with participation in the Appropriate Technology Uganda (ATU) seed dissemination project during the early 2000s. We are particularly interested in the sustainability of the project outcomes 10-years after the end of the original intervention. The impact of the ATU intervention is examined with respect to increased productivity (higher expected yields) and risk-reduction (improved disease resistance and drought tolerance). We find that participating farmers allocated 21% more of their available land to improved groundnut varieties. The results also show that, for improved varieties, beneficiaries produce 32% higher yields than their non-participating neighbors, and 55% higher yields relative to non-neighbor controls. This implies that the project led to significant increases in profitability for participating farmers. In addition, we observe significant spillover effects from the project, which is clearly revealed by the yield difference between non-participating neighboring households and non-neighbor controls. These results imply that project beneficiaries transferred some benefits to the neighbor control group over the course of the 10-year period following the project. This is an important result suggesting that farmer-led programs offer additional advantages to developing communities and may provide a cost-effective means of information and technology dissemination. |
| Keywords: | Environmental Economics and Policy, Land Economics/Use, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaae16:246450&r=eff |
| By: | Orea, Luis; Álvarez, Inmaculada C.; Jamasb, Tooraj |
| Abstract: | An important methodological issue for the use of efficiency analysis in incentive regulation of regulated utilities is how to account for the effect of unobserved cost drivers such as environmental factors. This study combines the spatial econometric approach with stochastic frontier techniques to control for unobserved environmental conditions when measuring firms’ efficiency in the electricity distribution sector. Our empirical strategy relies on the geographic location of the firms as a useful source of information that has previously not been explored in the literature. The underlying idea in our empirical proposal is to utilise variables from neighbouring firms that are likely to be spatially correlated as proxies for the unobserved cost drivers. We illustrate our approach using the data of Norwegian distribution utilities for the years 2004 to 2011. We find that the lack of information on weather and geographic conditions can likely be compensated with data from surrounding firms using spatial econometric techniques. Combining efficiency analysis and spatial econometrics methods improve the goodness-of-fit of the estimated models and, hence, more accurate (fair) efficiency scores are obtained. The methodology can also be used in efficiency analysis and regulation of other types of utility sectors. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:oeg:wpaper:2016/06&r=eff |
| By: | Willy, Daniel Kyalo; Muyanga, Milu; Jayne, Thomas |
| Abstract: | The Boserupian theory holds that population density growth can be accompanied by sustainable agricultural intensification (Boserup, 1965). However, it is not certain whether the positive link between population density and environmental/economic benefits associated with agricultural intensification are indefinite. The current study utilizes cross sectional data from a random sample of farm households drawn from two densely populated Counties in Kenya to assess whether Boserupian agricultural intensification is sustainable at high population densities. The study utilizes a robust approach that incorporates soil quality parameters into economic analysis to assess the effect of population density on soil quality and crop productivity. It employs non- parametric regression, OLS regression and asymmetric trans-log production function estimation methods. Results indicate that at low a population density, endogenous sustainable agricultural intensification occurs, which is associated with improvements in soil quality and crop yields. However, as population densities exceed 600 persons/Km2, soil quality attributes such as soil texture, soil pH levels and fertility indicators such as soil organic matter (SOM) and electrical conductivity (EC) start to deteriorate. The end result of deteriorating soil quality is binding of critical nutrients and thus reduction in the crop yield response to fertilizer application. This reduces crop productivity and consequently returns to agriculture. These findings have imperative policy bearing on livelihoods and smallholder agriculture considering that a large proportion of sub-Saharan Africa’s population is dependent on rain-fed agriculture and population densities continue grow. |
| Keywords: | Population density, Intensification, soil quality, crop productivity, Crop Production/Industries, Land Economics/Use, Productivity Analysis, |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaae16:246433&r=eff |
| By: | Romina R. Giuliano; Benoît Mahy; François Rycx; Guillaume Vermeylen |
| Abstract: | This article provides first evidence on whether corporate social responsibility (CSR) influences the productivity effects of overeducation. By relying on detailed Belgian linked employer-employee panel data covering the period 1999-2010, our empirical results exhibit a positive and significant impact of over-education on firm productivity. Moreover, they suggest that the effect of over-education is positively enhanced when the firm implements a corporate social responsibility process, especially when it aims to have: i) a good match between job requirements and workers’ educational level, ii) a diverse workforce in terms of gender and age, and iii) a long-term relationship with its workers. Whenfocussing on required and over-education, the results suggest that CSR, besides representing an innovative and proactive approach for the firms’ stakeholders, may also be beneficial for the firm itself through a bigger increase in productivity for each additional year of required or over-education. |
| Keywords: | Educational mismatch; Productivity; CSR; Linked panel data |
| JEL: | J28 I20 J24 M50 |
| Date: | 2016–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/239579&r=eff |
| By: | Krüger, Jens J. |
| Abstract: | We propose a two-stage procedure for finding realistic benchmarks for nonparametric efficiency analysis. On the first stage the efficient DMUs are figured out by a free disposal hull approach. These benchmarks are directly targeted by directional distance functions and the extent of inefficiency is measured along the direction towards an existing DMU. Two variants for finding the closest or the furthest benchmark are proposed. With this approach there is no need to use linear combinations of existing DMUs as benchmarks which may not be achievable in reality and also no need to accept slacks which are not reflected by the efficiency measure. |
| Keywords: | directional distance functions,targeting,direct benchmarks |
| JEL: | C14 D24 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:darddp:229&r=eff |
| By: | Klaus Gugler (Department of Economics, Vienna University of Economics and Business); Mario Liebensteiner (Department of Economics, Vienna University of Economics and Business) |
| Abstract: | We estimate cost functions to derive productivity growth using a unique database on costs and outputs of essentially all regulated Austrian gas distribution companies over the period 2002–2013, covering the times before and after the introduction of incentive regulation in 2008. We estimate a concave relation between total costs and time, and a significant one-off but permanent reduction in real costs after an imposed reduction in granted costs in the course of the introduction of incentive regulation. Our results imply that technological opportunities were higher in the early years of the sample than in later years, and that productivity growth grinded to a halt from 2008 on. We conclude that technological opportunities are exhausted (for the time being) in the Austrian gas distribution sector giving rise to an optimal general X factor (X-gen) of zero for the foreseeable future. |
| Keywords: | X-gen, Productivity, Regulation, Gas distribution |
| JEL: | L22 L25 L51 Q48 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp236&r=eff |
| By: | Elena Beccalli; Mario Anolli; Giuliana Borello |
| Abstract: | In light of the policy debate on too-big-to-fail we investigate evidence of economies of scale for 103 European listed banks over 2000 to 2011. Using the Stochastic Frontier Approach, the results show that economies of scale are widespread across different size classes of banks and are especially large for the biggest banks. At the country level, banks operating in the smallest financial systems and the countries most affected by the financial crises realize the lowest scale economies (including diseconomies) due to the reduction in production capacity. As for the determinants of scale economies, these mainly emanate from banks oriented towards investment banking, with higher liquidity, lower Tier 1 capital, those that contributed less to systemic risk during the crises, and those with too-big-to-fail status. |
| Keywords: | bank; economies of scale; regulation; too-big-to-fail; EU |
| JEL: | G21 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:62936&r=eff |
| By: | François Rycx; Yves Saks; Ilan Tojerow |
| Abstract: | This paper is one of the first to estimate how the region in which an establishment is located affects its productivity, wage cost and costcompetitiveness (i.e. its productivity-wage gap). To do so, we use detailed linked employer-employee panel data for Belgium and rely on methodological approaches from both Hellerstein and Neumark (1995) and Bartolucci (2014) to estimate dynamic panel data models at the establishment level. Our findings show that inter-regional differences in productivity and wages are significant but vanish almost totally, both in industry and services, when controlling for a wide range of covariates, establishment fixed effects and endogeneity. Thus, our results suggest that wage cost and productivity differentials are ceteris paribus relatively well aligned across regions. |
| Keywords: | Regions; productivity; labour costs; linked panel data |
| JEL: | C33 J24 J31 R30 |
| Date: | 2016–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/239577&r=eff |
| By: | Maria Conceição Portela (Católica Porto Business School and CEGE, Universidade Católica Portuguesa) |
| Abstract: | This paper addresses the assessment of efficiency of production units in cases where some characteristics of the production process are known. In particular we focus on the existence of direct linkages between inputs and outputs, where certain outputs are produced from specific inputs and not jointly produced from all inputs. Our aim is to use and empirically compare alternative forms of reflecting the linkages between inputs and outputs. The alternatives to be compared to reflect the linkages between inputs and outputs are: the use of separate assessments; the use of ratios between linked outputs and inputs; and the use of differences between linked outputs and inputs. These alternatives are presented and contextualised within existing procedures for dealing with output-specific inputs, and results are discussed and illustrated empirically in the context of evaluating courts' efficiency. |
| Keywords: | Efficiency measurement, output-specific inputs, government services, courts |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:cap:mpaper:022016&r=eff |
| By: | Saara Tamminen; den Berg Marcel van; Marrewijk Charles van |
| Abstract: | Do firms engaging in international trade have higher or lower profit margins? It is well-established that more productive firms engage in trading activities and as a result have higher profit levels. We use two theoretical models (the Melitz model and the Egger-Kreickemeier model) to clarify the relationship between productivity, trade activity, and profit margins and derive three hypotheses: (I) profit margins rise as productivity rises for domestic firms, (II) profit margins rise as productivity rises for trading firms, and (III) profit margins are not higher for trading firms than for domestic firms. We test these hypotheses using detailed micro-data for Finland (2005-2010) and the Netherlands (2002-2010). We find strong support for hypothesis I (in favour of the Melitz model), hypothesis II (in favour of both models), and hypothesis III (in favour of the Egger-Kreickemeier model). A propensity score matching analysis provides further support for hypothesis III. |
| Keywords: | profit margins, productivity, trade |
| JEL: | F14 L25 |
| Date: | 2016–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:fer:wpaper:80&r=eff |
| By: | Hasan Shahzad (Pakistan Institute of Development Economics, Islamabad); Attiya Yasmin Javid (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | This study attempts to investigate the empirical relationship between debt and productivity and debt and investment for the Developing Asian Countries over the period of 1984-2007. The study uses two methodologies for empirical investigation, first is panel fixed effect using 5 year average data and second methodology is GMM applied on the annual data for the larger data set and to tackle the issue of endogeniety. The results show negative relationship between debt and investment and debt and productivity for Developing Asian Countries which confirms the presence of crowding out hypothesis. The results indicate negative impact of government size and budget deficit on investment. Productivity has positive relationship with investment. Trade openness and population growth are positively related to the productivity models. Financial development shows a positive relation in investment and productivity models. The present study confirms the existence of non-linearity of debt in investment and in productivity models. The implication that comes out from analysis that government needs to adopt debt reducing polices and reducing deficit will enhance private investment and productivity. |
| Keywords: | Economic Growth, Debt, Debt Over-hang, Crowding Out Hypothesis, Productivity, Investment |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2015:127&r=eff |
| By: | Persson, Emma (Department of Statistics, Umeå University); Persson, Sofie (Department of Clinical Sciences, Lund University); Gerdtham, Ulf-G. (Department of Economics, Lund University); Steen Carlsson, Katarina (Department of Clinical Sciences, Lund University) |
| Abstract: | This paper investigates if the effect of type 1 diabetes mellitus (T1DM) on school performance has changed over time using national Swedish population register data. The issue is of interest because management and treatment of the disease have improved over the last decades and, furthermore, because of changes in the educational grading system. Despite these changes, data indicate a persistent negative effect of T1DM on compulsory and upper secondary school grades and the results appears similar to earlier findings on cohorts completing school under the previous grading system. Moreover, the results are robust to alternative model specifications and econometric estimation strategies. Whereas access to new treatment technologies and improved diabetes management strategies has reduced the burden of diabetes in daily life, the results from this study indicate that other trends have not implied a reduction, over time, in the impact of T1DM on school performance. This finding indicates that continued efforts are needed to improve the situation in school for children with T1DM to prevent potential long-term socioeconomic consequences. |
| Keywords: | type 1 diabetes; education; school performance; register data |
| JEL: | I00 I10 I21 J24 |
| Date: | 2016–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2016_028&r=eff |
| By: | Usman Qadir (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | The growth trajectories of developed and developing countries are diverging rather than converging as expected from theory. Five policy areas have been identified that are crucial for ensuring development efforts succeed, of which a vital area is in innovation promotion and imitation and accelerated or sustained catching up policies. It is generally agreed that positive progress is required on all the five policy fronts highlighted above, for there to be sustained growth over long time horizons. Against this backdrop, a key concern for developing countries that merits further research in the context of learning by doing and innovation promotion is: what has been the country’s performance with regard to technology acquisition for purposes of enhancing productivity? Has the country been effective in its efforts to acquire the appropriate technology needed to boost productivity levels? Has the country made effective use of the technology acquired? What market failure(s), if any, are constraining the country’s ability to acquire the technology and make appropriate use of it? This research addresses these questions in the light of the experience of Pakistan’s economy, focusing on the development of the domestic automotive industry. The research frames these issues in the context of rent-seeking, political settlements and firm-level efficiency and proposes a framework of analysis that allows for an assessment of technology acquisition efforts at the firm level. |
| Keywords: | Economic Development, Technology Acquisition, Productivity, Pakistan, Political Settlements, Rent-seeking |
| JEL: | O11 O30 O47 D72 O53 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2016:134&r=eff |
| By: | Dlamini, Thula; Nalley, Lanier; Tisboe, Francis; Shew, Aaron; Barkley, Andrew |
| Abstract: | This study estimates the proportion of dry bean yield increase in South African Agricultural Research Council (ARC) released dry bean cultivars that are attributable to genetic improvements through the ARC breeding program. Using data from 32 test plots across South Africa, the study quantifies the yield and yield variance evolution attributable to the breeding program. In addition, this study calculates the economic benefits to small landholder’s attributed to the ARC dry bean breeding program. Results indicated that by releasing modern dry bean cultivars, the ARC dry bean breeding program increased average producer yield by 11.42 kg/ha annually. During the period of 1972 to 2014, the ARC Breeding Program contributed 489.36 kg/ha cumulatively (11.42*42) to dry bean yields solely from genetic improvements, which is equivalent to a 23.15% (489.36/1130.78) increase in producer yields. The benefits associated only with the genetic gains from the breeding program are estimated to be 701.4 million Rand (46.8 million USD) from 1992-2014. Using historic ARC breeding costs the benefit cost ratio was estimated to be 5.67:1. Like every other country in the world South Africa continuously has to battle for agricultural R&D funds to support programs like ARC whose role is to help small scale producers in Africa. As such, we find the annual genetic gain attributed to the ARC Breeding Program has increased, and the returns to the breeding program continue to play a large role for dry bean farmers and consumers in combating food insecurity. |
| Keywords: | dry beans, breeding program, cost benefit, Crop Production/Industries, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaae16:246382&r=eff |
| By: | Chiara Bentivogli (Bank of Italy); Litterio Mirenda (Bank of Italy) |
| Abstract: | The paper studies the impact of foreign ownership on a firm’s economic performance. We use a unique panel dataset to test the foreign ownership premium by comparing our sample of firms based in Italy and owned by a foreign subject with a sample of purely domestic firms that, in order to have a proper counterfactual, were selected using propensity score matching. Our difference-in-differences results show the existence of a premium for the size, profitability and financial soundness of the foreign-owned companies. The premium increases with time, is concentrated in the service sector, and disappears if the foreign investor is based in a fiscal haven. |
| Keywords: | multinational enterprise, ownership, foreign direct investment, firm performance |
| JEL: | F23 F61 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1085_16&r=eff |
| By: | Isabel Narbón-Perpiñá (Department of Economics, Universitat Jaume I, Castellón, Spain); Kristof De Witte (Top Institute for Evidence Based Education Research-Maastricht University and Leuven Economics of Education Research-Katholieke Universiteit Leuven) |
| Abstract: | The efficient management of the available resources in local governments has been a topic of high interest in the field of public sector. We provide an extensive and comprehensive review of the existing literature on local governments’ efficiency from a global point of view, covering all articles from 1990 to August 2016. This paper is the second of two. It covers the aspects related to local governments’ efficiency measurement along with its determinants, i.e., taking into account the effect of environmental variables over efficiency. First, we describe which techniques have been used to incorporate environmental variables in the context of local governments. Second, we provide a classification for the determinants used and we summarise their impact on efficiency. Finally, we discuss some operative directions and considerations for further research in the field. |
| Keywords: | Efficiency, local government, survey, contextual factors |
| JEL: | H40 H72 D61 R50 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2016/21&r=eff |
| By: | Mignouna, Djana; Akinola, Adebayo A.; Abdoulaye, Tahirou; Maroya, Norbert |
| Abstract: | A bold step to addressing myriads of constraints affecting yam productivity was achieved through Yam for Income and Food Security in West Africa (YIIFSWA) project. The project has embarked on a series of activities culminating in the development, deployment and disseminating intervention options/technologies in Nigeria and Ghana. This paper assesses the potential economic impacts, the number of beneficiaries and poverty reduction through these agricultural technologies/intervention options. The land area coverable by the technologies ranged 320,000–650,000 ha in the two countries. The land area under varieties for adaptation to environments with low soil fertility was the highest followed by resistance to nematode cultivars. The net present value (NPV) ranged $144 million–$616 million and was highest for YIIFSWA diagnostic tool and temporary immersion bioreactor. Crop management and postharvest practices option had the lowest benefit-cost ratios of 6.0 and 20.03 while the aeroponics option had the highest benefit cost ratio of about 36.90. Not less than 750, 000 would be brought out of poverty by these technologies. The technologies are expected to reach not less than 20 million households by 2037 in Nigeria and Ghana. The technologies are more responsive to change in adoption rate than change in costs. Overall, while the potential economic gains are considerable, realization of these gains depends on the efficiency and effectiveness of extension and input supply systems. Concerted extension efforts are needed to drive the use of these intervention options. Moreover, considerable technical advice would also be needed to explain how to apply them |
| Keywords: | Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaae16:246453&r=eff |
| By: | Tanoli, Mubashar Farooq |
| Abstract: | This study tries to illustrate the relationship between training, mentoring and employee performance. The purpose of the study is to highlight the role of different practices which are mainly out of a few practices of HR. Employee training and mentoring shows their influence on the employee performance. It will generate different results of empirically tested and analyzed data. Data from 250 staff members will be collected from different public and private sector universities of Islamabad. After collection of data it will be analyzed through SPSS and certain results will be achieved. Further, on the basis of calculations results will be obtained through SPSS. Limitations of the study mainly defines the lack of interest of many teacher who are less or not reluctant in sharing the information. |
| Keywords: | Training, Mentoring, Employee Performance |
| JEL: | J24 J28 O15 |
| Date: | 2016–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:74956&r=eff |