nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2017‒02‒05
twenty-one papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Production Efficiency Analysis of Capsicum (Bell Pepper) Cropping System under the Tunnels in Punjab, Pakistan By Fatima, Hina; Almas, Lal K; Yasmin, Bushra
  2. Land Misallocation and Productivity By Diego Restuccia; Raul Santaeulalia-Llopis
  3. The problem of raising labor productivity in Russia: the concept of lean production By Dobrin, Kirill; Zolotareva, Sofia
  4. Exact and superlative measurement of the Luenberger-Hicks-Moorsteen productivity indicator By Frederic Ang; Pieter Jan Kerstens
  5. Are Efficient Farms and Inefficient Farms Heterogeneous? By Kim, Youngjune; Chen, Bowen; Featherstone, Allen M.; Pendell, Dustin L.
  6. Growing like Spain: 1995-2007 By Manuel García-Santana; Enrique Moral-Benito; Josep Pijoan-Mas; Roberto Ramos
  7. Grass-Fed Beef Enterprise Efficiency Analysis in the U.S. By Qushim, Berdikul; Bhandari, Basu; Gillespie, Jeffrey; Scaglia, Guillermo
  8. Credit Constraints and Firm Productivity: Evidence from Italy By Francesco Manaresi; Nicola Pierri
  9. Does Innovation Mediate Good Firm Performance? By Llanto, Gilberto M.; del Prado, Fatima Lourdes E.
  10. The Efficiency of Russian Higher Education Institutions and its Determinants By Alexander D. Gromov
  11. Approaching effects of the economic crisis on university efficiency: A comparative study of Germany and Italy By Lehmann, Erik E.; Meoli, Michele; Paleari, Stefano; Stockinger, Sarah A. E.
  12. A Standardized Method for the Evaluation of Adherence to Practice Guidelines By Stephanie Thomas
  13. The Effects of Japanese Customer Firms' Overseas Outsourcing on Supplier Firms' Performance By INUI Tomohiko; KODAMA Naomi
  14. Effect of Silage Quality on Milk Production and Ogallala Aquifer Conservation Potential in the Texas High Plains By Almas, Lal K; Guerrero, Bridget L; Lust, David G; Fatima, Hina; Mensah, Emmanuel
  15. Does Competition Affect Bank Risk? By Liangliang Jiang; Ross Levine; Chen Lin
  16. Innovation, public support and productivity in colombia By Isabel Busom; Jorge-Andrés Vélez-Ospina
  17. Efficiency and Competitiveness of Kosovo Raspberry Producers By Vuciterna, Rina; Thomsen, Michael; Popp, Jennie; Musliu, Arben
  18. The Mystery of TFP By Nicholas Oulton
  19. Boosting productivity in Malaysia By Hidekatsu Asada; Stewart Nixon; Vincent Koen
  20. The great trade collapse and the Spanish export miracle: Firm-level evidence from the crisis By Eppinger, Peter S.; Meythaler, Nicole; Sindlinger, Marc-Manuel; Smolka, Marcel
  21. Lending to unhealthy firms in Japan during the lost decade: distinguishing between technical and financial health By Chakraborty, Suparna; Peek, Joe

  1. By: Fatima, Hina; Almas, Lal K; Yasmin, Bushra
    Abstract: Technological change is one of the most effective ways to make improvements in crop yields. However, lack of ability or willingness of the producers to adopt technology and other institutional barriers cause slow adoption. Technological adoption for value added crop production in Pakistan is making progress with the introduction of tunnel technology. The present study investigated the technical efficiency and productivity of capsicum crop (Bell Pepper) grown under the tunnels in Punjab, Pakistan. The farm data were collected from 150 farmers through an interview questionnaire. The stochastic frontier analysis was used to measure the productivity and technical efficiency of capsicum crop grown under tunnels. The results of the study revealed that the average technical efficiency of sampled capsicum farms under tunnels was around 83%. The farmers can optimize the production frontier of the capsicum cropping system by overcoming the existing level of technical inefficiencies. The number of irrigations, pesticides, labor hour, land preparation and seed have been important inputs for capsicum cropping system production and technical efficiency among farmers in the study area. The access to credit and farmer’s education have the positive relationship with technical efficiencies. Lack of credit and education cause significant production inefficiency.
    Keywords: Technical Efficiency, Capsicum (Bell Pepper), Production Tunnels, Stochastic Frontier Analysis, Punjab, Pakistan, Crop Production/Industries, Farm Management, Production Economics, Productivity Analysis,
    Date: 2017
  2. By: Diego Restuccia; Raul Santaeulalia-Llopis
    Abstract: Using detailed household-level data from Malawi on physical quantities of outputs and inputs in agricultural production, we measure total factor productivity (TFP) for farms controlling for land quality, rain, and other transitory shocks. We find that operated land size and capital are essentially unrelated to farm TFP implying substantial factor misallocation. The aggregate agricultural output gain from a reallocation of factors to their efficient use among existing farmers is a factor of 3.6-fold. We directly link factor misallocation to severely restricted land markets as the vast majority of land is allocated by village chiefs and not marketed. In particular, the output gain from reallocation are 2.6 times larger for farms with no marketed land than for farms that only operate marketed land.
    Keywords: misallocation, land, productivity, agriculture, Malawi, micro data.
    JEL: O1 O4
    Date: 2017–01–25
  3. By: Dobrin, Kirill (Russian Presidential Academy of National Economy and Public Administration- Stolypin Volga Region Institute of administration); Zolotareva, Sofia (Russian Presidential Academy of National Economy and Public Administration- Stolypin Volga Region Institute of administration)
    Abstract: For many years in Russia are trying different ways to increase productivity. Leaders set the new equipment, try to innovate and develop the most effective control system. Often, however, do not achieve the desired effect the performance of the new equipment is much lower than estimated, the output of the production lot of marriage, are not reduced, and production costs. In order to achieve productivity growth in Russia, it should be concerned not only the state, but also every single company. Diagnosing problems, development of methods for increasing productivity and implementing them in practical work is a matter of time-consuming and costly. In this regard, it is necessary to use modern mechanisms for effective motivation. Increase productivity and motivation is not just staff. However, there are mechanisms and models to do this. For example, in our opinion, this may contribute to the concept of lean manufacturing. In all enterprises in the organization of production activities there are losses directly affecting the productivity in the organization and does not benefit the final consumer. Implementation of lean manufacturing for domestic enterprises to identify and reduce the loss of data will improve productivity at the country level. Keywords : productivity, efficiency, lean manufacturing, motivation of personnel, material and technical base, organization of labor, the cost of production.
    Date: 2016
  4. By: Frederic Ang; Pieter Jan Kerstens
    Abstract: This paper shows that the Bennet-Bowley profit indicator is an exact and superlative approximation of the additively complete Luenberger-Hicks-Moorsteen productivity indicator when the input and output directional distance functions can be represented up to the second order by a quadratic functional form. It also establishes the conditions under which the exact and superlative measures of the Luenberger productivity indicator and Luenberger-Hicks-Moorsteen productivity indicator coincide.
    Date: 2017–01
  5. By: Kim, Youngjune; Chen, Bowen; Featherstone, Allen M.; Pendell, Dustin L.
    Abstract: Data Envelopment Analysis (DEA) is one technique that is commonly used for measuring efficiency. Previous studies focus on identifying the sources of inefficiency with implicit assumption of homogeneity between efficient and inefficient farms. Since technical efficiency cannot be greater than one in the standard DEA, those studies are not capturing the marginal effects of input variables on the efficiency improvement for efficient farms, which leaves the heterogeneity in the marginal effects hard to be examined. We exploit a methodology called super DEA, which facilitates the study on the heterogeneity by producing the ranking information in the efficient Decision Making Units(DMUs). A quantile regression is employed to identify the sources of efficiency for efficient farms and inefficient farms, respectively. Using the Kansas Farm Management Association (KFMA), we find that an increase in feed affects efficiency in opposite ways for efficient farms and inefficient farms. This result suggests that efficient and inefficient farms are heterogeneous.
    Keywords: Heterogeneity, Super DEA, Quantile Regression, Nonparametric efficiency, Farm Management, Production Economics, Productivity Analysis,
    Date: 2017
  6. By: Manuel García-Santana (Universitat Pompeu Fabra); Enrique Moral-Benito (Banco de España); Josep Pijoan-Mas (CEMFI); Roberto Ramos (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: Spanish GDP grew at an average rate of 3.5% per year during the expansion of 1995-2007, well above the EU average of 2.2%. However, this growth was based on factor accumulation rather than productivity gains as TFP fell at an annual rate of 0.7%. Using firm-level administrative data for all sectors we show that deterioration in the allocative efficiency of productive factors across rms was at the root of the low TFP growth in Spain, while misallocation across sectors played only a minor role. Cross-industry variation reveals that the increase in misallocation was more severe in sectors where government infl uence is more important for business success, which represents novel evidence on the potential macroeconomic costs of crony capitalism. In contrast, sectoral di erences in nancial dependence, skill intensity, innovative content, tradability, or capital structures intensity appear to be unrelated to changes in allocative eciency. All in all, the observed high output growth together with increasing firm-level misallocation in all sectors is consistent with an expansion driven by a demand boom rather than by structural reforms.
    Keywords: TFP, misallocation, Spain.
    JEL: D24 O11 O47
    Date: 2016–03
  7. By: Qushim, Berdikul; Bhandari, Basu; Gillespie, Jeffrey; Scaglia, Guillermo
    Abstract: We determine technical and scale efficiencies, scope economies, marginal productive contributions for inputs and outputs, and efficiency drivers for U.S. grass-fed beef enterprises. Average technical efficiency was 0.82. Increasing returns to scale and scope economies were found. Results suggest grass-fed beef enterprises can be scale efficient at >100 grass-fed beef animals.
    Keywords: grass-fed beef, input distance function, return to scale, scope economies, stochastic production frontier, technical and scale efficiencies, Livestock Production/Industries, Production Economics, Productivity Analysis, L25, Q10, Q12,
    Date: 2017
  8. By: Francesco Manaresi (Bank of Italy, Structural Economic Department); Nicola Pierri (Stanford University)
    Abstract: This paper studies the impact of credit constraints on manufacturers' production. We exploit a matched firm-bank panel data covering all Italian companies over the period 1998-2012 to derive a measure of supply-side shock to rm speci c credit constraints, and study how it affects input accumulation and value added productivity. We show that an expansion in the credit supply faced by a firm increases both input accumulation (size effect) and its ability to generate value added for a given level of inputs (productivity effect). Results are robust to various productivity estimation techniques, and to an alternative measure of credit supply shock that uses the 2007-2008 interbank market freeze to control for assortative matching between firms and banks. We discuss different potential channels for the estimated e ect and explore their empirical implications.
    Date: 2017–01
  9. By: Llanto, Gilberto M.; del Prado, Fatima Lourdes E.
    Abstract: Aside from physical capital and human resource, private firms are also advised to invest in innovations to be more productive and profitable. However, it is important to ensure such investment is well-spent. This study found that product and process innovations do lead to increase in sales and profits, and improve labor productivity. It also showed that firm size, age, and foreign equity are important factors leading firms to innovate.
    Keywords: Philippines, innovation, small and medium enterprises, process innovation, firm performance, product innovation, SMEs
    Date: 2016
  10. By: Alexander D. Gromov (National Research University Higher School of Economics)
    Abstract: In Russia, resources available for higher education institutions (HEIs) have been reduced while the expectations of their results have grown. This raises questions about the efficiency of Russian HEIs and the factors influencing it. In this paper, estimations of the efficiency of Russian HEIs for the 2012/13-2014/15 academic years and its determinants are presented. Ratios of weighted outputs and weighted inputs constructed with data envelopment analysis (DEA) are used as the HEIs efficiency measure. Total financial resources of HEIs are used as the input and measures of education and research results are used as the outputs. For the analysis of changes in efficiency the Malmquist index is used. The relation between efficiency scores and the characteristics of HEIs are investigated using a Tobit regression. This research is based on data about 120 public HEIs collected from various sources. The results show that the potential for an increase in the efficiency still remains. An outward shift of the efficiency frontier, i.e. a technological improvement, was found. According to estimations, most institutions operate at decreasing returns to scale and reducing their size will increase their efficiency. However, the substantial growth of the number of HEIs with increasing returns to scale implies that the policy of resource consolidation could be a reasonable response to current challenges. A positive relationship between HEIs efficiency and the diversification of fields of study was revealed.
    Keywords: higher education, efficiency analysis, data envelopment analysis, returns to scale, Malmquist index.
    JEL: I21 I22 I23
    Date: 2017
  11. By: Lehmann, Erik E.; Meoli, Michele; Paleari, Stefano; Stockinger, Sarah A. E.
    Abstract: In this paper, we compare the efficiency of the Italian and German university system in the process of translating public funding into the multiple outputs of a university, i.e. graduating students, publishing research, and patenting activity. We do this with a particular focus on the policies implemented following the financial crisis in 2007/08. Using a sample of 133 public universities, of which 73 public universities in Germany and 60 public Italian universities, observed over the period 2006-2011, we find that Italian universities are significantly better in terms of cost efficiency than German universities. The crisis does not show a general impact, while the treatment effect indicates that Italian universities coped better during the crisis than their German counterparts at a highly significant level.
    Keywords: higher education,economic crisis,governance,data envelopment analysis,malmquist productivity index
    JEL: H11 H12 I2 N30
    Date: 2016
  12. By: Stephanie Thomas
    Abstract: Practice guidelines are widely used in medical settings as a means of improving efficiency and quality of care by aligning service provision with evidence of what is effective. The objective of this work is to propose a methodology for the effective evaluation of the match of clinical practice data with a practice guideline. The proposed methodology uses a combination of existing analytical techniques which minimize the need for the analyst to specify a functional form for the process generating the clinical data. The methodology is illustrated in an application to a set of field data on the supplemental oxygen administration decisions of volunteer medical first responders. The result is a methodology for evaluation of guideline adherence which leverages existing patient care records and is generalizable across clinical contexts. In addition, the results are visually intuitive, supporting communication across diverse audiences.
    Keywords: adherence to guidelines, health care utilization, performance evaluation, medical first responders
    JEL: C12 C18 C52 I1 I18
    Date: 2016–10
  13. By: INUI Tomohiko; KODAMA Naomi
    Abstract: We examine the effects of globalization on firm performance through buyer-seller networks. In particular, we focus on the impact of the start of customer firms' overseas outsourcing on supplier firms' productivity, markups, employment, average wage, and sales. Previous literature examines the direct effect of import activities on firm productivity, but there has been only limited research looking at the effect of import activities through buyer-seller networks. This paper analyzes the effects of changes in customers' import status on supplier firms' performance. We combine propensity score matching with difference-in-differences (DID) estimation, comparing the performance of manufacturing firms whose major customers begin importing with those whose customers continue to procure intermediate inputs within Japan. Our results indicate that the impact of a customer's commencement of importing on suppliers' markups, productivity, and sales is negative but with no significant effects on wage and employment. These results imply that an increase in import activities of customer firms has procompetitive effects on domestic suppliers and leads to a decrease in their markups and productivity.
    Date: 2016–12
  14. By: Almas, Lal K; Guerrero, Bridget L; Lust, David G; Fatima, Hina; Mensah, Emmanuel
    Abstract: Agriculture production plays an integral role in the regional economy. However, the Ogallala Aquifer that supports the intensive irrigated agriculture and livestock operations is waning rapidly, which raises alarm for future sustainability of agriculture in the area. The main objective of the present study is to evaluate the effect of forage quality of corn and sorghum silage on milk yield per ton of silage dry matter. The traditional quantitative analysis and the Data Envelopment Analysis (DEA) are used. The DEA approach takes into account the comparative production efficiency analysis of corn and sorghum silage. The results revealed that there is a 16% more milk yield from corn silage due to better forage quality than sorghum silage. However, it is economically more profitable to feed dairy the sorghum silage. Improvement in crude protein, in-vitro true digestibility and starch content of sorghum silage will increase milk production per ton of forage dry matter. Considering both global and local concerns on water scarcity coupled with unpredictable climate changes, it is economically prudent to consider sorghum silage. Education on the true value of sorghum silage to the dairy industry can reduce silage production cost and save more water for future use in the Texas High Plains.
    Keywords: Silage Forage Quality, Milk Production, Ogallala Aquifer, Texas High Plains, Data Envelopment Analysis, Farm Management, Livestock Production/Industries, Production Economics, Productivity Analysis, Resource /Energy Economics and Policy,
    Date: 2017
  15. By: Liangliang Jiang; Ross Levine; Chen Lin
    Abstract: Although policymakers often discuss tradeoffs between bank competition and stability, past research provides differing theoretical perspectives and empirical results on the impact of competition on risk. In this paper, we employ a new approach for identifying exogenous changes in the competitive pressures facing individual banks and discover that an intensification of competition materially boosts bank risk. With respect to the mechanisms, we find that competition reduces bank profits, charter values, and relationship lending and increases banks’ provision of nontraditional banking services.
    JEL: G21 G28 G32 L1
    Date: 2017–01
  16. By: Isabel Busom (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Jorge-Andrés Vélez-Ospina (Departament d'Empresa, Universitat Autonoma de Barcelona)
    Abstract: We investigate the association between perceived barriers to innovation and the allocation of public support for innovation in manufacturing and service industries in Colombia, as well as the potential heterogeneity of returns to innovation across the firm-level productivity distribution. We extend the CDM recursive system by including an equation for the allocation of direct support and using quantile regression methods to estimate the productivity equation. We find some differences across manufacturing and service industries. Financing constraints are correlated with obtaining public support in manufacturing and in some services, but in knowledge intensive services (KIS) barriers associated with regulations are more significant. The introduction of innovations increases mostly the productivity of firms below the median of the productivity distribution, especially in services. Increasing human capital would boost productivity of firms in all industries, providing support to the hypothesis that human capital is indeed a bottleneck for productivity growth across the board in Colombia. We conclude that addressing factors that hinder innovation by low productivity firms in all service industries could significantly contribute to increasing productivity and reduce its dispersion.
    JEL: O31 O32 O33 O40 L8 C30
    Date: 2017–01
  17. By: Vuciterna, Rina; Thomsen, Michael; Popp, Jennie; Musliu, Arben
    Abstract: Raspberry production is a growing industry in Kosovo. In addition to private investments, this growth has been supported by grants, subsidies, and direct investment from international donor organizations and governmental institutions. At present, most of the commercially produced raspberries in Kosovo are produced on small farms, harvested by farmers and packed manually by collection centers, and then sold as frozen for the export market. The long-term viability and continued growth of raspberry production in Kosovo depends on the industry being able to compete in export markets and hold its own against production regions in Poland, Serbia, and Russia. Our study measures the efficiency of Kosovo raspberry producers with an aim towards enhancing industry competitiveness. We collected primary data on raspberry farmers in Kosovo during the summer of 2016. Using these data, we examine producer efficiency with an input oriented data envelopment analysis. Our findings suggest that efficiency improves with production experience and that outreach efforts could emphasize labor management.
    Keywords: Raspberries, Kosovo, data envelopment analysis, efficiency measurement, Agribusiness, Production Economics, Q12, D24,
    Date: 2017
  18. By: Nicholas Oulton (Centre for Macroeconomics (CFM); National Institute of Economic and Social Research (NIESR))
    Abstract: I analyse TFP growth at the sectoral and aggregate level, using data for 10 industry groups covering the market sector for 18 countries over the period 1970-2007 drawn from the EU KLEMS dataset. TFP growth displays persistence at the aggregate level but not at the industry level, suggesting industry outputs are measured with error. In all countries resources have been shifting away from industries with high TFP growth towards industries with low TFP growth. Nevertheless I find that structural change (as measured by changes in value added shares) has favoured growth in most countries. Errors in measuring capital or in measuring the elasticity of output with respect to capital are unlikely to substantially reduce the role of TFP in explaining growth. The pattern of growth in these 18 countries is more consistent with an underlying two-sector model than with the one-sector (Solow) model. Standard theory suggests that TFP growth induces capital accumulation, at least in the long run. This is not the case with the raw EU KLEMS data used here. But standard theory finds some support when the data are smoothed to remove cyclical effects.
    Date: 2017–01
  19. By: Hidekatsu Asada (OECD); Stewart Nixon (OECD); Vincent Koen
    Abstract: Productivity growth is essential to providing sustainable increases in living standards. Malaysia has reached a development stage where growth needs to be driven more by productivity gains than the sheer accumulation of capital and labour inputs. The 11th Malaysia Plan (2016-20) sets an ambitious labour productivity growth target of 3.7% per year, well above the 2% average growth recorded from 2011 to 2015. Co-ordinated structural reforms will be necessary to achieve the productivity improvements needed to attain high-income country status. Areas where reforms would deliver the greatest boost to productivity include increasing the quality of education and skills training, spurring innovation, adopting information technology more widely, fostering a well-functioning competition policy framework, improving the functioning of the labour market and the regulatory framework for small and medium-sized enterprises, fostering regional integration and raising public sector productivity. Renforcer la productivité en Malaisie Une amélioration soutenue du niveau de vie de la population n’est pas possible sans croissance de la productivité. Au stade de développement actuel de la Malaisie, la croissance doit reposer davantage sur des gains de productivité que sur l'accumulation des facteurs de production. Le 11ème Plan Malaisie (2016-2020) a fixé un objectif ambitieux de croissance de la productivité de 3,7% par an, bien au-dessus du taux de 2% enregistré entre 2011 et 2015. Des réformes structurelles coordonnées seront nécessaires pour réaliser les gains de productivité requis pour accéder au statut de pays à revenu élevé. Les réformes qui auraient le plus d’impact à cet égard touchent à la qualité de l’éducation et de la formation, à l’innovation, à un recours plus large aux technologies de l’information, à la politique de concurrence, au fonctionnement du marché du travail, au cadre réglementaire pour les petites et moyennes entreprises, à l’intégration régionale et à la productivité dans le secteur public.
    Keywords: competition, education, innovation, insolvency, performance review, productivity, public sector, regional integration, regulatory reform, skills, SMEs, structural reform, trade
    JEL: E20 F1 G3 H11 I0 O1 O40 P48
    Date: 2017–01–31
  20. By: Eppinger, Peter S.; Meythaler, Nicole; Sindlinger, Marc-Manuel; Smolka, Marcel
    Abstract: We provide novel evidence on the micro-structure of international trade during the 2008 financial crisis and subsequent global recession by exploring a rich firm-level data set from Spain. The focus of our analysis is on changes at the extensive and intensive firm-level margins of trade, as well as on performance differences (jobs, productivity, and firm survival) across firms that differ in their export status. We find no adverse effects of the financial crisis on foreign market entry or exit, but a considerable increase in the export intensity of firms after the financial crisis. Moreover, we find that exporters were more resilient to the crisis than non-exporters. Finally, while exporters showed a significantly more favorable development of total factor productivity after 2009 than non-exporters, aggregate productivity declined substantially in a large number of industries in Spanish manufacturing. We also briefly explore two factors that might help explain the surprisingly strong export performance of Spain in the aftermath of the great trade collapse: improved aggregate competitiveness due to internal and external devaluation and a substitutive relationship between domestic and foreign sales at the firm level.
    Keywords: international trade,financial crisis,Spain,manufacturing,firm-level data
    JEL: F10 F14 G01 D24
    Date: 2016
  21. By: Chakraborty, Suparna (University of San Francisco); Peek, Joe (Federal Reserve Bank of Boston)
    Abstract: We investigate the misallocation of credit in Japan associated with banks’ evergreening loans, distinguishing between two types of firm distress: (perhaps temporary) financial distress and technical distress, which reflects weak operational capabilities, as indicated by low total factor productivity. We show that previous evidence related to firms’ financial health is problematic due to the mixing of loan-demand and loan-supply effects. Using a direct measure of operational health, we provide unambiguous, direct evidence of evergreening behavior, as well as confirming evidence based on the relative impacts on subsequent firm viability of loans by bank types with different incentives to evergreen loans.
    Keywords: total factor productivity; bank lending; Japan; zombie firms; financial crisis
    JEL: E44 E51 G21
    Date: 2016–12–01

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