nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2017‒06‒25
fourteen papers chosen by

  1. The Transformation Function, Technical Efficiency, and the CCR Ratio By Subhash C. Ray
  2. A Reverse Directional Distance Function to Reconcile Between Competing Efficiency Goals: An Application to Indian Manufacturing By Subhash C. Ray; Kankana Mukherjee
  3. Industrial Espionage and Productivity By Glitz, Albrecht; Meyersson, Erik
  5. Cost of controlling water pollution and its impact on industrial efficiancy By Asha Gunawardena
  6. Food Productivity Trends from Hybrid Corn: Statistical Analysis of Patents and Field-test data By Mariam Barry; Giorgio Triulzi; Christopher L. Magee
  7. Effects of work environments and collaborations on productivity in Vietnamese social sciences: evidence from 2008-2017 Scopus data By Tung Manh Ho; Ha Viet Nguyen; Thu Trang Vuong; Hiep-Hung Pham; Nancy K. Napier; Quan-Hoang Vuong
  8. Local determinants of the spatial distribution of exporters in Poland: the role of FDI By Jaroslaw Michal Nazarczuk; Stanislaw Uminski; Tomasz Brodzicki
  9. Direct and Indirect Effects of Phonological Ability and Vocabulary Knowledge on Math Performance in Elementary School By Yulia V. Kuzmina; Alina E. Ivanova; Inna V.Antipkina
  10. Skills and global value chains: A characterisation By Robert Grundke; Stéphanie Jamet; Margarita Kalamova; François Keslair; Mariagrazia Squicciarini
  11. Crop Disease and Agricultural Productivity By Christine L. Carroll; Colin A. Carter; Rachael E. Goodhue; C.-Y. Cynthia Lin Lawell
  12. In Search of A New Development Model For Tunisia: Assessing the Performance of the Offshore Regime By Leila Baghdadi; Sonia Ben Kheder; Hassen Arouri
  13. Pyramid Capitalism: Cronyism, Regulation, and Firm Productivity in Egypt By Ishac Diwan; Philip Keefer; Marc Schiffbauer
  14. Agglomeration economies in the formal and informal sectors : a Bayesian spatial approach By Tanaka, Kiyoyasu; Hashiguchi, Yoshihiro

  1. By: Subhash C. Ray (University of Connecticut)
    Abstract: Charnes, Cooper, and Rhodes define the ratio of the virtual output to the virtual input as a measure of the technical efficiency of a multiple output multiple input firm. The aggregation weights used in constructing the virtual output and the virtual input may be arbitrarily chosen so long as the weights are non-negative and using these weights no firm’s input-output bundle shows efficiency exceeding 100%. In production economics, the ratio of aggregate output to aggregate input is a measure of total factor productivity and a direct link of the CCR ratio to technical efficiency is not obvious. Usually the CCR ratio is rationalized as efficiency by showing its equivalence to the Farrell efficiency measure. This paper offers a direct derivation of the CCR ratio measure of efficiency from a Transformation Function. We also show how the Banker, Charnes, Cooper (BCC) measure under variable returns to scale can be derived from the Transformation Function.
    Keywords: Supporting hyperplane; Convexity; Degree of Increasing Returns
    JEL: D24 C60
    Date: 2017–06
  2. By: Subhash C. Ray (University of Connecticut); Kankana Mukherjee (Babson College)
    Abstract: In analysis of technical efficiency in production, either the maximum proportional increase in all outputs or a minimal proportional scaling down of all inputs is generally selected as the criterion. In the recent literature, the Directional Distance Function combines the two objectives by increasing output and reducing input simultaneously to the extent possible. This paper introduces a Reverse Directional Distance Function as one possible approach to resolve the conflict between incompatible goals through a minimal adjustment applicable to both of the two objectives. In our empirical analysis we apply the proposed method to Indian manufacturing where increasing the output and conserving energy use are both highly important objectives. A comparison of the feasible targets obtained through the conventional and the Reverse Directional Distance Functions yields an estimated tradeoff between output increase and CO2 reduction (due to energy conservation) along the frontier.
    Keywords: Data Envelopment Analysis, Minimax Solution, Output Growth, Energy Saving
    JEL: C61 D24 L60
    Date: 2017–06
  3. By: Glitz, Albrecht (Universitat Pompeu Fabra); Meyersson, Erik (Stockholm School of Economics)
    Abstract: In this paper, we investigate the economic returns to industrial espionage by linking information from East Germany's foreign intelligence service to sector-specific gaps in total factor productivity (TFP) between West and East Germany. Based on a dataset that comprises the entire flow of information provided by East German informants over the period 1970–1989, we document a significant narrowing of sectoral West-to-East TFP gaps as a result of East Germany's industrial espionage. This central finding holds across a wide range of specifications and is robust to the inclusion of several alternative proxies for technology transfer. We further demonstrate that the economic returns to industrial espionage are primarily driven by relatively few high quality pieces of information and particularly strong in sectors that were closer to the West German technological frontier. Based on our findings, we estimate that the average TFP gap between West and East Germany at the end of the Cold War would have been 6.3 percentage points larger had the East not engaged in industrial espionage.
    Keywords: espionage, productivity, R&D, technology diffusion
    JEL: D24 F52 N34 N44 O30 O47 P26
    Date: 2017–06
  4. By: Frank T. Denton; Byron G. Spencer
    Abstract: A shift in population distribution toward older ages is underway in industrialised countries throughout the world and will continue well into the future. We provide a framework for isolating the pure effects of population aging on per capita GDP, employ the framework in calculations for twenty OECD countries, and derive the rates of productivity growth required to offset those effects. We consider also some labourrelated changes that might provide offsets, for comparison with productivity.
    JEL: J1 J11 O4
    Date: 2017–08
  5. By: Asha Gunawardena
    Abstract: This paper estimates the cost of effluent discharge regulations for firms located in the lower Kelani River catchment in Sri Lanka. The river provides water for many economic purposes including drinking water and avariety of ecosystem services. Employing multi-input and multi-output translog production technology, we estimate shadow prices of effluents and technical efficiency of firms belonging to eight industries. We also compute total abatement cost for firms under different policy scenarios related to simultaneous reduction in concentration of three water pollutants including current regulatory standards. Wide variations in firm and industry shadow prices (marginal abatement costs) provide a strong case for a comprehensive redesign of environmental policy to control water pollution by industries in Sri Lanka.
    Keywords: Shadow prices, Technical efficiency, environmental regulation, water pollution, distance functions
  6. By: Mariam Barry; Giorgio Triulzi; Christopher L. Magee
    Abstract: In this research we study productivity trends of hybrid corn - an important subdomain of food production. We estimate the yearly rate of yield improvement of hybrid corn (measured as bushel per acre) by using both information on yields contained in US patent documents for patented hybrid corn varieties and on field-test data of several hybrid corn varieties performed at US State level. We have used a generalization of Moore's law to fit productivity trends and obtain the performance improvement rate by analyzing time series of hybrid corn performance for a period covering the last thirty years. The linear regressions results obtained from different data sources indicate that the estimated improvement rates per year are between 1.2 and 2.4 percent. In particular, using yields reported in a sample of patents filed between 1985 and 2010, we estimated an improvement rate of 0.015 (R2 = 0.74, Pvalue = 1.37 x 10^-8). Moreover, we apply two predicting models developed by Benson and Magee (2015) and Triulzi and Magee (2016) that only use patent metadata to estimate the rate of improvement. We compare these predicted values to the rate estimated using US States field-test data. We find that, due to a turning point in patenting practices which begun in 2008, only the predicted rate (rate = 0.015) using patents filed before 2008 is consistent with the empirical rate. Finally, we also investigate at the micro level - on the basis of 70 patents (granted between 1986 and 2015) - whether the number of citations received by a patent is correlated with performance achieved by the patented variety. We find that the relative performance (yield ratio) of the patented seed is positively correlated with the total number of citations received by the patent (until December 2015) but not the citations received within 3 years after the granted year, with the patent application year used as control variable.
    Date: 2017–06
  7. By: Tung Manh Ho; Ha Viet Nguyen; Thu Trang Vuong; Hiep-Hung Pham; Nancy K. Napier; Quan-Hoang Vuong
    Abstract: Measuring factors affecting scientific productivity is an issue that often draws attention of the scientific community and policy-makers. In Vietnam, the studies about this have just begun for a few years with limited data. Especially, there has been little understanding about what affects the performance on the social sciences research publication productivity yet. This research, using OLS method, analyses the data of 406 Vietnamese social scientists in Scopus within a period of 2008-2017. The results confirm the impact of work environments shown in the varying degrees of influence of collaborations on scientific output β au.ttl(Uni ) = 0.183 ,P
    Keywords: Scientific productivity; Research fields; University; Research institute; Collaborations
    JEL: I23 O32
    Date: 2017–06–20
  8. By: Jaroslaw Michal Nazarczuk (University of Warmia and Mazury in Olsztyn); Stanislaw Uminski (Institute for Development; Faculty of Economics, University of Gdansk); Tomasz Brodzicki (University of Gdansk, Faculty of Economics; Institute for Development, Sopot)
    Abstract: In the light of the hereto insufficient empirical evidence on the determinants of location of exporters and given the access to a unique GIS-based database for counties in Poland (LAU 1) on the distances to diverse points of interest (POIs) and infrastructure endowment, and data on regional heterogeneity, we investigate the deep determinants of exporters’ location in Poland. Our analysis is mostly driven by the concepts of NEG theory and the firms’ heterogeneity concept. With the use of econometric modelling, in the first step, we identify the determinants of regional location of exporting firms. In the second step, we try to identify the differences in the locational decisions of firms distinguished by ownership form, namely domestic and foreign-owned exporters. Our findings indicate the more predictable behaviour of foreign-owned exporters, for which the quality of transport endowment and inputs plays a more significant role in the decision in comparison to indigenous exporters, affected to a larger extent by deep-rooted factors and path-dependency. The locational preferences of FOEs are more influenced by the proximity to the airport and the motorways as well as subject to agglomeration externalities. The results point furthermore to the significance of accessibility to markets as evidenced by the role of infrastructure endowment and the role of the greater regional human capital endowment.
    Keywords: locational determinants, the spatial distribution of exporters, regional trade, foreign investors, Poland
    JEL: R12 F14 R15
    Date: 2017–06
  9. By: Yulia V. Kuzmina (National Research University Higher School of Economics); Alina E. Ivanova (National Research University Higher School of Economics); Inna V.Antipkina (National Research University Higher School of Economics)
    Abstract: The main aim of this study was to estimate direct and indirect effects of phonological ability and vocabulary knowledge on subsequent mathematics and reading performance. To achieve our goals we used two-wave longitudinal data from the international Performance Indicators in Primary Schools (iPIPS) data set, which was produced in Russia in 2015-2016. We used rhyming skills and ability to repeat words/pseudowords as indicators of phonological ability, and identified three types of mathematical skills (digit identification, number manipulations and formal math). The results of our analysis confirmed the predictive role of preschool phonological ability as a domain-general precursor of later achievements. Phonological ability had a positive direct and indirect effects on the subsequent reading and math performance. Moreover, the direct effect was higher than the indirect effect. Reading fluency mediated the effect of phonological ability and did not mediate the effect of vocabulary knowledge. Vocabulary knowledge had insignificant direct effect on math achievement and positive indirect effect via phonological ability
    Keywords: iPIPS; phonological abilities; vocabulary knowledge; mathematics; reading comprehension, elementary school
    JEL: Z
    Date: 2017
  10. By: Robert Grundke (OECD); Stéphanie Jamet (OECD); Margarita Kalamova (OECD); François Keslair (OECD); Mariagrazia Squicciarini (OECD)
    Abstract: This study follows a job task-based approach to measure the skills of individuals. It exploits information contained in the OECD Survey of Adult Skills (PIAAC) and conducts an exploratory state-of-the-art factor analysis to obtain six task-based skills indicators that are comparable across 31 countries. By combining the PIAAC-based skills indicators with OECD Trade in Value Added (TiVA) data, light is shed on the way skills and their distributions (at the country-industry level) relate to industry performance and to integration into global value chains (GVCs). The results underline the importance of cognitive skills such as literacy, numeracy and problem solving for any industry to thrive in the global economy. Also, a persistent and positive association with labour productivity and participation in GVCs is observed, at the industry level, for non-cognitive skills such as managing and communication skills, ICT skills and workers’ readiness to learn and to think creatively.
    Date: 2017–06–23
  11. By: Christine L. Carroll; Colin A. Carter; Rachael E. Goodhue; C.-Y. Cynthia Lin Lawell
    Abstract: Crop diseases and how they are managed can have a large impact on agricultural productivity. This paper discusses the effects on agricultural productivity of Verticillium dahliae, a soil borne fungus that is introduced to the soil via infested spinach seeds and that causes subsequent lettuce crops to be afflicted with Verticillium wilt. We use a dynamic structural econometric model of Verticillium wilt management for lettuce crops in Monterey County, California to examine the effects of Verticillium wilt on crop-fumigation decisions and on grower welfare. We also discuss our research on the externalities that arise with renters, and between seed companies and growers due to Verticillium wilt, as these disease-related externalities have important implications for agricultural productivity.
    JEL: Q00 Q10 Q12
    Date: 2017–06
  12. By: Leila Baghdadi (World Trade Organization Chair Holder, Université de Tunis); Sonia Ben Kheder; Hassen Arouri
    Abstract: The main purpose of this paper is to examine the offshore regime in Tunisia and to assess the overall effects of this export promoting strategy for the years 2002-2014. Using firm-level data, we look in particular at its impact on turnover, productivity, wages, job creation, profitability and survival of firms. We compare offshore firms to onshore firms to assess if the incentives that were provided to the former have been successful. Analysis of offshore premium on samples including all firms and only exporting firms show that both categories of offshore firms have a better performance for all indicators. Generally, the important gap between the performance indicators such as turnover, productivity and wages and the very high level of profitability displayed by offshore firms, all categories considered, compared to onshore firms points out that incentives given by the Tunisian Investment Code is benefiting more firms than to the country. When considering the specific example of offshore exporting and importing firms, performance is weaker than their onshore counterparts across the board, except in the areas of gross job creation and profitability. Lower productivity of two way offshore traders suggest that these firms are low performers and that they self-select in the offshore regime in order to cover their export fixed costs. The survival analysis highlights an increased probability that offshore two-way traders will exit the market once tariffs and tax exemptions privileges end, usually after 10 years. Thus, incentives given in the Tunisian Investment Code are attracting mainly firms in lower rungs of the Global Value Chains. Instead of incentives, Tunisia should rethink its Investment Code in favor of highly added sectors that requires more complex skills and capital.
    Date: 2017–06–07
  13. By: Ishac Diwan; Philip Keefer; Marc Schiffbauer
    Abstract: Using a large, original database of 385 politically connected firms under the Mubarak regime in Egypt, we document for the first time the negative impact of cronyism on economic growth. In the early 2000s, a policy shift in Egypt led to the expansion of crony activities into new, previously unconnected sectors. 4-digit sectors that experienced crony entry between 1996 and 2006 experienced lower aggregate employment growth during the period than those that did not. A wide array of supporting evidence indicates that this effect was causal, reflecting the mechanisms described in Aghion et al. (2001), and not due to selection. Crony entry skewed the distribution of employment toward smaller, less productive firms; crony firms did not enter into sectors that would have also grown more slowly even in the absence of crony entry; and they enjoyed multiple regulatory and fiscal privileges that reduced competition and investments by non-crony firms, including trade protection, energy subsidies, access to land, and favorable regulatory enforcement. Moreover, energy subsidies and trade protection account for the higher profits of politically connected firms.
    Keywords: Firm performance, Patronage, Productivity Growth, Industrial Productivity, Productivity Level, Corruption, Economic Growth
    JEL: D72 D24 O47
    Date: 2016–10
  14. By: Tanaka, Kiyoyasu; Hashiguchi, Yoshihiro
    Abstract: This paper examines whether localized clusters of similar industries produce agglomeration economies in the formal and informal sectors. We develop a Bayesian method to estimate a spatial autoregressive model with an endogenous independent variable. We use establishment-level census data that cover both formal registered and informal unregistered establishments in Cambodia. We find that the density of local employment has a significantly positive effect on productivity in the informal sector, but little effect in the formal sector. For manufacturing, a doubling of employment density increases productivity in the informal sector by 9% through local linkages and by 17% through spatial multiplier linkages, leading to a 26% increase in total. A spatial network magnifies the local impact of agglomeration economies in the informal sector.
    Keywords: Cambodia,Industry,Informal sector,Productivity,Agglomeration economies,Bayes
    JEL: C11 C21 C26 H26 O17 R12
    Date: 2017–05

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