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on Efficiency and Productivity |
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Issue of 2017‒09‒03
fifteen papers chosen by |
| By: | Carine Milcent (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Brigitte Dormont (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine) |
| Abstract: | There is ongoing debate about the effect of ownership on hospital performance as regards efficiency and care quality. This paper proposes an analysis of the differences in productivity and efficiency between French public and private hospitals. In France, public and private hospitals do not only differ in their objectives. They are also subject to different rules as regards investments and human resources management. In addition, they were financed according to different payment schemes until 2004: a global budget system was used for public hospitals, while private hospitals were paid on a fee-for-service basis. Since 2004, a prospective payment system (PPS) with fixed payment per stay in a given DRG is gradually introduced for both private and public hospitals. Payments generally differ for the same DRG, depending on whether the stay occurred in a private or public hospital. A convergence of payments between the nonprofit and for profit sectors was planned by 2018 by the previous government, but this project has been abandoned by the newly elected government. Pursuing such a convergence comes down to suppose that there are differences in efficiency between private and public hospitals, which would be reduced by the introduction of competition between these two sectors. The purpose of this paper is to compare the productivity of public and private hospitals in France. We try to assess the respective impacts, on productivity differences, of differences in efficiency, patient characteristics and production composition. We have chosen to estimate a production function. For that purpose, we have defined a variable measuring the volume of care services provided by each hospital, synthetizing the hospital multiproduct activity into one homogenous output. Our data comes from two administrative sources which record exhaustive information about French hospitals. Matching these two database provides us an original source of information, at the hospital-year level, about both the production composition (number of stays in each DRG), and production factors (number of beds, facilities, number of doctors, nurses, of administrative and support staff, etc.). We observe 1,604 hospitals over the period 1998-2003, of which 642 hospitals are public, 126 are private not-for-profit and 836 are private-for-profit. This database is relative to acute care and covers more than 95 % of French hospitals. We use a stochastic production frontier approach combined with hospitals fixed effects. We find that the lower productivity of public hospitals is not explained by inefficiency (distance to the frontier), but oversized establishments, patient characteristics and production characteristics (small proportion of surgical stays). Once patient and production characteristics are taken into account, large and medium sized public hospitals appear to be more efficient than private hospitals. As a result, payment convergence would provide incentives for public hospitals to change the composition of their supply for care. |
| Abstract: | En France les cliniques privées jouent un rôle important dans l’offre de soins hospitaliers. En 2007,56% des séjours ont eu lieu dans des hôpitaux publics, 8% dans des hôpitaux privés à but non lucratifs, qui participent au service public hospitalier (PSPH) et 36 % dans des hôpitaux privés à but lucratif (cliniques). Plusieurs rapports administratifs ont récemment montré qu’un séjour dans unhôpital public ou PSPH était plus coûteux que dans une clinique privée, suggérant que la productivité du secteur public était relativement faible. Cet article a pour but de comprendre les différences deproductivité observées en France entre les hôpitaux publics, les hôpitaux PSPHet les cliniques privées.L’introduction de la Tarification à l’Activité (T2A) en 2004 visait à améliorer l’efficacité de la dépense pour les soins hospitaliers. La mise en œuvre du nouveau paiement est progressive, avec une application intégrale à partir de 2008. Dès le départ, les tarifsdifféraient selon que le séjour avait lieu dans un hôpital public ou un hôpital privé à but lucratif. Actuellement, les paiements par séjour dans une pathologie donnée sont en moyenne 27 % plus élevés dans le secteur public que dans le secteur privé.Une convergence des grilles tarifaires des secteurs public(et PSPH) et privé était prévue à l’horizon 2018. Cet objectif a été abandonné par le gouvernement élu en 2012. Mettre en place cette convergence reviendrait à supposer que les différences de coûts sont exclusivement dues à des différences d’efficacité, qui seraient éliminées par l’introduction d’une concurrence entre les deux secteurs.Notre objectif est d’examiner s’il existe une influence de la composition des séjours sur la productivitédes hôpitaux en matière de soins aigus. Si tel est le cas, introduire de la concurrence entre lesétablissements sur la base de la T2A crée de fortes pressions en faveur d’une réorganisation de l’offrede soins. Ces changements sont souhaitables s’ils permettent d’améliorer l’efficacité dans ladélivrance des soins hospitaliers.En revanche, il n’est pas souhaitable que le système de tarification crée des incitations à la sélection de patients ou à l’arrêt de la production de soins qui seraient importants du point de vue du bien-être collectif.Les données utilisées proviennent de deux bases administratives: les données du PMSI et celles de la SAE. La base finale contient 1 604 hôpitaux sur la période 1998-2003, dont 642 sont publics, 126 sont PSPH et 836 sont privés. Pour les soins aigus cette base est proche de l’exhaustivité : en 2003, elle représente 90% de l’ensemble des séjours de soins aigus en France métropolitaine.L’analyse couvre les six années précédant l’introduction de la T2A en France afin d’observer précisément la situationqui préexistait avant la mise en place de nouvelles incitations. Ce travail permet d’avoir un référentiel sur la situation du tissu hospitalier français et les performances comparées des établissements publics, PSPH et privés, avant la mise en place de la réforme.En synthétisant l’activité “multiproduit” de l’hôpital par un produit homogène défini selon des critères identiques, quel que soit le statut de l’hôpital, nous montrons que le diagnostic sur l’efficacité producti |
| Keywords: | prospective payment system (PPS),health care,Hospitals,Public hospitals,Proprietary Hospitals,Industrial productivity |
| Date: | 2017–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:hal-01521269&r=eff |
| By: | Albrecht Glitz; Eric Meyersson |
| 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 9.5% 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: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1576&r=eff |
| By: | Vincent Vandenberghe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | Vandenbussche et al (2006), Aghion et al. (2009) posit and show that when economies operate close to the technical frontier, their ability to generate efficiency gains rests on the contribution of workers with advanced forms of education (i.e. those who attended tertiary education). The main originality of this empirical paper is to revisit and improve the analysis of that assumption in the context of firms located in advanced economics, assuming that something that has been verified for OECD countries or US states is likely to be observed also at a much more desegregated level. To that purpose, we analyse a rich panel of Belgian firm-level data, covering the 2008-14 period. In the first step, we concentrate on properly estimating each firm’s distance/proximity to frontier. Step 2 consists in regressing each firm's efficiency growth rate on [1] the share of workers by education attainment [2] its (initial) distance/proximity to the frontier and [3] (the main variable of interest here) the interaction between [1] & [2], whose sign provides a direct test of the Vandenbussche/Aghion assumption. The main result of the paper supports the idea that the closer the firms are from the frontier, the more educated workers matter for efficiency gains. |
| Keywords: | Efficiency growth, Highly-educated workers, Frontier Firms, Proximity to frontier |
| JEL: | J24 I20 E24 O30 O40 |
| Date: | 2017–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2017012&r=eff |
| By: | Sangeeta Pratap (Hunter College and CUNY Graduate Center); Carlos Urrutia (ITAM); Felipe Meza (Instituto Tecnológico Autónomo de Méx) |
| Abstract: | We study the effect of credit conditions on the allocation of inputs, and their implications for aggregate TFP growth. For this, we build a new dataset for Mexican manufacturing merging real and financial data at the 4-digit industrial sector level. Using a simple misallocation framework, we find that changes in allocative efficiency account for 75 percent of aggregate TFP variability. We then construct a model of firm behavior with working capital constraints and borrowing limits which generate sub-optimal use of inputs, and calibrate it to our data. We find that the model accounts for 56 percent of the observed variability in efficiency. An important conclusion is that sectoral heterogeneity in credit conditions is key in accounting for efficiency gains. Despite overall credit stagnation, better credit and lower interest rates to distorted sectors contributed substantially to the recovery from the 2009 recession, suggesting a plausible mechanism for credit-less recoveries. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:538&r=eff |
| By: | Roberto Roson (Department of Economics, University Of Venice Cà Foscari and IEFE, Bocconi University, Milan) |
| Abstract: | This study provides some empirical evidence and quantification of differences in labor productivity among industries and countries. Using a recently available data base of value added per worker, country and time fixed effects are estimated first for various industries. Results are subsequently elaborated, to identify some time trends and sectoral profiles by country, which are in turn employed in a cluster analysis, summarizing some salient characteristics of industrial labor productivity in different economies. |
| Keywords: | Labor productivity, structural change, economic dynamics, cluster analysis |
| JEL: | C23 C82 O11 O47 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2017:15&r=eff |
| By: | Kumar, Nitin; Sensarma, Rudra |
| Abstract: | We examine the efficiency-outreach debate in the context of Indian Micro Finance Institutions (MFIs). We employ the stochastic distance function approach for 75 MFIs during 2004-2011. We find that there are significant inefficiency effects but efficiency is improving over time. Among the determinants of inefficiency, average loan balance per borrower and number of women borrowers appear to improve efficiency. This suggests that the efficiency-outreach debate is more nuanced than is presented in the literature and depends on the way outreach is defined. Profitability, size and leverage seem to increase efficiency whereas age of the MFI is associated with higher inefficiency. |
| Keywords: | Micro Finance Institutions; Efficiency; Stochastic Distance Function |
| JEL: | C33 C51 G21 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:81064&r=eff |
| By: | Thomas Stoerk |
| Abstract: | This research evaluates China's main air pollution control policy. In 2005, China decided on a 10% SO2 emissions reduction goal as part of the 11th Five-Year Plan (2006-2010). I study the effect of this policy on pollution outcomes, using both the offcial, misreporting-prone indicator and independent NASA SO2 satellite data in a differences-in-differences strategy that exploits variation in target stringency at the province level. I find that results from the offcial and the satellite data differ initially when the Chinese government lacked the ability to effectively monitor SO2 pollution. Ultimately, however, the policy worked and reduced air pollution by 11%. The regulated provincial governments react through rhetorical compliance, measured by a unique dataset of quantified political statements, and by shutting down small, ineffcient thermal units. Rhetorical compliance increases, especially before the government gained the ability to monitor SO2 in 2008. Real compliance sets in through the shutdown of small, ineffcient thermal units. Next, I compute detailed marginal abatement cost curves for SO2 for each province in China, thus illustrating the large heterogeneity in abatement cost across provinces. I use those curves to construct the counterfactual cost-effcient allocation of SO2 reduction targets across provinces. Using this benchmark, I find that the cost-effcient allocation would increase effciency by 49% at the margin, by lowering marginal abatement cost from 658e/tSO2 to 338e/tSO2. This finding is robust to inclusion of a back-of-the-envelope measure for the marginal benefits of abatement. I conclude that a market-based allocation of SO2 reduction targets would have doubled the effciency of China's main air pollution control policy. Contrary to the US experience, I find that a mandate on scrubbers would reap most of those effciency gains. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp273&r=eff |
| By: | Steve Gui-Diby and Oliver Paddison from the Macroeconomic Policy and Financing for Development Division. (United Nations Economic and Social Commission for Asia and the Pacific) |
| Abstract: | To increase productivity in agriculture, appropriate policies and strategies are needed to affect a convergence of labour productivity across agriculture, industry and services. Such policies will, for one, include the removal of regulations that limit the movement of labour and capital across sectors. Importantly, absorbing labour from agriculture will require concerted efforts to improve its employability in other sectors: workers need to be retrained so that they can carry out different functions, can operate more sophisticated machines and can become industrial workers that are better able to utilize technical services in rural areas. This requires the provision of good-quality education and training systems. Furthermore, access to financial services, particularly for small and medium enterprises, needs to be improved, especially in rural areas, to foster rural industrialization. |
| URL: | http://d.repec.org/n?u=RePEc:unt:pbmpdd:pb38&r=eff |
| By: | Blaum, Joaquin; Lelarge, Claire; Peters, Michael |
| Abstract: | We use French microdata to test an ubiquitous property of firm-based models of importing. When firm efficiency is factor neutral and input prices and qualities are common across firms, firm size should have no effect on expenditure shares on the different products and varieties sourced, holding the extensive margin constant. We show that this property is not supported by the data. Holding the sourcing strategy fixed, we find that larger firms (i) have lower import shares, (ii) concentrate their import spending on their top varieties and (iii) pay higher prices for their imported inputs. Our findings imply that input trade, through the intensive margin, is less beneficial for larger firms. Our results are consistent with a complementarity between firm productivity and input quality. |
| Keywords: | Firm Heterogeneity; firm size; non-homothetic; trade in intermediate inputs |
| JEL: | D21 D22 D24 F11 F12 F14 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12237&r=eff |
| By: | Kounetas, Kostas; Alexopoulos, Elias; Tzelepis, Dimitris |
| Abstract: | This study examines the causal linkage between environmental and financial performance in Greek manufacturing firms. Environmental performance is measured according to accounting data following the Eco Management and Auditing Scheme guidelines and ISO certification. Return on assets and return on sales are used as indicators of financial performance. Empirical findings suggest that there seems to be a link between these dimensions irrespectively of the particular sector of activity. Contrary to similar studies a “virtuous circle” does not exist as the avoidance of environmental improving investments is related to a better financial performance. On the other hand firms with superior financial performance seem to achieve a better environmental performance. At the same time firm specific and market characteristics significantly affect this relationship. These findings provide evidence that governmental and corporate actions are necessary in order to lead to a more sustainable corporate performance in the long run |
| Keywords: | environmental performance; financial performance; causality; GMM; Greece. |
| JEL: | Q0 Q00 Q56 |
| Date: | 2016–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80906&r=eff |
| By: | Michael Webb (Stanford University); John Van Reenen (Sloan School of Management, MIT); Charles Jones (Stanford University); Nicholas Bloom (Stanford) |
| Abstract: | In many growth models, economic growth arises from people creating ideas, and the long-run growth rate is the product of two terms: the effective number of researchers and the research productivity of these people. We present a wide range of evidence from various industries, products, and firms showing that research effort is rising substantially while research productivity is declining sharply. A good example is Moore’s Law. The number of researchers required today to achieve the famous doubling every two years of the density of computer chips is more than 75 times larger than the number required in the early 1970s. Across a broad range of case studies at various levels of (dis)aggregation, we find that ideas — and in particular the exponential growth they imply — are getting harder and harder to find. Exponential growth results from the large increases in research effort that offset its declining productivity. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:566&r=eff |
| By: | Yoshihara, Naoki; Veneziani, Roberto |
| Abstract: | This paper analyses the theoretical issues related to the measurement of labour content for general technologies with heterogeneous labour. A novel axiomatic framework is used in order to formulate the key properties of the notion of labour content and analyse its theoretical foundations. The main measures of labour content used in various strands of the literature are then characterised. Quite surprisingly, a unique axiomatic structure can be identified which underlies measures of labour aggregates used in such diverse fields as neoclassical growth theory, input-output approaches, productivity analysis, and classical political economy. |
| Keywords: | labour content, labour productivity, technical change, axiomatic analysis |
| JEL: | D57 J24 O33 D46 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:663&r=eff |
| By: | Azmi, Wajahat (International Centre for Education in Islamic Finance (INCEIF); Ali Abdul Manap, Turkhan (The Islamic Research and Teaching Institute (IRTI)) |
| Abstract: | This study tests the proposition that the Islamic banks are more stable and profitable, especially during the crisis period and tests the impact of competition on both the Islamic and conventional banks using array of measures including the recently developed Boone index in OIC countries. The results can be summarized as follows. First, increase in share of Islamic banks assets increases the overall stability of banking sector. Second, Islamic banks are more stable as compare to their conventional peers but the profitability measures shows that the both the banks are same. This finding is in sharp contradiction with the theoretical standing of Islamic banks being more profitable. This may be due to the significant divergence of Islamic banks from the theory as it is supposed to operate on the risk sharing arrangement. Third, competition has similar effects on stability and profitability on both the banks. Fourth, Islamic banks did better in terms of profitability during the crisis as compare to conventional banks. It also suggests that the Islamic banks were more stable during the crisis period. Finally, we provide evidence of complimentary effect of Islamic and conventional banks in influencing the income per capita suggesting that the co-existence of both the banking system is rewarding for the economies. |
| Keywords: | Competition; Boone Index; Stability; Islamic Banks; OIC Countries |
| JEL: | D40 G21 Z12 |
| Date: | 2017–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:irtiwp:2017_006&r=eff |
| By: | Khalid Maman Waziri (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - ECM - Ecole Centrale de Marseille) |
| Abstract: | This paper highlights the limitations inherent to the stochastic earnings frontier methodology to analyzing wage discrimination and introduces the use of the metafrontier approach as an important improvement. Using US data from the Current Population Survey, we find that white women’s and black men’s maximum attainable hourly earnings represent respectively 80% and 76% of those of white men on average. Furthermore, the metafrontier approach shows that male-female and white-black differences in maximum attainable earnings are observed at all levels of human capital. This innovative methodology permits the identification of a “generalized” glass ceilings against females and blacks in the US. |
| Keywords: | sample selection correction,stochastic metafrontier approach,glass ceiling,stochastic frontier,wage differentials,discrimination |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01569834&r=eff |
| By: | J.A. Bikker; Tobias M. Vervliet |
| Abstract: | The aim of this paper is to investigate the impact of the unusually low interest rate environment on the soundness of the US banking sector in terms of profitability and risk-taking. Using both dynamic and static modeling approaches and various estimation techniques, we find that the low interest rate environment indeed impairs bank performance and compresses net interest margins. Nonetheless, banks have been able to maintain their overall level of profits, due to lower provisioning, which in turn may endanger financial stability. Banks did not compensate for their lower interest income by expanding operations to include trading activities with a higher risk exposure. |
| Keywords: | profitability, risk-taking, low interest rate environment, (dynamic) panel data models |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:1710&r=eff |