nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2017‒10‒29
thirteen papers chosen by

  1. Measuring Technical Efficiency and Marginal Costs in the Performing Arts: The Case of the Municipal Theatres of Warsaw By Víctor Fernández-Blanco; Ana Rodríguez-à lvarez; Aleksandra WiÅ›niewska
  2. Relative Prices and Sectoral Productivity By Margarida Duarte; Diego Restuccia
  3. Specification Testing of Production in a Stochastic Frontier Model By Xu Guo; Gao-Rong Li; Wing-Keung Wong; Michael McAleer
  4. Investment climate, outward orientation and manufacturing firm productivity: New empirical evidence By Hoang Thanh Mai NGUYEN; Marie-Ange VEGANZONES-VAROUDAKIS
  5. Technological catching-up, sales dynamics and employment growth: evidence from China's manufacturing firms By Giovanni Dosi; Xiaodan Yu
  6. Measuring the Free Digital Economy within the GDP and Productivity Accounts By Leonard Nakamura; Jon Samuels; Rachel Soloveichik
  7. Regulation, Institutions, and Productivity: New Macroeconomic Evidence from OECD Countries By Balazs Egert
  8. BIG Data - BIG Gains? Understanding the Link Between Big Data Analytics and Innovation By Niebel, Thomas; Rasel, Fabienne; Viete, Steffen
  9. CSR gets a makeover in forming the new CSR2 Productivity Index By Jensen, Jim
  10. Frontier Knowledge and Scientific Production: Evidence from the Collapse of International Science By Iaria, Alessandro; Schwarz, Carlo; Waldinger, Fabian
  11. Do Bank Shocks Hamper Firms’ Innovation? By Mariana Spatareanu; Vlad Manole; Ali Kabiri
  12. Efficiency of Slovenian General Public Libraries: A Data Envelopment Analysis Approach By Andrej Sarkar; Eva KodriÄ -DaÄ ić; Klemen Koman; Damjan KavaÅ¡
  13. Bank Distress and Firm Performance during the Great Recession - Evidence from Ireland By Mariana Spatareanu; Vlad Manole; Ali Kabiri

  1. By: Víctor Fernández-Blanco (Department of Economics, University of Oviedo, Spain); Ana Rodríguez-à lvarez (Department of Economics, University of Oviedo, Spain); Aleksandra WiÅ›niewska (Department of Economics, University of Warsaw, Poland)
    Abstract: The aim of this paper is to bring new contributions to the analysis of efficiency and productivity in the performing arts. First, we consider that the behavior of a performing arts company can be analyzed under a multi-output technology of production, since they offer different products in terms of quantity and quality. Second, and for the first time to the best of our knowledge, we propose a procedure to measure the marginal costs associated with the production of performing arts firms. To achieve our goals, we estimate a stochastic input distance function to a set of nineteen public municipal theatres in Warsaw during the period 2000-2012. Additionally, we calculate the technical efficiency indices for these theatres and characterize some determinants of their efficiency, paying special attention to the effect of public grants. Our findings suggest that those municipal theatres in Warsaw could have used 7% less inputs to achieve the same level of outputs. At the same time, the presence of public grants improves efficiency and, so, contributes to extend novelty and diversity. The marginal cost of a new performance is around 7,149 PLN; and introducing a new title costs up to 3.33 times more than staging one title already established in the repertoire.
    Keywords: theatres, multi-output technology, marginal cost, duality theory, input distance function
    JEL: L82 D24 Z10
    Date: 2017–10
  2. By: Margarida Duarte; Diego Restuccia
    Abstract: The relative price of services rises with development. A standard interpretation of this fact is that productivity differences across countries are larger in manufacturing than in services. The service sector comprises heterogeneous categories. We document that many disaggregated service categories--such as transportation, communication, and finance--feature a negative income elasticity of relative prices, whereas the relative price of aggregate services is mostly driven by large expenditure categories in housing, health, and education that feature a positive income elasticity of relative prices. We also document a substantial reallocation of expenditures in services from categories with positive income elasticities (traditional services) to categories with negative elasticities (non-traditional services) as income raises. Using an otherwise standard multi-sector development accounting framework extended to include an input-output structure, we find that the cross-country income elasticity of sectoral productivity is large in non-traditional services (1.14), smaller in manufacturing (1.06) and much smaller in traditional services (0.67). We also find that heterogeneity in services has a substantial impact on aggregate productivity and that the input-output structure is important in this assessment.
    Keywords: Productivity, services, input-output structure, non-traditional services.
    JEL: O1 O4 E0
    Date: 2017–10–23
  3. By: Xu Guo (School of Statistics, Beijing Normal University, Beijing.); Gao-Rong Li (Beijing Institute for Scientific and Engineering Computing, Beijing University of Technology, Beijing.); Wing-Keung Wong (Department of Finance and Big Data Research Center, Asia University Department of Economics and Finance, Hang Seng Management College Department of Economics, Lingnan University.); Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.)
    Abstract: Parametric production frontier functions are frequently used in stochastic frontier models, but there do not seem to be any empirical test statistics for its plausibility. To bridge the gap in the literature, we develop two test statistics based on local smoothing and an empirical process, respectively. Residual-based wild bootstrap versions of these two test statistics are also suggested. The distributions of technical inefficiency and the noise term are not specified, which allows specification testing of the production frontier function even under heteroscedasticity. Simulation studies and a real data example are presented to examine the finite sample sizes and powers of the test statistics. The theory developed in this paper is useful for production mangers in their decisions on production.
    Keywords: Production frontier function; Stochastic frontier model; Specification testing; Wild bootstrap; Smoothing process; Empirical process; Simulations.
    JEL: C0 C13 C14 D81
    Date: 2017–10
  4. By: Hoang Thanh Mai NGUYEN; Marie-Ange VEGANZONES-VAROUDAKIS (Centre d'Etudes et de Recherches sur le Développement International(CERDI))
    Abstract: Drawing on the World Bank Enterprise Surveys (WBES), we revisit the link between investment climate and firm productive performance for a panel of enterprises surveyed twice in 70 developing countries and 11 manufacturing industries. We take advantage of the surveys done at different times in an increasing number of economies, to tackle the endogeneity issue which has been seen as a problem in previous studies. We also use pertinent econometric techniques to address other biases inherent in the data, in particular measurement errors, missing observations, and multicollinearity. Our results reinforce previous findings by validating, with a larger than usual sample of countries and industries, the importance of a larger set of environment variables. We show that infrastructure quality (Infra), information and communication technologies (ICT), skills and experience of the labor force (H), cost of and access to financing (Fin), security and political stability (CrimePol), competition (Comp) and government relation (Gov) contribute to firms’ and countries’ different performances. The empirical analysis also illustrates that firms which chose an outward orientation have higher productivity levels. Nevertheless, outward oriented enterprises are, at the same time, more sensitive to investment climate limitations. These findings have important policy implications by showing which dimensions of the business environment, in which industry, could help manufacturing firms to be more competitive in the present context of increasing globalization.
    Keywords: Investment climate, Outward orientation, Manufacturing, Total factor productivity, Firm survey data.
    JEL: C52 L21 O14 O12 D24
    Date: 2017–10
  5. By: Giovanni Dosi; Xiaodan Yu
    Abstract: This paper investigates the microeconomics of employment dynamics, using a Chinese manufacturing firm-level dataset over the period 1998-2007. It does so in the light of a scheme of "circular and cumulative causation", whereby firms' heterogeneous productivity gains and sales dynamics, and innovation activities ultimately shape the patterns of employment dynamics. Using firm's productivity growth as a proxy for process innovation, our results show that the latter correlates negatively with firm-level employment growth. Conversely, relative productivity levels, as such a general proxy for the broad technological advantages/disadvantages of each firm, do show positive effect on employment growth in the long-run through replicator-type dynamics. Moreover, firm-level demand dynamics play a significant role in driving employment growth, which more than compensate the labour-saving effect due to technological progress. Finally, and somewhat puzzlingly, the direct effects of product innovation and patenting activities on employment growth appear to be negligible.
    Keywords: Employment Growth, Demand, Product Innovation, Process Innovation, Export, China catching-up
    Date: 2017–10–24
  6. By: Leonard Nakamura; Jon Samuels; Rachel Soloveichik (Bureau of Economic Analysis)
    Date: 2017–10
  7. By: Balazs Egert
    Abstract: Empirical research on the drivers of multi-factor productivity (MFP) is abundant at the firm- and industry level but surprisingly little research has been conducted on the determinants of MFP at the macroeconomic level. In this paper, we seek to understand the drivers of country-level MFP with a special emphasis on product and labour market policies and the quality of institutions. For a panel of OECD countries, we find that anticompetitive product market regulations are associated with lower MFP levels and that higher innovation intensity and greater openness go in tandem with higher MFP. We also find that the impact of product market regulations on MFP may depend on the level of labour market regulations. Better institutions, a more business friendly environment and lower barriers to trade and investment amplify the positive impact of R&D spending on MFP. Finally, we also show that cross-country MFP variations can be explained to a considerable extent by cross-country variation in labour market regulations, barriers to trade and investment and institutions (including corruption).
    Keywords: multi-factor productivity, trade openness, innovation, product market regulation, labour market regulation, institutions, policy interactions, OECD
    JEL: C23 C51 J20 L43 L51 O40
    Date: 2017
  8. By: Niebel, Thomas; Rasel, Fabienne; Viete, Steffen
    Abstract: This paper analyzes the relationship between firms’ use of big data analytics and their innovative performance for product innovations. Since big data technologies provide new data information practices, they create new decision-making possibilities, which firms can use to realize innovations. Applying German firm-level data we find suggestive evidence that big data analytics matters for the likelihood of becoming a product innovator as well as the market success of the firms’ product innovations. The regression analysis reveals that firms which make use of big data have a higher likelihood of realizing product innovations as well as a higher innovation intensity. Interestingly, the results are of equal magnitude in the manufacturing and services industries. The results support the view that big data analytics have the potential to enable innovation.
    Keywords: Big data,data-driven decision-making,innovation,product innovation,firmlevel data
    JEL: D22 L20 O33
    Date: 2017
  9. By: Jensen, Jim
    Date: 2016–03–25
  10. By: Iaria, Alessandro; Schwarz, Carlo; Waldinger, Fabian
    Abstract: We show that WWI and the subsequent boycott against Central scientists severely interrupted international scientific cooperation. After 1914, citations to recent research from abroad decreased and paper titles became less similar (evaluated by Latent Semantic Analysis), suggesting a reduction in international knowledge flows. Reduced international scientific cooperation led to a decline in the production of basic science and its application in new technology. Specifically, we compare productivity changes for scientists who relied on frontier research from abroad, to changes for scientists who relied on frontier research from home. After 1914, scientists who relied on frontier research from abroad published fewer papers in top scientific journals, produced less Nobel Prize-nominated research, introduced fewer novel scientific words, and introduced fewer novel words that appeared in the text of subsequent patent grants. The productivity of scientists who relied on top 1% research declined twice as much as the productivity of scientists who relied on top 3% research. Furthermore, highly prolific scientists experienced the starkest absolute productivity declines. This suggests that access to the very best research is key for scientific and technological progress.
    JEL: I23 J44 N3 N30 N4 N40 O3 O31 O5
    Date: 2017–10
  11. By: Mariana Spatareanu; Vlad Manole; Ali Kabiri
    Abstract: Using a unique matched bank-firm-innovation data for the UK, this paper finds that bank shocks negatively affected firms’ innovations during the recent crises. After carefully controlling for several potential biases in estimation we find that firms whose relationship banks were distressed patented less, and those patents were of lower technological value, less original and of lower quality. The impact is larger in the case of small and medium enterprises (SMEs). We also show that banks’ specialization in financing innovation mitigates the impact of bank distress on firms’ innovation. The results highlight the significantly negative impact of distress in the banking sector on firm’s innovation and potential future economic growth.
    Keywords: innovation, bank distress, crisis, UK
    JEL: G21 G34 O16 O30
    Date: 2017–09
  12. By: Andrej Sarkar (Institute for Economic Research (IER) and Faculty of Economics, University of Ljubljana, Ljubljana, Slovenia); Eva KodriÄ -DaÄ ić (National and University Library, Ljubljana, Slovenia); Klemen Koman (Institute for Economic Research (IER), Ljubljana, Slovenia); Damjan KavaÅ¡ (Institute for Economic Research (IER), Ljubljana, Slovenia)
    Abstract: In the article, we study financing and efficiency of Slovenian GeneralPublicLibraries. We employ a rich dataset of CEZAR –Centre for Development of Libraries for the years 2008-2014 for 58 libraries and use data envelopment analysis, cluster analysis and regression methods to study the efficiency of libraries over the years. Our main results show that the problems for the libraries in this period did not lie in the lowered efficiency but more likely in other system requirements. Wealso provide a grouping of libraries following clusteranalysis with spatial constraints and show thecluster membership had significant effects on theperformance of the libraries.
    Keywords: general public libraries, Slovenia, financing, efficiency, data envelopment analysis, constrained clustering
    JEL: Z11 Z18 D61 C38 C33
    Date: 2017–09
  13. By: Mariana Spatareanu; Vlad Manole; Ali Kabiri
    Abstract: This paper investigates the impact of bank distress on firms’ performance using unique data during the Great Recession for Ireland. The results show that bank distress, measured as banks’ credit default swap spreads (CDS) has negatively and statistically significantly affected firms’ investment expenditures. Interestingly, firms with access to alternative sources of external finance are not impacted by bank distress. The results are robust to accounting for external finance dependence, demand and trade sensitivities, which affect firm performance and the demand for credit.
    Keywords: firm performance, bank distress, crisis
    JEL: E44 E50 G20
    Date: 2016–01

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