nep-eff New Economics Papers
on Efficiency and Productivity
Issue of 2018‒01‒08
twelve papers chosen by

  1. The Productivity Puzzle and Misallocation: An Italian Perspective By Sara Calligaris; Massimo Del Gatto; Fadi Hassan; Gianmarco I. P. Ottaviano; Fabiano Schivardi
  2. Technical Efficiency of Agricultural Production in India: Evidence from REDS Survey By Kailash Chandra Pradhan; shrabani Mukherjee
  3. Export Performance, Innovation, and Productivity in Indian Manufacturing Firms By Santosh Kumar Sahu; Sunder Ramaswamy; Abishek Choutagunta
  4. Temperature Effects on Productivity and Factor Reallocation: Evidence from a Half Million Chinese Manufacturing Plants By Zhang, Peng; Deschenes, Olivier; Meng, Kyle C.; Zhang, Junjie
  5. State-Owned Enterprises in Emerging Europe: The Good, the Bad, and the Ugly By Uwe Böwer
  6. Investment climate, outward orientation and manufacturing firm productivity: New empirical evidence By Mai Nguyen; Marie-Ange Veganzones-Varoudakis
  7. Bank business models: popularity and performance By Rungporn Roengpitya; Nikola Tarashev; Kostas Tsatsaronis; Alan Villegas
  8. The relationship between nurse staffing levels and objective and subjective quality of care: A panel data approach for Germany By Augurzky, Boris; Bünnings, Christian; Wübker, Ansgar
  9. Economic Growth and the Public Sector: A Comparison of Canada and Italy, 1870†2013 By L. Di Matteo; Tom Barbiero;
  10. An Evaluation of Cross-Efficiency Methods, Applied to Measuring Warehouse Performance By Balk, B.M.; de Koster, M.B.M.; Kaps, C.; Zofío, J.
  11. European industrial policy — tapping the full growth potential of the EU By Berglöf, Erik
  12. Does a Short-Term Increase in Incentives Boost Performance? By Angelova, Vera; Giebe, Thomas; Ivanova-Stenzel, Radosveta

  1. By: Sara Calligaris; Massimo Del Gatto; Fadi Hassan; Gianmarco I. P. Ottaviano; Fabiano Schivardi
    Abstract: Productivity has recently slowed down in many economies around the world. A crucial challenge in understanding what lies behind this \productivity puzzle" is the still short time span for which data can be analysed. An exception is Italy where productivity growth started to stagnate 25 years ago. Italy therefore offers an interesting case to investigate in search of broader lessons that may hold beyond local specific cities. We find that resource misallocation has played a sizeable role in slowing down Italian productivity growth. If misallocation had remained at its 1995 level, in 2013 Italy's aggregate productivity would have been 18% higher than its actual level. Misallocation has mainly risen within sectors than between them, increasing more in sectors where the world technological frontier has expanded faster. Relative specialization in those sectors explains the patterns of misallocation across geographical areas and firm size classes. The broader message is that an important part of the explanation of the productivity puzzle may lie in the rising difficulty of reallocating resources between firms in sectors where technology is changing faster rather than between sectors with different speeds of technological change.
    Keywords: misallocation, TFP, productivity puzzle, Italy
    JEL: D22 D24 O11 O47
    Date: 2017–12
  2. By: Kailash Chandra Pradhan (National Institute of Labour Economic Research and Development (NILERD), Sector A-7, Narela Institutional Area, Narela, Delhi-40); shrabani Mukherjee (Assistant Professor, Madras School of Economics)
    Abstract: The study aims to estimate the technical efficiency of agricultural production in India using production frontier model for both cross section and panel data for the years 1999 and 2007. Given the persistent problem of under utilization of capacity in Indian farm sector still there is a serious need to identify the determining factors for technical efficiency for agricultural production in order to accelerate sustainable productivity and technological improvement. Farmers' age and education level, household size, household?s management in production, proportion of irrigated area covered by canals, availability of wells, yielding variety of lands, services provided by the government, agricultural expenditure by local government are the factors which significantly contribute to efficiency in resource utilisation. Traditional method of farming or learning by doing is preferred to adoption of new technologies which creates technological lock-in.
    Keywords: Production function, agricultural farmers, technical efficiency India
    JEL: C33 D20
  3. By: Santosh Kumar Sahu (Assistant Professor, Madras School of Economics); Sunder Ramaswamy (Visiting Distinguished Professor of Economics, Madras School of Economics); Abishek Choutagunta (Institute of Law and Economics, Universität Hamburg)
    Abstract: This study re-examines the relationship between export performance and productivity in manufacturing firms in India for the period 2003-2015, using firm level information. Departing from the earlier studies on India economy, we argue that product innovations boost export performance of the economy. The hypothesis being that, in the post-economic-reforms era competitive export market scenario, productivity alone, without product innovation and participation in R and D cannot drive export performance. We observe that the argument of highly productive firms entering the export market without reallocating resources towards innovation and R and D seems to be invalid in our sample. Nevertheless, we find in our sample, that productivity as a selection criterion coupled with advertising and marketing strategies explains participation in R and D in boosting exports.
    Keywords: Export Performance, Innovation, Productivity, Manufacturing firms, India
    JEL: D20 D24 L16 L6 L60
  4. By: Zhang, Peng (Hong Kong Polytechnic University); Deschenes, Olivier (University of California, Santa Barbara); Meng, Kyle C. (University of California, Santa Barbara); Zhang, Junjie (Duke Kunshan University)
    Abstract: This paper uses detailed production data from a half million Chinese manufacturing plants over 1998-2007 to estimate the effects of temperature on firm-level total factor productivity (TFP), factor inputs, and output. We detect an inverted U- shaped relationship between temperature and TFP and show that it primarily drives the temperature-output effect. Both labor- and capital- intensive firms exhibit sensitivity to high temperatures. By mid 21st century, if no additional adaptation were to occur, we project that climate change will reduce Chinese manufacturing output annually by 12%, equivalent to a loss of $39.5 billion in 2007 dollars. This implies substantial local and global economic consequences as the Chinese manufacturing sector produces 32% of national GDP and supplies 12% of global exports.
    Keywords: manufacturing, productivity, climate change, China
    JEL: Q54 Q56 L60 O14 O44
    Date: 2017–11
  5. By: Uwe Böwer
    Abstract: State-owned enterprises (SOEs) play an important role in Emerging Europe’s economies, notably in the energy and transport sectors. Based on a new firm-level dataset, this paper reviews the SOE landscape, assesses SOE performance across countries and vis-à-vis private firms, and evaluates recent SOE governance reform experience in 11 Emerging European countries, as well as Sweden as a benchmark. Profitability and efficiency of resource allocation of SOEs lag those of private firms in most sectors, with substantial cross-country variation. Poor SOE performance raises three main risks: large and risky contingent liabilities could stretch public finances; sizeable state ownership of banks coupled with poor governance could threaten financial stability; and negative productivity spillovers could affect the economy at large. SOE governance frameworks are partly weak and should be strengthened along three lines: fleshing out a consistent ownership policy; giving teeth to financial oversight; and making SOE boards more professional.
    Date: 2017–10–30
  6. By: Mai Nguyen (NTU - Nanayang Technological University - Nanayang Technological University); Marie-Ange Veganzones-Varoudakis (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)
    Date: 2017–10–18
  7. By: Rungporn Roengpitya; Nikola Tarashev; Kostas Tsatsaronis; Alan Villegas
    Abstract: We allocate banks to distinct business models by experimenting with various combinations of balance sheet characteristics as inputs in cluster analysis. Using a panel of 178 banks for the period 2005-15, we identify a retail-funded and a wholesale-funded commercial banking model that are robust to the choice of inputs. In comparison, a model emphasising trading activities and a universal banking model are less robustly identified. Both commercial banking models exhibit lower cost-to-income ratios and more stable return-on-equity than the trading model. In a reversal of a pre-crisis trend, the crisis aftermath witnessed mainly switches away from wholesale-funded and into retail-funded banking. Over the entire sample period, banks that switched into the retail-funded model saw their return-on-equity improve by 2.5 percentage points on average relative to non-switchers. By contrast, the relative performance of banks switching into the wholesale-funded model deteriorated by 5 percentage points on average.
    Keywords: balance sheet characteristics, cluster analysis, discriminant analysis, model transitions, bank performance
    JEL: D20 G21 L21 L25
    Date: 2017–12
  8. By: Augurzky, Boris; Bünnings, Christian; Wübker, Ansgar
    Abstract: In this study we investigate the relationship between nursing staffing levels and hospital quality in Germany. We use administrative data from almost all German hospitals from 2002 to 2013 and link it to mortality rates and patient satisfaction measures. To analyze the association between nursing staffing levels and hospital quality indicators empirically, we estimate linear regression models and control for a wide range of hospital and patient characteristics that might bias the results. In addition, we exploit the longitudinal structure of the data and rule out potential bias due to time-invariant unobserved heterogeneity. The estimation results indicate a positive relationship between nurse staffing levels and hospital quality for both subjective and objective quality measures. Increasing nurse staffing levels by 10 percent reduces the mortality rate by 0.05 percent and increases patient satisfaction by around 0.7 percent, on average. Although we find some of these relationships to be statistically significant, at least marginally, the absolute magnitudes of the estimated coefficients are rather small.
    Keywords: Hospital quality,nurse staffing,patient satisfaction,mortality rate
    JEL: C23 I11 I18
    Date: 2017
  9. By: L. Di Matteo (Lakehead University); Tom Barbiero (Ryerson University);
    Abstract: There is considerable evidence that the size of the public sector can influence an economy’s rate of economic growth. We investigate public sector spending of central governments and economic performance in two G7 countries over the long†term, Canada and Italy. Their economic performance has diverged in the last 25 years and it is worth investigating whether the size of government was a contributing factor. We find that in both the case of Canada and Italy the size of central government spending directly affects the performance of their economies in an inverse U†shaped relationship known as a Scully/BARS Curve. These results suggest that along with modifying current central government size, other levels of governments may need to shrink their own spending.
    Date: 2017–12
  10. By: Balk, B.M.; de Koster, M.B.M.; Kaps, C.; Zofío, J.
    Abstract: In this paper method and practice of cross-efficiency calculation is discussed. The main methods proposed in the literature are tested not on a set of artificial data but on a realistic sample of input-output data of European ware- houses. The empirical results show the limited role which increasing automation investment and larger warehouse size have in increasing productive performance. The reason is the existence of decreasing returns to scale in the industry, resulting in sub-optimal scales and inefficiencies, regardless of the operational performance of the facilities. From the methodological perspective, and based on a multidimensional metric which considers the capability of the various methods to rank warehouses, their ease of implementation, and their robustness to sensitivity analyses, we conclude to the superiority of the classic Sexton et al. (1986) method over recently proposed, more sophisticated methods.
    Keywords: Cross-efficiency methods, warehouse efficiency, automation investment
    JEL: C43 C61 D22 D24 L81 L87
    Date: 2017–12–06
  11. By: Berglöf, Erik
    Abstract: Europe, like many of the world's advanced economies, is facing a fundamental growth challenge. Growth has slowed in the wake of the global financial crisis, as investment has decreased and the legacy of non-performing loans and uncertainty about the institutional arrangements established in response to the crisis are likely to be with us for years. However, the evidence suggests that this slowdown started before the crisis, as improvements in productivity did not come at the same pace as in the past.
    JEL: J1 N0
    Date: 2016–11–01
  12. By: Angelova, Vera (TU Berlin); Giebe, Thomas (Linnaeus University); Ivanova-Stenzel, Radosveta (TU Berlin)
    Abstract: If agents are exposed to continual competitive pressure, how does a short-term variation of the severity of the competition affect agents\' performance? In a real-effort laboratory experiment, we study a one-time increase in incentives in a sequence of equally incentivized contests. Our results suggest that a short-term increase in incentives induces a behavioral response but does not boost total performance.
    Keywords: contest; tournament; real-effort; experiment; contract theory; forward-looking;
    JEL: C91 D91 J22 J33
    Date: 2017–12–28

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